American Plutocrats No Pasaran Mañana.

Paul Krugman, playing half clueless, bemoans that the Euro did not head back up in the stratosphere, where it can't breathe: "Yes, I know — the point is not to lift the euro. Still, the exchange rate is a quick measure of the impact on eurozone confidence, which bounced with the policy announcement but doesn’t seem to be staying up …"

OK, let's repeat slowly, so Krugman can learn the half of the lesson he did not quite digest yet:


To relaunch growth in Europe, the Euro, and its poodle, the Pound, have to come down big time. So rescue all you want, but go down. Go down at a more sedate pace, but go down. Down is a long way down.


The Euro was established by fixing parity against the very long term value of the French Franc. More recently, under the EMu and the Ecu, the long term average was a bit higher, at 1.07.


In any case, the support of the European Union for the economy of the USA is over: time to care about number one, namely Europe. The modern version of Smoot Hawley bill, Obama's ill conceived plan to double USA exports, will not pass. No pasaran.

Smoot-Hawley, passed in July 1930, boosted tariffs by 50%, and caused the Great Depression of the 1930s. To lift the Euro by 60% belongs to the same sort of ilk. Fortunately this time Europe is unified and democratic, and, while the somewhat confused Merkel went to find solace with her Russian friends, Sarkozy and company did what needed to be done (OK, they may have started the whole thing as a device to lower the Euro, agreed, so they were well placed to stop what they started...)


Notice that, last time this battle cry was offered, by "La Pasionara" during the attack against the Spanish republic by the fascist forces of Italy and Germany, with a rebel army from spanish Morocco headed by traitor general Franco,they passed nevertheless. And stayed for several decades.

But they passed, because they flew overhead, fueled by Texas oil (it was one of the rare things that made Adolf Hitler laugh). The Spanish Navy had blockaded Africa, where the fascist rebel force was, so Hitler's Luftwaffe organized an aerial bridge into Spain. That is also what we are talking about when we defend the Euro.


Nowadays, though, the risk has come down. There is less oil in Texas, and we know where the Gulf oil goes, and the US Army is searching for oil in all the wrong places...


Those who bathe in crude shall drown in it too.

PA