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Today's Unprecedented Swiss Bank Intervention Driven By Massive Capital Flight From Germany To Switzerland; Result Was Euro Surge

Tyler Durden's picture




 

Earlier today we disclosed what were not one but several massive central bank interventions in the Euro-Swiss Franc exchange rate. The intervention was large enough to push the rate up by 300 pips, a gargantuan amount in a world where applied leverage is often in the thousands. The amount of capital required to achieve this was likely unprecedented. Yet what bothered us was why would the SNB so glaringly intervene in the FX market not once but three or even more times. Thanks to the Telegraph we find out that the reason was a massive €9.5 billion capital flight from Germany into Swiss deposit accounts just this morning, according to BNP. Unfortunately for Germany this is only the beginning of capital reallocation from the country into neighboring Switzerland. And the technical bounce in the EUR today was in fact an even greater sign of weakness: in fact, as the IMF's Tim Kingdon pointed out, the money run in Club Med banks last week resulted in a massive €56 billion of interbank lending as the move from the periphery to the core accelerated. Now that the next stage of the run is from the core, Europe will very soon find itself with depleted depository capital very soon. Because if money is fleeing Germany, it is certain that France, Italy and the UK can not be far behind.

Below, is a chart we posted earlier of the record Swiss National Bank intervention.

And here are more details on today's unprecedented move from Evans-Pritchard:

The market is left asking what skeletons are lurking in the cupboard," said Marc Ostwald from Monument Securities. The short ban follows a report by RBC Capital Markets that circulated widely in the City accusing German banks of failing to come clean on 75pc of their €45bn exposure to Greek debt.

German lenders have the lowest risk-weighted capital ratios in the world after Japan. They were slow to rebuild safety cushions after the sub-prime crisis, and now face a second set of losses on Club Med holdings. Reporting rules have let Landesbanken delay write-downs, turning them into Europe's "zombie" banks.

Even so, nothing adds up in this BaFin episode. Germany acted alone, prompting a tart rebuke from French finance minister Christine Lagarde. "It seems to me that one should at least seek the advice of the other member states concerned by this measure," she said. Brussels was not notified. The deep rift between Berlin and Paris has been exposed again, leaving it painfully clear the European Montary Union still lacks the fiscal and governing machinery of a viable currency union.

Far from stabilising markets, BaFin's move set off a nasty sell-off in credit markets. Markit's iTraxx Crossover index – measuring risk in mid-level corporate bonds – jumped 57 basis points to 586. Markit said BaFin had caused liquidity to dry up in "febrile conditions". The Libor-OIS spread watched for signs of strain in interbank lending widened further.

If the purpose of BaFin's action was to drive wolfpack "speculators" off Greece's back, it failed. Yields on 10-year Greek bonds rose 37 basis points to 7.918pc. What it showed is that CDS contracts barely matter. The issue is whether "real money" investors such as the Chinese central bank are willing to buy Greek and Portuguese debt.

The short ban set off instant capital flight to Switzerland. BNP Paribas said €9.5bn flowed into Swiss franc deposits in a matter of hours on Wednesday morning.

The Swiss central bank intervened to hold down the franc. This caused the euro to shoot back up against the US dollar after an early plunge. The euro had already bounced off "make-or-break" technical support at $1.2135, the 50pc "retracement" of its entire rise since 2000, but any rally is likely to be short-lived.

The commentary by BNP currency chief Hans Redeker is priceless, if for no other reason than to indicate to what great degree the great ongoing experiment to prevent the disintegration of the EU is an improvisation at every single step. As such, it is only a matter of time, before a fatal mistake is executed and the whole thing falls apart, despite the best intentions of European bureaucrats.

"As a German citizen, I wish to apologise for the stupidity of my government," said Hans Redeker, currency chief at BNP Paribas. He said the CDS ban deprives reserve managers of a crucial hedging tool for non-securitised loans and will scare away global investors needed to soak up Club Med bonds.

"The European market is likely to become utterly dysfunctional. Just as the market showed signs of stabilisation with real money starting to buy euros, the Germans have destroyed this glimmer of hope," said Mr Redeker. "The BaFin ban is a desperate political move by a government battling for survival. Angela Merkel needs the support of the Left so she has given in to a witch-hunt against banks and speculators."

As for talk of disintegration, we know that Europe was hours away from implosion as recently as Friday.

Tim Congdon from International Monetary Research said deposit data from the ECB shows that there was a "major run" on Club Med banks in the second week of May. Some €56bn of interbank lending facilities were withdrawn, probably as citizens in the South switched funds to banks in the eurozone core. Bank reliance on the ECB lending window jumped by €103bn – or 22pc – in a week.

"It was extreme and very sudden, probably on Friday afternoon. The eurozone was undoubtedly in peril," he said.

The question raised by BaFin is whether underlying damage to the eurozone banking system runs even deeper than feared.

If one considers that Libor keeps crawling higher, and that the Libor reporting dispersion between the European and foreign banks in the BBA USD panel is almost back at record wides, we are fairly certain that the answer to the last question is a resounding yes.

 

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Wed, 05/19/2010 - 19:14 | 361825 TheGoodDoctor
TheGoodDoctor's picture

Is interbank lending like what we did in college so we could get beer while our paychecks cleared over the weekend? Essentially writing each other checks and deposting them?

Wed, 05/19/2010 - 19:38 | 361861 SWRichmond
SWRichmond's picture

Is interbank lending like what we did in college so we could get beer while our paychecks cleared over the weekend?

Idk, is interbank lending like going to the plasma clinic?

Wed, 05/19/2010 - 22:13 | 362133 Raymond K Hassel
Raymond K Hassel's picture

lol, added bonus - needing less buck for the same bang. 

Wed, 05/19/2010 - 22:15 | 362137 moneymutt
moneymutt's picture

check kiting for beers...brilliant

Wed, 05/19/2010 - 23:10 | 362223 TheGoodDoctor
TheGoodDoctor's picture

It seemed an apporpriate comparison.

Thu, 05/20/2010 - 01:53 | 362342 wagefreedom
wagefreedom's picture

It seems European central bankers did the same thing in college...

Wed, 05/19/2010 - 19:17 | 361828 Cognitive Dissonance
Cognitive Dissonance's picture

Where there's smoke, there's fire. And there's a lot of smoke. Can you say volatility times 10?

Wed, 05/19/2010 - 20:16 | 361912 Thunder44
Thunder44's picture

What? Nothing strange there.------------Yeah right.

Wed, 05/19/2010 - 19:23 | 361835 Mitchman
Mitchman's picture

A beautiful article.  The system is fatally flawed and the Germans took the first logical step towards asserting their authority as the only adults in the bunch and as the owners of the only solid balance sheet in the group. Good for them.  And good for them for giving Bernanke the finger.

Wed, 05/19/2010 - 19:40 | 361862 Renfield
Renfield's picture

I agree.

WTF are these idiots trying to hold onto? What do they think they can avoid? The global financial system has been falling apart for years. The collapse has been accelerating for the last couple of years, but there is no 'stabilising' it. All that 'stability' - bailouts, shadow banking system, increasingly complex financial instruments, too-big-to-fail - was just making things worse.

Merkel has a spine after all, as it turns out - altho she shouldn't have ever softened on the bailout pap. Should have said No and called Sarkozy's bluff, should have refused to consider it in the first place. The EUR would have taken its lumps earlier. Merkel has more backbone than any of our lapdog administration - she is the first to face reality.

Their fucking 'bailout' was transparently unworkable from the start. Greece, Europe, and the rest of the western world is behaving like a desperate debtor trying to buy any time at any price. I'm not surprised at the blaming and weeping and carrying on by the cockroaches who are trying to kick the can down the road one last time, who are so close now to being made to hold the bag of their own debt. How dare Merkel refuse to pour her citizens' labour out like water so the banksters can party for another year.

I pity the peasants of Europe, though. Stupid or entitled as they may have been, they don't deserve the blaming and the pillaging they are getting from their guilty, complicit leaders.

There is a debtor's lineup happening. Europe, the 'resources' currencies, Japan, and at the end the US.

PS: And I can't tell from the various articles posted, whether the ZH panel is in favour of more bailout, and bigger shadow banking system, or not! Up until this week, I would have thought they'd be applauding - it's weird to read some posts that sound like they're coming straight from the Soc Gen.

Wed, 05/19/2010 - 20:24 | 361923 Fraud-Esq
Fraud-Esq's picture

as to you last point, I was surprised too.

Wed, 05/19/2010 - 23:19 | 362235 TheGoodDoctor
TheGoodDoctor's picture

I may have missed this, what are you speaking of?

Thu, 05/20/2010 - 02:30 | 362376 Bolweevil
Bolweevil's picture

In my view the criticism from ZH is not necessarily the ban on naked shorts, but the "late to the party" nature of Merkel's poorly timed, back-firing, stab at gaining control of a too far gone rotten corpse of an EU (EMU?).

Thu, 05/20/2010 - 03:15 | 362404 Fraud-Esq
Fraud-Esq's picture

oh, I think I meant the general opinion of the contributors = against bank speculation, etc... no big deal. just seemed the opinion changed a bit. i guess some days you want to pound sovereigns and some days banks for the many follies of all. Just when it comes down to the bone, as much as I've had it with sovereigns, I'm personally with THEM on most every battle/regulation against banks. Seemed this contribution was with PNB's book, incidental or not.   

Wed, 05/19/2010 - 20:32 | 361937 sushi
sushi's picture

I like your sentiment. Nothing like a little sturm und drang.

"she is the first to face reality."
They are in this mess because nobody faced reality. Loaning funds to persons/nations who lack the means to repay the debt is hardly a prudent course of action.

"Their fucking 'bailout' was transparently unworkable from the start."
Forget the Greeks. They are toast. The "bailout" was to protect French arms sales to Greece and prop up the overleveraged and undercapitalized German banks.

"How dare Merkel refuse to pour her citizens' labour out like water so the banksters can party for another year."
This is great writing. Truly great. Replace Merkel with Obama and her with him and you are really on to something.

"it's weird to read some posts that sound like they're coming straight from the Soc Gen."
Truly. Disclosure: long guillotines and tumbrils.

Wed, 05/19/2010 - 23:21 | 362236 TheGoodDoctor
TheGoodDoctor's picture

I figure this graph is the culprit. Correct me if I am wrong.

http://paul.kedrosky.com/archives/2010/05/the_case_for_a.html

 

 

Thu, 05/20/2010 - 03:02 | 362401 Hephasteus
Hephasteus's picture

Weird how everyone ends up owing each other more than everyone could possibly pay back. It's like there's something FUNDAMENTALLY and MATHEMATICALLY wrong here.

Thu, 05/20/2010 - 04:45 | 362444 THE DORK OF CORK
THE DORK OF CORK's picture

Its derivatives baby - in theory they should be net neutral but someone or something is skimming here. 

Wed, 05/19/2010 - 20:49 | 361977 Hatshepsut7
Hatshepsut7's picture

Totally agree with your sentiments (much voiced by comments posted online for ex. on FAZ.net discussing bailouts), the political establishment in Germany is out of touch with their voters to a large degree. Mrs. Merkel has some serious political damage to undo, let's hope she maintains her back bone.

s to ZH's bipolar nature on this issue....yeah, right, have been getting the same sense. Has gotten my little red lights flashing pretty hard last few days....

Wed, 05/19/2010 - 23:50 | 362262 Assetman
Assetman's picture

Perhaps the "bipolar" nature you speak of depends on who owns gold and who doesn't.  If you were betting on hyperinflation in the near term, Merkel just ruined your party it appears.

Food for thought...

Thu, 05/20/2010 - 00:28 | 362286 Alienated Serf
Alienated Serf's picture

wrt all the bipolar talk, since when is it wrong for ZH to post opposing viewpoints?

Thu, 05/20/2010 - 02:27 | 362372 defender
defender's picture

You have to admit that we have pretty well crucified anyone that says anything outside of the groupthink for some time now.  Examples include Harry Wanker, Master Bates, Mako, and even Leo.  The soup du'jour is to junk posts without even reading them.  Contrary views are indeed accepted on ZH, even rewarded

by beating the submitter with a rubber hose.

Thu, 05/20/2010 - 02:54 | 362392 akak
akak's picture

I have to disagree.

In fact, just in the last couple of days here I have had a number of polite and constructive exchanges with several posters who admitted to being agnostic if not skeptical about the value of holding gold.  I neither jumped down their throats, nor did anyone else.  And you know why?  Because, unlike MasterBates (aka JohnnyBravo) or JayBayBaker, they did not (1) immediately enter the dialogue with an aggressive and hostile attitude and manner, (2) refuse to address or rebutt the issues raised by myself or others, and (3) did not swarm the thread with numerous hostile and gratuitously antagonistic posts.

Face it: there ARE trolls who do not deserve to be tolerated in online forums, and those who you mentioned (I will exclude Leo) were demonstrably in that camp.

Thu, 05/20/2010 - 03:46 | 362417 defender
defender's picture

I saw the exchanges that you are talking about and thought that they were the most informative and useful posts for that week.  Unfortunately I have to disagree with your final statement.  There are trolls, but they should be refuted, not crucified.  And when refutation doesn't work, they should be ignored. 

I would hate for this site to become like slashdot, a slave to its group think.  There are too many great minds here to lose them all to dogma.

Thu, 05/20/2010 - 10:52 | 362944 WaterWings
WaterWings's picture

So far dogma has been the only way for the little guy to hold onto his wealth in these markets.

If you want dogma go to the MSM.

Thu, 05/20/2010 - 08:07 | 362602 Alienated Serf
Alienated Serf's picture

akak, you are never a abusive unless it is to a troll like mr. wanger, which is fine, b/c he is a troll who just tries to rile people up and adds nothing constructive.  

i was just talking about the potential for groupthink to become entrenched.  i think its good we have leo or whomever else who have something constructive to add, even if it is at odds with what most of us think.  

if commenter's are gonna be like "oh i can't believe that guy doesn't agree with me and was allowed to post," isntead of crying about it, refute it!!

we can't afford to become an echo chamber, and i don't think we are, but we should be on gaurd.

Wed, 05/19/2010 - 20:54 | 361993 buzzsaw99
buzzsaw99's picture

PS: And I can't tell from the various articles posted, whether the ZH panel is in favour of more bailout, and bigger shadow banking system, or not!

 

Agreud. Some of this stuff spins like it came straight from the belly of the beast.

Wed, 05/19/2010 - 22:17 | 362141 Ropingdown
Ropingdown's picture

I agree with both above, and with the surprisingly ambiguity shown in the comments.

Merkel quickly set up protection to stabilize German banks as the need to soon save them became apparent.  The French played a duplicitous game last week, in attempting once again to make Germany pay a disproportionate share only to prop up a soft currency and another round of la dolce vida on Germany's dime.  Now the legislature can stop the bailout, Germany can face its banking reorganization, and France can go to the IMF by itself.

Wed, 05/19/2010 - 22:29 | 362163 darkpool2
darkpool2's picture

The French played a duplicitous game last week,

LOL, nothing new there......the French political caste is as sleazy as they come

 

Wed, 05/19/2010 - 22:35 | 362174 merehuman
merehuman's picture

Banks have in their rent seeking made war on us for centuries. We are finally catching on.

Bullish on truth.

Thu, 05/20/2010 - 03:19 | 362353 Fraud-Esq
Fraud-Esq's picture

This is the second blog today which threw a CURVEBALL on the SAME subject.

WTF. In order to mock sovereigns, we don't have to take up bank talking points.....there is ample sovereign-mocking material. I'd like to see if merkl can move the market and I dont mean price. I'm tired of watching numbers and charts, I want to see someone's foot in a chart.  

Thu, 05/20/2010 - 03:21 | 362407 ConfederateH
ConfederateH's picture

With this latest ban on naked shorts, Merkel is showing she has turned into a Euro-prude.

The real issue here is the stealth-coup performed by the Euro-elite when they broke Maastricht in order to formulate the 750B bailout.  It was a blatant power grab where Brussels and ECB wanted to take over the budgets of all Euro countries.  It would appear that Merkel has had a change of heart, and this is a gigantic victory for all opposed to the elite and their constant efforts to centralize control of the entire world.  One can hope that Germany has looked at Switzerland and decided that perhaps the Swiss were right to avoid being sucked into the EU morass.

This comment from the Telegraph article was my favorite:

My reply is that the EU Finance Ministers May 2010 Summit took the eurozone out of a trade and currency union and into a region of global governance; a European Economic Government was announced by EU Finance Leaders and State Leaders; they effected a bloodless coup de etat; sovereign nation states are history. National sovereignty is a principle of a bygone era. Perhaps a Framework Agreement, but definitely future Summit Announcements, will announce governing machinery and mechanisms for coordinated economic, banking, financial, monetary and seigniorage policy.

 

I refer to the EuroIntelligence article Euphoria Ends As Investors Suspect Another Shameless EU Confidence Trick, where France’s Finance Minister Christine Lagarde in Les Echos.fr May 11, 2010 article ”This Is Not Just An Emergency Plan — It Is A Historic Turning Point For Europe”, relates that this is a historical turning point for the euro zone.

She said that there is a political determination now to build something new, to reinvent the European model. The original construction faults of the eurozone will be dealt with, but this will not happen overnight. The work starts soon (21 May) under EU president Van Rompuy. Lagarde listed among others a convergence of economic models, a reinforced stability and growth pact and improved functioning of the eurogroup.

An excerpt with questions and answers is as follows:

Is Germany ready for the euro area that changes its nature by being more integrated politically and economically? … “Germany has agreed to change its traditional position with focus on bilateral loans as we have seen in Greece, to defend us, with the creation of a stabilization fund for Europe, whose dimension is collective, is the key element.”

Is this one ounce of federalism? … “It’s more than an ounce of European federalism, as the fund’s programs will purchase securities or offer loans.”

Clearly historical facts show that at the May 2010 European Summit, the EU Finance Ministers announced a region of global governance, specifically a federal economic, political, and monetary government, with a EU Treasury which has the authority to buy ailing sovereign debt and to exercise seigniorage. Mr. Trichet is tasked as the EU’s Treasurer and Chief Banker.

It is significant to note the optimism and sense of mission in the Les Echos interview, as Finance Minister Lagarde stated that “This is a historic turning point is extremely clear. This is not just a device concocted for emergency requirements. We wanted to build a system for the long term. Basically, there is a realization that we’re all in this together and we suffer the same blows. There is a determination to build a new building, to reinvent the European model. We must find the rules that we preserve such crises in the future. When you put 500 billion euros on the table, it still believes that will be satisfaction. This also means that there will be fiscal adjustment for everyone. “

She went on to highlight the pivotal role of incoming EU chairman: “The work cannot be done in one day. The work will begin soon after May 21, with the appointment of the new chairman of the European Union, Herman Van Rompuy.”

Clearly we have a new building and reinvention of the European model — the European Monetary Union that Mr. Evans-Pritchard referred to is history, it is part of a bygone era: the age of European Economic Governmenance has arisen, it will be presided over by its Sovereign, Herman Van Rompuy, and its Seignior, Jean-Claude Trichet.

 

Has Merkel gotten cold feet, and decided that Germany would rather remain sovereign?  I pray to god that she has....

Thu, 05/20/2010 - 04:12 | 362411 Fraud-Esq
Fraud-Esq's picture

Sounds to me like they're selling a grand skyscraper, a vision of Europe, to house and protect the wealthy shareholder of the very creditors who made bad loans in order to get rich. I agree with you. The only house that stands is the one where the reckless, loan-to-wealth creditors lose their money (with the shareholders) and the system resets. The reckless creditors cannot be allowed to gain financially and take more sovereign power, as well. That would be it. 

liberte egalite fraternite anyone?

ha

Thu, 05/20/2010 - 05:40 | 362464 AnAnonymous
AnAnonymous's picture

Truth, justice and freedom anyone?

Ha.

 

It is sounder to declare the failure of the many, not one in particular.

Wed, 05/19/2010 - 19:26 | 361841 sushi
sushi's picture

I'm sure everyone running capital wants to commit to the eurozone and run the risk of getting Merkeled. Survive that and then you get Sarkozied. And then just for laughs you will be Papandraoueowed. Ouzo on!

Wed, 05/19/2010 - 20:02 | 361889 Amish Hacker
Amish Hacker's picture

I'm wondering what happens when all the capital that would have been invested in projects in Germany (and France, Spain, etc.) is sitting in Swiss banks instead. Makes it hard to see any kind of European"recovery" fueled by capital spending any time soon.

Wed, 05/19/2010 - 22:18 | 362142 moneymutt
moneymutt's picture

kinda like US banks taking their Fed dollars and burying them to bolster reserves....dead, cold money doing nothing

Thu, 05/20/2010 - 03:36 | 362412 Fraud-Esq
Fraud-Esq's picture

except earning 3.5% and being used to leverage prop trades in addition?

Wed, 05/19/2010 - 22:07 | 362117 tom a taxpayer
tom a taxpayer's picture

And then you will be LilyVonShtupped!

Lili Von Shtupp: Would you like another schnitzengruben? 

Bart: No, thank you. Fifteen is my limit on schnitzengruben. 

http://www.most-wanted-western-movies.com/blazing-saddles-quotes.html

Wed, 05/19/2010 - 22:43 | 362182 bonddude
bonddude's picture

Later...

Lili: "What a nice guy" ;-)

Wed, 05/19/2010 - 22:37 | 362179 merehuman
merehuman's picture

 We have been obamad !

Wed, 05/19/2010 - 23:00 | 362211 Miles Kendig
Miles Kendig's picture

And bushwacked.  two sides of the same coin

Thu, 05/20/2010 - 00:27 | 362285 mojine
mojine's picture

If'n the right one don't getcha , the left one will!

Thu, 05/20/2010 - 00:31 | 362290 Alienated Serf
Alienated Serf's picture

lol, politics

Wed, 05/19/2010 - 19:26 | 361843 mogul rider
mogul rider's picture

Yo gold bitches!

Our days are coming where people will treat us with respect instead of disdain. It'll be so cool to say at parties that you are a gold bitch and everybody will nod is awe.

 

 

 

 

 

 

Wed, 05/19/2010 - 19:27 | 361844 mogul rider
mogul rider's picture

It'll also be cool to be the only guy with money to pay for the beer.

Wed, 05/19/2010 - 19:44 | 361865 Renfield
Renfield's picture

Yeah, YOU pay for the beer with your gold.

I'm going to pretend to be just another broke debtor, drinking at the table and getting bailed out by rich guy talkin' up his gold, when the bill comes.

What gold? I would have loved to get some & pay for thise here beer but I listened to the dollar bulls. Whups, I seem to be a little light this week...take an IOU? ;-)

Wed, 05/19/2010 - 19:28 | 361847 Mark McGoldrick
Mark McGoldrick's picture

When the Swiss central bank intervenes to suppress the franc, how exactly do they do this? Do they simply go in the open market and buy Euros with their francs?  If this is true, how do market participants know that a central bank is doing this?  

Thanks...  

 

Wed, 05/19/2010 - 19:53 | 361877 Kataphraktos
Kataphraktos's picture

Yup, pretty much.

I used to work on an FX desk, and was the trader designated to deal with calls from the Fed. They call up a list of dealers, and will ask for a price on whatever currency pair they want to affect. In my case, it was always USD/JPY, when the USD was tanking in the mid-1990s.

The trader knows which way the intervention is going, so you misprice to make sure you can get rid of it without taking a loss, and of course every trader covers a little extra to ride the intervention wave up or down. To understand sizes, back then ,the quote was always for 100m USD. I suspect they were calling around 20 or so banks, so at least a couple of billion - and that was 15 years ago. We can safely assume current interventions are at least 3-4 times as big to have a similar impact these days.

Wed, 05/19/2010 - 20:00 | 361883 Rainman
Rainman's picture

.....+100 for the insight on inner workings.

Wed, 05/19/2010 - 23:02 | 362213 Miles Kendig
Miles Kendig's picture

knowing is usually better than the alternative

Wed, 05/19/2010 - 20:36 | 361946 laosuwan
laosuwan's picture

what I'd like to know is what will the Swiss banks DO with all this German flight capital? Where will they invest it? In Europe? In gold?

 

A big chunk of the Swiss GDP comes from trade with Eurozone so I cannot figure out if the franc is going to go up or down long term.

Wed, 05/19/2010 - 21:41 | 362072 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Chocolate.

Wed, 05/19/2010 - 22:23 | 362154 tom a taxpayer
tom a taxpayer's picture

Richer, cheesier fondue.

Stronger, deeper, more secret vaults.

More ski resorts.

Better  ski wax.

Sexier apres-ski wear.

Fence along the Italian-Franco border.

Increased military budget for Papal Swiss Guard at Vatican.

Thu, 05/20/2010 - 00:48 | 362298 palmereldritch
palmereldritch's picture

Cuckooier clocks?

Wed, 05/19/2010 - 22:47 | 362187 tmosley
tmosley's picture

I think the whole "intervention" thing should give you a clue.  It's going nowhere but down, right along with the rest of the fiat currencies.

Wed, 05/19/2010 - 23:04 | 362214 Miles Kendig
Miles Kendig's picture

It won't matter when Northern Europe departs the EMU as it now defined and joins with Switzerland in a new economic confederation that will still respect national sovereignty.

Thu, 05/20/2010 - 00:42 | 362296 Alienated Serf
Alienated Serf's picture

the swiss will not be joining any confederation.  they aren't even in the EU.  and i don't blame them.

Thu, 05/20/2010 - 02:09 | 362354 Willzyx
Willzyx's picture

Can't remember where I read this, but nations lacking sufficient natural resources in their own borders must develop sophisticated banking systems to become powerful.  Places like Scotland, of course Switzerland, nowadays the Cayman Islands.

Thu, 05/20/2010 - 03:44 | 362416 Fraud-Esq
Fraud-Esq's picture

The nations without natural resources tend to have the highest per capita incomes. Was a book based on that theory

Ex. Singapore, Hong Kong.

Wed, 05/19/2010 - 22:20 | 362147 moneymutt
moneymutt's picture

thanks for that great info

Wed, 05/19/2010 - 22:39 | 362180 merehuman
merehuman's picture

They follow the smell of money

Wed, 05/19/2010 - 19:43 | 361863 RobotTrader
RobotTrader's picture

What was obvious today was that margin calls are forcing everyone to sell gold.

Anything and everything that is liquid will be dumped en masse in a panic.

And, of course, the most liquid risk asset in the world is gold.

Wed, 05/19/2010 - 20:02 | 361885 Mitchman
Mitchman's picture

Query:  Why is it not a ploy to get everyone to stampede folks into the greenback and give the Chinese some breathing room to dump some of their long dollar positions at a profit at the expense of the Europeans?

Wed, 05/19/2010 - 21:39 | 362068 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

I like this idea.  If I was them, I would be looking for the back door.  They should know that their assets are at risk. 

I may be out on a limb, but I have wondered if the Chinese have not had more of a role in all of these happenings (flash crash?).  It is rather quiet over there.  Maybe too quiet.

Wed, 05/19/2010 - 22:19 | 362145 Raymond K Hassel
Raymond K Hassel's picture

Who is playing who? - surely there are big picture plans at work here too - let no crisis go to waste - don't count Russia out - their only hope at maintaining influence is an obscure end run. 

Wed, 05/19/2010 - 22:22 | 362151 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Right?!  China, Russia, The United Goldman States, Europa.... What a mess they are in!  Calvinball continues!

Wed, 05/19/2010 - 22:22 | 362150 moneymutt
moneymutt's picture

the TPTB are not necessarily monolithic..when they fight, we get to look behind curtain a bit...I bet rival gangs are playing quite a chess match right now

Wed, 05/19/2010 - 23:32 | 362245 TheGoodDoctor
TheGoodDoctor's picture

I had a conversation with a friend last night where we were wondering if the Chinese were not rubbing their hands together watching the fall of the western world.

Thu, 05/20/2010 - 00:01 | 362269 Assetman
Assetman's picture

I was having a similar conversation with a colleague.  We concluded that the Chinese and the Germans are talking quite a bit, being the best of a bad lot. 

If they decide to export deflation to the rest of the world by executing realtively tight policy, who's left to finance the next bailout?  Bennie Mae will have to double the size of that balance sheet, and risk reserve currency status.

Thu, 05/20/2010 - 00:49 | 362299 Alienated Serf
Alienated Serf's picture

i'd also keep an eye on german/russian relations, they are getting quite cozy with bilateral energy agreements. they are really pissing off poland and demonstrating a desire to move away from paris.

germany has moved past its post war guilt and is now acting more assertivley in its own interest.  they financed the whole EU experiment and subsidized their neighbors for years.  i think they are growing tired of throwing good money after bad.

german/sino relations are interesting by dint of being the worlds two largest exporters, though of a diff nature (high tech high quality vs. low tech low cost).

Thu, 05/20/2010 - 01:32 | 362328 akak
akak's picture

Poor Poland, "The playground of Europe", stuck for a millenia between the Teutonic rock and the Russian hard place.

Thu, 05/20/2010 - 02:02 | 362348 Printfaster
Printfaster's picture

When Germany and Russia join, the world will shake.  It is inevitable.  Russia cannot fight off the golden hordes, either from Islam or the Orient without Germany.  We are facing an all out contest for world supremacy, all the while the US will be fighting Mexico.

 

Thu, 05/20/2010 - 02:19 | 362365 Assetman
Assetman's picture

... and losing.

Thu, 05/20/2010 - 05:45 | 362468 i.knoknot
i.knoknot's picture

i was wondering what that situation would look like if it were a ground-based 'skirmish'.

there's some tough mothers on both sides, but the US would be defending their turf, or at least clearing it back out. motivation would win over tatoos.

it would probably end up being laser-guided tho' - the US would win that one.

Thu, 05/20/2010 - 03:55 | 362422 Fraud-Esq
Fraud-Esq's picture

You didn't happen to be drinking a Tsingtao?

The greatest German-Chinese collaboration yet.

Great looking German influenced city that few people know of.   

(Qingdao)

Thu, 05/20/2010 - 05:45 | 362469 i.knoknot
i.knoknot's picture

i love a good silver lining :^)

and a good beer.

Thu, 05/20/2010 - 03:47 | 362419 Fraud-Esq
Fraud-Esq's picture

listen to chinese guy. Bill white is good too

http://www.youtube.com/watch?v=AnD44GCKWOs

Wed, 05/19/2010 - 23:51 | 362263 zhandax
zhandax's picture

Collateral damage/ backdoor benefit depending on how you are positioned/ where you live.  Essentially a replay of the 1931 European default minus the Chinese (eventually substitute the Chinese for the 1931 US).

Thu, 05/20/2010 - 00:51 | 362301 Alienated Serf
Alienated Serf's picture

ding ding ding! worlds largest creditor and manufacturer...  enjoy the overcapacity fellaz. (though lets be honest, we can't really figure out what the hell they are going to do)

Sat, 05/22/2010 - 03:48 | 362474 i.knoknot
i.knoknot's picture

while i keep hearing this comparison, and appreciating the logic, i see one notable difference worth mentioning:

in the 1940s no other country had what the US had (production-capacity/resources/economic/cultural momentum), and nobody else could create it from 'where they were' (economically or politically - too much euro-social momentum/baggage and not enough cash due to wars, etc.)

now, the US appears to be in the same relative position to China, but actually could regroup and produce if motivated (war, pride, etc.). and this isn't all speculation, given the last 75 years as proof (i know, just forget the last 20...). Germany recovered amazingly quickly once the dust of war and politics settled.

that said, the dynamics *do* seem similar, but different enough that i wouldn't bet on the same outcome.

Wed, 05/19/2010 - 20:30 | 361935 drwells
drwells's picture

Good, I was waiting for all the weaklings to be kicked out. Are you expecting a $100+ correction like 2007 and 2008?

Wed, 05/19/2010 - 20:46 | 361968 abalone
abalone's picture

Euro's & Aussie dollars aren't too far behind

Wed, 05/19/2010 - 20:47 | 361970 wang
wang's picture

 

 

What was obvious today was that margin calls are forcing everyone to sell gold.

 

as in the autumn of 2008...

Thu, 05/20/2010 - 03:04 | 362403 Hephasteus
Hephasteus's picture

Ya I hate it when you have a huge margin call and you have to sell all your gold then 2 years later you have another huge margin call and you gotta sell your gold again. That totally sucks. You know willow could probably do his disappearing pig trick on you and make you think he banished the baby to a realm you couldn't touch.

Wed, 05/19/2010 - 21:36 | 362065 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Asia ain't going for it.  Not now, not ever!  At least not yet, as they have let their equities split from their gold consumption for the last month or so.  They may be in a bear market over there, but they will not give up opportunities to buy gold.

Thu, 05/20/2010 - 02:11 | 362355 Willzyx
Willzyx's picture

Right before the options expire at the end of the week

Wed, 05/19/2010 - 19:48 | 361869 Belrev
Belrev's picture

Interesting. And I thought that it was the FED that went nuts and started buying Euros, or the Chinese CB trying to support its main export destination's currency rate.

Wed, 05/19/2010 - 21:04 | 361960 DosZap
DosZap's picture

Belrev,

Everone thinks China is so intelligent............

We know their still buying the dollar(stupid move), add the Euro, and that's double dog stupid.

These bitches USD/Euro, is going down..............throwing good money after bad is the definiton of Insanity.

Besides, China has an HUGE issue of ther own fixing to eat their ass.

Thu, 05/20/2010 - 04:05 | 362426 Fraud-Esq
Fraud-Esq's picture

It's not that they're more intelligent, they just take a LONG term look at almost everything, religiously. It's a perspective from a very long history on the very same land. 

Zhou Enlai was asked in the 1970's what he thought about the French Revolution and he famously answered, "it's too early to tell"

 

I always liked that. 

Wed, 05/19/2010 - 19:53 | 361872 Belrev
Belrev's picture

I would also add that the Germans are going all in to destroy the Eurozone and the Euro currency without appearing to do so directly, while speaking about how much they love the Euro and that it is the foundation of their economic growth now. I may be crazy, but the Germans may be taking this opportunity to knock down the globalist empire and end the occupation of Germany by ZOG troops.

Wed, 05/19/2010 - 19:57 | 361881 Mitchman
Mitchman's picture

+1.  Only a matter of time before they call Benron and say "Ve haff very nice vaults vere ve kan keep our own gold."

Thu, 05/20/2010 - 00:58 | 362305 Alienated Serf
Alienated Serf's picture

didn't think you were a zogger

Wed, 05/19/2010 - 21:35 | 362062 Paladin en passant
Paladin en passant's picture

Please stop displaying your idiocy in public.  Thx.

Wed, 05/19/2010 - 22:16 | 362138 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

It is all to fail anyway, so who is to blame is splitting hairs.  They and we are to blame, so let us make a new plan.  Go.

Wed, 05/19/2010 - 22:44 | 362184 merehuman
merehuman's picture

sounds good to me, why the junks?

Thu, 05/20/2010 - 00:59 | 362304 Alienated Serf
Alienated Serf's picture

i'm guessing ZOG, you douche. 

i'm not calling our troops ZOG, but god damn we need to bring our troops home.  WW2 is over, the cold war is over, can we please bring the troops home?  Their presence can not be construed as anything but an outpost of our imperial legions, a launching for misadventure and a massive waste of my money.  We will collapse under the weight of our armor.

and if you think i am a german, hater, please see my above comment.  i don't blame them at all for being assertive, they can do better then to make welfare payments to southern euros.

 

Wed, 05/19/2010 - 23:18 | 362232 Bob
Bob's picture

Don't know why you were mercilessly junked, but perhaps the Uberman thing has something to do with it. 

Whatever.  I guess it's the inherent notion of German victims of World dominatrices pushing their hand that disturbs me.  Germans have a lotta things going for them, but victimhood does not seem to be among them. 

They remain every bit the measure of all that they really are, however. 

For better and for worse. 

Sad when it takes Germans to hold something even worse at bay. 

But somebody's gotta do it. 

 

Thu, 05/20/2010 - 07:26 | 362526 FischerBlack
FischerBlack's picture

LOL. I think he's being junked for reference to 'ZOG troops'. That's the first time I've heard that term. And actually wikipedia has an entry for it:

http://en.wikipedia.org/wiki/Zionist_Occupation_Government

I was stationed in Germany when I was in the service, so that makes me a former ZOG trooper, I guess.:)

Guys, you really don't need to posit zionist conspiracies (or any other kind of conspiracy) to make sense of what's going on out there right now. Bumbling, incompetent central bankers in fear for the system they are charged with maintaining, panicky politicians in fear for the power of their station, and amoral elites in fear for the loss of their capital, are more than adequate to explain both the general lack of sense and foresight among all three groups, as well as the continuing destruction of the Western middle class.

Historically, stoking fear of the jews has been a really good strategy for Western elites trying deflect attention from their own ineptitude and evil ways. Don't fall for it.

Wed, 05/19/2010 - 19:54 | 361879 silvertrain
silvertrain's picture

 Whats the odds the germans get there gold back that we are protecting for them? I bet the comex and the lbma are on pins and needles right about now....

Thu, 05/20/2010 - 07:49 | 362562 desgust
desgust's picture

None. Your goverment are thieves. Long ago spent for WARS.

Wed, 05/19/2010 - 19:58 | 361882 Tic tock
Tic tock's picture

Why would the SNB need to hold down the Franc?- were they trying to keep the transfer quiet?

Wed, 05/19/2010 - 20:04 | 361892 walküre
walküre's picture

From where I sit right now, Frau Merkel gets a lot of respect.

Yes, she didn't act in concert with other Euro leaders but who cares?

Her move has got attention and the Euro is up again.

Anyone who knows Europe intimately understands that when Germany takes a lead, the rest of Europe.. well doesn't exactly follow. They get scared. I'm sorry about that. On behalf of Germany let me tell you, it had to be done. Sorry we didn't consult en francais and op nederlands before but sure you understand. There's lots at stake here and the sovereign default of Greece is really their only option. What other option is there for them to ever repay the debt? The first tranche of bailout funds will satisfy mainly German and French lenders. That makes sense.

Now let's focus as Europeans, as the next superpower on this planet to emerge stronger and more unified as before. We speak your languages and we identify as Europeans among 46 different cultures. We are the future of this world. Europe is the future.

If this world and its civilizations are to have a chance at surviving the coming challenges of climate change and sustainable living, we need to have leadership and face the challenge.

Europe is the leader in this and you all know it. The Euro is not a figment of someone's imagination or a drug induced wet dream, it's the 21st century reality and the result of European cultural integration and evolution.

We will seek commodity contracts with OPEC in Euros rather than Dollars because we consume OPEC's oil and want to pay in our currency. Take it or leave it.

Get used to more of this.

 

Wed, 05/19/2010 - 20:14 | 361910 Renfield
Renfield's picture

Merkel rocks. Wish I was German.

I think everyone's mad at her b/c she didn't ask the banksters permission first. And give heaps of warning and time for them to unload their positions, oh and get them to help write the law.

You know, the way the free world does it.

Wed, 05/19/2010 - 20:49 | 361978 Cognitive Dissonance
Cognitive Dissonance's picture

Renfield, you can be my German anytime you want. How are you with riding crops, whips and leather chaps? :>)

"You know, the way the free world does it."

I get your point. But in fact it seems the Germans ARE free and the rest of the "free" world is deep captured by the banking cartel.

Thu, 05/20/2010 - 05:59 | 362475 Renfield
Renfield's picture

Cogi

If you bring the saddle and nippyclippies, I'll bring the whipped cream. No more of that cheap honey, though - took me a week to get it out of the carpet last time.

:-D

"...it seems the Germans ARE free and the rest of the "free" world is deep captured by the banking cartel."

Yeah, that song keeps running thru my mind, "Fascism's just another word for nothing left to lose..."

Thu, 05/20/2010 - 06:02 | 362477 i.knoknot
i.knoknot's picture

Farcism's just another word for nothing left to lose...

tnx marla

Wed, 05/19/2010 - 22:27 | 362161 Ropingdown
Ropingdown's picture

Agree with both Renfield comments above.  The glory of Merkel's actions was specifically that she did not bother to notify the French or Brussels.  It was a gesture of utter disdain, and at the same time of good sense.  The behavior of the French last week was appalling. Germans loathe the games, the talk.  The game is afoot. There is no happy going-back after the French-South conspiracy last week.

Wed, 05/19/2010 - 22:50 | 362195 merehuman
merehuman's picture

I am free ,and german, i am free,arms in air and jumping up and down. Oh, shit that was my drink! Im wet , im wet

Thu, 05/20/2010 - 00:19 | 362281 DoChenRollingBearing
DoChenRollingBearing's picture

+ 36

Very funny.

Agree with above posters that Germany, as a respectable country whose citizens work and save, can do whatever they think is right to save themselves.

Sorry to hear about you losing your drink.

Thu, 05/20/2010 - 03:51 | 362421 merehuman
merehuman's picture

i made up the drink for the humor, really am german, wishing i could still be proud of america. Smoking a bowl ,aware of how bad things are on so many levels. Its a personal battle for all of us now to not succumb to the fantastic amount of contrary indicators eh?

ps i worked and saved and stayed honest. DNA?

Wed, 05/19/2010 - 23:38 | 362252 TheGoodDoctor
TheGoodDoctor's picture

You know it only takes one. But I wonder if she is part of the NWO or not? It would seem she is, but this move is counter productive to the NWO.

I always think that there will be some hero. Some really true hero that will fuck the system as the handlers would not like.

Thu, 05/20/2010 - 01:12 | 362316 palmereldritch
palmereldritch's picture

Methinks she's not a hero

http://www.rnw.nl/english/article/ex-stasi-members-necessary-german-gove...

and some  Swiss hidey-holes never change

http://www.youtube.com/watch?v=ZGp0hCxSg98

(Hitler...Stalin, same Satanic parent... ever notice how similar Palin and Stalin are when you spell them?...is that the attraction? ... Perhaps I should consult my attorney)

Thu, 05/20/2010 - 02:06 | 362351 Printfaster
Printfaster's picture

Ever notice that the president's name has the words Bark and bomb in them?

 

Thu, 05/20/2010 - 02:28 | 362373 palmereldritch
palmereldritch's picture

Don't mention the war...I mentioned it once but I think I got away with it

Thu, 05/20/2010 - 03:27 | 362409 MaxPower
MaxPower's picture

All in the Market together, old differences forgotten, and no need at all to mention the war … SORRY! Sorry. What was it again?

Renfield, if you're reading this, you have to get started on Fawlty Towers after you wade through the other Monty Python stuff...

MP

Thu, 05/20/2010 - 06:06 | 362479 Renfield
Renfield's picture

Man, you must be psychic. My husband (who loves all things 70s & 80s) bought a box set of that! But the first disk won't talk to our dvd player, yet.

Now I'm looking forward more to seeing it, anyway! Recommended by you, that's a step up - I have to say the cover doesn't have very impressive lookers on it, so I wasn't too enthused.

Just saw Ministry of Silly Walks and This Parrot is Dead. Didn't really get the silly walks thing but the dead parrot sketch made me choke laughing...

Hey! That's kinda a propos of EUR, no?

"It's not pinin', it's passed on! This currency is no more! It has ceased to be! It's expired and gone to meet its maker! THIS IS A LATE CURRENCY. It's a stiff. Bereft of life, it rests in peace, if you hadn't nailed it to the CHF it would be pushing up the daisies! It's rung down the curtain and joined the choir invisible! THIS IS AN EX-CURRENCY!"

Thu, 05/20/2010 - 07:01 | 362498 MaxPower
MaxPower's picture

There are many reasons Homer is my avatar, but one of them is that all of our present foibles are imitating art. OK, well, TV, not really art.

But you see my point. Fiction is more believable these days, isn't it?

If you're a fan of the poster here Anonymous Monetarist (and you should be if you aren't), then perhaps you'll enjoy this, from one of his recent posts. Sorry, having trouble with the search function at the moment...

Randomwalkin's not pinin'! It's passed on! This theory is no more! It has ceased to be! It's expired and gone to meet 'is maker! 'It's a stiff! Bereft of life, it rests in peace! If you hadn't nailed it to the masses it'd be pushing up the daisies! It's metabolic processes are now 'istory! It's off the twig! It's kicked the bucket, it's shuffled off 'is mortal coil, run down the curtain and joined the bleedin' choir invisible!! THIS IS AN EX-THEORY!!' - Anonymous Monetarist

MP

Thu, 05/20/2010 - 00:09 | 362272 zhandax
zhandax's picture

I can agree with Renfield, but walküre needs to quit sucking the koolaid out of the bong.

Wed, 05/19/2010 - 20:17 | 361915 THE DORK OF CORK
THE DORK OF CORK's picture

Do you think OPEC is going to give us nice cheap oil when we DON'T have a expeditionary force - get real.

If Germany and the rest has any serious intentions towards superpower status they should give up supplying Spain / Greece with savings to build villas in the Med for sun starved Northern Europeans and Build Nuke plants now.

Wed, 05/19/2010 - 20:44 | 361965 sushi
sushi's picture

Quote

Do you think OPEC is going to give us nice cheap oil when we DON'T have a expeditionary force - get real.

Endquote

The Chinese do not have an "expeditionary force" and doing significant energy trades with Gulf states.

Having an expeditionary force is a two edged sword. Keeps you wondering if they are there to protect me from them or are they here avoid my excercise of my own sovereignty? If they do not like my price could they just not excercise their sovereign right to protect their own interests?

And do not forget that the finest military borrowed Chinese money can buy has been fought to a standstill by a bunch of goatherders!! They should teach animal husbandry at West Pt.

Wed, 05/19/2010 - 21:17 | 362034 THE DORK OF CORK
THE DORK OF CORK's picture

The Chinese are a continental force that is relatively close to the Iranian border (Hence the American presence in Afghanistan)

The US and the Uk before them are essentially naval powers that project force via the sea and air.

Western Europe has always been a hybrid power(France being both a continental power with aspirations on the high seas).

Has noted below the US is structurally incapable to deal with high oil prices and must use force projection to continue its hegemony.

Even if capable of being self sufficient in liquid fuel the vast riches of the pursian gulf would be a lost opportunity cost as retreat from this area would provide others with a cheaper resourse base.

As for Europe its culture only had a American graffiti moment during the post war years and is indeed structurally and culturally more capable of engaging in a energy diet.

It is in fact on this diet now as the American China reserve currency is continuing its production consumption binge as Europe is forced into austerity.

Given the fact that Europe is incapable and unwilling to engage in military adventures it should commit its remaining resources to a measure of energy independence using its technological advantages.

Wed, 05/19/2010 - 20:45 | 361966 walküre
walküre's picture

What is cheap? We can afford $100 oil. We have ample infrastructure and fuel economy to make it work. The US can't which is why they collapsed in 2008. Leverage based on thin air and $150 oil killed the US economy. End of story. If we get hit with even $200 oil, we can adapt. The US can't.

FYI.. China and Russia are on record for having offered to support Greece long before the IMF got involved.

It's not as much a superpower status that we need, it's a strong opposition to US hegemony and financial imperialism. In our best interest and the best interest for the US citizen.

 

Wed, 05/19/2010 - 22:26 | 362159 moneymutt
moneymutt's picture

so if oil was $80 barrel in 2008, US housing would still be going strong???

Wed, 05/19/2010 - 22:36 | 362177 Ropingdown
Ropingdown's picture

All the comments about international power and oil problems are pointless. The US has "at its disposal" more than enough oil and natural gas to survive on its own, when appropriate depression-age measures are ordered.  China, on the other hand, will be chaos six months into any true trade breakdown.  And whose oil are the French going to use?  Europeans pride themselves on knowledge of geography.  Take a look at the globe.  Calculate the true result of a depression-era political/economic storm.  Food? Oil? Gas? Safe borders? A huge open-water fleet? Technical knowledge? You would pick the Chinese? The French?

Thu, 05/20/2010 - 06:51 | 362481 i.knoknot
i.knoknot's picture

it's not quite junkable, but there is a gnarly nationalistic tone that isn't really backed up with much more than "we're better than you" that detracts from your usual contributions. had a few beers, perhaps?

pride is fine, but history shows the winner isn't usually determined that way. results still do matter. looking at the situation today, i'd bet on asia/amerika/south-america before the euro-zone or middle-east. this isn't a moral judgement either. evil, when strong, often prevails.

(fwiw, the US banking/political machine is certainly squandering most everything they've ever earned in terms of respect and trust - a pretty serious bummer - but... even after beers, they're a better looking fugly)

Wed, 05/19/2010 - 20:21 | 361920 chet
chet's picture

"Europe is the leader in this and you all know it."

Wow, you really are German aren't you?  :)

Wed, 05/19/2010 - 20:32 | 361941 walküre
walküre's picture

Native European. Tribal.

 

 

Thu, 05/20/2010 - 01:11 | 362315 Alienated Serf
Alienated Serf's picture

wtf is a native european?!!  part viking?  lots of arabic blood in spain and sicily.  are greeks native europeans?  i've never heard of this before, enlighten me.

Thu, 05/20/2010 - 02:30 | 362371 CD
CD's picture

That truly is a tough one... It's rather hard to decide where to draw the line on native. I'd guess anything after the Bronze Age could be termed 'fresh off the boat', and it gets hard to prove your papers once you get past written history. http://en.wikipedia.org/wiki/Genetic_history_of_Europe

I'm kinda happy to know there are at least dozens of distinct tribal bloodlines in me, the whole inbreeding thing generally does not lead to adaptive results.

Walküre probably mainly meant she would qualify for German/EU citizenship on grounds of ancestry even she didn't currently hold it already - and perhaps that she considers herself European first, German second? That part gets confusing.

Wed, 05/19/2010 - 20:29 | 361933 Rainman
Rainman's picture

Bullshit. If Europe is the future, they better drop a lot of baggage right now. They've fought and squabbled with each other for decades....mostly about money, debts and territory. Worst of all, they required a bloody allied intervention to save their collective asses for nearly a century. To think they will bond on the issue of econometrics and debt management is a real reach. 

Pick a different continent.

Wed, 05/19/2010 - 20:37 | 361947 THE DORK OF CORK
THE DORK OF CORK's picture

 Antarctica.......... oh I forgot we will have to notify the UN first , and what will happen to those poor penguins.

Never mind something will come up - we will teach those Americans how to run a Imperium.

Eventually.

Wed, 05/19/2010 - 23:11 | 362225 Miles Kendig
Miles Kendig's picture

Ya, we've seen how well Sean Fitzpatrick/Anglo-Irish and his golden shower pals did with their attempts at this experiment...

Thu, 05/20/2010 - 05:08 | 362452 THE DORK OF CORK
THE DORK OF CORK's picture

Well Seany boy knew how to blow up things - our strategic planning was just a bit off, we should have sent the fucker abroad somewhere to rape and pillage.

Fri, 05/21/2010 - 14:36 | 366218 Miles Kendig
Miles Kendig's picture

I thought that was what all of Seany's work in the Southwest of England was all about...

Fri, 05/21/2010 - 19:18 | 366890 THE DORK OF CORK
THE DORK OF CORK's picture

We probably own that Shit Seany made using the greatest property company in the History of Mankind - behold - NAMA

The sum of all fears.

I think we need to rethink our strategic deterrence......

We may need to become the North Korea of the EU

We can dig a hole in the Kerry mountains invisible to annoying EU bureaucrats, create the Irish Super and once we detonate our first weapon in The Bog of Allen we can threaten Brussels and Frankfurt with nuclear oblivion unless they continue to give us large amounts of structural funds and agree to restructure our debt.

Also some free Carlsberg and expensive Belgium Beer would be nice.

 

Wed, 05/19/2010 - 20:39 | 361952 walküre
walküre's picture

We fought for centuries. Actually our forefathers fought. The 35 to 50 y/o generation has no interest in rehashing old resentments. We matter now. Our kids matter and we need to secure the future for our kids.

Either we get our shit together now or we dance to the tune of the Wall Street piper - forever.

I'm not interested. None of my friends across Europe are interested. We need European solutions for European problems.

We all know that the systems aren't sustainable over the long term. Now we need to figure out a way to reduce government and reduce socialism and at the same time encourage capital to invest. Massive challenges for MY generation that we can either face NOW or flee.

Merkel took a lead. I appreciate that. Someone had to. The system was falling apart at the fringes.

Wed, 05/19/2010 - 20:46 | 361967 THE DORK OF CORK
THE DORK OF CORK's picture

If you really want to change things in Europe you will have to eliminate the ECB at least in its present form - its monetary policey is at the core of the European malaise.

 

Thu, 05/20/2010 - 00:09 | 362273 TBT or not TBT
TBT or not TBT's picture

Deathbed demographics, severe rigidities, and lavish entitlements have nothing to do with it.   Just get rid of the ECB and shazam! Europe will take off.

Thu, 05/20/2010 - 05:20 | 362459 THE DORK OF CORK
THE DORK OF CORK's picture

Yea the ECB stood back as the whole of the Med was covered in useless concrete - now that Iberia is investing in sustainable transport etc Weber wants to cut the fiscal deficit of the periphery - go figure.

Bangladesh have no demographic problems but its sinking into the sea - the last time demographics mattered was when energy labour came from the slave trade.

Wed, 05/19/2010 - 20:49 | 361981 DosZap
DosZap's picture

walk,

fellow Kraut, I have your answer, and Europes..............Form a collection of staes, and draft a common Cnstitution, and BOR's,and form a Republic, with a form of Democracy.............

We have done great with it up until the last 1-2yrs..........................as has the rest of the free world.

I am serious, this will solve your (Europes problems)..............adopt English as your common language..................amazing what will happen when your free.

Wed, 05/19/2010 - 20:59 | 362004 walküre
walküre's picture

You're right. The time is now. The Euro idealism is actually there already. Europeans in my opinion can identify with a fellow European leadership rather than anything from the outside.

The dawn of a new age could be a European Renaissance. We have so much in common and so much to offer to each other and to the world.

Thu, 05/20/2010 - 02:31 | 362377 chindit13
chindit13's picture

The old song Breaking Up is Hard to Do comes to mind.  Just as money is at the root of the majority of marital problems, I suspect it will prove the same in the geographical union.  The euro was not especially good for most of Europe, though it was a benefit to Germany, but this was masked during the euro's brief reign by the booming world economy (which was largely the product of debt expansion in general and US home equity loans in particular).  Now that the Seven Year Plus Itch has emerged, it is becoming clear that the euro was a disaster for Greece and Spain among others.  I doubt Euro types in Spain, faced with 20% UE, are feeling all warm and fuzzy about their northern European neighbors.  Nothing is more dead than dead love.

The entire worldwide model remains broken, if it ever was sustainable;  the savers can no longer rely on the buyer of last resort, and vice versa.  There simply isn't a place for everybody without constant and rapid innovation, which in turn must have a low impact on the planet.  All this other stuff is just fluff; the real problem is Malthusian in style:  too many people dressed for a party for which they lack an invitation.  Historically, war has always been the answer.  Unfortunately, it will remain the only answer to what ails.  Even the idealistic youth will soon be wooed by its charms and its siren song.

Thu, 05/20/2010 - 04:41 | 362439 walküre
walküre's picture

you address sustainability.

that will be the most challenging economic issue going forward.

if sustainability means we need to grow our populations exponentially for decades to come at the expense of limited resources, land etc.. we are doomed - long term.

there's got to be something else and that something else gets figured out by Europeans that have no other choice.

Euro up. Merkel should get credit for this.

Thu, 05/20/2010 - 05:14 | 362456 Oh regional Indian
Oh regional Indian's picture

Sorry Wulkere, Chancellor hissy fits aside, Germany is as woven into this shitty Globalized fabric as the rest of us are.

And your mindset is too socialist ( I speak from direct and long experience with Germany as well as having had a truelu Teutonic german partner for a while).

Even Germany itself is a house divided, Rascist south, liberal north, Turkish issue.

And you are export dependent. Totally (for the scale of your production).

Saying bye bye to America are you? I'd suggest looking up trade figures.

We are, all of us, in a Hotel California situation and any semblence of freedom from the coming consequences of the 20th century is at best a dream and will quickly turn nightmarish.

Plus and sorry to say this here, but Germans make up the highest percent of Europerv tourists (Thailand, Sri Lanks jump to mind).

Karmic pay up time will not be fun.

Of course the whole 6,000,000 thing is well off your back. A big fat lie it was anyways.

Thu, 05/20/2010 - 06:24 | 362485 i.knoknot
i.knoknot's picture

"Either we get our shit together now or we dance to the tune of the Wall Street piper - forever.

I'm not interested. None of my friends across Europe are interested. We need European solutions for European problems."

walkure,

now *that's* more like it.

ironically, change the European references to Amerikan references and you've just described most of my recent lunchtime conversations with like-minded peers.

we both (all) have the same foe. fwiw, i'm impressed with (Dr.?) Merkle's actions. if they don't work, she'll respond rationally until they do.

nice.

Wed, 05/19/2010 - 20:40 | 361954 laosuwan
laosuwan's picture

europe has bigger problems than that...at present birth rates within 20 years most of europe will be majority muslim. think about it.

Wed, 05/19/2010 - 20:48 | 361972 walküre
walküre's picture

so what? muslims work, eat, shit and pay taxes.

besides.. the stats are not a correct reflection of what goes on in each country.

the North is baby booming, not immigrants I might add.

 

Wed, 05/19/2010 - 22:00 | 362107 nikku
nikku's picture

And if your sister converts to the Muslim religion and later changes her mind, even the moderates agree the Koran says to stone her to death.  How can that religion be compatible with religious tolerance?

Thu, 05/20/2010 - 04:45 | 362443 walküre
walküre's picture

Well, if you paid attention you would have seen that various Europeans are openly addressing the issues surrounding Islam. About every Euro state has implemented or is implementing something called "Leitkultur". New immigrants get taught the local values and integrate. Sharia law is NOT coming to Europe.

10 years ago though, your example would have concerned me. Not anymore.

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