I see an economic diasater coming...

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If the capitulation of Federal Chancellor Merkel at the EU Summit stands, with her agreement that the ESM will undertake the direct recapitalization of European banks in the future, and that Italy and Spain â€" and indeed, soon other states â€" can claim EU money, this will prove to be a fatal mistake which will lead all of European civilization into catastrophe. Given the condition of the trans-Atlantic banking system, this means nothing less than a new edition of the Versailles Treaty, in which Germany is supposed to pay for the debts of foreign banks and speculators. The result threatens quickly to become the same as in 1923: hyperinflation â€" but this time not in one country, but throughout Europe and the U.S.A. As recently as Thursday Ms. Merkel had uttered the memorable phrase on this subject, that there would be no "joint debt liability" for "as long as I live." Then what has happened? How did this 180-degree reversal occur? Why has Ms. Merkel let Italian Prime Minister Monti and Spanish Prime Minister Rajoy put this over on her, when immediately beforehand she had been expressing skepticism about the so-called master plan of the four EU presidents Van Rompuy, Barroso, Draghi, and Juncker, precisely because it provided for collectivization of debt?

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Prime Ministers Monti and Rajoy had recognized the Achilles heel of Merkel's position. Given the serious pending constitutional complaints in Karlsruhe against the ESM and the Fiscal Pact, she wanted to have them adopted in the Bundestag with a two-thirds majority; i.e., with the help of the SPD and the Greens, for which the SPD demanded in return, in consultation with French President Hollande, the so-called growth package of 120 billion euros which Ms. Merkel had initially opposed. Monti and Rajoy now threatened a veto against this growth package, and thereby sabotage of the potential two-thirds Bundestag majority. President Hollande now conveniently discovered his sympathy for Spain and Italy, and thus increased the pressure on Ms. Merkel.
This is the more suspicious in that this pressure comes at the most inopportune moment; and the circumstances under which Ms. Merkel has agreed to the de facto collectivization of debts by a further order of magnitude, must be urgently clarified, because the existence of all of Europe is at stake.

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In the preceding days, in any case, Sarkozy's former advisor Alain Minc, in an interview with the French newspaper Les Echos, recommended to Hollande that he use the same tactic against Germany as had Francois Mitterrand at the time of German reunification, when the latter had forced the abandonment of the D-Mark and the introduction of the euro as the price for reunification. Mitterrand's former advisor Jacques Attali wrote on this point in his Mitterrand biography, that Mitterrand had even threatened Kohl with a war if Kohl refused.  Aside from the fact that this was obviously an absurd bluff, Helmut Kohl spoke repeatedly of the European Currency Union as a question of war and peace in Europe. It should not be forgotten, moreover, that Hollande, like Sarkozy before him, is insisting on a collectivization of European debts because the French banks are exposed to huge amounts of debt in the Mediterranean states. German voters and taxpayers have every right in the world to be familiar with these background matters.

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Prior to the summit, Hollande was called by Obama, who had already repeatedly demanded that the crisis in the Euro countries had to be solved according to the stipulations of the EU, the ECB, and the IMF, because Obama obviously feared that a further escalation of the situation would further reduce the chances of his re-election. Here can also be found the reason why U.S. Treasury Secretary Geithner and Fed Chairman Ben Bernanke â€" who bears the nickname Helicopter Ben because he wants to throw bank notes out of helicopters in case of a systemic crisis â€" according to Members of the U.S. Congress, have demanded that Congressmen prepare emergency legislation to adopt an additional mega-bailout package, which must be much larger this time than the liquidity pumped into the markets after the 2008 Lehman failure â€" which at that time was between 17 and 25 trillion dollars. This newly printed money is then, with the help of the swap agreements between the Fed and the ECB, also supposed to be made available to the sick European banks. Since they report that it is expected that the crisis will dramatically worsen, new legislation with new powers is supposed to be ready in advance, since the extent of the crisis would demand an immediate, extraordinary intervention "to save the system."

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Anyone who wants to understand the situation must also read the article by Greg Palast on June 26 in the British newspaper The Guardian, where he writes: "The idea that the Euro has failed shows a dangerous naivete. The Euro is exactly what its inventor [Robert Mundellâ€"HZL] and the wealthiest 1% who supported him foresaw and intended." Mundell, the inventor of the "single currency space" and theoretical father of the Euro, emphasized to Palast in personal conversation that the Euro would really only fulfill its purpose if the crisis hit. If government control of the currency were abolished, annoying little popular representatives would no longer have the ability to use financial resources to pull their country out of recession. Mundell told him that with the Euro, "financial policy will be removed out of the reach of the politicians." And without fiscal policy, nations can only maintain employment if they give up regulating the markets and thereby become competitive. Workers' rights, environmental laws and controls â€" these would all be swept away by the Euro, and states would have no other choice than to abolish all state regulations, massively privatize state industries, reduce taxes, and consign the European social state to the trashbin.
Exactly this is the intention of the financial institutions' intention, which is usually expressed by the synonym globalization, and which can be thanked for the fact that the governments of the G-20 countries for five years now (!), since the outbreak of the U.S. real estate crisis in July 2007, have done absolutely nothing to regulate the banking sector. On the contrary, the governments are driven by "the markets," and do everything to meet their demands, like the SPD and the Greens in Germany.