The crisis in Europe is real. Greece is basically bankrupt. Italy teeters at the edge of default. Only intervention by the European Central Bank today pushed Italian bond rates below 7%, which threatened Italy’s solvency.
Spain is also close to default. The head of the European Commission, who is Portuguese, has stated publicly that Europe now faces a “systemic crisis.” These are powerful words. Senior officials rarely if ever use this phrase. But he did.
The push is on to create an illegal unification of the eurozone nations — 17 member states that joined the European Monetary Union. The treaties that created the European Union stated that fiscal unification would not take place. Now, most of the leaders are calling for this.
This means the official end of sovereignty for European nations. But the politicians now face a growing revolt. Nationalism has been dominant in Europe since the defeat of Napoleon in 1815. It cannot be stamped out by the decisions of a few politicians and the Eurocrat system. Spain faces a long-term revolt by the Basques. Italy faces a growing revolt in the north.
This is a battle between the Old Europe and the New World Order. At the center are the banks. They face destruction. They were as stupid as Lehman Brothers. They are as leveraged as MF Global was. Idiots. Fools. And huge winners if the European Central Bank inflates to bail out their debtors, the PIIGS.
The showdown is here.