The Greek bailout has the potential to put the global economy into a recession. Some critics say that Greece isn't getting bailed out but the actual banks that own the Greek debt are. Many say the banking establishment needs to go and shouldn't be bailed out as a risky deal goes bad. Lew Rockwell, chairman at the Ludwig Von Mises Institute, gives us his thoughts on the Eurozone debt crisis.
Lew Rockwell: The Euro and the EU were a mistake
As the European debt crisis continues to escalate, President Obama urged European Union leaders today to act quickly to resolve the eurozone crisis, saying that “the United States stands ready to do our part to help them resolve this issue.
“This is of huge importance to our own economy. If Europe is contracting or if Europe is having difficulties, then it’s much more difficult for us to create good jobs here at home because we send so many of our products and services to Europe; it is such an important trading partner for us,” the president said following an annual meeting between U.S. and EU officials. “We’ve got a stake in their success, and we will continue to work in a constructive way to try to resolve this issue in the near future.”
While Obama did not say what kind of assistance the U.S. would be willing to provide, earlier today the White House ruled out any financial contributions from U.S. taxpayers. “We do not in any way believe that additional resources are required from the United States or from American taxpayers,” White House Press Secretary Jay Carney told reporters.
“This is a European issue, that Europe has the resources and capacity to deal with it and that they need to act decisively and conclusively to resolve this problem,” Carney said.
Obama Says US 'Stands Ready to Do Our Part' for Eurozone Crisis
President Barack Obama said resolving the European debt crisis is of “huge importance” to the U.S. and his administration is “ready to do our part” in stabilizing the global economy.
Obama said a “large part” of the annual U.S.-European Union summit was spent on the impact of the crisis in the euro- zone. He spoke at the White House after meeting with European Council President Herman Van Rompuy and European Commission President José Manuel Barroso.
Van Rompuy said the U.S. and EU “both need to take strong action” to maintain the economic recovery. Barroso said he has “full confidence” that Europe will deal with the sovereign debt issue.
Iran’s nuclear program, strengthening exports and investments, Middle East peace prospects, terrorism and cyber crime also were on the agenda for annual meeting.
The summit comes as European finance chiefs are set to meet this week to discuss a rescue plan, and days ahead of a Dec. 2 report by the U.S. Labor Department on the nation’s unemployment rate for November. The rate for October was 9.0 percent.
About $4.6 trillion was wiped from the value of global equities this month on mounting concern that Europe’s debt crisis is spreading.
http://www.zerohedge.com/news/uncle-sam-wants-you-bail-out-europe
Obama to bail out Europe? — RT
Officially it never was called an "Emergency summit." But with the European currency only days from collapse according to many economists, it was clear that European leaders came to beg the American president for help.
A closed-door conversation today between US President Barack Obama and European Council President Herman Van Rompuy and European Commission President Jose Manuel Barroso dealt with, among other things, the ongoing crisis that is spreading out of the Eurozone and into the United States.
And according to statements courtesy of Obama, the time of American intervention could be coming soon, and at a monumental cost to the American public.
The European debt crisis, says the president, is of “huge importance” to the United States, and the Obama administration is “ready to do our part” in keeping the economy overseas afloat.
As Obama attempts to postpone the impeding crumbling of the American economy — and his own administration — the president could propose a bailout to the countries of the European Union that could cost taxpayers upwards of trillions. Given that RT reported earlier today on the massive bailout extended from the Federal Reserve to the biggest banks in the country between 2008 and 2010, an offering of trillions couldn’t be out of the question.
Obama to bail out Europe? — RT
It's hard to actually write a cogent critique of this as this is just such a horrible idea, it practically renders me speechless. What exactly is our part? Are we part of the Euro? Wasn't the Euro created in part to be a competitor to the supremacy of the US Dollar? So isn't it partly in our interest, in order to keep the US Dollar the world's reserve currency, to see the Euro fail horribly? And one more question. The money will come from where exactly? Aren't we ourselves faced with a debt/GDP ratio of 100% with an annual deficit equal to 11% of GDP? Where exactly are we going to find the hundreds of billions, if not trillions, of dollars necessary to stem this crisis? There was a rumor this weekend that the IMF was readying a bailout of just Italy which could have totaled $800 billion, so if you add Spain, Portugal and Greece to the mix (and potentially France) the numbers get very serious very fast (of course the rumor was swiftly denied, I guess it was too early to mention that discussion point). Even if Obama is simply referring to the bailout of Europe via the IMF, our "quota" is almost 18% of the funding so for Italy alone this could cost the American taxpayer $144 billion. And chances are it would be much higher as Italy's quota is over 3% and all the countries smaller than Venezuela contribute 28% (how exactly do you ask third world countries to bailout out a lazy first world country?) so my guess is some IMF participants simply won't participate. Try getting that through Congress. Senate Democrats can't even pass a budget.
The Federal Reserve option just isn't much better. So we are going to print money to buy European bonds now? Our monetary base is $2.6 trillion right now so printing of the magnitude that would be required could have severe a severe inflationary impact, hurting American consumers as commodity prices will undoubtedly skyrocket. As an extra kick in the face, the Euro will actually get even stronger as we will be printing massively at the same time the ECB isn't. Just brilliant.
For once, it might be a good thing that Team Obama is in campaign mode 24/7. As soon as they see their poll numbers dropping (and they will, like a rock), they will probably chicken out of any actual bailout and do nothing but the usual handwaving. Unless they want to get to the point where even Ron Paul can beat them in the general election.
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