Mitt Romney is venturing overseas to spend two days each in the UK, Israel, and Poland. It will hone his international credentials, give him an opportunity to look “presidential,” and allow him to establish or refine connections. He will also court Americans living abroad. Every vote counts. Campaign brawls will stay “at the water’s edge,” so no speeches or news conferences. But there will be fundraisers. And foreign corporations are donating to both sides.
After 21 summits to save the euro, followed by dog-and-pony shows to calm the markets, followed by confidence-inspiring pronouncements about insurmountable firewalls and pandemic structural reforms, the euro is in greater danger than ever before. Spanish Prime Minister walked away from the last summit in June with a victory smile. Now, Spain is on the brink. And word is out: default.
Spain’s banks are getting bailed out with €100 billion. It won’t be enough, but it’ll buy time—a Eurozone mantra. Three of Spain’s seventeen heavily indebted regions asked for a bailout from the central government, and more are coming, but the central government can’t bail out anything because it’s broke. It needs a bailout for itself and for its regions. A bailout far larger than any of the prior bailouts. And then there’s Italy.
“The euro is irreversible,” said ECB President Mario Draghi as a whiff of panic began sweeping over the Eurozone. Everybody was supposed to enjoy their long vacation, and nothing important was supposed to happen. But, like a group of disruptive homeless guys, the ECB, the International Monetary Fund, and politicians have apparently gotten tired of kicking the Greek bailout can down the road, and they stomped on it instead.
My twelve-and-a-half minutes of conversation with Max Keiser on the Keiser Report—“Where Money Goes to Die”—aired today on RT. In the first half of the show, Max and Stacy with their tongue-in-cheek, pungent, and edgy manner tear into central banks, bankers, NIRP, the new Apartheid, the Libor scandal…. It’s quite a ride! My part starts in the second half (video).
Bulgaria, which has a balanced budget, a growing economy, and a top income tax rate of 10%, fires a withering blast at neighboring Greece where the new government, instead of implementing structural reforms, invokes bankruptcy unless it gets more money. And in Spain, which is teetering on economic collapse, protests erupted in the streets as people resist reforms. So, Bulgaria put joining the euro on ice
My first experience with euros was mid-December 2001 when I travelled to Germany. Bank showcases were filled with euro feel-good agitprop. Euro bills and coins would enter circulation soon, and this was part of the campaign to persuade Germans to surrender their marks. People had apprehensions, but my business contacts were gleeful: the euro would become the dominant reserve currency in the world; oil would be priced in it.
I was making coffee this morning when President Obama’s voice ruined it. His words didn’t even sound unreasonable, as I was still half asleep. He advocated giving tax breaks to companies that create jobs in the US, rather than those that create jobs overseas. Mitt Romney also wants to hand out tax breaks and tax cuts, just different ones.
Jean-Claude Juncker was desperate. The Prime Minister of Luxemburg and President of the Eurogroup is the ultimate Eurozone infighter. “We all know what to do, but we don’t know how to get re-elected afterwards,” he’d once said—now referred to as “Juncker’s curse.” But he, the longest-serving head of state in the EU, knows how to get reelected. So when he is desperate, even the German Constitutional Court listens.
I’m shocked and appalled that the Libor fiasco could even occur in our modern, highly ethical, and transparent financial sector. Banks misreporting anything…. unheard of. Nevertheless, it occurred. Not just once, but from get-go. And everyone and his dog, even Treasury Secretary Timothy Geithner, back in 2008 when he was still President of the New York Fed, knew about it.