Friday, November 11, 2011

Portuguese President: Mad Money Printing Needed to Solve Eurozone Crisis

The European Central Bank can stop the spread of the Eurozone crisis with “foreseeable, unlimited” purchases of Italian and other government bonds,says Portuguese President Anibal Cavaco Silva. This, of course, means huge money printing by the European Central Bank.

“The European Central Bank has to go beyond a narrow interpretation of its mission and should be prepared for foreseeable intervention in the secondary market, not as the central bank has done up to now,” Cavaco Silva said yesterday in an interview at Bloomberg headquarters.

“It has to be able to be a lender of last resort,” said Cavaco Silva, who as Portugal’s prime minister presided over the 1992 signing of the Maastricht Treaty, which cleared the way for the euro common currency. “It has to be a foreseeable, unlimited intervention.”

In an insane sort of way,Cavaco Silva is correct. The only way the Eurozone is going to be "saved" is through ECB money printing. There is no other source capable of funding the bailouts required by the Eurozone. Of course, the problem with money printing is that in addition to distorting the structure of an economy, the amount of money that would be required to be printed is so massive that price inflation would start to gallop follow the printing of such sums---and ultimately destroy the euro completely.

The only real solution is bankruptcy for the governments that can't pay their debt. The only reason this option is not being considered is because the banksters own too much of the government paper and they don't want to take the hit.


  1. Yet another example on how government treaties, constitutions, promises, are worthless. They're simply made to get their foot in the door.

    What was once a mandate of 2% inflation (which is still theft) is now turning into "unlimited intervention".

  2. Milton Friedman established the prior economic paradigm, where one was free to choose. The regime was Neoliberalism, and was underwritten national sovereignty and provided the” seigniorage of freedom”, consisting of floating currencies, ponzi financing of all types, such as the China shadow lending on collateralized commodities scheme, carry trade lending by the Bank of Japan and banks in Austria, and Federal Reserve credit liquidity, ZIRP, and quantitative easing I, and II. Fiscal spending and economic growth came through the securitization of GSE and treasury debt by sovereign governments.

    Angela Merkel is working through the 1974 Clarion Call of the Club of Rome to establish the new economic paradigm, where sovereign leaders and bodies rule via diktat. The regime is Neoauthoritarianism, and is underwritten sovereign leaders providing the "seigniorage of diktat”, that is the moneyness of diktat. Now state insolvency and bank insolvency is emerging and some suggest that the only real solution is bankruptcy for the governments that can’t pay their debt. Fiscal spending will come out of a diktat union where soveign leaders provide dole to residents living in regional alliance.

  3. The little people complain that the Greeks evade taxes but that makes them the smartest people on earth. Taxpayers in a counterfeit money racket are just fools.

  4. Basically, what Silva is saying is, "let's play 'Sudoku-zilla', but every time we blink some douche-bag quickly writes in a bunch of random numbers."

    Great plan, Silva! Let's go ahead and discoordinate calculation and see what we get.... I am inclined to say either malinvestment, extreme inflation, declining wages, wasting of capital, or all of the above and then some. Deixe-nos fazĂȘ-lo!

  5. I should also say that one cannot entirely ignore debt; both principle and interest. Of course, I am speaking in terms of sovereign (coerced) debt.

    If you have a central bank that issues the currency at interest, then you can readily see who holds the advantage in Silvia's suggestion (i.e. it isn't the People).

  6. The most surreal is that Cavaco Silva, before he joins politics, was teacher of Public Economy in one very important Economic University.

    Is unbelievably, but now he is against the cuts of the public workers salaries that government is trying to implement. The public workers in Portugal, work fewer hours by week, earn more money and retire earlier those private workers.

    In Portugal, the public workers cannot be fired and there are thousands of them that have a paid job, but do not work at all. For paying that, Portuguese people and companies are drown with taxes. Each time taxes raise, there are more business fail and more unemployment.

    Fortunately, the prime-minister - Passos Coelho – who seems to be a wise man is trying to cut the huge and spent of state. Of course there are several and important lobbies that join forces to try his failure.

    The next 2 or 3 years will decide the future of Portugal.

    (a Portuguese)