European moral hazard gap

I am - to put it mildly - disappointed by the latest developments in "European affairs". I am convinced that what the EU leaders see as a "good path to competitiveness" will lead European countries into a much worse crisis with much worse effects than the (and what) mortgage crisis in the US was (and had).

According to most of the top managers addressed in the CZECH POSITION poll, the Czech government behaved correctly when it did not join the Euro Pact.
According to most of the top managers addressed in the CZECH POSITION poll, the Czech government behaved correctly when it did not join the Euro Pact.

It all starts with "rescuing" irresponsible politicians and scattered banks, first in Greece, then in Ireland, Portugal, and let's wait for Spain and others. It really is by no means "saving the countries," because none other than current politicians and banker-creditors make money on that "rescue."

The fact is that many European banks have a lot of money (their clients) deposited with many indebted European countries, many of which do not or will not have in the near future to repay their liabilities. Creditors will lose money. By the way, these are often German and French banks.

Why did the whole situation happen? Why has anyone in history lent to irresponsible and indebted Greece? We can say that it was the fault of investors, we can say that it was primarily the Euro, we can say that it was both. But what is clear to everyone is that profit and loss are information and experience for the future - I gained? Okay, I'm doing my job well. I lost? Bad luck, I'm not doing it well.

If those banks lost money in Greece (and so on), I would expect more cautious financing of government debt in the future. We just have to really start farming efficiently. We, who are now alive, would stop wasting our current government spending on the future, our children.

Some banks would probably put it, it is possible. Lots of people would lose money, it's possible. These would probably often be sad stories. The only ones we could blame for the whole situation would be the politicians who set up the system as it is - single European currency, high indebtedness and complete elimination of market signals, misallocation of resources. It's all their job.

However, politicians came up with a great idea - they give Greece (and others) money, so that Greece et al. then sent to the account of those creditors (banks). Lenders will be satisfied and will live up to the idea that if they invest anywhere where any euro-state flickers, they will get their money back, no matter what nonsense that the word "yield" has not seen from the fast. They will lend money, but when it comes to repayment, no one will have it, because the projects will not yield.

Under these projects, imagine, for example, an unreformed social system, unreformed healthcare, unreformed pensions, an unreformed state administration with a definitive one, a thousand and one unnecessary state office and others. Well, just the "productive issues."

"The essence of business and investment is a realistic valuation of risks. If the state provides guarantees for someone's investment, it removes part of the risk from it, artificially reduces its risk. This can lead to inefficient investment - bad loans and excessively risky investments. "

- Holman, R. Economics. 4 updated editions. Prague: CH Beck, 2005, p. 357.

Taking some of the risk from one's investment is exactly what the famous European Union, under the baton of Germany and France, does when we give money from EU members to the Greeks for their debt, which the Greeks will satisfy creditors from German and French banks. Moral hazard was at the beginning of many crises and we do not and do not learn.

The result will be that in the future we will have even more government debt, even more payments on government debt, even more taxes, even more inflation and a strong banking lobby, which, for fear of its money, will push for new and more "Euro- then the stability of v4 ++. ”Today's politicians may not be interested, because they will no longer be here at that time, that is true.

But we should be interested.

The fact that Greece "surprisingly" suddenly does not have the money to repay its debts is significant. It is such a foretaste of what will happen in the future when even the ECB's purchases are no longer sufficient. Namely - to lose 70% of a hundred is still less than to lose 70% of a thousand. Of course, creditors will lose money first. But who is the creditor? Often banks or other financial institutions in which other companies have shares. In banks, it will be our money (yes, your and my current account), in losses in stock prices, our pensions or jobs.

Euro-politicians from Germany and France are preparing a completely idyllic future for us. We will rightly remember the course and effects of the US subprime mortgage crisis as the "good old days."

Competitiveness and the growth of unifications and the fall!

Let's dissolve the prank ... (photo: Audiovisual Service EU)
Let's dissolve the prank ... (photo: Audiovisual Service EU)

An even bigger comedy is the effort to increase the EU's competitiveness, for example by "tax harmonization" and other measures that form a whole called the "Euro Pact."

This political agreement is ridiculous. It is extremely interesting that many tax havens (ie tax havens) are in the EU's neighborhood (those thieves are certainly attacking in a targeted manner!) It would be natural in the long run if, thanks to this competition, there were tax cuts in EU countries that would be driven by mutual competition from European countries.

In other words, if we want to promote competitiveness, we must make competition work. Incompetence is inability to compete! Unification is the elimination of competition, ie "non-competition." Treating competitiveness by "harmonizing" taxes is like fighting a fire with gasoline.

It is also interesting to see who is enforcing this pact - again, France and Germany, countries with high taxes (and regulations) and very complex tax systems. By the way, the evil anti-European elements subverting our minds claim that The German tax system is perhaps the most complex in Europe.

So what does Germany want to achieve with that "harmonization"? Of course, he wants to get rid of competition in the EU, so to achieve tax increases and complexity of tax systems for other members. To be one-eyed with cataracts among the blind.

Please stop using our money to liquidate our future and dissolve the association, dear Merkel and Sarkozy.

PS: And we all pay for this whole circus.


  1. Slave-fortune teller: I'm going with you.
    Pavel Pátek: I completely agree. Unfortunately, the fact is that the world has only a handful of people in control, who control everything, nothing in the world can be trusted anymore, perhaps only spiritual values. What is presented to us as great and wonderful is, in fact, another attempt to enslave and impoverish people. In my opinion, we are beginning to reach such a stage that society will be two-class - terribly rich and terribly poor. This will be the result of those raising their taxes and wanting reforms. It's just that, gentlemen, people won't have anything to eat for a while. You just can't say it more finely. In fact, sometimes I feel like moving to Mars.

  2. Good article again. Unfortunately, the abyss of moral hazard is not just a matter for Europe, but for the whole world.
    As long as the money was covered with gold and silver, it was actually covered with confidence in these precious metals. By believing that they are rare, that they do not just disappear and that they are able to preserve value. While today almost all the numbers in the accounts or the few papers circulating in the world economy are nothing but debt. The value of these numbers and papers is given only by the confidence that these debts will sometimes be paid. Either debts must be paid or the opposite is true. If debts do not have to be paid, then confidence in repaying debts is nothing and the value of all these "means of exchange" is virtually zero.
    Everyone who creates any fair value is rewarded with a debt that someone has created before. The joke is that the turnover of the "funds of exchange" thus earned is significantly faster than the overall increase in debt over time. This then creates the illusion that "money" has real value in relation to the goods and services for which it is exchanged. It cannot be assumed that "making money on debt" is a random process, or just a mistake of altruistic "experts." It is an intention. And a well thought out intention. Just like any other counterfeit money. Like counterfeiting money, this process cannot be called anything other than fraud, which results in an unobservable transition of the values ​​created from those who create them to those who need to do nothing but create this "money". And it is not even about the values ​​as such, but about the power that comes from their "ownership". Imagine that for some reason, all creditors will want their counterfeit "money" back at once. But why would they do that? It is not in the power of any debtor to repay such volumes. So the end result is simply the fact that over time, these "creditors" have become the de facto owners of everything and everyone. This is not a conspiracy theory or phantasmagoria. That's just a fact. And if these "creditors" also have or will have the means of power to force anyone to refuse to pay their debts, all debtors have actually become slaves without the possibility of defense. And they have had these resources at their disposal for a long time. We give this power to them ourselves. It is precisely this power that has enabled and continues to enable them to constantly maintain this process and to deepen its consequences.

    This really can no longer be called just "moral hazard". It is quite a common and ingeniously thought-out theft, with the robber living in the illusion that it is so good and the thief plays the role of a "genius" benefactor who knows best what is good for everyone else and completely altruistically "sacrifices" for the good of all.

    And who are "THEY"? Well, of course, those who own the assets of creditor banks and then those who cooperate with them and parasitize on them. They are cartels of financial oligarchies together with mostly collectivist states and their instruments of power.

    It's simple, and yet probably incomprehensible to most people.

    There are not many imaginable predictions.

    One possibility is that people will finally "wake up" and with very wise, rational and correctly timed and quantified steps, they will be able to gradually dismantle this whole "clown" in an organized manner. Some hope.

    Another possibility is that the whole system really only works as an unguided missile fired by irresponsible lunatics with the helsh "flood after us". It is unlikely but possible. In that case, however, "goodbye and a scarf".

    The third possibility is that the whole process works on the basis of well-thought-out moves, which somehow "naturally" lead to the "realization" that there is no other way than complete unification of the world in terms of one central bank, one monetary policy and one piece of legislation. And who will lead us? Well, of course, the same "geniuses" who brought us here. The result, however, will necessarily be a nationwide neo-slave system, where those who rule decide all the essential aspects of the life of every individual who has no choice.

    I am sure that there is no possibility of an endless process with the current rules of the game. Because again: either debts must be paid or not.

    Can anyone think of another option?

  3. Well written. What bothers me the most is that even if half of the Europeans grind about the problem from morning to evening, even for a month, there would be no change.
    There will probably be some violence soon. At least the Czech Republic would benefit greatly. Is anyone else for defenestration?

    But one more thing scares me.
    Some funds and money buffers are constantly being created. But economists "do not want" to guess what will happen in the case of immediate (quick) payment of a similar giant debt, when on the one hand a huge bundle of money is released, but there will be nothing worth buying for them. In my opinion, some, especially politicians, are already speculating how, with such a devaluation of the currency, would relieve states from debt, and at least one parallel global economy is growing here (probably brown and generally smelly).

    Today, it is somehow difficult for me to put my thoughts together, but perhaps I have expressed the essentials clearly enough.

Comments are off.