BANKRUPT DUTCH GOVERNMENT MINGLES IN PRIVATE SECTOR WITH PAYMENT DEFAULT GUARANTEES.
"They had to find the money" (translated: it takes time to print the money), said Finance Minister Bos. For more than 35 years, and supported by their natural gas find in Groningen, Holland has been known to subsidise all problems it encountered. And if the subsidy created an unintended problem, the sub-problem was also quickly subsidised. After 25 years, the sub, sub, sub, sub problems together are creating a systemic risk. Slowly the welfare state will be coming to an end as the government will be attacked financially from 2 sides: 1. less income because of company bankruptcies and 2. more expenditure because more people are claiming the generous state unemployment benefits. The miscalculation of risk is one of the sources of the financial crisis. Ask the Insurance Companies, they learned it the hard way and are now hardly insuring anymore. Not for the Dutch. Hah..! A problem! The Dutch government is adement to subsidise all problems (and let them disappear), hence a construction whereby it guarantees payment against default for orders of the private sector. They might as well hand over the money now as the depression is going to be deep and nasty with political and social unrest. State support for the private sector feels good for the politician and might gain a few votes but will only prolong the agony.
Financieel Dagblad, Holland
Free Google Translation: The government is going to guarantee payments against default for order by the private sector up to euro 1.5 billion. The Cabinet is going to decide about this insurance for the private sector today whereby it will run a risk until the end of this year of euro 40 million
Following the government's announcement, the employer associations VNO-NCW, MKB and credit insurers agreed on the credit insurance to companies.
Since the start of the credit crisis companies had the problem that credit insurers have become more cautious in ensuring their orders against default...
Let's follow the spending behaviour of the Dutch government for a few months:
- 26th of June: Oopsie, problem: Government supports ABN Amro with € 2,5
ion with capital injections and guarantees. ABN AMRO now Zombie Bank. Bill
- 27th of June: Damn, another problem. Social Affairs minister Donner wants to increase
budget for part-time unemployment benefit with € 550 Million Rand. He found the money
- 29th of June: Dutch Cabinet asks help of pension funds with recovery. They especially would like them to invest in the financial sector and State Bank ABN-AMRO. In this regard I urge you to look at this video until the end.
- 30th of June: Social security benefit will increase. If you are living alone you will get € 647,54 inclusive of money for a well deserved holiday. The increase is € 5,64/month.
- 30th of June: If you own a home you can get € 200-350 subsidy for advices to isolate your home. There is also an arrangement for lower VAT for floor and roof isolation, credit for energy savings and subsidies for double glass home isolation. Take your pick!
- 1st of July: Christian Union wants to cancel tax on electrical cars. They government is the one which sends the message what to buy, not the consumer.
- 2nd of July: Amsterdam city will mix "chance arm" and "chance rich" pupil in government schools by providing free education. Will cost them € 2,5 Million. They just want to make sure they both end chance
The government knows nothing. But how come we put so much faith in the governments? Please read the following excerpt of the interview of The Daily Bell and James Turk of Goldmoney.com of July 2009:
"Daily Bell: How did we get to where we are today in terms of the current crisis?
Turk: That's a very good question. The world is in this mess because of the misplaced reliance people have placed on government. They mistakenly think government can solve all the world's problems by passing laws or redistributing wealth. Government leaders and policymakers of course believe that too, or at least tell us that they do because this unthinking reliance on government by the masses enhances politicians' power, which ultimately is derived from people willing to do what government tells them to do.
In fact, everyone should instead be relying upon the free-market process, namely, one which operates under a consistent rule of law instead of under the conditions of the way the ‘market' now exists, which is being battered by the whims and capriciousness of politicians. Governments destroy free-markets long before they ever understand how the market process works. But there is a second element to today's mess that goes beyond the misplaced faith people have placed on government."