While the news of Greece’s financial woes have been widely headlined, the fact that the euro itself is in trouble hasn’t been quite as publicized. One interesting thing about the Euro is that “It was meant to be a monetary union but not a political one,” according to a http://www.ft.com article on Sunday. The article went on to state that “A fully fledged currency requires both a central bank and a Treasury. The Treasury need not be used to tax citizens on an everyday basis but it needs to be available in times of crisis. When the financial system is in danger of collapsing, the central bank can provide liquidity, but only a Treasury can deal with problems of solvency. This is a well-known fact that should have been clear to everyone involved in the creation of the euro. Mr. Issing (one of the fathers of the euro) admits that he was among those who believed that ‘starting monetary union without having established a political union was putting the cart before the horse.’ The European Union was brought into existence by putting the cart before the horse.”
Greece is so deeply in debt and has such a major deficit that much doubt that it will be able to escape financial ruin. But Greece isn’t alone. Other European countries who are in trouble include Spain, Italy, Portugal and Ireland. In fact, the 2008 crash of the euro created a situation in which their banking system had to be bailed out by each affected country – much like when several banks that were “too large to fail” collapsed in 2009 and had to be bailed out by the US federal government. To make matters even more interesting, a http://www.wsj.com article reported that “Economies across the continent (of Europe) have used complex financial transactions – sometimes in secret – to hide the true size of their debts and deficits.” This type of thing has apparently been going on for a while in an effort to make it appear as though those using the euro currency were meeting requirements designed to “build trust in the stability of the euro…Even Germany, Europe’s largest economy, tried to reappraise gold reserves for a fast fix in 1997, though it backed off after resistance from the country’s central bank.” In fact the issue of questionable practices has prompted “a number of prominent European politicians” to call for an investigation into “whether banks helped governments distort their books.”
The one world currency will have a political element to it in that a person must pledge their allegiance to a one world leader and government in order to have a job, a place to live, buy food or other items, or function in society in any way. George Soros has indicated (some might even say warned) that a one world regulatory bank system is “in the works.” In fact he’s been particularly supportive of Obama’s move to restrain the activities of large banks. And with the financial nightmare going on in Europe right now, it’s likely that there may be a greater global insistence for it in the near future.