Spain, Italy and can Secessionist Movements hit the US?

Catalonia is getting a lot of international press lately because of its secessionist movement that is seriously contemplating secession from Spain. Catalonia is Spain's most prosperous region and includes 16% of Spain's population as well as a fifth of Spain's economy.  Like the rest of Spain, Catalonia is experiencing profound economic problems and Catalonians are sick and tired of sending their tax dollars to the central government in Madrid. Much has been written about the situation in Catalonia.

Catalan Leader Boldly Grasps a Separatist Lever New York Times

Spain risks break-up as Mariano Rajoy stirs Catalan fury The Telegraph

Secession crisis heaps pain on Spain Financial Times

The situation in Catalonia isn't the only secessionist movement brewing in Europe.  In Italy the Venetians are in a secessionist mood.

Venetian Protesters Demand Independence From Rome; Polls Show 70% Favor Independence

Its not just regions in Spain that are sick of centralized government. Take a look at Italy where Venetian protesters demand independence from Rome.

The rally, which was organized by the separatist Indipendenza Veneta party, drew large numbers of energetic protesters.

“The situation here is almost explosive, so today we have thousands of people who have gathered in front of the regional government and we’re going to present to them a resolution signed by thousands of participants to have a referendum for independence,” Chairman of the separatist Indipendenza Veneta Party, Lodovico Pizzati, told RT.

“The main reason is economic. We are in a situation worse than a colony because the tax rate in Italy is the highest the world and our services are extremely poor. We have 20 billion euros missing from our regional resources each year and that’s unbearable,” Pizzati said.

And while some question the region’s ability to stand alone, Pizzati says the goal is completely attainable.

In Italy, the Venetians aren't the only Italians considering secession; Sicily and Sardinia also have secessionist movements brewing because folks are sick of sending their tax  dollars to Rome. Then there's the Scotish secessionist movement.

Scotland's 'explosive' push to secede from the U.K.

Basically, these various secessionist movements are the result of crushing economic misery amid mountains of unsustainable debt.  It's a three-part drama that is unfolding:  1.  the collapse of the European cradle to the grave socialist entitlement model 2. failed statist Keynesian policies and 3.. forcing the people to endure austerity to bailout the banksters.  Even The Ecomonist was quite upfront in correctly labeling Spain's bailout as a bailout of Spanish banks.

The Spanish bail-out  Going to extra time, The €100 billion pledged to help Spain was meant to rescue the banks and calm the euro zone. Instead it has added to the drama

It's true that the banks who made bad loans are being bailed out and it's also true that transferring the cost of the bankster bailouts to the people is grossly unfair and unjust.  Nowhere was a European styled bankster bailout more hideously thieving than in the case of Ireland.  Ireland was an economically flourishing nation with low taxes and low debt, an unusual situation for a European nation.  But Ireland suffered a severe bout of Banksters Gone Wild and the Irish people were left paying for the hugely expensive mess.

The Withering Shamrock: How the Irish People Got Stiffed by the Irish Government

In Greece, the financial disaster is attributable to unsustainable borrowing to maintain an unsustainable socialist cradle to the grave entitlement state. The Greeks couldn’t live on the money of other Europeans forever and their day of reckoning arrived. In Iceland, a tiny nation of 300,000 fishermen and farmers magically churned themselves into high finance gurus who traded on money borrowed from Iceland’s banks that borrowed the money from foreign banks. The Icelanders did the only thing they could do; they allowed their banks to go bankrupt and started over by going back to fishing and farming....

But Ireland? Ireland is a real tragedy because the Irish people are paying for the financial sins of its corrupt government, banksters and bankrupt real estate developers. The Irish banks borrowed from foreign banks who lent mountains of money to Irish real estate developers. Irelands was praised by the media and financial pundits as an economic miracle – living proof that borrowed fiat money creates wealth and prosperity until one day it all ended. The great Celtic Tiger ceased to roar and lay mortally wounded in September, 2008.....

Aside from the fact that the Irish people are idiots for supporting a government that bails out the rich at their expense, the story of how it actually happened is even more horrifying. The gory story is succinctly laid out by Michael Lewis in his outstanding book Boomerang.

But what the Irish government did next was unthinkable. It voted to guarantee the debts of Irish banks which then became the debt of the Irish people. The Irish government told the public that it must save the Irish banks. Lewis makes a most astute observation and discloses that the bailout of the Irish banks was nothing more than a bailout of bondholders:

"....These private bondholders didn’t have any right to be made whole by the Irish government. The bondholders didn’t even expect to be made whole by the Irish government. Not long ago I spoke with a former senior Merrill Lynch bond trader who, on September 29, 2008, owned a pile of bonds in one of the Irish banks. He’d already tried to sell them back to the banks for 50 cents on the dollar-that is, he’d offered to take a huge loss, just to get out of them. On the morning of September 30 he awaked to find his bonds worth 100 cents on the dollars. The Irish government had guaranteed them! He couldn’t believe his luck.

But it gets worse as Lewis states:

"A political investigative blog called Guido Fawkes somehow obtained a list of the foreign bondholders: German banks, French banks, German investment funds, Goldman Sachs. (Yes, even the Irish did their bit for Goldman.)" Michael Lewis in Boomerang.

 And it gets worse as Credit Writedowns reported on 3/3/12 that Irish taxpayers are now even paying unsecured bank creditors."

Folks are certainly catching on to the stone cold reality that while austerity is forcibly being imposed on the poor, the pensioners and the middle class, there is zero austerity for the criminal bankster class who continue to have a license to plunder no matter where they are.

As the economic situation continues to worsen in the US, and it will, one has to ponder how many US states will start clamoring for a divorce from Fedzilla, the Bridezilla that consumed an entire nation.  It certainly isn't beyond the realm of possibility. Failed government at all levels creates a lot of desperate people who will resort to desperate measures for their own survival.  Most assuredly, trust in government won't be a component of their survival plans.

What Happens When Governments No Longer Have Money to Pay Entitlements and Pensions?

Greece is broke. Spain is broke. Portugal is broke. Italy is nearly broke. Bailout requests continue to mount. Many nations simply borrowed heavily to sustain an unsustainable socialist cradle to the grave paradise. Folks are protesting in the streets in big numbers. They are protesting cuts in entitlements. They are protesting cuts in public sector pensions.  They are protesting cuts in healthcare benefits.  They are protesting the lack of jobs.

Demand for Spanish Bonds Collapses; "No Money Left to Pay Services" says Treasury Minister; Massive Protests Over Austerity; Two-Year Yield soars 60 Basis Points

But they can protest all they want. At the end of the day, broke is still broke, bankrupt is still bankrupt and there literally is no money to pay promised benefits. As the debt mounts, more and more revenues are siphoned off just to service the gargantuan debt which in turn decreases the amount of money left over for entitlements.

In France, Francois Holland won an election by promising to tax the rich at a rate of 75%, a campaign promised that he kept.  It's widely believed that such a draconian measure will drive the wealthy out of France and to much friendlier tax abodes.  The panicked Spainards are considering similar measures.

Prepare for Spanish Implosion: Businesses Threaten to Leave Spain Over Tax Hikes; Finance Minister Proposes 56% Tax on Short-Term Financial Transactions

Americans tend to ignore what is happening across the pond because they really don't believe that what is happening in Europe and elsewhere could ever happen in America.  Of  course, Americans are living in a fantasy land but that won't last long and when reality finally hits America it will pack a wallop of a bite.

There are credible signs in America that our delusions will be short lived.  The US is sitting on unfunded liabilities (pensions, SS, Medicare, Medicaid and other entitlements) of over $100 trillion.  This didn't come from Alex Jones.  It came from the Dallas Federal Reserve!

According to our calculations at the Dallas Fed, that unfunded debt of Social Security and Medicare combined has now reached $104 trillion—trillion with a 'T'—in discounted present value. – Richard Fisher, February 10, 2010

There is also the issue of massively underfunded public sector pensions and retirement benefits at the state and municipal level.

Public Sector Pensions Underfunded by $4.6 Trillion - That's a Future Tax Folks

Here's what is really going to happen.  Sooner rather than later, nations and people will simply be forced to start living off what they actually produce and save instead of the debt fueled consumerist economy driven by fiat banksters.

Will it be painful?  Absolutely.  But the alternative of continuing to live the monetary lie will be far more painful as central banks just continue to inflate currencies to the point where folks will need a truckload of greenback just to buy a loaf of bread.

Governments steal from the people by devaluing currencies with inflation.  And yes, citizens are complicit in the schemes so long as they perceive a value for themselves (raking in their share of the plunder).

America has one huge advantage.  The dollar still maintains its lofty status as the world's reserve currency and it's also a petro-currency.  If oil ever starts trading in non-dollar currencies, the dollar is toast and America officially becomes just another failed banana boat republic.  Moreover, there is the issue of our mountain of unsustainable debt and the continued willingness of foreign nations to subsidize our outsized debt fueled fictitious lifestyles.  Many astute financial pundits believe and have documented the fact the foreign nations are quietly and not so quietly shedding Treasuries because they are very concerned about ever getting paid. The simple truth is that America is a Debt Man Walking.   Who is the largest purchaser of Treasuries?  The Federal Reserve!

The Federal Reserve has been the largest buyer of U.S debt in the last three years...here.

Economist Peter Schiff has been saying for years that America needs to get back to producing things, learning to save and living within our means.  He's right.  It's precisely how America became the wealthiest and greatest free nation to ever grace the planet.   America once had the most prosperous middle class in all of human history.

We simply blew it by allowing government, banksters, militarists and corporatists to concentrate wealth and power into the hands of a few.  The consequences have been devastating.

Pundits like using the term SHTF (shit its the fan).  When the SHTF what will really happen?  Commodities will become the new temporary currency, especially food, fuel and medicines.  Alternative paradigms of survival will emerge, notably in underground economies that will grow as government becomes powerless.  There are communities in Greece where they barter and use local currency (not the Euro).   Raw and absolute survival instincts will kick in and trump loyalty to the state.

Some folks have put forth the premise that America's failed system of governance and its fascist, crony capitalist economic system must fail if the people are ever going to have the opportunity to rise in liberty and restore their prosperity.  It's a valid premise.

100 years of Keynesian statist economic central planning has effectively obliterated all that once propelled western nations to liberty and prosperity.  The system can't be tweaked or even saved. All that's left is starting over and starting over can only work with sound money and minimal government power.