Gold price falls as the EU gives a consummate lesson in the art of expectation management and spin
The headlines said it all this today “PM blocks EU-wide treaty changes” and the assumption is that the EU conference that started yesterday has been a failure. But has it?
First of all this conference wasn’t really about fixing the looming debt explosion that just about all EU countries face. After all how could it? We all know that the ‘solution’ will come via the printing presses of the ECB, FED and/of the IMF. Rather this conference should be seen in the light of ‘never letting a good crisis go to waste’.
What the unelected technocrats of Europe are really about is using the crisis to solidify Europe as a superstate and the increasing centralisation of power to those unelected faceless grey suits in Brussels.
But how to do it? You see if the gang meeting in Brussels did come out with a new all singing all dancing treaty they would face a rather huge problem. Namely that a new treaty would require votes through parliament and even a few referendums in some countries.
These guys in Brussels are a lot of things but stupid is one they are not. They know that they haven’t got a hope in hell in getting public support for more centralised power. No, far better to announce before the meeting that you’re trying to pass a new treaty only to wrap up the meeting seemingly in ‘failure’ because you only managed to agree an accord of the 17 euro using countries.
The genius of this is that it means they can get all the changes they were ever after with absolutely no pressure to hold a referendum on the matter. On top of that the UK PM Cameron get’s to come home looking like he ‘stood-up’ to the EU shoring up his increasingly discontent Tory base. Win-win for all our dear leaders and lose-lose for its citizens.
Too cynical for you? Remember this is the lot that are on record as saying that it is quite acceptable to lie to the electorate if it means propping up the long term goal of more centralied power.
In short the summit was only presented to the electorate as a failure so people wouldn’t notice the ever increasing erosion of national sovereignty and demand referendums. In fact we know this because the unelected leader of the unelected Italian government told us as much:
I don’t see the EU summit as a failure
So just what have been agreed? From the Accord:
…Today we agreed to move towards a stronger economic union.
This implies action in two directions:
- a new fiscal compact and strengthened economic policy coordination;
- the development of our stabilisation tools to face short term challenges.
So right off the bat we can see the real goal was more centralised power.
The accord continues:
The stability and integrity of the Economic and Monetary Union and of the European Union as a whole require the swift and vigorous implementation of the measures already agreed as well as further qualitative moves towards a genuine “fiscal stability union” in the euro area.
In layman’s terms that means the ability of the unelected Brussels gang to raise taxes on sovereign countries.
With this overriding objective in mind, and fully determined to overcome together the current difficulties, we agreed today on a new “fiscal compact” and on significantly stronger coordination of economic policies in areas of common interest.
Repeat after us this had nothing to do with solving the euro debt crisis but rather using the opportunity to centralise power.
General government budgets shall be balanced or in surplus; this principle shall be deemed respected if, as a rule, the annual structural deficit does not exceed 0.5% of nominal GDP.
Such a rule will also be introduced in Member States’ national legal systems at constitutional or equivalent level. The rule will contain an automatic correction mechanism that shall be triggered in the event of deviation. It will be defined by each Member State on the basis of principles proposed by the Commission. We recognise the jurisdiction of the Court of Justice to verify the transposition of this rule at national level.
Member States shall converge towards their specific reference level, according to a calendar proposed by the Commission.
Member States in Excessive Deficit Procedure shall submit to the Commission and the Council for endorsement, an economic partnership programme detailing the necessary structural reforms to ensure an effectively durable correction of excessive deficits. The implementation of the programme, and the yearly budgetary plans consistent with it, will be monitored by the Commission and the Council.
Translated this means that countries must get their debt down (good), but if they don’t or aren’t doing it quickly enough then that country must submit a plan on how they will achieve the debt reduction that must be ‘endorsed’ by the Commission. The Commission will then ‘monitor’ these actions.
So long national sovereignty, it was nice knowing you.
As soon as a Member State is recognised to be in breach of the 3% ceiling by the Commission, there will be automatic consequences unless a qualified majority of euro area Member States is opposed. Steps and sanctions proposed or recommended by the Commission will be adopted unless a qualified majority of the euro area Member States is opposed. The specification of the debt criterion in terms of a numerical benchmark for debt reduction (1/20 rule) for Member States with a government debt in excess of 60% needs to be enshrined in the new provisions.
So the EU will automatically ‘force’ a sovereign nation to undergo ‘austerity’ and/or raise taxes as it sees fit.
It seems that most of the market ‘bought’ the whole ‘the summit was a failure’ line. But this summit was never ever about fixing the immediate problems the Europe faces, when you think about it logically how can it? The fix will come in every Central bank and its dog printing money – after all why change the habit of a lifetime?
Gold dropped to around £1097 after this supposed ‘failure’ and looks set to end the week down about £25, still very much in its consolidation range we talked about yesterday.
Link to this article: : http://www.goldmadesimplenews.com/gold/gold-falls-as-the-eu-gives-a-consummate-lesson-in-the-art-of-expectation-management-and-spin-5886/