Europe Is About to Implode... Are You Ready?

Phoenix Capital Research's picture

 

I've warned time and again that the EU would collapse in May-June. That collapse is here right on schedule. And NO ONE will be able to stop it.

Here's why:

1) According to the IMF, European banks as a whole are leveraged at 26 to 1 (this data point is based on reported loans... the real leverage levels are much, much higher.) These are a Lehman Brothers leverage levels.

2) The European Banking system is over $46 trillion in size (nearly 3X total EU GDP).

3) The European Central Bank's (ECB) balance sheet is now nearly $4 trillion in size (larger than Germany's economy and roughly 1/3 the size of the ENTIRE EU's GDP). Aside from the inflationary and systemic risks this poses (the ECB is now leveraged at over 36 to 1).

4) Over a quarter of the ECB's balance sheet is PIIGS' debt which the ECB will dump any and all losses from onto national Central Banks (read: Germany)

So we're talking about a banking system that is nearly four times that of the US ($46 trillion vs. $12 trillion) with at least twice the amount of leverage (26 to 1 for the EU vs. 13 to 1 for the US), and a Central Bank that has stuffed its balance sheet with loads of garbage debts, giving it a leverage level of 36 to 1.

And all of this is occurring in a region of 17 different countries none of which have a great history of getting along... at a time when old political tensions are rapidly heating up (see Germany and France's recent butting of heads over fiscal policy).

So if you’re not already taking steps to prepare for the coming collapse, you need to do so now. The US will not escape from this unscathed. No one will. The global banking system is too interconnected: some estimates put US exposure in the ballpark of several TRILLION Dollars.

Again if you are not preparing for this, YOU NEED TO DO SO NOW.

 

I recently published a report showing investors how to prepare for this. It’s called How to Play the Collapse of the European Banking System and it explains exactly how the coming Crisis will unfold as well as which investment (both direct and backdoor) you can make to profit from it.

 

This report is 100% FREE. You can pick up a copy today at: http://www.gainspainscapital.com

 

Good Investing!

 

Graham Summers

 

PS. We also feature numerous other reports ALL devoted to helping you protect yourself, your portfolio, and your loved ones from the Second Round of the Great Crisis. Whether it’s a US Debt Default, runaway inflation, or even food shortages and bank holidays, our reports cover how to get through these situations safely and profitably.

 

 

 

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ROCE's picture

Graham is a FRAUD as well as his services. Graham Summers.... Initials G.S. .... Got it just inverse

hedgehog9999's picture

Argentina wasa microcosm of what's going to happen,

Initially a massive deflation of asset prices just like 2008 as the USD zooms upwards, then a massive inflation across the board with a massive bond crash while stocks and GOLD and PM's soar.....

Question is when, it could start as early as this week, but more than likely we'll leviate a bit more and then the sucking sound will deafen us all.......................

Thankfully Obama is doomed because of what'll happen. A lot of money will change hands, some revolutions and wars will start but overall the patient will have to take the medicin or DIE!!

 

MikeMcGspot's picture

 Dear Mr. Hedgehog999.

What’s wrong with death, when the alternative is choking down a bunch of bull shit for the rest of your life? What about fighting? Not being a bitch slave?Cop that attitude and cast another reality if you wish as you see fit. Ask yourself the question? Are you more afraid to live than die?

Hopefully we can have a chat soon over coffee or after 5:00 Central USA a cool drink.

Rock on bro!

MikeMcGspot's picture

Ctrl+P = time for continuation of the current financial reality.

Whatcha going to do with it?

MikeMcGspot's picture

 Hey Graham,

Let’s meet out front of your place tomorrow for the space ships to pick us up. You supply the date, I will be there.

I will not be drinking cyanide laced Kool-Aid should your predictions be off a bit.

Sorry, I was wrong, let me restart please, with the word sorry you sorry ass.

Sorry,

Hey Graham,

On the day the space ship is to land and take us off to never never land, let’s meet at the Dojo of your choice and throw down like humans in battle.

I am prepared.

Are you?

Xkwisetly Paneful's picture

I normally would not post in your blog but one of your numbers is inaccurate.

The amount of wealth in both Europe and the US is about the same around $65trillion.

Making the denominator in any leverage equation equal.

boiltherich's picture

Seen at Ambrose E-P's column today:

Brussels floated the idea on Wednesday for a eurozone “bank union” and use of the European Stability Mechanism -- which has not yet been ratified by most states -- to rescue banks and sever the dangerous nexus between crippled lenders and crippled states.

The proposals were shot down instantly by Berlin. Such plans amount to debt-mutualization, a form of back-door eurobonds. German opposition is “well known”, said the Kanzleramt.

Sources in Berlin say Germany wants Spain to tap the International Monetary Fund -- as well as the EU -- to spread the rescue burden to the US, China, Japan, Britain and others.

 

There you have it in bold black letter flat out truth, Germany wants the eurozone bailouts spread out as much as can be onto the rest of the planet.  IMO this eurozone mess is at least as the fault of Germany as the failing Club Med states so why do the US and Japan and others have to pay for European unwillingness to deal with their own problems?  Europe is in debt and over leveraged on a fiat money that never should have been created, but it still is one of the wealthiest places on the planet, I say not one (more) American dime goes to help Germany buy time to finish looting the rest of Europe.

Davalicious's picture

Right - the Fed will print to save Europe, at least for a while. Europe won't collapse at this point.

The interesting thing is that this means more QE and hence higher prices for precious metals. Glad I have all that silver & gold :-)

tim73's picture

You mean US prints some new dollars and gives them to IMF as guanrantees is somehow a sacrifice? Even to pretend US is some innocent bystanders in this financial crisis is laughable.

BTW, IMF uses it own currency, Special Drawing Rights (SDR) on top of these common pool of guarantees from all member nations to make loans to crisis nations. IMF also very rarely has to suffer loan losses, their loans are always tight to restucturing of a nation. It is truly the lender of last resort.

dexter_morgan's picture

Hell yeah, we got VJ in the white house making policy and running things, what can go wrong?

boiltherich's picture

And in about 7 hours Ireland votes on the ESFS, as of yesterday 40% of the electorate had not made up their minds.  A no vote according to the Germans will mean removal of Ireland from the eurozone.  Though they cannot kick them out, but they can freeze them out so that any nation thus cut off from any and all funds and banking will have to go back to indiginous currency or starve to death. 

ghenny's picture

I have frequently said Europe will handle this one way or another.  Frankly, I am starting to have my doubts.  Unless they do a European wide guarantee of bank deposits there will be much larger and faster transfers to the Northern countries from the South which will create havoc if some control is not put in place ASAP.  I am not seeing that happening fast enough.  No big bazooka anouncements.  No coordinated agreement about preventing contagion, reorganizing labor markets, pension agreements, taxes, spending and public sector employment.  No coordinated encouragement of business and reduction in red tape.  No carefully managed reorganization of real estate losses and infrastructure investments.  All this has to happen in synch.  The technocrats know what needs to be done but they can't get the politicians, the unions, the civil servants and the business lobbyists to play ball or the tax collectors and tax payers.  They have to focus more on consumption taxes and less on income taxes.  They have to offer youth employment and appropriate training.  They have to teach people how to be entrepreneurs and intrapreneurs.  They have to help people learn how to live with greater performance based income and less on guaranteed salaries.  They have to help people accept more risk in their lives while still picking them up when they fall.  This is a gigantic order. It will take a generation to do.  They have to try and muddle through until then.  I thought they would.  I am starting to have serious doubts.

Votewithabullet's picture

you having doubts man? I was about to go all in on the collapse untill Notradumbass aka phoenix fuck face said it will happen  may-june now I'm convinced die frau will save the day. This pussy said the dollar would collapse this time last year(actually put a date on it). Not in your lifetime negro.

The Fonz...before shark jump's picture

Remember world war 2? The western front, the Germans on one side the French on the others...they just stared at each other while they hung laundry and just postured...called the phony war....Took a long time for the war to begin...but it did

Don't worry though...it takes a while for the Europeans to warm up...but once they do it becomes a full vlown calamity spectacle on a massive epic scale.....

OC Money Man's picture

When people talk about average leverage in European banks, they need to specify by country.  British banks are leveraged 23 times, French banks 24 times and German banks 35 times.  Germany has a better sovereign debt position, but a much worse banking position.  This explains why Germany has not forced the PIIGS to leave. 

When Greece leaves, it is lights out for the euro and lights on for drachma.  I believe there will be a big bounce in Greece to take advantage of the low cost of tourism and Greek products.  This is exactly what happened in Argentina after 2000. 

 

hedgeless_horseman's picture

 

 

I believe there will be a big bounce in Greece to take advantage of the low cost of tourism

Good luck with that.

andrewp111's picture

Once the Euro collapses, there will be plenty of rich and depraved Germans eager to enjoy the bodies of poor and desperate Greeks. Sexual tourism will make Greece solvent again, and kill half of them with AIDS. A true Faustian Bargain.

rrrr's picture

Anyone who has ever found a tick on their dog knows what to do about central bankers.

The Alarmist's picture

Been ready for three years ... are they ever going to light this candle?

Ripped Chunk's picture

Liquify it all, all of it........

TheTwoJohns's picture

WHERA is my goddamit short eur'usd key button..?

NewWorldOrange's picture

Been short EUR/USD for nearly a month, as well as NZD/USD and AUD/USD. Scaled in for two weeks. ALL IN NOW. Do or die. Thanks Tyler. The incessant "gloom and doom" on Europe definitely encouraged me. I owe you buddy;:

HERE'S HOW YOU GET RICH OFF THIS SHIT PEOPLE

Sun, 05/06/2012 - 17:37 | 2401652 NewWorldOrange "It's going to be a very interesting summer."

Yes indeed it is. Perhaps even better than last summer (for currency traders.)

As for this evening, I think AUD/USD and/or NZD/USD are better shorts than EUR/USD. Always great "risk off" trades, especially on a Sunday evening after such a weekend. Whether the markets perceive increased volatility much in part due to the Europe elections, a decline in global markets, or are still just pricing in the Friday's jobs report, there is likely to be a flight to the "safety of the US dollar" (yeah, I know - LMAO too) and when that happens the Aussie and Kiwi usually take a real beating. Especially if commodities markets are trending down as they have been.

Shorted both and EUR/USD Friday afternoon. Just closed EUR/USD. Just added BIG to my already sizeable shorts on AUD/USD and NZD/USD. I'll either wake up with a huge profit or most of my earnings from the past two months wiped out. Because sometimes you just gotta' go for the gusto.

[UPDATE 5-30-12: I got back in EUR/USD shorts the next week...closed my AUD NZD shorts last week...still in the EUR/USD short and in fact just went all in on that with a target of 1.21...}

(I think I'm allowed to gloat a bit especially after the past few days, heh. I'M RICH BITCHES!)

Ned Zeppelin's picture

Actually, this time the crisis seems much more out of control.  Not that it won't be controlld, in some way, and in the end, as John Wilmot suggests, but it does seem to be building momentum through sucessive waves of wimpy Euro area "containment" measures.

20-20 Hindsight's picture

Graham Summers is not credible and, as such, his rants and flawed predictions hurt ZH's own credibility as a whole.  There needs to be a disclaimer inserted in front of Summer's "contributions" to reassure readers that his views do not necessarily reflect the views of ZH.

kito's picture

leave graham alone. he saved tyler's life........

hedgeless_horseman's picture

 

 

...yes, but only once.

garypaul's picture

Yes, what do you say we propose to Tyler that he ban G.S. from this blog if Greece is still there at the end of June? 

falak pema's picture

it'll implode most likely up every Oligarch's ass hole, not to say it won't bring down the sheeple. Which orifice are you gatekeeper of?

Buck Johnson's picture

It will implode, and it will be nasty.

walküre's picture

Graham, you're getting a lot of flack here. Have you ever been to Europe?

hannah's picture

we wont see europe c0llapse until they just print money without collateral or any 'rules'...then the SHTF...same for the usa. when ben justs prints with no cap..then that will be the holy f^ck moment and we arent there yet.

 

everyone still thinks the banks can just print more to save everyone.

markar's picture

there hasn't been any collateral for months. It's all toilet paper.

walküre's picture

print money without collateral or any 'rules'

Where have you been for the last decades?

Their re-definition of COLLATERAL has blown up in the central banker's faces.

jomama's picture

I've warned time and again that the EU would collapse

yes, yes you have.

RoadKill's picture

Im not ready yet...  What I need is someone to take Ghrams posts and summarizes them for me and then post the summary on Pheonix Capital's website 2-3 weeks after he writes it...  and claim that its their own research so they can try to sell me advice.

Seriously talk about rehypothcation.

itisthetimethisistheplace's picture

Graham, a leg-end on ZH. I don't know why but I have started looking forward to his posts getting bashed.

Graham is a 24kt cock. I just wish ZH would stop posting his rubbish.

 

Zaydac's picture

You misunderstand. It is the Tylers' tactic to post this stuff as counterpoint to their own predictions. By posting a stopped clock it makes the Tylers' own predictions seem a little bit better. One is more likely to ignore the occasional cock-up by the Tylers if one has Kleenex Capital to compare them with.

Errol's picture

Maybe, Zaydac.  Or perhaps the Tylers use Phoenix Capital's postings as a primer for new arrivals to ZH.  He provides a short overview of the fundamentals.

boogerbently's picture

You SUCKED ME IN AGAIN, bastard !!  SPAM< SPAM< SPAM

boogerbently's picture

"Indeed, we’re so concerned about what’s coming that we’ve re-opened the $249 subscription price on Private Wealth Advisory for one final week. We The stakes are simply too high for investors not to get access to information that can help them navigate the coming Crisis."

John Wilmot's picture

Nope...

"According to the IMF, European banks as a whole are leveraged at 26 to 1 (this data point is based on reported loans... the real leverage levels are much, much higher.) These are a Lehman Brothers leverage levels...The European Banking system is over $46 trillion in size (nearly 3X total EU GDP)."

So what? The ECB can loan out as much money as it likes, and collateral requirements can be lowered as much as they like, or even eliminated altogether. The ability of the ECB to inflate is unlimited. Any rules which limit its ability to inflate will be tossed aside and forgotten as necessary.

"The European Central Bank's (ECB) balance sheet is now nearly $4 trillion in size (larger than Germany's economy and roughly 1/3 the size of the ENTIRE EU's GDP). Aside from the inflationary and systemic risks this poses (the ECB is now leveraged at over 36 to 1)."

So what? All the ECB's assets can go to zero and that does not impair the ability of the ECB to inflate. It does impair their ability to stop an inflation once it begins, but I don't think they're concerned with that.

"Over a quarter of the ECB's balance sheet is PIIGS' debt which the ECB will dump any and all losses from onto national Central Banks (read: Germany)"

Again, so what? Central banks cannot have "losses" in any meaningful sense. Taking on worthless assets as collateral for loans, or directly monetizing worthless assets, impairs their ability to stop an inflation, yes, but not to inflate. Inflation is the order of the day - or decade.

"And all of this is occurring in a region of 17 different countries none of which have a great history of getting along... at a time when old political tensions are rapidly heating up (see Germany and France's recent butting of heads over fiscal policy)."

Political tensions or political farce? ALL the major parties in Europe are on board with the agenda for total European integration. There is no real nationalism in Europe, not among the people who matter. Nor are those people confused about what to do, or incompetent. They know exactly what they are doing. They knew that EMU without a central european government would fail, and it has, and now they have the desired opportunity to use this crisis as justification for the creation of that central euriopean government. They will use inflation and the mutualization of debt to prevent a break-up, and achieve their goal of total integration. Watch and see. These "political tensions" are puppet theatre, like the farcical rivalry between Democrats and Republicans in the U.S.

andrewp111's picture

Unless Frau Merkel says Nein Nein Nein and pulls Germany out of the Eurozone. Then the ECB can inflate to their hearts content and there will be a mad dash to get out of the Euro and into the New Reichsmark.

stocktivity's picture

Exactly...It's all Bullshit!

pupton's picture

You are right on in your critique of his statements of facts (not analysis).  He may be posting accurate facts, but SO WHAT?  Those facts alone do not support his claim of "collapse" by the end of June.  That's like a jury finding a defendant guilty for having "opportunity", without the prosecution even "mentioning" motive.  Size and leverage aren't the only factors that matter.  I must wholeheartedly agree with all posts that hate on Graham, as usual.  He's the chicken little that won't shut the fuck up.  Graham, talk to us in July about how right you were once the sky is laying in pieces on the ground.

The Monkey's picture

Let's face it. Europe is a total clusterfuck. Sad but true.

GS can't call the timing of it's demise, but it doesn't take rocket science to observe that a much greater recession is developing there than is priced into the markets. So, there are actionable ideas regardless of the structural outcome.

John Wilmot's picture

To be clear, the Eurozone economy is headed into the gutter, and the "solution" of inflation and debt mutualization will only cause further harm - this can happen even as the EU as a political entity strengthens.

John_Coltrane's picture

I believe you ignore the strong human psychology geared toward tribalism.  The Germans will make the PIIGS suffer even if it hurts them too.  The great centralization, NWO experiment of the fabian socialists is on its deathbed.  Extreme Nationalism is a much more probable outcome-and the extreme parties in Europe are its manifestation.  The order of human priority is always, individual, family, friends, city, state, nation and world in that order.