Thursday, 20 May 2010

Merkel puts the jackboot in it

Back from my Greek idyll and things seem to have gotten worse in Euroland thanks to the Fuerher's cack handed attempt to ban short selling of Eurozone bonds, CDSs, bank and insurance shares in the Fatherland. Well there are other fatherlands and one is populated by Harold Wison's nemesis, the nasty gnomes in Zurich. So great was the flow out of the Euro precipitated by the Dr Frau's idiotic actions that the Swiss Central Bank had to intervene in the market to sell SF and buy Euro. One German banker, Hans Redeker, said "As a German citizen, I wish to apologise for the stupidity of my government". It's a cross we ordinary people all have to bear Herr Redeker! Markets are like squashy balloons. Squeeze them at one point and they pop out somewhere else, in this case Zurich.

Merkel is simply shooting the messenger and as politicians have done throughout the ages, blaming Johnny Foreigner speculators for her own incompetence. It does not work as Gord just found out. The Euro continues to fall as does Sterling, the FTSE, the Dax and all the Eurozone indices. Markets have long suspected German banks were not coming clean about their dodgy MBS and bond holdings but now they think they have written far too many CDS contracts on dodgy Eurozone sovereign bonds. They think the Dr Frau doth protest too much and there are some nasty skeletons in the German banks cupboards. The Landesbanks are already the walking dead. Meanwhile Merkel continues her campaign against the good burghers of Mayfair, Mr and Mrs Hedge Fund and continues to demand changes to the Lisbon Treaty so the master race can approve the budgets of the lesser states, including the UK.

Worse the US Senate passed a unanimous motion 94-0 on Tuesday banning the lending of US money to countries unlikely to ever be able to repay the loan , ie Greece. The United States is the IMF's largest contributor and has veto power to block decisions, although it has never used it.

And what of Greece? Well I spoke to a small sample of the Greek people and the general consensus was to blame their corrupt politicians who had created through patronage a bloated and overpaid public sector. So no different from Brussels or the UK. The ordinary Greeks in the private tourist sector work very hard and very long hours. One waitress in our hotel was working 14 hours a day 7 days a week. Come on Barroso get down there and tell them about your working hours directive!

Greece and mosy of the other PIGs should never have been allowed to join the Euro. They have more in common with the developing countries than the developed core of Western Europe.

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