ALLIANCE FO§ DEMOCRACY

The Junk Currency

The euro has been losing value for nine years. It is now valued at $1.16, an historical low. Now, the press is reporting that many fear the start of a new crisis, or the continuation of the old one, which the German press ignored anyway. But there is a bright side to the drop in value, at least according to the money merchants or the jugglers exporting goods from Europe to all corners of the world for whatever price they can fetch. Meanwhile, it no longer matters whether the value of the goods corresponds to a monetary value. The crisis has trumped all laws. The important thing continues to be profit, no matter how little. The crisis fosters humility. This means that Europe’s economy continues to buzz, although more quietly. Moreover, all goods from all over the world are more expensive as compared to the goods measured in euros. The products of other countries are becoming shelf warmers because, in addition to low prices, goods produced in Europe promise something that makes a trader’s heart race: getting the most for the least amount of effort. This is how Germany, above all, conducts itself in the world as an export nation. We owe this situation to the crisis which, as we mentioned, is far from over but just taking an occasional breather facilitated by the ECB. On the opinion page of its weekend edition, Süddeutsche Zeitung (10/11 January 2015, p. 4) says this trend is positive. They say the currency is still not quite so cheap in terms of buying power. After all, at $1.40, the euro was overvalued, writes the author of the opinion, Nikolaus Piper. And that’s surprising because when the euro was riding high it was indeed the centrepiece of the currency union, the value of which no one doubted. So, it is surprising how such a decline can now be seen as so positive, even though the currency was already junk when it was introduced and is now the most reasonably priced junk on the world market. A further decline is not only possible but predetermined.
The SZ author gives credit for this seemingly wonderful development to the ECB, which intends to effectively allow Eurozone countries to buy up their own government bonds through their central banks starting on 22 January 2015. The bottom line is this: Countries, which are bankrupt, buy their own government bonds, which are now worthless, with cheap money, which is also worthless but fresh off the press. Nevertheless, the author acknowledges that a solution to the problem can hardly be expected with this type of approach, but he advocates that the ECE do at least something.
Inaction is not good, but far from austerity programmes and amended or rigged national budgets, what is the right thing to do? The answer is immediate currency reform, which the Alliance for Democracy has been urging for a long time. Perhaps that would be the right thing to do. Because the governments, which became dysfunctional long ago, along with the central bank, have been manoeuvring around the problem without resolving it. And because the dysfunctional politicians, and the central bank, have no plans for an economic revival, they attempt every possible action, but the so-called rescue will only work with a turnaround that is backed by the people. Otherwise, this could result in conditions that could lead to a civil war or the next world war – we don’t know. We do know, however, that politics is no longer an option for resolving our problems today.
A euro that is at an historical low point may help politicians to survive but it does not help Europe to survive, because the incompetent politicians and the central bank have always thought only of their own survival, with slogans and election results. It is a pity they were not capable of rethinking the whole concept of Europe to finally establish the conditions necessary for a united Europe: strong individual states with direct democracies, with individual constitutions that defer to a European Constitution, which also works on democratic principles, and currencies that gain value through their differences.
Judging from the mountain of work left behind by these failed policies we can imagine how big the tasks of the future will be. Perhaps Europe will find the strength to put these perpetrators on trial – which can be done without war. It can be done by working together. And it can be done with purpose. Not political purpose, but the kind that is beneficial to society. Volunteers step forward!