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A "Who Is Who" Of Countries About To Fund The IMF's Bail Out Of Europe

Tyler Durden's picture




 

When back in April we wrote about the huge expansion in the IMF's New Arrangement to Borrow (NAB) multilateral facility (which was expanded from $50 billion to over $550 billion), one of our observations was that "Funny money will galore. At this point nobody will allow anyone or anything to fail." And since all of Europe is about to be bailed out by the now insolvent ECB and the still somewhat solvent IMF, it strikes us as an opportune time to recall just who will bear the cost of this pan-European rescue. Surely, by now even idiots realize since the ECB is bailing out Europe, it is really bailing out itself, in a process described beautifully by Sean Corrigan recently, and any incremental money coming from ECB member countries will really go to themselves, and therefore its "new capital" contribution can be completely ignored. The same thing goes for European member countries of the IMF: that Ireland has pledged $2.9 billion to the IMF's NAB (not to mention Spain's $10.3 billion and Portugal's $3.4 billion) is late night comedy circuit fodder. Which is why it is not at all surprising that new capital will come from the US, Japan and China, in that order: the trio is about to spend over $250 billion (and soon much more) to rescue Club Med, as the Ponzi unwind shifts into a higher gear.

New, incremental sources of capital have been conveniently highlighted in the table below which lists the NAB participants and amounts pledged.

And just so there is no confusion, here is Nomura explaining why the existing EFSF framework is insufficient to fund even the rescue of Spain:

...Our estimate of total rescue funds available comes close to but does not fully cover complete three-year bailouts of Portugal and Spain (Figure 4). At the outset this seems to justify recent market moves given the likelihood also that if Spain was to roll over contagion would have room to extend further.

However, there are options open on this front that could make the numbers seem more palatable. First, it is not necessarily the case that potential rescue packages will look to cover the entire three years. In the Greek case for instance we project that the provided package effectively covered the funding gap into the latter part of 2012, the implicit assumption being that market access would improve by that time and that the sovereign would be at least partly be able to resume independent financing. Whether Greece is actually able to do this is another question. However, in the interim we see no reason why this approach would not be adopted for other countries. If nothing else it provides a signal to the markets of confidence in the underlying apparatus.

An expansion in the EFSF framework is another possibility and we note the amount of traffic around this subject over the last couple of sessions, most notable ECB?s Weber in, saying that he was convinced that interested parties would “do what is necessary to protect the euro”. Greater reliance on bilateral credit sources could be an outlet as well, with Ireland?s case showing that even non-euro denominated countries are willing to become involved where their own banking sectors are exposed. Overall. we think that Europe does have the underlying resources to accommodate the rescue of Portugal and Spain. Were the need to spread further though, Italy perhaps being the most telling example, worries over the ability of the region to cope could gain some credence.

Ergo: once Spain is under (+/- one month), then the full cost of the Italian and subsequent rescues will be increasingly borne by America.

 

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Sat, 11/27/2010 - 15:51 | 757740 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Quite the new invite list.  The newly bankrupted Grease, Ire'land, Port de Gaul join the BRICs.  Globalist Voltron uniting into a one world banking order.

Sat, 11/27/2010 - 17:17 | 757870 Commander Cody
Commander Cody's picture

I can spare a few bucks.  Sign me up.

Sat, 11/27/2010 - 19:36 | 758039 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Your IMF standards and liabilities include the operational ability to:

-Lease gold from the IMF

-Bailout the IMF

-All decisions and designs concerning the operations will be designated by IMF

Any questions?

Sat, 11/27/2010 - 17:34 | 757887 cossack55
cossack55's picture

Hip, Hip, Hooray.  The US is still #1.  Screw those third worlders.

Sat, 11/27/2010 - 17:49 | 757904 Spitzer
Spitzer's picture

Not so fast..

Can you explain to me why the US sponsored IMF is bailing out Europe when Europe has the ability to print Euros and bail out itself ?

Sat, 11/27/2010 - 18:13 | 757926 Spalding_Smailes
Spalding_Smailes's picture

The US dollar shortage in global banking ~ Bank For International Settlements

Banks’ global expansion

European banks’ combined long US dollar positions
grew to more than $800 billion by mid-2007

Banks’ foreign positions have surged since 2000. The outstanding stock of BIS
reporting banks’ foreign claims grew from $11 trillion at end-2000 to $31 trillion
by mid-2007, a major expansion even when scaled by global economic activity
(Graph 1, left-hand panel). The year-on-year growth in foreign claims
approached 30% by mid-2007, up from around 10% in 2001. This acceleration
coincided with significant growth in the hedge fund industry, the emergence of
the structured finance industry and the spread of “universal banking”, which
combines commercial and investment banking and proprietary trading
activities.
At the level of individual banking systems, the growth in European banks’
global positions is particularly noteworthy (Graph 1, centre panel). For
example, Swiss banks’ foreign claims jumped from roughly five times Swiss
nominal GDP in 2000 to as much as eight times in mid-2007. Dutch, French,
German and UK banks’ foreign claims expanded considerably as well. In
contrast, Canadian, Japanese and US banks’ foreign claims grew in absolute
terms over the same period, but did not significantly outpace the growth in
domestic or world GDP (Graph 1, right-hand panel).

Concluding remarks

The crisis has shown how unstable banks’ sources of funding can become. Yet
the globalisation of banks over the past decade and the increasing complexity
of their balance sheets have made it harder to construct measures of funding
vulnerabilities that take into account currency and maturity mismatches. This
special feature has shown how the BIS banking statistics can be combined to
provide measures of banks’ funding positions on a consolidated balance sheet
basis. The analysis suggests that many European banking systems built up
long US dollar positions vis-à-vis non-banks and funded them by interbank
borrowing and via FX swaps, exposing them to funding risk. When heightened
credit risk concerns crippled these sources of short-term funding, the chronic
US dollar funding needs became acute.
The resulting stresses on banks’
balance sheets have persisted, resulting in tighter credit standards and
reduced lending as banks struggle to repair their balance sheets.

 

PDF -


The US dollar shortage in global banking - BIS Quarterly Review ...

Sat, 11/27/2010 - 18:33 | 757964 Spitzer
Spitzer's picture

This is not dollar positive.

Does the article not basically say that the Euro banks did all their shitty deals with dollars and not Euro's ?

 

Sat, 11/27/2010 - 18:50 | 757977 Spalding_Smailes
Spalding_Smailes's picture

This is dollar positive a thurst for dollars/new debt/securitization. Businesses continue to fund debt through dollars on a global scale every day. Look at a 5 year chart of the dollar all this new debt issued and what move/crash. The trillion dollar securitization market was built using dollars. The deflation from the breakdown will last a very long time.

The dollar is the king our inflation gets exported. The rest caught in our dollar denominated web drink inflation 24/7. Global trade is based on the dollar/letters of credit this churn will always keep a floor under the dollar.

 

Country Garden Holdings Co Ltd, a leading Chinese real estate developer with a focus on Guangzhou and Foshan in Guangdong Province, today said that it plans to float US$400 million in five-year dollar-denominated bonds with a coupon rate of 10.5%, sources reported.

Emerging market governments and companies have raised $151bn in dollar-denominated bonds this year, a record since 1995.

 

Sat, 11/27/2010 - 19:12 | 758014 Spitzer
Spitzer's picture

The Fed does not hand out dollars out of the kindness of its heart. The Fed is dealing with it because its the dollars problem.

Sat, 11/27/2010 - 19:13 | 758016 Spitzer
Spitzer's picture

The Fed does not hand out dollars out of the kindness of its heart. The Fed is dealing with it because its the dollars problem.

Sat, 11/27/2010 - 19:18 | 758021 Spitzer
Spitzer's picture

dp

Sat, 11/27/2010 - 19:46 | 758033 Spalding_Smailes
Spalding_Smailes's picture

European banks’ combined long US dollar positions
grew to more than $800 billion by mid-2007

 

Swap lines = ?Who needs who ? Banks in europe need dollars to stay solvent and if they cant get dollars on the debt market they go boom. Game over for the euro.

The banks that played in the forex/dollar/bond gang bang are getting blowtorched on the meltdown in the shadow banking industry. They are all on the hook and must continue to make that debt payment every month in dollars the central banks hold tons of dollars because of this and will always need more.

Gold can not back global trade/global banking/ thats the reason they dumped it in the 70's they need cdo's,siv's trillions so gold cant back the shadow banking needs/wants. Only the dollar can.

The securitization market is nothing like it was thus the credit is being pulled in across business/credit card/ninja loans ect .... But they must continue to service this debt or whats left all the non performing loans. New dollar debt needed to keep the hamster wheel spinning.

Euro negative ~

The analysis suggests that many European banking systems built up
long US dollar positions vis-à-vis non-banks and funded them by interbank
borrowing and via FX swaps, exposing them to funding risk. When heightened
credit risk concerns crippled these sources of short-term funding, the chronic
US dollar funding needs became acute.
The resulting stresses on banks’
balance sheets have persisted, resulting in tighter credit standards and
reduced lending as banks struggle to repair their balance sheets.

Sat, 11/27/2010 - 19:52 | 758055 Spalding_Smailes
Spalding_Smailes's picture

China negative ~

Take the most obvious example, the PBoC itself.  The central bank officially has about $2.5 trillion in reserves.  This by the way almost certainly understates its true position but let’s ignore that for a moment.  The PBoC has funded this position with an equivalent amount of RMB liabilities, which makes it very vulnerable to changes in the value of the currency.

Rate addiction

In fact there were strong rumors last year that the PBoC was technically insolvent as a consequence of the 20% increase in the value of the RMB against the dollar during the 2005-08 period of currency appreciation.  Weirdly enough, although the numbers are huge, it has proven difficult to convince anyone that the PBoC is not the richest institution in the world, and that it is actually very vulnerable to big losses (although I notice that Sovereign Trends’ Terrence Keeley, in an OpEd in the Financial Times Tuesday, seems also to have done the numbers).

The problem for the PBoC occurs not just because of the currency mismatch but also because it needs repressed funding costs to keep it profitable.  How much do the PBoC foreign currency assets earn?  I would guess probably between 3% and 4%, maybe less.  The RMB funding cost, on the other hand, is roughly between 1.5% and 2.5%.  This leaves the PBoC with a net positive carry of between 1% and 2%.

If the RMB appreciates by as little as 2% a year, in other words, the PBoC runs a negative carry on its assets.  Every further 1% increase in interest rates, or additional 1% rise in the value of the RMB, then, erodes its capital by at least $25 billion (annually, if it happens through an increase in interest rates).

Let’s assume, for example, that over the next two years we see a combined appreciation and interest rate increase of 10% (let’s say a 2% increase in interest rates and a 4% annual appreciation), which is, in my opinion, the absolute minimum that China must do to slow down the worsening domestic imbalances.  Assuming no change in the rate earned on reserve assets, which in fact may decline, this means that the PBoC’s net indebtedness would rise by over $250 billion, or roughly 5% of the country’s GDP.

These kinds of number quickly add up.  And of course it is not just the PBoC that has this addiction to repressed interest rates.  Many years of very low cost borrowing has created a huge dependency on low interest rates among SOEs, local governments, and other creditors of the bond markets and the banks (not to mention the banks themselves), all of whom are directly or indirectly funded by long-suffering households.

 

 

http://mpettis.com/2010/07/the-pboc-can%E2%80%99t-easily-raise-interest-...

Sat, 11/27/2010 - 20:23 | 758094 Spitzer
Spitzer's picture

PBoC was technically insolvent as a consequence of the 20% increase in the value of the RMB

im not going to waste my time with a keynesian.

 

Sat, 11/27/2010 - 20:29 | 758104 Spalding_Smailes
Spalding_Smailes's picture

Dont hate the playa/uncle ben hate the game.

Dollar crash = wrong call.

 

Sat, 11/27/2010 - 22:50 | 758268 Spitzer
Spitzer's picture

You are the keynesian I am talking about.

Nasdaq crash=right call

real estate crash=right call

Treasury/dollar crash=right call

Sun, 11/28/2010 - 12:23 | 758690 Spalding_Smailes
Spalding_Smailes's picture

Check out a five year chart of the dollar ... After all the backstops, bailouts, trillions in new credit/debt.

What crash ? 2005 (85) 2010 (80.43)

The bubbles you speak of Dot.com/Homes/Now Gold. Lots of golden paper floating about, enjoy the crash.

 

China Medical Technologies Inc., which makes devices for tumor treatments, plans to sell bonds denominated in U.S. dollars, according to a person familiar with the matter.

Deutsche Bank AG and Standard Chartered Plc are managing the sale, said the person, who asked not to be identified because the details are private. The company is planning a series of investor meetings from tomorrow, the person said.

 

Venezuela announced a dollar-denominated government-bond sale for at least $3 billion, a move that gave the bolivar currency a boost against the dollar in the black market.

Venezuela's Finance Ministry said that the bond sale, which is being managed by Deutsche Bank AG and Citigroup Inc., would come in two issues, one for $1.5 billion with a 2019 maturity and another for the same amount, with a 2024 maturity.

In a long-anticipated move, France's Compagnie de Financement Foncier (CFF) priced its first-ever U.S. dollar-denominated (USD) covered bond Thursday (April 15).

The Debts of the World: Colombia Offers Dollar Denominated Bonds

All aboard the dollar carry trade train! Weeks after the German government decided to issue dollar denominated bonds, a slew of European nations also decided to follow on board. Even countries like Venezuela have followed.

Now, Colombia is the latest country to join this global arbitrage game of selling dollars. As I said before, the issuance of dollar denominated bonds is a very attractive factor for US fund managers seeking to gain foreign exposure whil e retaining currency risk at a minimum.


Brazil plans to sell dollar-denominated bonds in the international capital markets , the national treasury said on Tuesday.

The government hired Goldman Sachs and Merrill Lynch to manage the bond sale, according to a source with knowledge of the deal.

Sun, 11/28/2010 - 06:58 | 758549 rsi1
rsi1's picture

Where do you get the funding cost for RMB for PBoC? they are the central bank, they issued RMB as a liability to keep the PEG, but that is just cash, has no interest cost, while the assets they received do, even if small.

In any case, talking about insolvency of  a central bank in a fiat currency system doesnt sound possible.

Sat, 11/27/2010 - 15:53 | 757745 unky
unky's picture

How I love this giant ponzi scheme, I think even a kindergarten child understands that this is a ponzi scheme. Maturing loans payed with new loans and so on.

Its just money out of thin air.

Sat, 11/27/2010 - 16:14 | 757784 mikla
mikla's picture

+1

HAHAHAHAHAAAAAA!  Did you get that?!  Ireland will pledge billions to help bail out Ireland.

Oh, Late Night Comedy was never so good!

Sat, 11/27/2010 - 16:42 | 757823 Eternal Student
Eternal Student's picture

I'm guessing that it's a requirement now, in order to get bailout funds.

It's also the classic hallmark of a Ponzi scheme. I think it was Bruce K. who had a recent article about the CDO bubble; in order to sell, you absolutely had to buy some. And around, and around it went, creating more "profits", until it didn't.

The only question is how much longer can they keep this Ponzi going?

Now the only thing missing is some Prime Minister, President or Central Banker telling the Bond Market Vigilantes to piss off, because they have restored the system.

Sat, 11/27/2010 - 17:48 | 757902 Trifecta Man
Trifecta Man's picture

What they need is a real ponzi bailout pro.  Release Bernie Madoff, put him in charge, and he will likely keep these ECU bailouts going for another umpteen years.

Sat, 11/27/2010 - 18:29 | 757961 shortus cynicus
shortus cynicus's picture

Yes, exactly, let real experts to their goods work.

Sat, 11/27/2010 - 16:21 | 757793 SwingForce
SwingForce's picture

Yes! But the diff is THEY CHARGE INTEREST!

Asset Reallocation: From one pocket to the other.

Sat, 11/27/2010 - 16:46 | 757828 MeTarzanUjane
MeTarzanUjane's picture

Yea, so.

Who ya gunna call? Ponzibusters?

Get with it, sell your gold now. Reallocate. Become profitable and then buy metals when their price is depressed.

Otherwise you're doomed for a quick elevator ride into the basement.

Sun, 11/28/2010 - 02:16 | 758458 delacroix
delacroix's picture

check out the current availability, of physical silver. it's starting to dry up.

Sun, 11/28/2010 - 09:48 | 758598 tallystick
tallystick's picture

Stop trying to hurt people!

Sat, 11/27/2010 - 16:51 | 757841 MasterB
MasterB's picture

If you look up "piker" in the dictionary now, there's a picture of Bernie Madoff.

Sat, 11/27/2010 - 15:57 | 757750 QQQBall
QQQBall's picture

Its history's biggest "Collective Reach-around"

Sat, 11/27/2010 - 16:05 | 757767 snowball777
snowball777's picture

This crap is lame; can't we use all those SDRs to play a televised, winner-takes-all No Hold Em tourney instead?

Or would the EEEWW insist on baccarat?

 

Sat, 11/27/2010 - 16:49 | 757837 MeTarzanUjane
MeTarzanUjane's picture

Tarzan like scratch off.

Sat, 11/27/2010 - 16:07 | 757768 A Man without Q...
A Man without Qualities's picture

Ok, if we think of the US government spending, currently they are drawing down about $1 trillion per year to keep the nation in fried chicken and sweat pants and buy cool shit to blow up people in far flung places, yet this "burden" on the taxpayers is just about the only actual investment the government makes.  Why, because it is a loan and the borrowers must pay back principal and interest.  You know, when you have $1.3 trillion in delinquent consumer credit in New York State alone, the Fed is sitting on around $1 trillion of toxic MBS and the GSEs with several more trillion of terrible quality assets, making a loan to another sovereign nation, in order to pay pack the international banking cartel is nothing more than a commitment to keep the Ponzi going a little while longer.  People should stop worrying, it's only Dollars, not something of intrinsic value.

Sat, 11/27/2010 - 16:23 | 757797 SwingForce
SwingForce's picture

+1000

"Ben, you're surrounded. Take you finger off the trigger".

Sat, 11/27/2010 - 16:48 | 757831 Sudden Debt
Sudden Debt's picture

SUICIDE BY GUNFIRE BITCHEZ!! YOU'LL NEVER GET BENNY B. ALIVE!!

 

Sat, 11/27/2010 - 18:47 | 757984 shortus cynicus
shortus cynicus's picture

Correct remark. I never understood all this claims about limiting borrowing and spending. All is done with just imaginary symbols, so lets do it until somebody else hit a wall.

EUR is deep in trouble, let start new Korean war and JPY goes down, so USD is a clear winner, so Ponzi scheme may go some years further. In 1971 US defaulted changing definition of RFN from 'covered by gold' to 'covered by debt promise'. US may default second time changing definition to 'just uncovered, suck it up or be bombed'.

Austrian economic theory do not apply if whole economy is running with imaginary symbols without constant definition, instead of real money.

So spend and go in debt, there is no rational limit to it now.

But never, ever go in debt with real money.

Sat, 11/27/2010 - 16:22 | 757795 Careless Whisper
Careless Whisper's picture

Argentina. Not on the list!

Because they are dedicated to "helping our children have no idea what the imf is":

http://www.youtube.com/watch?v=lmDzlUvIM8A

 

Sat, 11/27/2010 - 16:26 | 757801 lizzy36
lizzy36's picture

Excellent article on IMF in Globe&Mail.

http://www.theglobeandmail.com/news/world/europe/what-ireland-proves-the-need-for-a-world-without-bailouts/article1815817/

Ireland's government was not in trouble. It did not have the overspending and long-term-debt problems that Greece did. Ireland's fiscal balance was fine except for the need to take control of the failed private banks. So the IMF has taken on a new role, as a guarantor of private banking and private-sector stability, that is far removed from the visions of 1944.

Our best hope is that the Irish debacle shows, vividly, what is wrong with the whole ritual: Even a sensitive and caring bailout is not designed to help a country. It is designed to help lenders get their money back.

Second, it creates moral hazard. Because a bailout is expected to spare bondholders pain in case of trouble, institutions lend recklessly to countries without sound fundamentals. Bailouts are now anticipated and demanded: Ireland watched this month as interest rates on its 10-year bonds soared to an unaffordable 9 per cent – not because there were any signs that its economy was insolvent, but because investors were not going to put their trust in a country with failing banks without promise of a bailout.

“The IMF doesn't put out fires,” Harvard economist Robert Barro famously argued. “It starts them.”

Sat, 11/27/2010 - 16:32 | 757804 DaveyJones
DaveyJones's picture

It's almost as if... the system is corrupt

Sat, 11/27/2010 - 16:49 | 757835 Sudden Debt
Sudden Debt's picture

don't make me wash your mouth with soap boy!

HOW DARE YOU SAY THAT!

Sun, 11/28/2010 - 09:48 | 758597 Kobe Beef
Kobe Beef's picture

Yes. And semantic confusion spread by the MSM is one of the scheme's prime enablers. The informed among the Zedge community should be doing our best to combat this.

Notice that it is called the "Irish bailout", not the "European money center banks who overlent into a real estate bubble bailout". Likewise, the "Greek Bailout", and the "Portugese Bailout", never identify the actual recipients of IMF, ECB, & FED bailout funds. Confusing the public about whom is the actual recipient of bailout funds allows the banksters to pillage in broad daylight.

I believe this intentional confusion of bailout recipients goes back to the "Mexican Bailout" of 1995, which conspicuously was not called the Citibank bailout.

Accuracy is important. Insist on it.

Thanks Davey,
Beef

Sat, 11/27/2010 - 17:45 | 757897 Sofa King
Sofa King's picture

Barrons also talked about how Ireland buried itself to protect the Bankster's.  Ireland should just default on the liabilities associated with the gurantees on the bank's toilet paper.  How can you punish some pensioner so some snake oil selling banker prick can expand his wine cellar?  It's about time these cocksuckers start jumping...

Sat, 11/27/2010 - 16:32 | 757806 frenchie
frenchie's picture

so the zombie US will rule the world as it will definitely own the planet through debt and/or military and it will become the center of the NWO ?

Sat, 11/27/2010 - 16:34 | 757809 The PolyCapitalist
The PolyCapitalist's picture

Ahh, but remember the IMF always gets repaid in full (at least according to their former chief economist, Simon Johnson).

 

http://www.project-syndicate.org/commentary/johnson14/English

Sat, 11/27/2010 - 16:37 | 757815 swissinv
swissinv's picture

and eastland is now gone adapot the Euro, unbelievable how stupid people are!!!!

Sat, 11/27/2010 - 16:45 | 757827 Sudden Debt
Sudden Debt's picture

Rumors have it that the Yines will also soon adopt the Euro!!

 

http://www.insidecatholic.com/myblog/new-amazonian-tribe-found-in-peru.html

Sat, 11/27/2010 - 17:20 | 757875 swissinv
swissinv's picture

well hopefully the Yines grow their own food they can exchange

Sat, 11/27/2010 - 17:38 | 757889 cossack55
cossack55's picture

Not for long. Monsanto has a crack team enroute even as I hunt-n-peck.

Sat, 11/27/2010 - 18:58 | 757998 shortus cynicus
shortus cynicus's picture

"own food" - what? do they hold  patents on all gens used for it ?

if not, they are intellectual property terrorists.

If they have little shame at all, they should starve. Mother earth don't like to feed weak and stupid (without labs and patent layers). No patents, no food, it's just simply as that.

Sat, 11/27/2010 - 16:40 | 757821 Sudden Debt
Sudden Debt's picture

I wonder what kind of economic problem there will be in 2 weeks...

first we had the QE2 which became boring after 1 week

now we have the Euro trash can glitches which are also becoming boring

I'm still a bit fascinated by the korean bully fight but unless we see some ground troop fights, that will also be boring by next friday

 

so...

 

what will it be...

Sat, 11/27/2010 - 16:55 | 757842 anony
anony's picture

I saved 15% on my car insurance...

Sat, 11/27/2010 - 17:01 | 757848 JohnG
JohnG's picture

Bank runs on 12/7 maybe?

Sotheby's auctions world record bugger and bidder is broke?

Sat, 11/27/2010 - 17:43 | 757894 cossack55
cossack55's picture

You may select one from list:

 

a.  Major earthquake in populated area

b.  Iceland/Indonesian volcano doing a ELE

c.  Hamas missiles over Israel

d.  TSA gropes and fondles citizens (delete, too late)

e.  Max Keiser crashes JPM

Sat, 11/27/2010 - 18:06 | 757925 Sudden Debt
Sudden Debt's picture

A. I already bought a sticker to support Haiti. That set me down 5 euro, so that's already enough.

 

B. I'm planning a 2 week trip by plane in 2 weeks so that's not a option.

 

C. Who cares anymore?

 

D. hmmm.... no

 

E. First silver will go down a bit further to 25 and then start to move back up. Won't happen in the next 2 weeks.

 

 

Sat, 11/27/2010 - 16:41 | 757822 tao400
tao400's picture

Actually when zero hedge says that back in april the system would not let anything fail, zero hedge was a little bit behind the curve. Jim Sinclair, over 2.5 years ago, was saying QE to infinity and that the central banks would not let anyone fail. Can there be any doubt that gold is going to the moon? It is getting to the point that even if the dollar strengthens, gold will still go up, which is contrary to the rules of gold. The reason for this is simple - just because the dollar strengthens relative to other fiat currencies does not mean that it is not losing value due to the money printing also. It just means that is not losing as value as fast as the other currencies. If this does turn out to be the case, that US through the IMF, bails out Spain, spend your dollars or buy gold. Hyperinflation is on the way in the whole western world. There will be no stopping it. The consequence of that might be war with China since their dollars will be worthless, though they are trying to spend them as fast as they can.

Sat, 11/27/2010 - 16:51 | 757838 Spalding_Smailes
Spalding_Smailes's picture
Thursday, January 29, 2009

Bill Gross Saying U.S. Should Buy Cheap Assets, Maybe Even PIMCO Bonds

Bill Gross, manager of PIMCO, the largest bond fund in the U.S., issued his February investment outlook today. His main argument is the following "To PIMCO, the remedy for this deflationary deleveraging and mini-depression is simple and almost axiomatic: stop the decline in asset prices." (ed. "mini" depression? Looks like Bill won't go full Rosenberg on this one). Without saying anything new, Gross is advising the Treasury, Central Bank, i.e. the U.S. taxpayers, to buy cheap assets (presumably ones in which Bill is axed himself). Not surprisingly, PIMCO was one of 4 funds picked in December to purchase mortgage-backed securities, and one of the managers selected to run the CP funding facility, and of course, was a top contender to purchase toxic debt under TARP before Hank Paulson scrapped that idea. In the spirit of increasing transparency, it is interesting just how much of these securities Bill has purchased ahead of time for his own book?

But we digress. Bill concludes "PIMCO’s advice to policymakers is as follows: you can’t bail out everyone, yet economic recovery is not possible unless certain critical asset sectors are not only reliquefied, but rejuvenated in price. Capitalism at its philosophical and practical center depends on credit, and while new loans can be and are being advanced via the banking system, it’s a much more difficult task to force shadow banks to lend. That lending depends on securitization which in turn depends on stable and eventually higher asset prices than currently exist."

 

Ok, we get it and we like it, but as hard as we try, we can't help being cynical in asking just how much of a benefit for his investors (and himself personally) would Bill reap as the U.S. uses taxpayer money to purchases these "cheap" security classes.
Sat, 11/27/2010 - 20:24 | 758095 unununium
unununium's picture

"we get it and we like it"

Speak for yourself.  LET IT ALL BURN.  Then prosecute.  And claw back.

Sat, 11/27/2010 - 17:27 | 757880 ZeroPower
ZeroPower's picture

 Can there be any doubt that gold is going to the moon? It is getting to the point that even if the dollar strengthens, gold will still go up, which is contrary to the rules of gold

Gold is going up to due to it's monetization. People think they are buying the real thing when they invest in any gold derivative (i.e. GLD). With the current levels of the ETF vs what it actually holds inside its vaults, if the trust actually were to go out and find all physical supply necessary, the prices would skyrocket causing an incomprehensible (and thus far, unwarranted) surge in prices.

OTOH, perhaps when people find out GLD doesn't actually have what they say it does, prices of GLD would plummet, and in turn this would likewise turn the actual commodity towards lower (reasonable) levels? IMO, i wouldn't put more credence in 1 scenario than the next, leave it to a coin-toss.


Sat, 11/27/2010 - 18:03 | 757920 Spitzer
Spitzer's picture

OTOH, perhaps when people find out GLD doesn't actually have what they say it does, prices of GLD would plummet, and in turn this would likewise turn the actual commodity towards lower (reasonable) levels? IMO, i wouldn't put more credence in 1 scenario than the next, leave it to a coin-toss.

No, when GLD is recognised for the fraud that it is, the demand for physical will be even higher. There could be a short term collapse in the paper price of gold but good luck trying to find any at those prices.

Sat, 11/27/2010 - 17:55 | 757910 Spitzer
Spitzer's picture

The consequence of that might be war with China since their dollars will be worthless, though they are trying to spend them as fast as they can.

They have spent allot of them already, China has trade deficits with Japan and Germany.

Can there be any doubt that gold is going to the moon?

No doubt, keep in mind though, that the ECB has 10,000 tons of gold on the reserve side of its balance sheet MARKED TO MARKET.

 

 

Sat, 11/27/2010 - 16:51 | 757840 max2205
max2205's picture

TD
Can we chart the rate of default in months Iceland 12 mths Greece 6 mths Ireland one mth with eastern block in between

Next bailouts defaults should hit every 2 weeks soon

Sat, 11/27/2010 - 17:14 | 757866 Atomizer
Atomizer's picture

Cannot provide subscriber links.

How Does Enterprise Corruption Stabilize Wages?

http://www.enterprisecorruption.com/?page_id=50

Speech by Mr Ben S Bernanke, Chairman of the Board of Governors of the Federal Reserve System, at the 6th ECB Central Banking Conference, Frankfurt am Main, 19 November 2010.

http://www.bis.org/list/cbspeeches/index.htm

And the IMF used car salesman speech

Strauss-Kahn on Europe's growth Challenges

http://www.imf.org/external/mmedia/index.aspx

Oh, but wait there is more..

REPORT ON THE OBSERVANCE OF STANDARDS AND CODES (ROSC)
Ireland

V. Transparency of Monetary and Financial Policies

Prepared by a staff team of the International Monetary Fund, on the basis of information provided by the Irish authorities.

Review of Code of Good Practices on Transparency of Monetary and Financial Policies

February 20, 2001

 

http://www.imf.org/external/np/rosc/irl/trans.htm

 

Sat, 11/27/2010 - 17:20 | 757876 ebworthen
ebworthen's picture

I vote China goes to the front of the line this time.

Sat, 11/27/2010 - 17:30 | 757878 Fíréan
Fíréan's picture

In a global economy, why is every aspect taken and dealt with individually here, and not  as a whole and the whole effect ? Ireland, Portugal, Europe, USA, Japan, China, BRIC, UK., whatever.... The discussion and articles on this blog/website go from one to another and yet never join up the dots, thus totally missing the whole point and the effect of the so called "shadow banking sector" on all countries' economies.

Sat, 11/27/2010 - 17:32 | 757883 Atomizer
Atomizer's picture

The discussion and articles on this blog/website go from one to another and yet never join up the dots, thus totally missing the whole point

 

Care to elaborate?

Sat, 11/27/2010 - 17:46 | 757895 MeTarzanUjane
MeTarzanUjane's picture

Yea ok I will help Illuminati things 4 u.

There are too many.

Too many sheeple, far too few ZHeeple, and too many banksters.

Game over for the goldbugs.

Sat, 11/27/2010 - 18:15 | 757941 Spitzer
Spitzer's picture

The elite are pushing the system exactly where they want it to go, which is to gold.

When the dust settles, the goldbugs will realize that the elite was doing them a favour all along.

Sat, 11/27/2010 - 18:48 | 757987 MeTarzanUjane
MeTarzanUjane's picture

Spits,
Sorry but no. If everyone was fat and happy no one would go to work. What they want is for you to lever up on overpriced shizel so they can crash the price of that shizel and keep your slave-ass working.

Good for you goldbug gold man.

Sat, 11/27/2010 - 19:26 | 758032 Spitzer
Spitzer's picture

Its so fitting for the elite to move to gold at this point, the point where the sheeple like you think they have this bubble thing figured out.

 

Sat, 11/27/2010 - 18:30 | 757963 GoinFawr
GoinFawr's picture

So far, so good! Oooer... hold it a sec, what was gold's close friday? 1362 bitz of pretty polly? My, my, those goldbugz sure are getting smoked.

/sark

Game over? Just beginning to get interesting, IMHO

Sat, 11/27/2010 - 19:39 | 758043 Atomizer
Atomizer's picture

Too many sheeple, far too few ZHeeple, and too many banksters.

Game over for the goldbugs.

 

So let me understand, your unemployed & your taxpayer funded rations cannot allow you to purchase an once of gold @ US$1,364.

Have we summarized your bitterness?

Sat, 11/27/2010 - 18:18 | 757945 Spitzer
Spitzer's picture

"shadow banking sector"

The shadow banking sector has maxed the fiat system out. Their next step is to gold and I would advise you to join them.

 

 

Sat, 11/27/2010 - 19:51 | 758057 Green Leader
Green Leader's picture

This could very well be a controlled opposition website, designed to confuse and fatigue.

If so, ZH would be quite a few notches above Infowars.

Everybody's vulnerable.

Sat, 11/27/2010 - 23:24 | 758320 Dantzler
Dantzler's picture

What might be good examples of

to confuse

and

to fatigue

on ZH?

I admit fatigue at times, but doubt ZH is an electrified Anarchist Cookbook.

Sun, 11/28/2010 - 00:21 | 758366 Green Leader
Green Leader's picture

Come on, figure it out on your own.

Make up a new term or something...see how in less than four hours it's Google-able. The spiders are ALL OVER this site. Why?

Sun, 11/28/2010 - 02:50 | 758478 tmosley
tmosley's picture

The more people link to you, the more spiders you get.  This is neither rocket science nor some vast conspiracy.

Sun, 11/28/2010 - 15:23 | 759086 Green Leader
Green Leader's picture

Mosley:

I have NO way of checking for spiders...made that up to see who'd swallow the bait.

You did!

http://www.youtube.com/watch?v=Txsutya8nGY

Sat, 11/27/2010 - 17:35 | 757888 eatthebanksters
eatthebanksters's picture

In the end, there can be only one...and the rest of us will be like serfs in the Dark Ages, groveling for an existence and paying most of what we produce in taxes...I for one will pick up a weapon and fight for my freedom rather than be shackled by the debts created by the criminal acts of the Wall Street fat cats.

Sat, 11/27/2010 - 17:40 | 757891 Conceptwizard
Conceptwizard's picture

I am committed to somehow raise the bar of awareness. Taxpayers (sheeple) read the headlines "Ireland gets bailout from IMF". They have no friggin idea that they are the ones doing the bailing.

No one seems to understand the serious shit they are in.

I bought a hundred acres, wine making gear, seeds and an old 1960 ford tractor, yeah and lead to make sure i keep it.

In the process of  building the second homestead, One for the family that thinks I'm nuts.

I want to thank Zero Hedge  for the last two years of high end information, i have been in the background since the beginning. I just decided to start some interaction.

I am a Financial Planner and have involved into more of a life planner these days.

Thanks to your committment to Project Mayhem I'd be proud to know you.

A word to the contributors, dont give up, just when you think its all for nothing a y of sunlight will appear. You are all making a difference in your own way. 

Sat, 11/27/2010 - 19:14 | 758019 TheSettler
TheSettler's picture

Financial Planner huh? For a minute there I thought you were a Grammar teacher. (evolved)

Sat, 11/27/2010 - 17:43 | 757893 Tiberius
Tiberius's picture

Does anyone know of a good online source that describes the workings of the PM physical market?  Specifically, what is the best way to redeem or sell gold and silver that you've accumulated?  Thanks

Sat, 11/27/2010 - 17:45 | 757899 MeTarzanUjane
MeTarzanUjane's picture

Exactly! Smart man.

Sat, 11/27/2010 - 17:49 | 757905 cossack55
cossack55's picture

The BIG question begs:

What are you planning on selling PM's for? Certainly not FRN's I hope.

Sat, 11/27/2010 - 18:07 | 757927 MeTarzanUjane
MeTarzanUjane's picture

Don't Big-Brother him dude. Let the man alone.

Sat, 11/27/2010 - 18:17 | 757937 Tiberius
Tiberius's picture

I have no plan of selling PM's anytime soon.  BUT I like to have a reasonably organized exit strategy for anything I invest in.  Trying to plan ahead and be practical.  I won't be doing the bidding of the Federal Reserve.

Sat, 11/27/2010 - 18:19 | 757946 MeTarzanUjane
MeTarzanUjane's picture

Like I said, smart man.

Soon some holders of the physical will try to bring it to market and will find out they can't even get one of these:

http://www.hesstoytruck.com

for an oz of the hypnotic shiny stuff.

Do you like that fighter jet on the back of the Hess truck? Nice. Symbolic. Dominant Dollar at all costs.

Sat, 11/27/2010 - 19:14 | 758017 Bay of Pigs
Bay of Pigs's picture

Are you always such an asshole?

Sat, 11/27/2010 - 19:19 | 758020 Bay of Pigs
Bay of Pigs's picture

And lack knowledge and understanding of real money?

Sat, 11/27/2010 - 19:46 | 758022 Bay of Pigs
Bay of Pigs's picture

Forget it. Guys like you never bother to do any homework, you just continually lob insults without thinking.

Sat, 11/27/2010 - 20:02 | 758070 Gordon Freeman
Gordon Freeman's picture

Tiberius: just sell it like anything else.  You might want to let people you trust know that you might be selling.  Usually, you'll be able to suss out who's for real.  For example, people at my place of work know that I will buy bullion, and occasionally I get approached (not often enough!).  At the very least, you can sell to a dealer, and pay the vig.  None of this is complicated.

Sat, 11/27/2010 - 20:16 | 758087 Jendrzejczyk
Jendrzejczyk's picture

There will be many tradesmen/women that will trade their services for your PMs. If the SHTF, there will be thousands of exit signs beckoning your gold and silver.

Sun, 11/28/2010 - 03:00 | 758483 tmosley
tmosley's picture

I'll tell you about my "exit" plan, if that helps.  I am mostly in silver right now, and plan to wait for the ag/au ratio to approach one before moving into gold, which I view as long term savings.  This event is likely to occur during a silver market crack up boom caused the failure of one or more large exchanges (namely the COMEX and the LBMA), and the resulting panic by industrial users who need small amounts of silver for their products, and are thus willing to pay any price in a physical squeeze.  

At that point, I will trade some of my gold for land, rental property, etc, assuming we are deeper into the depression than we are now, and thus prices are suppressed well below where they are now.  Once I see signs that the government will stop interfering in the markets, either as a result of a Ron Paul or similar presidency, or as the final result of a revolution, then I will also invest in stocks.  I will never invest in bonds, because I don't believe in credit.  If you are worthy of credit, then you can start smaller based on your savings and work your way up with profit reinvestment.

Sun, 11/28/2010 - 12:01 | 758701 Red Neck Repugnicant
Red Neck Repugnicant's picture

A few days ago, you actually told everyone here that you had the cure for cancer and the cure for HIV, but you couldn't talk too much about it. Supposedly, it was top secret. Most charitably, you gave us a hint of the cure by naming a critically important molecular compound that you - ironically - misspelled.  

Wouldn't the cure for cancer and the cure for HIV factor more into your "exit" strategy than a few silver coins? 

 

Sat, 11/27/2010 - 21:51 | 758198 swissinv
swissinv's picture

Have a look at GATA.org - you should learn about the gold price manipulation going on at LBMA (AM/PM fix). by the way Andrew Douglas from GATA made a nice regression analysis on this to prove the price manipulation.

Sat, 11/27/2010 - 17:45 | 757898 Atomizer
Atomizer's picture

More new job creation under Healthcare reform.

Modifications to SBD Health Sector Goods
to accommodate Clinton Foundation requirements

 

April 2004

 

http://webcache.googleusercontent.com/search?q=cache:BjRa_Ib8CQAJ:siteresources.worldbank.org/INTPROCUREMENT/Resources/Modifications-CF-countries-v4.doc+Clinton+foundation+%2B+world+bank&cd=2&hl=en&ct=clnk&gl=us

 

Follow the money

Sat, 11/27/2010 - 17:49 | 757903 MeTarzanUjane
MeTarzanUjane's picture

Google == CIA

Sat, 11/27/2010 - 18:02 | 757918 edwardo1
edwardo1's picture

Gold paper will burn like every other fraud going at warp speed across the globe. The real thing, physical gold, and to a lesser extent, silver will become spectacularly valuable.

Sat, 11/27/2010 - 18:09 | 757929 toathis
toathis's picture

There has always been a SOLUTION to wake up the sheeple. I know you all hate CASH (which by the way, it quite heavenly these days).

Buy your groceries from a store with an AUTOMATIC clerk. Pump your heavenly US dollar (which will still be around when all of you die, btw) into the machine. I disagree with all your Armageddon thesis and fimally believe Bernanke is doing the right thing for America buying long-term paper (Saving the US from an Ireland type crisis is quite heroic if you ask me)

You all scream here everyday about CHANGE CHANGE CHANGE. COLLAPSE COLLAPSE COLLAPSE.

Here is your chance. (I am not a contributor, so I hope you live with clicking away).

http://img.photobucket.com/albums/v733/youthinksoo/IMG_0088.jpg

Sat, 11/27/2010 - 18:11 | 757934 Conceptwizard
Conceptwizard's picture

Betca I can sell my whiskey, wine, bullets, bread and seeds for silver or anything else my little heart desires at a 2000 times what i paid for them, And i dont have to buy PM's to do it.

The risk is if the shit doesn't hit the fan. I get drunk, eat and target practice for a year.

My message... PM's are not the only answer but however i agree with the logic and upside.

Sat, 11/27/2010 - 18:13 | 757938 bugs_
bugs_'s picture

for amber waves of grain

Sat, 11/27/2010 - 18:16 | 757942 Atomizer
Atomizer's picture

It will be interesting the watch the Clinton-Gates foundation emerge in public eyes.

94002: China-U.S. Relations Updated November 25, 1996 

Kerry DumbaughForeign Affairs and National Defense Division

 

http://www.fas.org/man/crs/94-002.htm

Many have the signed Clinton document to authorize selling technology to China. Seems the TV media drama forgets. Wonder how this will play out in the minds of J6P learning of old foundations formed in past years.

Sat, 11/27/2010 - 18:16 | 757944 WTF2
WTF2's picture

If/when Europe becomes unglued US Treasuries and  the dollar will rein supreme.  Margin calls would follow in commodities, the unseen bubble.  The China case is just too pat and the sector so overowned.  Bernanke would then have tha last laugh.

Sat, 11/27/2010 - 18:21 | 757948 toathis
toathis's picture

US dollar is heavenly :)

nothing is coming, folks. NOTHING. A whole bunch of nothing.

I couldn't even drive down five miles yesterday to pick up a pizza. ROADS ARE JAMMED, JAMMED, JAMMED.

People lined up for 12 hours+ just like every other Thanksgiving+ Black Friday in modern history. Where is all this cash coming from? I thought we were in a SEVRE RECESSION!?!?!

(See my earlier post for doomer solutions)

Sat, 11/27/2010 - 18:33 | 757967 bob_dabolina
bob_dabolina's picture

I bet allllll those people are on time with their mortgage/student loans/credit card bills.

 

 

Sat, 11/27/2010 - 19:05 | 758006 Dirt Rat
Dirt Rat's picture

They had the money to spend because they were not paying their mortgage/student loans/credit card bills.

Sat, 11/27/2010 - 19:21 | 758026 Atomizer
Atomizer's picture

Welcome toathis. Did you get bored at MW because no one listened? Can you provide video on your road venture to pick up a pizza?

Didn't you know? You can order a pizza online.

Ordering pizza in 2010

http://www.youtube.com/watch?v=RNJl9EEcsoE

We look forward to your pizza trip video's

Sun, 11/28/2010 - 16:17 | 759223 Non Passaran
Non Passaran's picture

It's certainly very much like last year's - Bloomberg says sales are up only 0.3%.

Sat, 11/27/2010 - 18:22 | 757950 Spitzer
Spitzer's picture

Just the opposite.

The Euro will remain supreme because it gets the Fed to bail out Europe through swap lines and IMF bailouts even though the ECB has the ability to print its own money.

Sat, 11/27/2010 - 18:29 | 757959 ZeroPower
ZeroPower's picture

Right, so who's bailing out who? The mighty $ will 'save' Europe.

The USD will reign supreme as it has for the past century. I think the argument you've had on here against the $ is the fact that it's losing purchasing power. In terms of reserve currency, its still there as it always was, and so are all the numerous commodities and other instruments linked to the USD - not some other currency.

Sat, 11/27/2010 - 18:46 | 757981 Spitzer
Spitzer's picture

you've had on here against the $ is the fact that it's losing purchasing power

The US has what.... 50 billion dollars in Forex reserves ? Its not actually bailing out anyone. It looks to me like the ECB is hanging the Fed with its own rope because as, like you said, the more bailing out the Fed/IMF does, the more purchasing power the dollar loses.

The more purchasing power the dollar loses, the higher the % in value terms the reserve side of the ECB balance sheet goes. (10,000 tons MTM)

Sun, 11/28/2010 - 05:01 | 758529 ZeroPower
ZeroPower's picture

While the reserves are small, they have nothing to do with the QEx. The FX reserves are not what's bailing out the TBTFs, or what's being used in the swap lines with the ECB...

Either way, i agree both entities BSs will be inflated with fake assets (or more than real liabilities - not to mention long-term loans which presumably go into perpetuity..)

Sat, 11/27/2010 - 18:49 | 757982 doolittlegeorge
doolittlegeorge's picture

I find this very interesting.  Basically "the euro is a bank funding currency"--in effect "the only hard money on the planet."  The irony of  course is that "it's blowing up the sovreigns that back it" so "the banks now have to be bailed out of the currency they created for themselves."  I will forever wonder "why isn't Europe bailing out the sovreigns" because "where do they honestly think their banks come out should the whole Euro program go kaplooey thus bankrupting their member states?"  In any case "it's obvious what the IMF is being used for" which is to protect "non-European member nations' banks from the dissolution of European Union" therefore it is only common sensical that "these nations that have done so much to protect their bankers continue to do so."  Bascially it is "the ultimate in securitization."   I still see US equities moving higher "because God wants them to" and not obviously because of anything going on relative to Europe.  Indeed this terrifying combination of the mere THREAT of the end of the European Union and a major regional war on the Korean Penninsula overlayed with trillion dollar deficits in the USA would in a rational world cause--what does he call himself?  a "Dollar Bill Hiccup"?  Needless to say "this particular time is anything but rational." Nor has it been for some time...

Sat, 11/27/2010 - 18:38 | 757971 virgilcaine
virgilcaine's picture

Max Keiser is losing it!..calls people who lost their homes 'suckers'... Stay in the crumbling Eu Mr Keiser. With that wild hairdo and whacked website.

Sat, 11/27/2010 - 19:18 | 758024 Racer
Racer's picture

Countries?

No... it is the poor people who are bailing out the banksters around the world.

The fall of yet another civilisation but this time on a global scale

Sat, 11/27/2010 - 19:29 | 758034 CrashisOptimistic
CrashisOptimistic's picture

Official data is out.  Retail spending yesterday only up 0.3%.  Online spending up 30% but it is only 8% of total spending, which is still dominated by brick and mortar.

All the advertising hype and extra store hours are going to destroy profits vs last year.  There is no return on the advertising money and labor hours.

Sat, 11/27/2010 - 19:50 | 758060 Caviar Emptor
Caviar Emptor's picture

Interesting.....

Sat, 11/27/2010 - 20:14 | 758084 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Yet the media does nothing but hype the antics.  Frontpage shopping spree this morning in paper and online.  The media would have us believe anything.

Sat, 11/27/2010 - 19:28 | 758035 Racer
Racer's picture

"And we may further remark that a government which is composed of the middle class more nearly approximates to democracy than to oligarchy, and is the safest of the imperfect forms of government."

Aristotle:

Written 350 B.C.E

http://classics.mit.edu/Aristotle/politics.5.five.html

Sat, 11/27/2010 - 19:41 | 758050 bob_dabolina
bob_dabolina's picture

Oh...My...God

Compilation from this years Black Friday. I rec. watching the whole 3 minutes. At first I thought this was some kind of joke.

http://www.youtube.com/watch?v=q5Sx5NhIElk&feature=player_embedded

Sat, 11/27/2010 - 19:48 | 758054 Caviar Emptor
Caviar Emptor's picture

Caviar's Projections, speculations and conjectures:

As we watch The Bailout Parade of banks and nations go by, the floats and balloons (ok, bubbles) are getting bigger and bigger! Here comes Portugal! Here comes Spain! Can't wait for Italy and the whole Eurozone! It's entertainment at its finest!

Which has lead me to the following serious thought:  

--Caviar's Theorem: At a given inflection point, as bailouts approach infinity and the risk of failure correspondingly approaches zero, money will become funny.

Allow me to elaborate: the significance of money as a store of value and unit of account will be increasingly undermined by the giant snowball of proliferating bailouts without correction of the underlying pyramid-shaped debt matrix. The constraints usually imposed on insolvency will be increasingly meaningless. Everyone will want to lend depreciating paper capital to the worst managed, most bankrupt nations and entities because they will get bailed first and therefore present the least risk and greatest opportunity for return. Recklessness will beget recklessness, not abet it. In short, the line between Monopoly money and dollars will be blurred irrevocably. If the solution to insolvency is not deflating the underlying assets, then there's only one solution. As a result, the risk of global hyperinflation is here. Global. 

Sat, 11/27/2010 - 20:10 | 758077 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Everyone will want to lend depreciating paper capital to the worst managed, most bankrupt nations and entities because they will get bailed first and therefore present the least risk and greatest opportunity for return.

Goldman Sachs on the hook with the Euro Majors for the soddy lot, and they are looking to get bailed out.  $115 billion for Ire'land.  I wish one of these European countries would step up and not accept the terms the international banksters ask. 

Sat, 11/27/2010 - 20:58 | 758147 Caviar Emptor
Caviar Emptor's picture

But that's the dilemma of the moment: to accept or not to accept. 

Taking the money and giving the banksters head is the quick fix that many are looking for as they view the world from their couch through their flat screen. Anything else would mean action and suspense. 

Sat, 11/27/2010 - 19:51 | 758061 Atomizer
Atomizer's picture

Confessions of an Economic Hitman part 1/4

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

Wake the FUCK up..'DANCING with the STARS' lemmings.

Sat, 11/27/2010 - 20:29 | 758105 Jendrzejczyk
Jendrzejczyk's picture

"Funny money will galore..."

Very odd prediction.

Sat, 11/27/2010 - 21:01 | 758153 Caviar Emptor
Caviar Emptor's picture

It's gonna get giddy. Real giddy. 

Sat, 11/27/2010 - 20:55 | 758143 Racer
Racer's picture

ZH please, how do we go about a mass people protest against this?

Stop the banksters please :)

they are killing the poor people and they need to be stopped

Sun, 11/28/2010 - 01:06 | 758415 i-dog
i-dog's picture

They can only be stopped by removing the governments that provide them with their monopoly protection. Without governments, they would need to compete with each other and against entrepreneurial startups that would offer unbiased ratings and transparency through all levels of the media. Even the MSM's monopoly over information dissemination is a government-sponsored protection racket.

Sun, 11/28/2010 - 22:54 | 760061 honestann
honestann's picture

Stop thinking the way you do.  Start thinking the way the people in the revolutionary war did.  In other words, gather up your big mass of angry folks and "hang the suckers" (the top-level elitists).  That is the only way the current travesty will end.  But does anyone have the nerve to risk his own butt for it?  Doubtful.

Sat, 11/27/2010 - 21:45 | 758192 onlooker
onlooker's picture

-----Racer------ Interesting question. We have always been a Nation of problem solvers. Now everyone asks the same question, HOW. Does 1933 ring a bell?

Sun, 11/28/2010 - 01:02 | 758408 i-dog
i-dog's picture

You can't make this shit up: Just heard on a BBC interview with some Irish mouthpiece (not sure if he was a bureaucrat or a politician):

"The developers were at fault for pushing for permits for rezoning. The public was at fault for voting in politicians who were able to be corrupted!"

In the same vein, heard from Wall Street traders interviewd by Jesse Ventura a few weeks ago: "It's not our fault. You should have passed laws to stop us!"

It's never the perp's fault! Criminal muthafcukas!

Sun, 11/28/2010 - 02:45 | 758475 sethstorm
sethstorm's picture

Interesting that some Third World hellholes are now joining in.

Sun, 11/28/2010 - 18:03 | 759442 MyKillK
MyKillK's picture

The US is put putting $105 Billion towards the bailout of European countries??

Good lord do we need Ron Paul as president

Mon, 11/29/2010 - 12:10 | 761029 huckman
huckman's picture

Thank-you Spalding_Smailes for your attention to the US Dollar Shortage in Global Banking PDF report. The tickets to Davos-Klosters, Switzerland  this January, 2011 should come with a souvenier copy.  Conference attendees can use it like a high school yearbook and collect autographs.   

Do NOT follow this link or you will be banned from the site!