Euro Area




A “Major Concern”

The European Banking Authority EBA, which (we guess) is fighting for its survival after the ECB has become the sole supervisor of Europe’s “systemically relevant” banks, has recently issued a comprehensive report on the European banking system (this included the unintended revelation that its employees have yet to master the intricacies of Exel).

As an aside, we have little doubt that this bureaucracy will survive. Has there ever been a case of an EU bureaucracy not surviving and thriving? We don’t recall one off the cuff, but perhaps we are mistaken. We’re sure some reason will be found to preserve this particular zombie sinecure as well.


eba_2Hey guys! We’re still issuing reports! See how important it is to keep us well-funded?


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Greece – Ground Zero in the War on Cash?

We believe it was our friend Claudio Grass of Global Gold in Switzerland who first mentioned that the eurocracy may possibly have plans to use the Greek crisis as an opportunity to expand the ongoing war on cash. It stands to reason: Greece is well known for its extremely large “shadow economy” (the name for economic activity that flies under the radar of the greedy grasp of the State). Greece’s citizens not unreasonably regard the State as akin to a mafia organization which they are trying to avoid as much as possible (unless it promises them free goodies to buy their votes – they do of course gladly accept those).

We vividly recall an interview with a Greek shipping magnate about the constitutional provision that has relieved the country’s shipping industry from income tax. The interviewer asked (we are paraphrasing) whether the magnate thought it “fair” that this was so, and if he wasn’t troubled by his conscience in light of the Greek government debt crisis. The shipping magnate replied (again paraphrasing) along the lines of: “Just look at the government in Athens. They’re nothing but a bunch of crooks. Would you hand over your money voluntarily to Al Capone? Surely not. Well, neither do I.”


al caponeNot someone you want to hand your money to…

Photo credit: Bettmann / Corbis


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A Sharp Turn in Swedish Politics

When we recently discussed Europe’s refugee crisis, we mentioned that a sizable political backlash was to be expected and that unfortunately, extreme nationalist parties were likely to be among the main beneficiaries. We also mentioned the situation of Sweden, where the mainstream political parties in an ongoing fit of political correctness bordering on lunacy have apparently decided to transform Sweden into a province of Mesopotamia.


Jimmie_+àkessonLeader of the nationalist Sweden Democrats, Jimmie Akesson

Photo credit: Frankie Fouganthin / CC


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The Walking Dead

Now that Europe’s fractionally reserved banking system has been regulated into complete inertia, it is a good time to assess the current bottom line, so to speak. We should mention here that there are essentially two ways of dealing with the banking system. One is to introduce an unhampered free market banking system based on strong property rights and nothing else. Such a system would work best if it were based on sound money, i.e., a market-chosen medium of exchange. The regulations governing such a system would fit on a napkin.


zombie bank2

Image credit: Warner Bros, processing fmh


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Never let a Crisis go to Waste

As is well known, the EU’s socialist centralizers and “harmonizers” have always fully expected the adoption of the euro to lead to a crisis that would allow them to push through policies that would otherwise never have seen the light of day. Italian socialist and former EU Commission president (i.e., chief commissar) Romano Prodi told the Financial Times in 2001:


“I am sure the euro will oblige us to introduce a new set of economic policy instruments. It is politically impossible to propose that now. But some day there will be a crisis and new instruments will be created.


(emphasis added)


Montgolfiere_1783Montgolfière – engraving by Claude-Louis Desrais, 1783


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Greece is Still Lying in Wait …

We haven’t written much about Greece recently, but there have actually been a few developments worth paying attention to. Several easily foreseeable things have indeed happened in the meantime: Prime minister Tsipras felt forced to call a snap election after securing the first bailout tranche, the radical Marxist faction of Syriza led by Panaghiotis Lafazanis has split from the party, and so has its “youth wing”. In the meantime, the Greek economy has predictably nosedived as a result of the banking system freeze (Mish reports the grisly details here).




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The Gift that Likely Will Keep Giving …

Jay Taylor has mailed us an infographic he and his colleagues at Boston University and Pearson Education have put together, entitled “Why the Euro Zone Crisis is not Over”. We have decided to reproduce it here, as it provides a good overview of the most important data points surrounding the still festering crisis situation.


Why-the-Eurozone-Crisis-is-Not-OverInfographic by Boston University and Pearson Education – click to enlarge.


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