Posted Nov 13, 2013 by Martin Armstrong
QUESTION: Mr. Armstrong, it was great to have you here in Europe. You mentioned before that Germany needs the euro to maintain its trade surplus with Europe. There seems to be a rising tide that is starting to recognize that, especially here in Greece. Is this the seeds of the collapse of the euro?
ANSWER: There is little doubt that Germany’s greatest benefit from the euro is to be able to sell its products to all of Europe without currency wars. Germany is the core economy of Europe and the strength behind the euro. However, it will defend its trades surplus for if that fails, there ia zero reason to support the Euro for the capital will flow out of Germany not in. The core European nation’s export strength gives a false sense of security to the Euro for on a collective basis, it is merely a redistribution of wealth and income within Europe if you take the Marxist/Socialist view, which will no doubt become a popular viewpoint in Europe.
Keeping Europe in tact with a strong Euro benefits Germany at the expense of the periphery that is subjected to DEFLATION and German Austerity that is damaging Southern Europe’s economy and driving up both taxes and unemployment. This view is starting to gather steam behind closed doors. Many in Europe are now starting to probe Germany’s trade surplus. Even the IMF is now urging German Chancellor Angela Merkel to reduce its trade surplus to help its euro partners cut trade deficits to boost their economies.
So yes, this is the seed of destruction. Because there was no consolidation of national debts, there is still behind the Euro this image of separate but equal, when it is in fact separate and distinct. There was a single currency, without the backbone structure to support it. Consequently, the Euro runs the risk of complete collapse, but a Euro decline will then upset Germany and then the silver strings that bind the nations together will be stretched to the limit. Of course, you have the EU Commission that has eliminated democracy in Europe and they will seek to keep it together to merely keep their jobs and power-base. We are silently witnessing the federalization of Europe in which the people will have no say. So the likelihood of the Euro going off the boards entirely is not great unless the tide turns against the EU Commission as well,
Last week’s interest rate cut by the ECB surprised everyone, but it is very bad news not good news.The markets are still interpreting interest rates with a Marxist slant insofar as this stupidly believe lower interest rates are bullish rather than a sign that the economy is not borrowing for it fails to see an opportunity. The lower rates deprive savers and elderly of income and send pension funds into insolvency. This was a sign that the worst is by no means over for Europe.