Last week, European Union president Herman Van Rompuy has given new impetus to thalidomide research.

 

“The euro became a strong currency with very small interest rate spreads [on government bonds]. It was like some kind of sleeping pill, some kind of drug. We weren’t aware of the underlying problems.”, [said EU president Herman Van Rompuy]

 

(Van Rompuy says strong euro hid underlying fiscal problems

By Tony Barber in Brussels

Financial Times, Published: June 14 2010 03:00 | Last updated: June 14 2010 03:00

http://www.ft.com/cms/s/0/5387ff54-774b-11df-ba79-00144feabdc0.html

 

Ivo Cerckel
honestmoney@maktoob.com

 

 

EU president Herman Van Rompuy confessed that EMU lured countries into a fatal trap. “It was like some kind of sleeping pill, some kind of drug. We weren’t aware of the underlying problems,” he said.

(Gold reclaims its currency status as the global system unravels

We already know that the eurozone money markets seized up violently in early May as incipient bank runs spread from Greece to Portugal and Spain, threatening the first big sovereign default of our era. Jean-ClaudeTrichet, the president of the European Central Bank (ECB), talked days later of “the most difficult situation since the Second World War, and perhaps the First”. 

By Ambrose Evans-Pritchard

Published: 5:43PM BST 20 Jun 2010

http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/7841961/Gold-reclaims-its-currency-status-as-the-global-system-unravels.html

Herman Van Rompuy, president of the European Union.  BLAMES the strength of the euro in recent years for blinding the eurozone to its underlying fiscal problems. (1)

 

Van Rompuy forgets that the euro not only has severed the link to gold but also to the nation state (s’ budgets) . (2)

 

What’s the problem, Mr Van Rompuy?

 

Money is a good readily acceptable in exchange by everyone in a given geographical area and is sought for the purpose of being re-exchanged.  (3).

 

Money has no fiscal aspect, whatsoever.

 

Ivo Cerckel
honestmoney@maktoob.com

 

 

NOTES
 
(1)
Strong euro hid crisis, says EU chief
By Tony Barber in Brussels
Published: June 13 2010 22:05 | Last updated: June 13 2010 22:05
http://business.timesonline.co.uk/tol/business/economics/article7148137.ece
SNIP

Herman Van Rompuy, president of the European Union, has blamed the strength of the euro in recent years for blinding the eurozone to its underlying fiscal problems.

 

(2)

International Charlemagne Prize of Aachen for 2002
Acceptance speech by Dr. Willem F. Duisenberg, President of the European Central Bank, Aachen, 9 May 2002
http://www.ecb.eu/press/key/date/2002/html/sp020509.en.html

SNIP

The euro, probably more than any other currency, represents the mutual confidence at the heart of our community. It is the first currency that has not only severed its link to gold, but also its link to the nation-state. It is not backed by the durability of the metal or by the authority of the state. Indeed, what Sir Thomas More said of gold five hundred years ago – that it was made for men and that it had its value by them – applies very well to the euro.

 

(3)

George Reisman, “Capitalism – A Treatise on Economics”, Ottawa, Illinois, Jameson books, 1998. 3rd ed. p. 142

From Times Online
June 11, 2010
Jérôme Kerviel’s stock market gambles ‘crazy’ and ‘absurd’
Adam Sage, Paris
http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article7148025.ece
SNIP
Former colleagues of rogue trader Jérôme Kerviel denounced his stock market gambles as absurd and crazy in a Paris courtroom yesterday.
Selim Nemouchi, also a trader at Société Générale, told the Paris Criminal Court that Mr Kerviel had broken banking rules and customs to stake tens of billions of euros on the stock market. His evidence was significant because Mr Kerviel insisted that it was standard practice for traders to break official limits with the approval of managers.
Mr Kerviel, 33, faces a maximum sentence of five years in jail and a fine of €375,000 (£309,000) if found guilty of breach of trust, computer abuse and forgery.
UNSNIP
 
Money is a good readily acceptable in exchange by everyone in a given geographical area and is sought for the purpose of being re-exchanged. (George Reisman, “Capitalism – A Treatise on Economics”, Ottawa, Illinois, Jameson books, 1998. 3rd ed. p. 142)
 
Today, paper is considered to be money.
 
On Thursday 10 June 2010, European Central bank president Jean-Claude Trichet said, at his monthly press conference after the decision of the ECB governing council leaving interest rates unchanged, that he wants to restore the appropriate functioning of the monetary-policy transmission-mechanism.
 
There’s nothing to be transmitted. Money is no longer a good.
 
Trichet nevertheless went on to argue that the euro is a credible currency that keeps its value and whose track-record in maintaining price-stability is exceptional and that this capacity to maintain price stability is a major asset for domestic and international investors.
 
He declined to further comment, that is, he declined to come forward with the ECB’s, or to say in the open that the ECB has, gold reserves which are marked to market (price) on a regular basis.
 
Absurde, n’est-il pas?
 
Ivo Cerckel
honestmoney@maktoob.com

the ECB will display its golden deus ex machina in the open.