I would go a bit further than Canadian Finance Minister Jim Flaherty in commenting that “maybe Europe should give up on the eurozone”. Europe should definitely give up on the eurozone, that collectivist-inspired effort at central control of disparate nations and disparate lives. The attempt to have a common currency—the Euro—among 17 different economies was always doomed to failure. It is just another essentially useless fiat currency. It is legal tender because central authorities say it is. The conduct of trade between 17 competitors using the same currency cannot work because no adjustment can be made in a member country … Continue reading Out Damned Euro!
According to New York Times reporting concurrent with the bailout of Greece, the President of the United States advised leaders of Germany and France relative to the European Union/International Monetary Fund (IMF) decision. The Times cited unnamed senior Administration officials who stated that President Obama’s “experience” in brokering big deals was brought to bear (i.e. through his involvement in various U.S. economic stimulus packages and corporate bailouts); Obama’s encouragement to “think big ideas” allegedly helped lead to the trillion dollar deal via a “special purpose vehicle” (essentially a form of Eurobond issue). The end result of the weekend negotiations was … Continue reading The Greek Experiment
The twentieth anniversary of the fall of the Berlin Wall is an opportunity to remind ourselves that reality will always prevail over those who would rationalize against it. Every regime constructed by men who seek to force their views on other men is doomed to failure. Sometimes failure takes centuries or as in the case of Ancient Egypt, millennia. In the context of our own brief lives, or a generation or two, it may seem to occur faster when history places us in such close proximity to a seminal event. The Berlin Wall construction began in August 1961. The Berlin Wall … Continue reading Time and Tyranny
Do you really think that the decision by General Motors to try and renege on the deal for the sale of Adam Opel GmbH to Magna International Inc. was untainted by politics? People aren’t calling it Government Motors for nothing. The structure of the German Trust holding 65 percent of Opel allows for an impasse between GM and German government representatives. There is no tie-breaking provision. The only way out is political. One analysis I heard offered speculation that the United States government may not “allow” GM to use its improved cash position to invest in European operations. Remember that the … Continue reading International Government Motors
Prior to filing for legal bankruptcy protection on June 1, 2009, General Motors transferred 65 percent ownership of its money-losing operation in Europe, Adam Opel GmbH, into a German Trust. The five parties to the Trust include one non-voting Chairman, with two members representing GM’s now 35 percent minority interest and the remaining two representing several German governments, including the national government headed by Chancellor Angela Merkel. This Trust is supported with bridge financing of approximately $2.2 billion from Germany’s national government to continue operations until a new buyer takes over the controlling interest. Plans endorsed by the GM Board … Continue reading Only Politics Eludes Logic (OPEL)