by Gary North
If you have seen the stage version of Peter Pan, you know the scene in which the audience is asked to clap if they want Tinker Bell to live. It’s time.
Janet Daley wrote a provocative essay in London’s The Telegraph on the day before the Greek election (June 16). She did her best to explain why the eurozone is in crisis. Europe’s leaders are living in an illusion of their own making.
She began with what should be obvious to the financial markets by now. By entering into the eurozone, the politicians surrendered control over the money supply.
The problem is not that politicians surrendered control over the money supply. It is that they surrendered it to the European Central Bank. They should have surrendered it to the free market.
The politicians of Europe asserted control over the international money market in 1914, when they abandoned the international gold standard. They set the precedent. Everything that has followed has been one fiat money crisis after another. But only Austrian School economists teach this. In Europe, bureaucratic control over money has run the show ever since 1999.
The economy is now beyond the control of national governments, and therefore outside the remit of democratic politics. It has become truly global, and thus a law unto itself; nation states have gone broke in their attempt to feed its gargantuan appetites for consumption and debt…