Are Conspiracy Theorists Right about a New World Order?
Are conspiracy theorists actually right this time around? It appears that the European Financial Stability Facility is becoming more and more desperate. Over the last few weeks, investors across the globe have witnessed mounting debt issues across all the major European economies.
It started in Greece, and then spread to Italy and Spain. Recently, signs popped up in Germany that may signal trouble in the strongest of European countries. In an effort to contain the economic crisis, the EFSF has proposed a wide-scale bailout of the afflicted Eurozone nations.
However, the bailout strategy is particularly interesting. In 2008, the United States government decided to use $800 billion of taxpayers' money to fund a full-fledged bailout of the financial system. This time around, in Europe, the bailout is expected to exceed $1.5 trillion. In order to finance the fund, officials have determined that leverage is necessary.
Using assets valued at about $700 billion, the EFSF hopes to find investors that will pitch in over $1 trillion, in order to round out the safety net for European countries. However, the EFSF has been unable to convince investors of the financial prudence in investing in Europe.
The pitches that the EFSF has been undertaking involved fixed income assets for individual countries. In an attempt to be able to actually meet the bailout fund's needs, officials have been mulling over Eurozone bonds.
In fact, Angela Merkel of Germany recently stated that her office would be open to the idea of the bonds, given desirable specific terms. For the last several months, Merkel was fervently against the very idea. However, now that Europe appears to be pulling its last few strings, European bonds may become a reality.
And therein lies the conspiracy theorists' worst nightmare. European bonds signifies one step closer to a New World Order. Given the tangential problems in the United States, what if "Western" bonds were created in a few years. Given the slowing growth in China, what if "World" bonds were created down the road? Eventually, we may have a world government that has supreme sovereignty and power over everyone.
This is exactly what many conservative citizens do not want to see. While conspiracy theorists take the world government idea a bit far - some convinced that a world government would proceed to enslave the 99% - there are reasons for citizens to be worried.
A world government is an added layer of secrecy, further distancing citizens from their leaders. In an age where transparency is encouraged, a world government would achieve the exact opposite. It would also result in an added layer of control. New police forces and new laws may amplify the constraints that citizens already have in terms of liberties and self-expression.
While the doomsday theory is simply a theory, investors and citizens alike should be cognizant of the possibilities. In a financial context, the European bond signifies the inability of individual countries to be able to satisfy investors. This may be important in the future, if European nations are unable to restructure themselves and return to consistent growth. Investors should also remember that the United States has yet to fix its debt problems, so similar tactics to solve its own problems may occur.
Follow me on Twitter at @makinmarkets
© 2016 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.