The trouble with the Euro and the Eurozone is that it exists in the shadow of a Butterfly basing its value on ephemeral products that don’t actually exist anywhere else except on paper or in some digital archive.

Eurozone People

When you look at the people in the countries making up the Eurozone, all 27 countries have different cultures, lifestyles, needs, wants and aspirations. It is hardly a surprise that people are unwilling to give over their financial well-being to a centralised banking system made up of faceless people, computers and algorithms.

People have learned that Banks can’t be trusted. They give more allegiance to their shareholders than they do to their customers who have their weekly/monthly pay deposited into the bank coffers every payday.

Over time the public has been lulled by ease of being able to go to their banks on the day they are supposed to be paid, and just take their money out of their accounts. During this time, the banks have put our money into the overnight money market and made a great deal of profit for their shareholders and executive staff.

The latest banking crises in the Eurozone shows clearly the shadow of the Butterfly.

The Butterfly or Hedge Funds drop their money into the hole that will offer them the most return on their liquid assets. These liquid assets (cash) are no more than numbers on paper or digital equivalent. They produce nothing except a higher number when they are returned to the depositor/sender. They have increased the Hedge fund manager’s annual income because he/they get paid a fee for increasing the funds paper profits but produce nothing more tangible than a higher number on a computer screen somewhere.

Money is a tool.

Money is a tool that allows real products to be produced or services to be given. When you turn money into a self-replicating product, all you end up with is more money.

Regulating the Regulators

After the Global Financial Crises in 2008 when some regulations were put in place to regulate these banking procedures, our Governments took the easy option and regulated the regulators. This is a bit like regulating a Mother in charge of a disobedient child.

Regulators now don’t trust the Governments either

As this current fiasco plays out to its inevitable end in the Eurozone the regulators are now trying to disassociate themselves finally from the financial mess by downgrading the credit worthiness of Countries in the Eurozone. A countries sovereign debt is the amount of money that country owes. As a country’s ability to repay that debt becomes less certain, they lose their credit rating. A low credit score for a country means that country must pay more for its money that it uses to pay their bills. That is, they need money to pay for our services like hospitals, schools, Police, Defence and all other public service industries.

Banks sell and Buy money from each other

Repeal of the Glass-Steagall Act

“Provisions of the Glass-Steagall Act that prohibit a bank holding company from owning other financial companies were repealed on November 12, 1999, by the Gramm-Leach-Bliley Act.[49][50]

The repeal of the Glass-Steagall Act of 1933 effectively removed the separation that previously existed between Wall Street investment banks and depository banks. This repeal directly contributed to the severity of the Financial crisis of 2007-2010″ -Wikipedia

The repeal of this law opened the way for banks to have carte blanche to produce money-making schemes that did nothing more than make more money for all stakeholders participating in the schemes.

The general population was lulled into participating in these products by law-abiding financial institutions. As the number of shareholders in each managed fund grew, the funds combined into Hedge Funds for higher fund manager earnings with less risk. They sought to hide in the safety of numbers.

To gain these numbers they spread their pretty and ephemeral wings to the Eurozone and into the Euro. The European Banks saw it was a good thing for them to be able to make a lot of money easily and so were willing partners in the schemes.

And as their numbers grew, they gained more political access and all our Governments bowed down in their favour.

In a finite world, everything ends.

The most beautiful, delicate and awe-inspiring Butterfly will one day complete its life-cycle. As today’s Butterfly hovers and its shadow dances across the financial landscape; so too goes the life cycle of Hedge funds and unregulated banks.

The sooner their death knell sounds, the wealthier the people of the Eurozone will be.

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