Sunday, October 7, 2012

Spain, Italy and can Secessionist Movements hit the US?

Catalonia is getting a lot of international press lately because of its secessionist movement that is seriously contemplating secession from Spain. Catalonia is Spain's most prosperous region and includes 16% of Spain's population as well as a fifth of Spain's economy.  Like the rest of Spain, Catalonia is experiencing profound economic problems and Catalonians are sick and tired of sending their tax dollars to the central government in Madrid. Much has been written about the situation in Catalonia.

Catalan Leader Boldly Grasps a Separatist Lever New York Times

Spain risks break-up as Mariano Rajoy stirs Catalan fury The Telegraph

Secession crisis heaps pain on Spain Financial Times

The situation in Catalonia isn't the only secessionist movement brewing in Europe.  In Italy the Venetians are in a secessionist mood.

Venetian Protesters Demand Independence From Rome; Polls Show 70% Favor Independence
Its not just regions in Spain that are sick of centralized government. Take a look at Italy where Venetian protesters demand independence from Rome.

The rally, which was organized by the separatist Indipendenza Veneta party, drew large numbers of energetic protesters.

“The situation here is almost explosive, so today we have thousands of people who have gathered in front of the regional government and we’re going to present to them a resolution signed by thousands of participants to have a referendum for independence,” Chairman of the separatist Indipendenza Veneta Party, Lodovico Pizzati, told RT.

“The main reason is economic. We are in a situation worse than a colony because the tax rate in Italy is the highest the world and our services are extremely poor. We have 20 billion euros missing from our regional resources each year and that’s unbearable,” Pizzati said.

And while some question the region’s ability to stand alone, Pizzati says the goal is completely attainable.
In Italy, the Venetians aren't the only Italians considering secession; Sicily and Sardinia also have secessionist movements brewing because folks are sick of sending their tax  dollars to Rome. Then there's the Scotish secessionist movement.

Scotland's 'explosive' push to secede from the U.K.

Basically, these various secessionist movements are the result of crushing economic misery amid mountains of unsustainable debt.  It's a three-part drama that is unfolding:  1.  the collapse of the European cradle to the grave socialist entitlement model 2. failed statist Keynesian policies and 3.. forcing the people to endure austerity to bailout the banksters.  Even The Ecomonist was quite upfront in correctly labeling Spain's bailout as a bailout of Spanish banks.

The Spanish bail-out  Going to extra time, The €100 billion pledged to help Spain was meant to rescue the banks and calm the euro zone. Instead it has added to the drama

It's true that the banks who made bad loans are being bailed out and it's also true that transferring the cost of the bankster bailouts to the people is grossly unfair and unjust.  Nowhere was a European styled bankster bailout more hideously thieving than in the case of Ireland.  Ireland was an economically flourishing nation with low taxes and low debt, an unusual situation for a European nation.  But Ireland suffered a severe bout of Banksters Gone Wild and the Irish people were left paying for the hugely expensive mess.

The Withering Shamrock: How the Irish People Got Stiffed by the Irish Government

In Greece, the financial disaster is attributable to unsustainable borrowing to maintain an unsustainable socialist cradle to the grave entitlement state. The Greeks couldn’t live on the money of other Europeans forever and their day of reckoning arrived. In Iceland, a tiny nation of 300,000 fishermen and farmers magically churned themselves into high finance gurus who traded on money borrowed from Iceland’s banks that borrowed the money from foreign banks. The Icelanders did the only thing they could do; they allowed their banks to go bankrupt and started over by going back to fishing and farming....

But Ireland? Ireland is a real tragedy because the Irish people are paying for the financial sins of its corrupt government, banksters and bankrupt real estate developers. The Irish banks borrowed from foreign banks who lent mountains of money to Irish real estate developers. Irelands was praised by the media and financial pundits as an economic miracle – living proof that borrowed fiat money creates wealth and prosperity until one day it all ended. The great Celtic Tiger ceased to roar and lay mortally wounded in September, 2008.....

Aside from the fact that the Irish people are idiots for supporting a government that bails out the rich at their expense, the story of how it actually happened is even more horrifying. The gory story is succinctly laid out by Michael Lewis in his outstanding book Boomerang.

But what the Irish government did next was unthinkable. It voted to guarantee the debts of Irish banks which then became the debt of the Irish people. The Irish government told the public that it must save the Irish banks. Lewis makes a most astute observation and discloses that the bailout of the Irish banks was nothing more than a bailout of bondholders:

"....These private bondholders didn’t have any right to be made whole by the Irish government. The bondholders didn’t even expect to be made whole by the Irish government. Not long ago I spoke with a former senior Merrill Lynch bond trader who, on September 29, 2008, owned a pile of bonds in one of the Irish banks. He’d already tried to sell them back to the banks for 50 cents on the dollar-that is, he’d offered to take a huge loss, just to get out of them. On the morning of September 30 he awaked to find his bonds worth 100 cents on the dollars. The Irish government had guaranteed them! He couldn’t believe his luck.

But it gets worse as Lewis states:

"A political investigative blog called Guido Fawkes somehow obtained a list of the foreign bondholders: German banks, French banks, German investment funds, Goldman Sachs. (Yes, even the Irish did their bit for Goldman.)" Michael Lewis in Boomerang.
 And it gets worse as Credit Writedowns reported on 3/3/12 that Irish taxpayers are now even paying unsecured bank creditors."
Folks are certainly catching on to the stone cold reality that while austerity is forcibly being imposed on the poor, the pensioners and the middle class, there is zero austerity for the criminal bankster class who continue to have a license to plunder no matter where they are.

As the economic situation continues to worsen in the US, and it will, one has to ponder how many US states will start clamoring for a divorce from Fedzilla, the Bridezilla that consumed an entire nation.  It certainly isn't beyond the realm of possibility. Failed government at all levels creates a lot of desperate people who will resort to desperate measures for their own survival.  Most assuredly, trust in government won't be a component of their survival plans.

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