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EU Pulls Out Nuclear Option: Proposed 500 Billion Euro Bail Out Package Is Largest In History
From Le Monde:
Zone euro: l'Allemagne propose un plan d'aide de 500 milliards d'euros
AFP | 09.05.10 | 21h58
L'Allemagne a proposé dimanche soir la mise sur pied d'un vaste plan d'aide financier pouvant être utilisé pour les pays de la zone euro, d'un montant total de 500 milliards d'euros et impliquant le FMI, a indiqué à l'AFP une source diplomatique européenne. "L'Allemagne a mis sur la table une proposition totale de 500 milliards d'euros", a-t-elle indiqué. Elle comprendrait les 60 milliards d'euros de prêts octroyés par la Commission européenne, dont il était question ces derniers jours, ainsi que 440 milliards qu'apporteraient si nécessaire les pays de la zone euro et le Fonds monétaire international. Cette dernière enveloppe serait constituée "de prêts bilatéraux, de garanties pour des emprunts et de lignes de crédit du FMI", selon la même source. Il s'agirait par son ampleur, s'il fait l'objet d'un accord, d'un plan d'aide sans précédent dans l'histoire.
Translated:
Germany
proposed on Sunday evening the establishment of a comprehensive plan of
financial aid can be used for countries in the euro area, totaling 500
billion euros and involves the IMF, told AFP European diplomatic source. "Germany has put on the table a proposal of 500 billion euros," she said. It
would include 60 billion euros in loans from the European Commission,
he was in the last day, and 440 billion would accrue if necessary, the
euro zone countries and the International Monetary Fund. This envelope would be established "bilateral loans, collateral for loans and lines of credit from the IMF," the source said. It would be in scale, if the subject of an agreement, an assistance plan is unprecedented in history.
And once this money is exhausted which it will be, Europe will default as the playbook is TARP then immediate monetization, however without a reserve currency backstop. The EURUSD is spiking by 3 handles right now, however once traders realize that the ECB will commence printing money in earnest it will go straight down to parity.
For those who want to read the best perspective on the nuclear option, here is Evans-Pritchard's take on why this nuclear bomb will be a dud:
The EU is invoking the "exceptional circumstances" clause of Article
122 of the Lisbon Treaty, arguing that the euro is subject to an "organized
worldwide attack". This is a legal minefield. A group of professors has
already filed a case at Germany's Constitutional Court, claiming that the
Greek bail-out is illegal and that the EMU is degenerating into a zone of
monetary disorder.The judges have denied an immediate injunction on aid to Greece, saying that
it would to be too "dangerous" to take such a step on limited
facts, but it has not yet decided whether to hear the case. The battle has
escalated in any case. The new EU rescue mechanism is to be permanent and no
longer just bilateral help, if Mr Sarkozy is right. The professors have been
given an open goal. One almost suspects that the Kanzleramt in Berlin is so
weary of this dispute that it has given up worrying about lawsuits. If the
judges block an EU debt union, be it on their heads.Nor is this rescue fund any more than chemotherapy for the cancer eating away
at the foundations of monetary union. It is not a cure. The rot set it when
the South joined EMU before it was ready to cope with ultra-low interest
rates or match German wage-bargaining. The ECB made matters worse by gunning
M3 at an 11pc rate during the bubble. Club Med lurched from credit boom to
bust. It is now trapped in debt deflation at an over-valued exchange rate,
like Argentina with its dollar peg in 2001 until air force helicopters
rescued President De La Rua from the roof of the Rosada.The answer to this -- if the objective is to save EMU -- is for Germany to
boost its growth and tolerate higher `relative' inflation. This would allow
the South to close the gap without tipping into a 1930s Fisherite death
spiral. Yet Europe will have none of it. The weekend deal demands yet more
belt-tightening from the South. Portugal is to shelve its public works
projects. Spain has pledged further cuts. As for Germany, it is preparing
fiscal tightening to comply with the new balanced budget amendment in its
Grundgesetz.While each component makes sense in its own narrow terms, the EU policy as a
whole is madness for a currency union. Stephen Lewis from Monument
Securities says Europe's leaders have forgotten the lesson of the "Gold
Bloc" in the second phase of the Great Depression, when a reactionary
and over-proud Continent ground itself into slump by clinging to
deflationary totemism long after the circumstances had rendered this policy
suicidal. We all know how it ended.
h/t Nico
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I never grow tired of watching people do stupid-ass things with money.
Don’t worry ‘bout it. The backstage mimicking archons boogying with the shadows in Plato’s Cave know not what they do. Collectivism destroys incentive, which causes the creator/thinkers to withdraw to Gult’s Gulch. You’ll know the endgame is at hand when you begin seeing majic-box (TV) commercials offering wet and wild rides in exchange for creative ideas from the youngsters that have not already been indoctrinated into the hive mind.
That's a hell of alot of money for a small country like Greece.
My take on this is that the 500 billion will be spread throughout the PIIGS. You'll see in the next few months all of the sudden NOTHING coming out of Spain or Portugal about their debt problems. This needed to be passed ONCE, and passed for "good" (in a politicians eyes). Only problem is that "good" part is only kicking the can down the street, and these problems will surface again in the future.
Nowhere in my economics books can I find graphs or econometric models that analyze or detail an economic policy of 'buying time'. This way of handling an unfunded liability crisis by throwing more fiat (gas) into an economy (car) exhibiting deflation (parked) is truly pitiful.
950 billion , 962 billion ,,, rounding error at 500...
- it's all over.
http://www.youtube.com/watch?v=uG8JHSAVYT0&feature=player_embedded
http://2.bp.blogspot.com/_edvxM1dkFlo/S-dH_WYvOOI/AAAAAAAAAdQ/qU_0jTjeZFI/s1600/SkyTruth_dhrig_spill-09may10-aqua-interp.jpg
Heck of a job, Brownie.
Thanks for posting that Rusty. We come here and we joke cause it is a defense mechanism. This ain't no joke. I don't know if we have it in us to rethink our lives in time. Time is running out.
Love to you and yours. It is all we really have.
Double.
Rusty - A perfect visualization for so many aspects of our current situation on a micro or macro level. Financial or otherwise. It is simply time to prepare for the restructuring. Yes indeed, it is time. Until then......
h/t the best of ZH pal's for this introduction to it
http://www.youtube.com/watch?v=rK0LWsEcSjM
I felt like sharing the title of the next essay to be written by one of us or ZH. "So many changes so that nothing changes". If I had to sum up in one sentence what has happened in the last 2 years or so financially, politically or socially... Someone take it from here. I am tired physically but not at heart. The truth always prevails. Did I say always..... it may take time, but it does.
Stupid ass things with your money... The Federal Reserve is going to be providing the funds via an SPV. It's official, the banks are not going to be allowed to fail--at any cost:
http://market-ticker.org/archives/2297-Bernanke-Liar-Again.html
Dont know about stupid ass but I suspect the Thursday mayhem may not have been a totally unplanned event ? Action in TBT / TBF was bizarre too. Could a short term debt refi have been accomplished during the 25 minutes of (in)fame ?
If you trade TBT/TBF just take a look at TMV/TMF moves...
Just another bailout for US banks holding European sovereign debt. US taxpayers once again on the hook so the banks get paid 100 cents on the dollar.
AUDIT »---> FED!
So the IMF was involved...
...the BoE? The Fed? Where is Bruce.....
Apparently, the IMF is in for $40B.
I'd like to know how the €500 billion will be collected. Do the individual countries still have to approve their portion? When and how is money actually going to change hands? Or is this the n-th iteration of the same bailout announcement?
Someone linked this yesterday in another thread: http://goldtent.net/wp_gold/2010/05/08/british-taxpayers-ordered-to-bail-out-euro/
”The euro’s 16 countries have already agreed it - that’s a majority,” said a diplomat. “It’s a fait accompli. Those not in the euro - Britain, Poland, Sweden and other new EU members - can’t stop this.”
I wonder how the non Euro EU countries are going to react to these strong-arm tactics.
Such hostile words...it smells like a recipe for hostilities.
Like most all extortion...at gunpoint.
EU Crafts $962 Billion Show of Force to Halt Euro Crisis - Bloomberg
"$962 billion, do I hear a trillion?", says the auctioneer.
Absolutely the FED! The IMF SDR are most prominently propped up by U.S. dollars, and the ECB has a reserve account on Constitution Avenue that is being ratcheted upward without the "public" having any knowledge otherwise. Why do you think the FED wants to run silebnt and run deep?
Absolutely the FED! The IMF SDR are most prominently propped up by U.S. dollars, and the ECB has a reserve account on Constitution Avenue that is being ratcheted upward without the "public" having any knowledge otherwise. Why do you think the FED wants to run silent and run deep?
I susupect that the 1000 point crash was used to convince the law makers for a bailout. Much like when Hank Paulson threathened America with martial law if we didn't pass our bailout plan. Notice how they ask for $650 billion. At least it wasn't $700 billion right? At least this time around maybe we can see who all the counter parties are and who is going to get paid. Is another AIG, this time around, who are they embezzeling the funds directly to the banks this time around?
Just wait until China needs their bailout for their banks.
END GAME on muther fucker
Evil People is What They Are
Regardless of Size, the proposed Bailout Fund to stabilize Credit and Foreign Exchange market Dislocations cause by a "Wolfpack" represents the application of a mere Plaster to the Cancerous Tumor of deranged political and economic Taxation, Spending and Monetary policies.
It does Naught to Address let alone Solve the Fundamental Problems at Hand, Originally Birthed and Maintained by the same now Savior Political Class. Actions such as Outlawing CDS's, Speculative Position Limits and other such nonsense merely pass the Hemorrhaging into the very near future given the Magnitude of the EU and Euro Systems' Flaws. Too little Accomplished, far too Late.
Only a Brief Reprise if any at Onerous Costs measured in Monetary and Credibility Units. Indeed, such may be reaching Terminal Moments in Time.
The Continuation of National and Economic Pain Projected upon the Global Stage for the sake of Kabuki Prestige and Solidarity, Borders on the Criminal.
S&P futures to open lock limit up
Anyone remember where the futures opened after TARP passed?
The bazooka only farted: S&P futures gapped up and found resistance at the 61.8% retracement of Thursday's low.
Hasn't anyone caught on to the use of the word PROPOSED in that statement?
How many proposals did Greece get from the EU before the IMF bailed them out?
TOKYO, May 10 (Reuters) - Nikkei futures traded in Singapore fell 0.91 percent on Monday amid talk of a massive stabilisation plan for the euro zone to keep Greece's fiscal woes from spreading.
Wunderbar!
Ich bin ein berliner.. or whatever. They just wont fail, somebody please pull the plug on the EC, EU and EMU
We are all helicopter pilots, now.
Brilliant!
I laugh, but I also cry.
yeah so they print to SAVE the euro??? as opposedd to kicking out the deadbeats form it??
I dont trade anymore, but I say the market opens limit down and crashes each day, until they actually vote the fraud through. Then you get the 1ooo pop. Maybe that's what that big move on Friday was about. Goldman was practicing for this big news announcemnt about the bailout? Yes the market opens limit down. Love watchin people loose money.
This plan is more of the same.. Print more Fiat Funny Money..
It is like trying to stop a Freight Train going 60 MPH with a
Volkswagon Rabbit...
Go big or go home.
Shock & Awe 2.0
Joe 6-pack bend over...
Joe 6-pack has been sucking the tit of big government for years with fake disabilities, fraudulent worker's compensation claims, not claiming their "cash only" and illegal rental apartments in their houses on their IRS forms, pretending they have 9 dependants, arranging for no co-payment with their doctor, approving "doctored up" insurance adjustors claims if/when they get into a car accident (not to mention going to the chiropractor for free 3x a week to complain, exaggerate an injury in hopes of a cash/insurance settlement). The list goes on.
I used to be related to a bunch of joe 6-packers. They brag about the above at their 4th of July BBQs in their backyards, while prancing around with full bellies and stinky feet.
If Joe 6-pack every finds out that Corporate America or his local Municipal employer has decoupled from him there will be no amount of re-education that could possibly get him caught up into present time. He won't even be able to compete with college students for minimum wage jobs and be relegated to live mortgage free until his # is called.
Parasites like this will wake up one morning and find that the big sweet government teet they have been feeding on for years has suddenly been replaced by a huge, clap infested dick which is being shoved down their throats.
Sorry, but why fund the Ponzi? the GWOT? the Banker Bailout Billions. No Taxation Without Representation. Most Americans no longer believe the gov represents their interests.
Patriots Don't Pay. Do it legally if you have to. Get out of the banking system. Resist.
Even better - A General strike to reclaim the government from those who have bought and paid for it.
I am holding my breath and counting 1 .. 2 ..
Have to defer to you and yer girlfriend liquidfuk on "clap infested dicks shoved down your throat" nothingman(appropo). You two pussies must be the only honest citizens left. Buffett said more than once secretaries @ fortune 500 companies pay more tax than the CEO? But you want to point your mfucking finger at us. USA pays 20 billion monthly in interest payments...INTEREST ONLY but joe sixpack is a parasite. FUCK YOU.
these are trying times. We feel it, some with trepidation , some with anger. You cant screw up society this bad and not have some emotional content. Please be patient, it takes a bit to adjust to the new reality (quicksand).
I'm pretty sure that's what the Greek Joe Sixpacks are rioting about right now.
yep a 19 ear old person was in the front of the rioting ,, put off because she has to wait until 65 to collect a pension.. she says they have ruined my life
sorry - but rants like that don't go over well with honest folks.. since most people use things roughly the way they were made..
I rather critics go after and jail the fraudsters.. ALL fraudsters since ANY set of rules can be gamed.. even whatever brilliant world you believe we should live in.. that one too can be totally defrauded
Sounds like white trash, not what most of us mean by J6P. And this makes you....
Trash comes in many different colors ;)
Using a well-known term, but yes, color is irrelevant. The personality types are spread evenly.
Well. you gatta figure, when a socialist style govt gets bailout fever, they dont hold back!
Not enough money. 2011 we will be back to meltdown mode.
I agree. The rate of bailouts needs to go exponential, just to break even. The melt down begins late this summer/early fall. The markets will want another, bigger bailout, but the world will reach its practical limits sooner than later at this pace.
+1
This is a piss-ant little pile of money compared to the unwind they want to stop.
What hubris.
Hubris indeed. The system is dead yet nobody is supposed to notice?! You can only get away with playing Weekend At Bernies for so long...the foul odor of decomposition will eventually reveal the truth. It wouldn't surprise me one bit to see little change in CDS spreads this week because the corpse of Mr. Market Confidence is starting to bloat and stink...the gig is just about up and the smart money knows it.
Any proof of that, or just a bs claim made on the intrawebs by an asshat who doesn't have the first clue about anything? I'd really like to know because I'm considering a career move and I need to make sure the timing is right.
Can anyone compile a total for all the bailouts we've seen in the last 2 years.It doesn't matter if it's enough,next year they will print another 500 billion and so on.The bailout train is at full speed no way to stop now.
Well TARP was only supposed to be for $700 Billion, no fat finger there, but yet we have the Fed printing and buying well over $2 Trillion in debt, definitely a fat finger there.
Market up 500 tomorrow am?
Behavioral Economics Rule #1: The market will always go higher on MONDAY...so sayeth the Lord(s) (Blankfein, Summers, Geithner, Dimon, Trichet, etc..)
EARP--the European Asset Relief Program. They can toss out all the numbers they want. I want to see how every member nation is going to approve of this by tonight. I think the speculators are going to call bullshit on this just like every other plan on every other Sunday for the past two months!
why don't they just print the money? Every other major central bank has printed vast amounts of money and nobody cared.
Oh, duh-uh,
That's where all money comes from....fiat printing presses. Notice they're going to use an ...
Off Balance Sheet
Special Puropse Vehicle
....to Fund the Operation.
Off balance sheet....so won't count as debt for national or Pan European debt counting purposes.
sheet i am thinking wheelbarrows.
Old data deleted.
“We are going to defend the euro,” Spanish Economy Minister Elena Salgado told reporters as she arrived to chair today’s Brussels meeting. “We think we have a duty for more stability for our currency. We will do whatever is necessary.”
HUH???? printing 500bn euro is defending it u dumb f**ks??? how fcking dumb ARE YOU POLITICIANS??? FC U ALL
GOLD BITCHEZ
Pushing all in long S&P futures. 54 minutes and counting.
Dow will be up 300-500 points tomorrow on this news.
No, it won't.
you're right... might be up more
I think you are right, though it may not have sufficient legs to get through the full day before rolling over.
eminis will start trading soon
http://finance.yahoo.com/q/fc?s=ESU10.CME
My money is on this-
Monday- Tepid rise in S&P from ingestion of large fatty slices of Fiat cake
Tuesday - Indigestion pains in chest
Wednesday - Heart failure
Thursday - Undertakers called
Friday- we bury em
This should not be construed as investment advise but U all know this cakes baked
The market will probably regain most if not all its losses from last week as "investors" digested the stellar jobs report and sterling retail sales numbers over the weekend. That coupled with low-to-average valuations in the S&P (per the Sunday WSJ) and the current implosion of the Eurozone make the US markets the only safe haven to be in. Gold and silver will probably be bitch-slapped down several percentage points in retaliation to the JPM investigation.
Yeah, that'll take care of monday, and then the collapse will continue.
So, let me get this straight....
Printing 500,000,000,000 new euro makes the euro more valuable? IN this upside-down, brave new world we live in, I suppose it does.
Euro rallies back to 1.29 and then rolls over once more.
Its not just a simple as printing up a half trillion check and handing it out to the pigs. That would take the euro down way too much.
Ben and Timmay are helping them out with swaps. The euro only has to get not much more worthless than the usd and all is well for a few months.
Yep. FOREX markets figured this out fast, the dollar gapped waaaaay down before trading opened.
It's the new normal. "Just look at us. Everything is backwards; everything is upside down. Doctors destroy health, lawyers destroy justice, universities destroy knowledge, governments destroy freedom, the major media destroy information and religions destroy spirituality."
— Michael Ellner
That was quite an empirical observation of truth. Impressive and well said. Thank you.
Lance Orton is a hero
And isn't this how real wars are started? The Gulf and Afghan are pitiful. But when everything is this upside down the reversals could be led by war that escape the parameters of the controlled conflict.
The kind of wars that divide armies and divide countries. The US Civil War had how many fatalities?
What an awesome quote, apropos!
Thanks.
Euro 500B is simply nothing...For Greece alone 110B have been deployed.
If Portugal fail (which it will) than Spain fail and Germany fail as well. On Monday although I think UK will be under huge pressure and I woundn't be surprised to see their debt plummeting.
Remember Swiss National Bank spend Euro 40B and did nothing...What do you think Euro 60B of stabilization are? It's like a tortue how hopes to catch a rabbit..no way.
Markets now know that Euro 600M (this was the rumour on Friday) is worthless and it won't be deployed to the banking system.
They missed once again and the markets will responde with simply huge moves tomorrow.
I wouldn't be suprised to see Swiss borders with Europe closed within few days..
I think the Italians are the next in line to go down.
that's what Reggie says too
At which point it possibly makes sense for Italy itself to then split into north and south, productive vs dependent, sections.
Agree 100%. Country changes completely as you go down south from the austrio-germanic do-it-all and do-it-right crowd up north to the bagarre feisty hearty do-nothing or do-it-all-wrong type mafiosos down south.
Meanwhile TBT/TBF also made phenomenal swings on Thursday. Did somebody exploit that scenario too well ?
Something for bears to remember and why the Greece crises will be solved by June 11, 2010!
http://www.bostonwealth.net/2010/05/09/something-for-bears-to-remember/
Hey dopey, what were analysts looking for in S&P EPS in the middle of 2008?
Hey Boston Wealth, your answer is to tap "Junk" instead of actually looking at the data and recognizing the sheer absurdity of your "argument"?
Well, no biggie, I'll do it for you.
At the end of 2007 people were looking for $105 in S&P EPS for 2008. Guess where it came in? About $40.
I only hope you are 23 and living in your parents' basement where the amount of damage you can do is reasonably limited.
"At year end the consensus estimate was approaching $105. A more likely expectation is $90 to $95 for 2008" (actually, that $90 was a little off also)
http://seekingalpha.com/article/60090-consensus-estimates-too-high-entering-earnings-season
So...what's left in the medicine cabinet for Spain, and the rest? For a cure to work, each patient much receive the medicine. Diseases are contagious....cures rarely are.
Amen Sandman... they go and blow their wad right away. Plenty of holes left to fill and they won't have the money for it. Should be fun to watch. Great job boys, you gave yourselves a few days of breathing room.
Who knew Hank Paulson was European? What's next? Stress tests?
Speaking of stress tests I am sure we had a Euro failure and sovereign default for one of the possibilities along with the mythical unicorn accounting.
Counting Unicorns is not Mythical, but Political.
mounting unicorns more difficult yet.
Recap of Rasputin's take over the weekend, as he so accurately predicted:
Showdown at "QuantSleaze Corral"
Rasputin
- Sat, May 8, 2010 - 07:20 AM
For months now, I have quietly (and not so quietly) stated that the Fed
will have to implement "QuantSleaze 2.0" sooner or later.
Well, it appears it will be sooner.
Because, as demonstrated this last week, the world has plummeted
back into "Great Disintegration Mode" with literally every single equity
index getting pounded, CDS spreads blowing out, inter-bank lending
frozen, currencies gyrating and other destruction and mayhem being
visited on the Ponzi Pyramid monetary system.
So, this weekend really is "It". The great showdown between the
debt/derivatives destruction and the central banks and governments who
have vowed to fight to the death against the liquidation that is again
underway.
Last night, the EU fired their first "bazooka round" by stating
they will defend the sclero at all costs, take on the "Evil Speculators"
(translation: Bond Vigilantes who are finally calling the bluffs of
bankrupt sovereigns), and perhaps even spin up their own captive
"ratings" agencies to slap AAA approvals on any toxic trash that strikes
their fancy.
Furthermore, the Chocolate-Makers are also discussing creating
their own "EMF" (European Monetary Fund) so that these bankrupt EU
countries can bail themselves out...by borrowing more from one another!
However, these moves--even if all somehow miracously implemented
before Sunday night's Asian stock market open--will not be sufficient
to overcome the resurgent re-collapse of the financial system.
Which leads us to what WILL stem the implosion, and will absolutely
be implemented:
1. The ECB will finally throw in the towel and agree to monetize
trash, flinging fresh scleros in exchange for deadbeat sovereign
debt/bad bank "assets"
...and:
2. The Fed will--at a minimum--re-open the swap lines they used in
2008, only this time probably to the tune of a TRILLION fiatscos
(Ras Conclusion): Anything LESS than these two drastic measures of
turning the spigot on the "Fiatsco Flame Thrower" to "Full Blast" and
the economic chaos that picked up speed last week engulfs the entire
planet.
And these goons know it.
So, the "Showdown at QuantSleaze Corral" is on.
And my prediction is TPTB come out with all guns blazing.
I had been scratching my thick Rasputin head all
last week, trying to figure out why the ECB didn't just "Go Bernanke"
and offer to trade freshly flung scleros for dead, toxic sovereign debt
offered to it by the individual countries in the EU.
Well, now I have the answer.
As stated in this NY Times article:
http://www.nytimes.com/2010/05/09/business/global/09ripple.html
...the Europe Commission ITSELF will be borrowing funds to shore up
the individual deadbeat countries and to try to stabilize the sclero.
So, rather than have to deal with a bunch of individual deadbeat EU
members, the ECB can now just exchange fresh scleros for the new Europe
Commission bonds.
Problem solved.
Heh, once all the puzzle pieces are revealed, even the dumbest,
slow-witted-est Rasputins can assemble them into a coherent picture.
Oh, and by the way, as also revealed in the above article, U.S.
banks have a:
THREE TRILLION FIATSCO EXPOSURE
...to EuroZone banks, so you can bet that they (and the Fed too!)
are watching this weekend's panic maneuvers very closely.
And they won't be disappointed.
For, "QuantSleaze 2.0" will be unleashed with a flurry in a matter
of hours, with the European Commission's announcement of their "Bazooka
Fund", the ECB committing to buy the debt of the EC, and perhaps the Fed
re-opening the "Infinite Fiat Swap Spigot" last utilized during the
previous collapse in 2008-09.
One nice, tidy little "fix" to what ails the world's economic
system, all cobbled together in a couple of days by TPTB.
And within hours, the EU/EC/ECB/FED are
gonna announce that they are opening up the "Infinite Smorgasboard of
fiatscos/scleros on which the Pigmen will again gorge themselves.
Now for the "Rinse"
part of the "Wash, Rinse, Repeat" cycle:
Continuing an analogy, the overweight Ponzi Monetary System (PMS) undergoes a
"liposuction treatment" by debt collapse/scrooming sheeple out of their
savings, pensions and stock "gains".
Then, the "Repeat" cycle comes into play, with the EXACT SAME fiat
currency/fractional reserve lending/central banking system in place, and
the EXACT SAME (or similar) Alpha dogs in charge of it. Back to the
buffet table we go.
By the way, just to remind everyone how we came to be in such a mess.
Here goes:
1. Beginning nearly a century ago, the fiat/fractional
reserve/central banking scam--devised by corrupt governments and
banksters--began to really take hold over national economies
2. At the end of WWII, the global financial system of "Bretton
Woods" was put into place, with the U.S. fiatsco tied to buggy whips and
every other currency tied to our currency. Which had the effect of
fostering massive international trade of goods and services...and
financial flows with them
3. It took the U.S. approximately twenty-seven years to so
thoroughly abuse our "exhorbitant privilege" that other countries
(notably, France and Germany) began demanding buggy whips instead of
fiatscos for payment.
4. Rather than face overt national bankruptcy, then-President Nixon
instead choose "stealth default" and slammed shut the "gold window" on
the fingers of our creditors.
5. After a few years of turmoil and wrangling ("Washington
Ageement", etc.), the rest of the world figured out that a pure-fiatsco
base of the Ponzi Pyramid was a license to steal--especially as
generations of sheeple became more ignorant and lazy regarding
understanding prudent monetary practices
6. In the interim time between August 15, 1971, and now, legions of
Pigmen traders, speculators, quants, and other gamblers have sprung up
to wildly bet on any and all things financial.
7. The advent of lightning fast communications, computer and
software technology facilitated and exponentially grew the casinos to
today's multi-trillion-fiatsco size. So too did lobbying by the Pigmen
to blow off all regulations further enhance the gargantuan growth of the
gambling.
(Ras Conclusion): There it is, bears: Seven Easy Steps leading to
wholesale destruction of our lives.
"Finally"?
Hyperinflation here we come!
Thanks for reposting windy. Weimar first, THEN deflation (aka crack-up boom and currency destruction).
+1
This is all about saving the core EU banks via monetizing bad debt (sovereign and otherwise) and "distributing the wealth" across the eurozone. Just like the US bailouts, it's a politically convenient solution, that without much systemic changes will result in more pain down the road.
But, But, Tyler, You said Euro, R.I.P. I thought the Euro is dead. Im no genius and even i figured this one out. The US will bailout the Eurozone. Whatever it takes to " Calm the markets" .Come On Tyler, Please enlighten us as to why bailing out Greece is so wrong and how this will cause irreparable harm and how the markets will go Kaboom.
Because that money does not exist, will never exist, and there is no scenario by which it will ever exist.
Simply put imagine if everytime you visited the supermarket you pulled out a mini money printer to pay the bill. How about when you wanted to pay your cable bill? Now did you actually go and produce work of value (AKA laborious mining and storing gold or making a pair of sneakers to barter?) no you created a debt.
Now imagine if this has worked out so successfully that you begin to lend your money that is printed to your 3 best friends to gamble at the horsetrack. Now imagine they were betting on 7000 horse races a day and lost it all one day. Sure the debt still exists and now we have more dilutive dollars out there chasing prices. Now here is the best part of the magical money printer.
Now imagine that the debt owners came to you and said, "Listen the fact that you can print money is all well and good but I think we have reached a limit. So if you would like for us to keep accepting all the money printed out of the little machine in your pocked first we need you to go around and knock on all the neighbors door within the square mile and tel them they will need to retire 10 years later, have their salaries cut along with their expected pension benefits..oh and also tell them you need to raise their taxes"
All of this so you can walk around with your little machine and never work or contribute to society. Now how do you think they will react when you come knocking? Well Greece would best summarize your neighbors response. Does that work?
Serious question:
Do you know how many people in the world actually WORK for a living?
Would you guess half or less?
One of the greatest unknowns, is how few are needed on a daily basis to get us where we are today in global output.
What would you guess the total employment is in the U.S. out of 400,000,000 people? Would you believe that the majority do not work?
I wouldn't be at all surprised if we've crossed the 50% threshold of parasites to producers, here or anywhere. For the U.S., I'm sure even that is grossly overoptimistic.
Hey, I know for a fact that all the boyz at the SEC and probably CFTC are hard at work every day downloading Debbi, Gina, and Suzie the WonderPutz. Wake up man.
Well I guess we need to first define "work". In services utopia America do we have a model projection for coping with 20% unemployment and the other 40% in the services industry. Well what happens when there are no "services" left to be done? The fact that we re dealing with a beginning stage depression after the greatest wealth destructions and continued credit destruction debt creating environment in history and the Dow is at 10k is so unsustainable that it is the precise reason I went all in FAZ in November in expecting these political headwinds and I reiterate that the Federal Reserve will be forced to raise interest rates while the Dow is collapsing. Banks will not survive this and I am certain of that since Americans do not wish to play, "This time we will get it right" ever again. We will get it right this time but it will mean bank nationalization, bond holder wipeout and the Federal Reserve will become the "true lender" of last resort. In the meantime save your gold/cash and enjoy the cherry picking of homes at 1978 -1983 prices in coming years. The only way for America to pull out of this is for affordable housing. Deflation is the medicine we not only need but will have forced down our throat. Mad Max is a possibility but unlikely we will simply have a modern depression with people lined up giving handjobs for Internet access as opposed to soup lines.
Clear thinking. +1. The idea to hold in our heads going forward is, as you said, that we are in the beginning stages of a depression. People are performing all kinds of mental gymnastics, and working on the blame game, to avoid this realization. However, any rung on the E Kubler Ross grief ladder short of rung 5 is mere delusion.
Fed will go into hyperspace first. Quadrillions will cede to Dodecatillions. And some little Hollywood trollop will become our first Sextillionaire.
956 billion put in bank first
using fractional multiplyer .. times thirty
30 trillions of fiat now available .
the magic of the wand. presto .
5-10%, or about 10-20% of the workforce. The rest either work for the government, or do some sort of regulatory compliance work. If you cut out of that 5-10% those people who do "work" in bubbilicious parts of the economy (think real estate), then you'd probably come up with something like 2.5-5%.
That's IF those jobs haven't been offshored. It might just be the farmers and the energy producers that are left, meaning less than 2%
http://www.usdebtclock.org/ says we have 110m taxpayers, which is around 35% of the population. Of course, many of those "taxpayers" are not really contributing any actual productivity to the economy. Take the 4.25m federal employees, for example. They actually spend most of their time making the real workers less productive.
there has got to be decent summary of this data somewhere but most stuff I see is not thorough whatsoever, its about grinding on a point by pulling out certain data. Like sometimes people talk about what precentage of people that pay federal income tax. Well, our tax code is right there to see, if you are low income, but not poor family with a couple of kids, you probably won't be paying much federal income tax while you have the kids. People with kids get lots of tax breaks. But you will be paying sales taxes, property taxes, possibly state income tax and of course FICA and Medicare. How many adult people are so disabled/sick they can't work. How many people don't have to work, have income from other source et...
nice explanation...
Fucking nitwit. I don't think you'd understand it even if we explained it.
I agree with this somewhat. How much money was "printed" for the US bailout? I think I read somewhere that the Fed bought 2 trillion in assets.
Where's the inflation?
Milk is still $2.99 a gallon. Prices have gone down if anything.
The way I see it, all they're doing is refilling the bubble to where it was before. If the banks don't spend or lend that money does it still cause inflation?
'US will bailout the Eurozone'? Did you forget the US is in exponentially worse shape than any of them? 'Bailout' with what?
Does this call off the IB/hedges in the US? Is 500bn Euros large enough? This could be one hell of a fight!!!
500 billion Euro...nah, that's not inflationary.
Italy ALONE will need 251 billion this year + debt servicing costs. This will, MAYBE, cover that. It futile to even think it will be enough for the rest. The end is nigh, the end is nigh bitchez, RUN TO THE HILLS.
+1
I can't even spell GDP, but I believe $251 billion is gross refunding. Some Italians pay taxes, and they do have tariffs, right?
bonds coming due this year. full notional amount after April 29http://www.zerohedge.com/modules/wysiwyg_spellcheck/tinymce/spellchecker...); background-attachment: initial; background-origin: initial; background-clip: initial; background-color: initial; cursor: default; background-position: 0% 100%; background-repeat: repeat no-repeat;">th. Just look at the data. This is added to the budget and add to that the budget deficit and you have the next victim in line. Italy is on the line for 600B EUR in the next 2.5 years. It will probably borrow [at an increased cost] to cover that, but i the lending turns sour [as i think it will in 1-3 months when EURIBOR and LIBOR explode] Italy is fucked. And remember Italy's debt-2-GDP is 121%. One of the highest in the EMU. 600 B coming due in the next 2.5 years represent 20% of 2.5 year GDP even with the medium projected growth of 3%. Think about that. 48% of all Italian economy will need to go towards bonds redemption. Italy is next, no doubt about it. They can maybe cover 30% of the 600B and thats it. They are then fucked and once again IMF, ECB, EMU bail someone out. And lets not talk about UK, Spain and the rest.
Billion dollars or euros?
EUR
see chart above
Oh come on, all the European leaders need to do is hold their shit together for long enough for the world to catch on that the US has been fiddling it data as badly as the Greeks have and investors to finally catch on that the US has no option but default via devaluation.
The US has used what it knew about Greece to maximum effect, got its minions at the ratings agencies to kick Spain and Portugal at the right time, but the rollovers just keep on coming and investors are getting tired and anxious. At least you know with Greece, they will let the IMF in, with the US, creditors will get nothing more than a middle finger if they try to make demands.
The EU as a zone has higher GDP than even the official US data and AEP needs to realize that Europe of the 21st century is a far more stable place than it was in the 1930s. I'm not saying it will all be fixed, I am just saying that Europe is certainly no worse than the US and the fact we have switched back to assuming the Dollar's role as global reserve currency is inviolable for years to come is almost amusing.
Yeah, the real game in town will be USA, maybe UK before that.
€60b capital injection into EU BoP funds to be levered 10x = €600b
How much does Gold fall tomorrow as flight to safety trad ends? 5 or 10%?
LOL...oh, you were serious.
From Quant Trader.
LMAO!
Something to chew on
goto:
Civil And Criminal Probes Launched Against JP Morgan For Silver Market Manipulation
we chewed on that earlier...
http://www.zerohedge.com/article/civil-and-criminal-probes-launched-agai...
How 'bout something newer to chew on?
Open Letter to EMU Heads of State
Latest post from FOFOA. Essential reading for those who think they know what is happening with the Euro.... have you seen the whole picture?
The politicians are not the ones running the show, are they? So why assume they are privy to all the info?
Or that you are?
I don't agree that this was the EU's nuclear option. That is still waiting in the wings.
Interesting read. A couple of weeks ago I was wondering why they didn't revalue gold. It makes sense. They did it during the depression ~ revalued from $33 to $45. With JPM being investigated, they can always throw the bankers under the bus and point fingers at Wall Street/ TBTF...maybe pin the blame on a few dead people, knock off Alan Greenspan & blame it all on him & Reagan (he's dead) for lack of oversight.
on Sun, 05/09/2010 - 16:20
#339808
How much does Gold fall tomorrow as flight to safety trad ends? 5 or 10%?
QuantTrader,
You have been Junked for speaking the truth? happens all the time.. the hopes and dreams crowd... the rapture crowd... the praying for the end crowd... or just the used car salesmen who are now selling gold... no worries Quant! all is well in your lil black box I am sure... as you made money on your foresight..
http://www.kitco.com/charts/livegold.html Gold is indeed down... and everything else is...
Green Shoots Bitches!!!!! Bailout equals good news! thats real growth you can count on now days?! wake up!!
Be well QuantTrader, JW
George Bernard Shaw, who once said “My way of joking is to tell the truth. It’s the funniest joke in the world.”
1. proposal
2. England need to agree
3. England says: the euro is not ours. We have the pound.
4. Euro is going down again.
Don't get to bullish now. Like I said, there things are so typical for them. They want to show off as the saviors, but overdoing it will cause the bill not to pass.
I still give it a 1% succes factor.
From what they are saying of the details, i don't think this needs to "pass" as such. They don't need parliamentary approvals for guarantees i think. I guess tomorrow morning they come with the swap lines as well?
Europe, unlike US, votes in the streets...no parlimentary action needed to determine if there is support
And there is currently no legitimate government in England...
I dont undertsand why they´re devising such complicated schemes, when there´s a simple solution for this - a common euro bond market.
You wanna co-sign your local crackhead's loans?
Well, I guess, a common bond market would be cheaper than the never-ending bailouts. First it was 45 bn EUR, then 120 bn, now 500 bn. What will be the number in a month? 3 trillion?
My point is that if your unified bond market includes the PIIGS, it won't be cheaper for the EU core.
120B euro sounds like a lot (and is), but France has a 2T euro budget and deficits near 120B; financing that sov debt with rates that price in the likes of Greece is simply not an option.
I'll grant you that these particular crackheads won't stay bought off for long, but having them wreck your credit rating too would be even less helpful.
Well, there's the law for one thing. Not something that's guaranteed to stop them, I accept.
Printing 500b Euros should be very bad for the Euro
why, more pricing pressure... buy low.. the Euro is going to go lower! to sell high later.. if you trust in the idiots over there.. they make our idiots seem very smart dont they...
I remember not so, so long ago… when Germany was demanding for their Gold to be returned to their Country… out of the U.S. vaults. Well now there will be shoring up the U.S. with their cheap ass fucking Euro’s BITCHES!!! Rounds are being bought all around by Germany and their bullshit of not supporting the Greek bailout! Thanks Germany, your protectionism just bought the U.S. at least a trillion in new monies thru the swaps windows that will be opened! Fuck ZEE Germans! And Europe as well, piece of shit cowards… didn’t want to fight in Iraq, well now the new, new price of energy price control is being brought to you another way… and the British, God Love those Fuckers! Told the Committee that England would offer a shoulder to cry on but no, NO! monies / pounds Bitches!
It’s almost like Europe’s entire financial market was systematically attacked and crushed… with the result being that the U.S. now owns Europe for dirt cheap… Europe is going to swap out their souls to the U.S. for pennies on the dollar… I said DOLLAR! BITCHES!!! U.S. swap facilities will make the Fed how much money? Not that anyone else other than the Fed will enjoy the benefits of that swap… more money for the Fed… less money for the people, Europe and in the U.S.! Not only have we not stopped the Fed here… the Fed is back in the worlds pocket! Gangsta Fed Bitches!!!!