Soros Up To His Old Tricks

From Bloomberg:

Soros Says Germany Threatens Europe With `Deflationary Spiral'

Germany’s push for European fiscal prudence amid tepid growth and sovereign-debt burdens is “liable to send the euro zone into a deflationary spiral,” billionaire investor George Soros said.

German leaders have insisted on fiscal austerity measures in the euro zone while continuing to cut their own deficits as exports have led to the fastest economic growth since reunification. German gross domestic product grew at 9 percent in the second quarter and unemployment has continued to fall.

In May, the European Union offered a 750 billion euro ($1 trillion) rescue fund for Greece and other peripheral members of the region to help address concerns about sovereign default. The loan package imposed budget rules on distressed euro-area members. Governments in Spain, Italy and Portugal have all pledged to step up deficit-cutting efforts.

However “deficit reduction by a creditor country such as Germany is in direct contradiction of the lessons learned from the Great Depression of the 1930s,” the 80-year-old Soros said in prepared remarks for a speech at Columbia University. When both creditor and debtor countries reduce their deficits amid high unemployment they “set in motion a deflationary spiral in debtor countries. It is liable to push Europe into a period of prolonged stagnation or worse.”


George Soros, the old investing crocodile, is up to his old tricks commenting and hoping to influence fiscal policy in Europe.

His solution to a problem of too much debt amongst Euro deadbeat nations is - more debt! Has he been taking telephone calls from Paul Krugman??

Perhaps he is sincere in his belief that a nation can spend its way to prosperity. But comments he once made about the end of US dollar supremacy and the use of IMF Special Drawing Rights (SDRs) as a replacement with an International Central Bank cause me doubt.

We examined this notion in the Power Elite Agenda blog post.

The reality of austerity does not seem to resound firmly with the Elite. Germany, Spain, Italy, Greece, Portugal, Ireland and ultimately the US and Canada all need to reduce their deficits to zero in the near term if the world of fiat currencies is to survive. The deflationary momentum that began back in 2001 and manifested itself in the US housing market collapse in 2007 is gathering steam. Japan has now lowered rates to zero in a vain attempt to re-inflate its economy. But its banks remain zombies and demographics are growing worse with every passing year.  Like Japan, the US and Europe will have deflation whether they like it or not.

All attempts at stopping this natural "economic winter" season will fail. Anyone who lives in a harsh northern climate knows that you can not stop winter. Winter may not come at the same time each year, perhaps it comes in October or waits until December, but it inevitably arrives. All one can do is prepare for the impending cold season.

The problem with austerity is it ultimately reduces the "reach" of government in their attempt to control our lives. Perhaps this is why it is so offensive to Fabian Socialist Soros?

What is the antidote to our present crisis?

A currency without a government, not a currency with an international central bank!

There is only one currency that fits the bill.