A regular theme in my writing over the past 2 ½ years has been the “economic terrorism” being perpetrated by Wall Street’s Big Banks against the nations of Europe, via attacks on their debt/bond markets.
Western media (and especially U.S. media) would have us believe that it is Europe which is the focal point of Western insolvency. The truth is that since Day 1 of the “Euro debt crisis” the U.S. has been more insolvent than even the worst of Europe’s Deadbeat Debtors (Greece). The only way that the mainstream media has been able to pretend that Europe’s bankruptcy/insolvency problems are worse than those of the U.S. is through two simultaneous frauds/manipulations.
Interest rates for European economies have been manipulated to artificial highs (relative to interest rates in the rest of the world); while interest rates in the U.S. have been suppressed to artificial lows. I’ve already written in great detail about the ongoing fraud in the U.S. Treasuries market, however (until now) Silver Gold Bull readers have not heard about how the debt markets of Europe have been manipulated (i.e. “attacked”) by Wall Street’s financial terrrorists.
This is accomplished through the fraudulent manipulation of the credit default swaps market, and assisted by the sham-ratings of the Big Three credit ratings agencies, and the relentless anti-Europe propaganda which emanates from the Corporate Media (as we see below). Describing the actual mechanics is a little too involved within the scope of this post, however those more interested in this issue can read some of my previous work in this area.
To understand the importance of the (fraudulent) manipulation of interest rates, all that we need to do is to take a couple of extreme examples; one hypothetical, one real-world. Hypothetically, a debtor with a debt of only $1 but paying an interest rate of infinity would have to make interest payments on that debt which were infinitely larger than a debtor with a debt of $1 quadrillion ($1,000,000,000,000,000) and paying an interest rate of 1 billion% (1,000,000,000%).
The real-life example is the dichotomy between the U.S. and Greece. U.S. professor and former Reagan economic advisor Laurence Kotlikoff has pointed out again and again that if the U.S. were forced to account for its debts/liabilities in the same manner that U.S. corporations are required to do (by law), then its actual level of indebtedness would amount to over $200 trillion – not the $15 trillion fantasy-number it peddles through the media propaganda-machine.
Put another way, if U.S. interest rates had been manipulated to the same, extreme high as Greek interest rates (at their worst), it would have required the U.S. government to shut-down the entire government (100%) and to quadruple tax revenues – just to pay the interest on its debt. This is why it is so crucial for the U.S. to permanently manipulate its own Treasuries market, and permanently suppress its own interest rates. If U.S. interest rates even moved to some “normal” level (given the size of its massive debts), even some conservative level such as a base rate of 5%; that would imply that the U.S. government would be spending at least 50% of each revenue dollar just on interest payments on its (massive) debt.
This would necessitate either viciously Draconian cuts in governments services (and employment) – which would mimic Greek “austerity”, and Greece’s collapse – or the U.S. would have to engage in the most-massive tax increases in history just to meet those higher interest payments. This is why I continue to describe the U.S.’s debt-market and (indeed) its entire economy as just one gigantic Ponzi-scheme. The moment that all of the fraudulent manipulation of its own debt market is exposed (and ended) it will instantly collapse into insolvency – and default just like Greece.
With that context in mind, read Bloomberg’s wildly inaccurate characterization of these parameters, as it assists Wall Street with its economic terrorism…
“Greece Back At Center Of Euro Crisis As Spain Yields Soar”
Europe was plunged into fresh market turmoil as the first call for bailout aid by a Spanish region sent borrowing costs surging, while Spain and Italy reinstated a ban on betting on stock declines…