Europe & Coming Capital Controls

QUESTION: Dear Mr. Armstrong,
In your blog on ECB vs Fed, you stated in your conclusion;

“The ECB is trapped. It cannot raise rates to raise money and it has destroyed its bond market. The only way out is to default on all debt and they will do that by declaring it to be now a perpetual debt that only pays interest like an annuity. This will allow them to escape the formal default which is inevitable.”

I understand what you’re saying here, but don’t understand how this will affect “the average person” and daily life. What areas will it impact and how? Or will this only result in taxes going through the roof, as the government generally takes any excuse to justify raising taxes?

Thanks for your time and endless efforts in helping society and us “the great unwashed” through these tyrannical times.
SR

ANSWER: The most likely course will be to convert all outstanding debt to perpetual bonds. Then they would pay interest and they need not redeem them, so no more rolling. They will be faced with a choice. If they decide to continue to borrow, then they will most likely do so by real auctions, and the ECB will not support the bonds or prevent interest rates from rising. They could take the more likely course of action and just print money to cover expenses, otherwise, the budget will no longer match the treaty.

I believe that the EU will move closer to a full-blown Marxist state. That implies they will seek to impose guaranteed basic income, which is starting in Spain after they have destroyed the tourist industry. This will most likely result in drastic economic consequences and they will seek to prevent wealth from fleeing Europe. They will most likely impose not only a 400% increase in taxes being proposed by the World Economic Forum but capital controls.