DOLLAR AND EURO COLLAPSE COULD BE ONLY WEEKS AWAY, SAYS AUSTRIAN ECONOMIST

*DEBT IS NOW NUMBER ONE WORLD ISSUE

*DOLLAR AND EURO FINANCIAL CRASH  IMMINENT

* US AND EUROZONE HAVE NO MONEY TO PAY EVEN THE INTEREST ON THEIR NATIONAL DEBT

* NEED TO REFORM FINANCIAL SYSTEM CLEAR: CREATING MONEY AS AN INTEREST-BEARING LOAN OWED TO PRIVATE BANK LOGICALLY RESULTS IN A DEBT AND CREDIT CEILING AND IN A CRASH

*CRASH COULD BE ONLY WEEKS AWAYS SAYS FRANZ HÖRMANN

*TIME TO STOCK UP ON 2 TO 3 WEEKS OF SUPPLIES JUST IN CASE AS WELL AS TO INTENSIFY CAMPAIGN FOR A CHANGE OF THE FINANCIAL SYSTEM

* GERMAN PEOPLE AND PARLIAMENT CONTINUE TO VIGOROUSLY RESIST TRANSFER UNION AND DEBT SLAVERY

*BREAK UP OF EUROZONE INTO MORE MANAGEABLE PARTS DISCUSSED AS AN OPTION EVEN BY MAINSTREAM MEDIA

*DEBT CRISIS ESCALATES AS EUROZONE’S THIRD LARGEST ECONOMY, ITALY, BECOMES INSOLVENT

*ECB TO PURCHASE HALF ITALIAN DEBT ON THE SECONDARY BOND MARKET IN FRESH STEALTH BAILOUT

*ITALIAN GOVERNMENT TO IMPOSE SAVAGE AUSTERITY BUDGET

*GERMAN GOVERNMENT COALITION AT RISK OVER ECB BOND PURCHASES OF ITALIAN AND SPANISH DEBT, SAYS FRANK SCHÄFFLER

The historical downgrade of US debt and insolvency of Italy and Spain — the eurozone’s third and forth largest economies — has focussed the world’s attention on the nature of our financial system with German FDP lawmaker Frank Schäffler calling for a world debt summit.

http://newsburger.de/fdp-finanzexperte-frank-schaeffler-fordert-weltfinanzgipfel-25509.html

The events of the past couple of weeks show that the USA and eurozone countries can no longer find sufficient money to pay even the interest on their national debts even as they go about expropriating their people.

The souvereign debts are utlimately set to grow because of the very nature of our financial system in which money is created by private banks as interest-bearing loans. Eventually, the credit and debt reach a mathematical limit.

http://www.opednews.com/articles/THE-GLOBAL-DEBT-CRISIS-HO-by-Ellen-Brown-110607-905.html

Because such a limit is an inherent feature of our financial system as it exists today under the control of private banks who earn interest everytime they create money, the current crisis is not a temporary one as the controlled mainstream media maintains. The limit has now been reached.

The stock markets may well rise a few times after they tumble. But eventually, the markets will recognise there is nothing to back up the gigantic amount of debt existing in the world today.

In Europe, specifically in Germany, people are simply not going to give up what remains of their pensions, welfare benefits, jobs and so on to make interest payments on the giant black hole of fractional-reserve banking debt. Making two or three trillion euros available to service Italian and Spanish debt as the „markets“ and banks demand is not a political option.

The final collapse of the financial markets and the dollar and euro currencies, which create money as an interest-bearing loan to private banks, could come in a just a few weeks, according to Vienna Economics Professor Franz Hörmann.

He advises people to stock up on supplies for 2 to 3 weeks in preparation for an economic meltdown, which could result in banks shutting down, in liquidity being sucked out of the real economy and in jobs being lost in a new depression.

As the economic cycle grinds to a halt, it could affect the supply of products to shops. Hörmann warns that any emergency food supplied by the government might not be enough.

If the people in the USA and Europe are ever going to be able to escape from this misery, they have, however, to do more than pile up food. They have to change to the fractional-reserve financial system – where banks can print money out of thin air in return for interest — and stop the money system being manipulated by a tiny elite for their profit.

The people in the USA and the eurozone are working in a different financial system that is loaded against them. No matter how hard the majority work, how much creativity they show, a time will come when there are no jobs, no manufacturing production, no affordable houses simply because the products of the entire real economy have been used by one rabbit trick or another to pay off the gigantic interest on an ever growing, non-existent, virtual, paper, fractional reserve banking debt which governments have burdened tax payers with.

 The elite hope to use this crisis to impose their own new order on the USA and eurozone. The imposition of a new IMF/SDR currency by the financial elite will permanently brand the US and European economy with a third world status.

To avoid this fate, people in the USA and Europe need to unite and exert pressure for the establishment of a new democratic financial system that abolishes the creation of money by private banks as loans and interest bearing debt.

Legislation needs, for example, to be introduced in the USA to renationalise the Federal Reserve, for example, to put the USA back on track.

This is a critical juncture in the history of humanity. Either people work together and implement measures to change the financial system by putting the Federal Reserve and the ECB back under public control. Or the people of the USA and eurozone face debt slavery, poverty and authoritarianism, wars and conflicts engineered by the banksters.

The signs are very hopeful that this crisis can be our opportunity to put our economies on a sound basis once and for all by reforming our financial and currency systems.

Each one of us can play a part in this historic push to reform the financial and currency systems.

At stake is also our freedom and democratic political systems.

The private banking control of our money system is the root not only of the booms and busts which have scarred the last 100 years or so but also of the world wars and the loss of our freedom and democracy.

A police state is required whenever most of the produce of any economy goes to banks as interest payments in return for paper debt, for money printed out of thin air. The need for a police grid is something that Adolf Hitler’s central banker Hjalmar Schacht himself recognised, urging Hitler to create a strong dictatorship after the 1931 banking crisis which resulted in savage austerity measures being imposed on Germans to allow for interest payments to be made to banks for losses they had engineered then as now.

Only people power can bring about this much needed change of our financial and political system and create more direct democracy, more direct control of government spending.

And Hörmann urges people to start campaigning actively – and outside of the established political parties — to bring about a lasting improvement to our financial systems, for example, by painting banners with slogans such as „Democracy begins with a democratic financial system!“.

http://www.theintelligence.de/index.php/wirtschaft/finanzen/3058-drei-bis-fuenf-durchgaenge-dann-kollabieren-die-maerkte-endgueltig.html

The USA, UK and eurozone took a giant stride towards placing their peoples into debt slavery in 2008 when their governments gave gigantic bailouts funded by tax payer money to banks and financial institutions for their fractional-reserve, paper bank losses. They borrowed more money from banks on a wasted „stimulus“ which was not spent on restoring the decimated manufacturing base. As a result governments everywhere have reached their borrowing limit.

Since 2008, every imaginable trick hs been used by the US government and private Federal Reserve to keep making unaffordable interest payments to banks on a staggering national debt at the expense of the real economy.

„ Zero policy rates, QE1, QE2, credit easing, fiscal stimulus, ring-fencing, liquidity provision to the tune of trillions of dollars and bailing out banks and financial institutions – all have been tried. But now we have run out of rabbits to reveal,“ says Nouriel Roubini in the FT.

The USA is now going to have to print more money and launch QE3 leading to yet more inflation to keep paying the interest to bondholders on its national debt.

After much political theatre and financial blackmail concerning raising the debt ceiling at the start of August, the US government – or rather a super congress consisting committee of 13 – is empowered to slash public spending.

Americans will no longer lose their houses, jobs and health so interest payments can be made to bondholders of national debt. They will lose their lives. Food stamps could be axed and the last benefits which stand between many Americans and total starvation could soon disappear.

While the USA has resorted to printing money to pay the interest on ist national debt, setting it on the road to hyperinflation – one form of expropriation of the entire population — , the eurozone governments have adopted austerity measures, which are now widely recognised to have failed.

Austerity measures cause not only social harship and unrest. They also shrink an economy and the pool of money available to pay the interest on an – ever increasing – national debt as money has to be borrowed to allow interest payments to follow on interest payments.

Austerity measures mandated by the ECB, IMF and EU in Greece, Portugal and Ireland have just increased the overall national debt. UCD Professor Morgan Kelly estimates Ireland’s debt will rise to 250 billion euro in 2015.

http://online.wsj.com/article/BT-CO-20110808-703663.html

The crisis engulfing Italy this week can largely be explained as part of the attempt by the financial elite to bounce Germany and the eurozone into agreeing to a 2 or 3 trillion euro fund for banks and also to an EU fiscal union, treasury and tax policy to provide the administrative architecture needed suck out the last available cent from citizen’s pockets across the eurozone.

In an outrageous new power grab for this ever decreasing pool of tax money, the financial elite have pushed through a Super congress of 13 to determine spending in the USA. A special council is set to control the new European Financial Stablity Facility (EFSF) fund in Europe, and it will have similar powers.

http://www.freiewelt.net/blog-3321/der-vertragsentwurf-zur-transferunion-ist-%F6ffentlich%28%21%29—ziel-ist-die-beendigung-staatlicher-haushaltssouver%E4nit%E4t.html

Alarmist messages from EU officials such as Manuel Barroso heaped pressure on the German government to summon parliament for a summer emergency session to rubber stamp an open ended new bailout fund for banks under the pretext that Italy hast o be saved. However, the blackmail bid has so far largely failed.

According to Der Spiegel, a German government spokesman said that Germany did not have the amount of money needed to fund Italy’s 1.8 trillion euro debt. Markets would realise Germany is on the verge of insolvency itself given the scale of its eurozone obligations.

Germany could indeed soon end up in the same position as Greece – a vassal state of the IMF, EU and ECB and in the yoke of forced „bailout“ to help it make the interest payments to banks fort he entire eurozone debt.

To circumvent parliament and the people yet again, the ECB today started to buy Italian bonds on the secondary market – and in spite of oppostion from the German central banker.

This stealth bailout could cost eurozone, mainly German, tax payers 1.2 trillion dollars, estimates the WSJ in „creeping fiscal union.“ The activities of the ECB could also only stave off the collapse of the euro for three weeks because at some point the markets will have to accept that the German parliament and people has a say, says Evans-Pritchard.

„As for boosting it further to €2 trillion or more – as suggested by Citigroup, RBS, and the European Parliament – we face a little local difficulty across the Rhine. Bavaria’s Social Christians said they will not back one bent Pfennig for extra bail-outs, and the FDP Free Democrats are almost of the same mood. Angela Merkel’s CDU base is more mutinous by the day.

In any case, such an expansion of the EFSF would set off its own chain-reaction as France and then Germany lost their AAAs and slithered into the swamp. So, obviously markets will turn very nervous once ECB purchases approach the level that corresponds to the EFSF ceiling. They know that the ECB’s Teutons will die in a ditch rather than cross that line, taking the bond risk directly onto the ECB’s own balance sheet.

That moment could come within three weeks,“ http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/100011349/euroggedon-postponed-again-as-ecb-gains-three-weeks/

The purchase of Italian bonds violates ECB rules and will further undermine support for the euro currency bloc.

In return for bonds of doubtful value, private banks are getting a trillion euros in cash, guaranteed by tax payers, when there is no money for schools or pensions.

A poll last week showed that 60% of Germans are now aware that the country’s exploding national debt is the top threat to their future.

Economics expert Hans Werner Sinn pointed out in mass circulation Bild newspaper recently that the tax payer money for the eurozone bailouts goes straight into the pockets of financial institutions. Why should tax payers be involved in paying off private bank losses at all? He asked.

Also, German central bank chief Jens Weidmann issued a warning that the decision to allow the ESF to buy the bonds of countries was leading to joint liability and a transfer union.

The German parliament was so far not been recalled over summer to beef up the bailout fund in a sign of resistance.

The main coalition partners of the governing CDU party led by Chancellor Angela Merkel, the FDP and CSU, have said they do not favour increasing the EFSF.

SPD leaders such as Bilderberg Peer Steinbrück have offered cross party support to get the bankster bailout through parliament. That he is working for the banks is crystal clear.

Julian Assange of Wikileaks presented a disc allegedly with the details of secret offshore bank accounts of German politicians in Switzerland, underlining the corruption of many of the political class. Assange never published the information and there has been no plausible explanation of why Assange – who has links to hedge funder George Soros failed to put the information in the public domain or hand it to the police. It is not hard to see how such information could be used to blackmail politicians, also Green Party and SPD politicians to sell out their people to the banks and support eurozone bailouts.

It is legitimate to ask whether Steinbrück was among the politicians with a secret offshore bank account given his support for the banker bailout.

When the endless stream of tax payer cash that banks have relied on to fund their fractional-reserve lending does dry up, banks will have to write down the losses on the hugely inflated active income of their balance sheets bringing them to the edge of failure. Many will have to close, wrecking havoc with the real economy unless steps are taken immediately.

The Royal Bank of Scotland last week said it had to write down 733 million pounds from the money it expected to get from Greek bonds. http://www.bloomberg.com/news/2011-08-07/bank-bonds-hurt-as-sovereign-crisis-threatens-more-writedowns-euro-credit.html

France’s Societe General is rumoured to be close to failure already because it has to factor in lower streams of revenue coming from Greek interest payments.

Under the current fractional reserve banking system banks have no money themselves. They only have the illusion of money. This illusion of money comes from the way they can borrow cash so easily from the privately controlled central banks. To keep together the tiny capital core of actual money which banks need to stay in business, banks rely on the revenues generated by a constant stream of interest payments and even a small interruption or loss can be fatal.

The banks have smothered the world in 550 trillion dollars of notional derivative debt . This is a 100% times greater than the total gross domestic product of the world at 57 trillion dollars, notes Otmar Pregetter. Whatever happens, the banks are going to collapse soon because even if they do suck in every cent belonging to every human being on the planet, it is not enough to pay the interest on the fractional reserve debt they have on their books.

http://www.theintelligence.de/index.php/wirtschaft/finanzen/3056-die-handelswoche-des-grauens-die-maerkte-werden-noch-weiter-nachgeben.html

Given the imminent financial collapse, it is to be hoped the German government has made preparations to reintroduce the German DM or to form a smaller core euro currency with The Netherlands and Finland, countries with similar current account surpluses.

As one of the few countries left in the eurozone with a strong manufacturing base, Germany still has products to trade in the real economy. True, a stronger DM II currency could lead to fewer exports in the short term, but this is not necessarily the case. Germany exported successfully with a strong D Mark.

In fact, Germany’s share of exports have remained the same under the euro as under the strong Deutschmark at 40%, suggesting that the euro as a factor explaining Germany’s strong exports has been exaggerated. Increasing domestic demand by raising the miserably low German salaries could serve to boost manufacturers struggling with exports.

The fastest road to economic recovery for the eurozone is to break up into more managebale units and to establish a new, democratic and sound financial system which serves the real economy and sustainable growth.

China’s phenomenal economic growth in the past few years is due to the fact that the central bank prints money not as a loan bearing interest as Hörmann explained.

Hörmann noted that corruption among the Chinese elite has led to central bank money flows being channelled into property bubbles rather than into the manufacturing sector. Nevertheless, this is a fault of the people in power rather than the system.

In the USA and eurozone, the fault is inherent in the financial system.

It is up to us, the people, to act to reform the financial system. We must start to do so today if we want a future.