In what turns out to be an embarrassing twist of irony the German finance minister questioned American debt even as numbers reveal the worst August deficit in U.S. history. In a Reuters article, Wolfgang Schaeuble was quoted:
Ahead of the election in the United States there is great uncertainty about the course American politics will take in dealing the U.S. government’s debts, which are much too high. We need to remind ourselves of that sometimes and the global economy knows that and is burdened by it.
The U.S. has built a reputation for meddling in the affairs of other countries, including every facet from political to fiscal influence. Perhaps the height of such misguided arrogance is exemplified by Zero Hedge’s article from last Fall.
Germany officially slammed the door on Geithner’s face:
Germany’s top two finance officials rejected using the European Central Bank to boost the euro-area rescue fund’s firepower, rebuffing a suggestion by U.S. Treasury Secretary Timothy Geithner.
Inviting Geithner to a euro meeting for the first time, European finance chiefs who wrapped up two days of talks in Wroclaw, Poland, today also said the 18-month debt crisis leaves no room for tax cuts or extra spending to spur an economy on the brink of stagnation.
The German stance risks leaving the euro area without sufficient means to prevent the crisis from engulfing Spain and Italy. Geithner floated a variation of a 2008 policy he developed while at the New York Federal Reserve that would expand the reach of the 440 billion-euro ($607 billion) European Financial Stability Facility using leverage in a partnership with the ECB, said Irish Finance Minister Michael Noonan.
“The EFSF’s sole purpose is the financing of states and that’s in order as long as it’s done via the capital market,” Bundesbank President Jens Weidmann told reporters today. “If it’s done via the central bank it constitutes monetary state financing,” which is forbidden under European Union rules.
So what gives? The U.S. currency-mismanagement-team attempts to tell other countries how to run their economies even while destroying their own? Again Zero Hedge offers some insight in an article posted Monday.
August deficit soared from a modest $70 billion to a whopping $192 billion, the highest August deficit in history, and coming at a time when traditionally the US Treasury does not generate substantial deficits. It also means that “that” $59 billion budget surplus in April, coming after 42 straight months of deficits, and which surprised so many, was just as we suspected, nothing but a play on the temporal mismatch between treasury receipts and outlays.
As the debt calendar rolls over $16 trillion, unemployment according to the 1970s formula soars above 22% and the people of America continue to have tax burdens heaped on them at every turn, from pseudo-security to pseudo-austerity, what business do such irresponsible leaders have meddling in anyone else’s business. They can’t handle their own.
Currently the machine is set to continue to grind away the wealth of the middle-class. The same thing is actually happening in Europe, in the same way except with slightly different nuances. The result is the further establishment of the elite class as wealth is transferred upstream from the wealthy, increasing the number of poor. As a recent comment quipped, “Obama so loved the poor, he created millions more.”
The poor can be controlled. The poor can be manipulated. The poor can be made dependent upon the government for their livelihood. In other words, our current system is a return to the serfdom that western culture crawled out of just a few centuries ago. Some call this progress.
For your prosperity,
J. Keith Johnson
The Gold Informant