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Angela Merkel Just Revealed the Real Situation in Europe
For several months now, I’ve been stating that the world’s central banks are in a bind. That bind is that their monetary policies are becoming less and less effective at placating the markets while the consequences of said policies (higher costs of living, the targeting of troubled banks in the credit market, etc.) are increasing.
As a result of this, central banks have begun resorting to more and more “verbal intervention” or promises to “act” without ever acting.
We received confirmation of this over the weekend when Angela Merkel chastised Germany Bundesbank Head Jens Weidmann for stating that an ECB policy of buying bond was like a dangerous drug.
Angela Merkel tried to calm a growing storm over euro zone crisis strategy on Sunday after the Bundesbank likened ECB bond-buying plans to a dangerous drug and a conservative ally of the German leader said Greece should leave the currency bloc by next year.
The comments, from central bank chief Jens Weidmann and a senior figure in the Bavarian Christian Social Union (CSU), Alexander Dobrindt, point to mounting unease in Germany with the policies being used to combat the three-year old debt crisis.
Domestic criticism has narrowed Merkel's room for maneuver at a time when Greece is in dire need of more aid and policymakers are scrambling to prevent contagion from enveloping big countries like Spain and Italy.
Two days after Greek Prime Minister Antonis Samaras visited Berlin and made an impassioned plea for politicians there not to talk up the possibility of a Greek euro exit, Merkel herself sent a warning to allies who have said the euro zone would be better off without its weakest link.
"We are in a very decisive phase in combating the euro debt crisis," Merkel told public broadcaster ARD in an interview. "My plea is that everyone weigh their words very carefully."
http://www.reuters.com/article/2012/08/26/us-eurozone-idUSBRE87P0AI20120826
For over two years now, we’ve been hearing time and again that the European crisis was “solved” and that things would improve. It’s obvious now that all of those claims were lies. Indeed, we’re now at the point that politicians are openly asking central bankers not to discredit attempts to prop up the markets.
Let me ask you, how desperate do things have to be that a politician asks a central banker not to use certain words during public appearances?
The answer: very, very desperate.
Indeed, the situation in Europe is fast approaching a crescendo. The German Constitutional Court votes on whether the ESM bailout fund is even legal on September 12. If it doesn’t, it’s the end of the EU as we know it.
Could this happen? The majority of Germans are fed up with Greece, worried about inflation, and want the Deutsche Mark back. Also bear in mind that Angela Merkel is up for re-election next year. So the courts could in fact rule the ESM is unconstitutional which would end the EU right then and there.
But, for the sake of argument, let’s say that Germany does ratify the ESM and the ESM is given a banking license (which Germany says will never ever happen). Even then Spain and Italy are supposed to fund 30% of it!
So even in a best case scenario, the bankrupt nations asking for bailouts are going to fund 30% of the very bailout fund that will bail them out!?!?
You couldn’t make this stuff up if you tried.
Make no mistake, the crisis in Europe is far from over. If anything, we’re fast approaching the REAL storm over there: when countries actually start defaulting and leaving the Euro.
When this happens, we will see the return of systemic risk. And the US will not prove immune to it. Europe is the single largest economy in the world. It’s also China’s single largest trade partner. If the EU goes down, it will send ripple effects around the globe. And with China entering a hard landing and the US re-entering a recession the potential for another 2008 type event is higher than at any point in the last three years.
On that note, we’ve recently published a report showing investors how to prepare for this. It’s called What Europe’s Collapse Means For You 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.
And ALL of this is available for FREE under the OUR FREE REPORTS tab at: http://www.gainspainscapital.com
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If you don't like Summers' articles . . . why read them ? To post and sound 'smart' ?
"...But, for the sake of argument, let’s say that Germany does ratify the ESM ..."
i hate to break it to you, babycakes, but the court will ratify it. that's how bad things are and how much control banksters have.
Yeah, those German judges will likely get a little visit by the ex-Stasi (East German secret police) boys who will undoubtedly 'convince' them of the right ruling to make.
Courage and principle seem pretty rare today.
"My plea is that everyone weigh their words very carefully."
pretty clear admission that the whole thing is just confidence trickery
The German Constitutional Court votes on whether the ESM bailout fund is even legal on September 12. If it doesn’t, it’s the end of the EU as we know it.
Just as the US Supreme Court found ObamaCare to be constitutional, no German court will overturn such a major work of the political branches. The German court could do many things, but it won't.
So even in a best case scenario, the bankrupt nations asking for bailouts are going to fund 30% of the very bailout fund that will bail them out!?!?
Not really. They will make a formal contribution of course, but the ECB will finance it by buying their debt. Ultimately, it is the money printer that finances everything, no matter how many channels the cash is stuffed through. And those states will be more on the hook than ever, totally dependent on the ECB.
It is pretty clear that Merkel is going all the way to the USE. When she presents the new Constitution to her people for a vote, it will be clear they have no choice but to ratify. She is just waiting for the right time.
The problem here is that the only people really saying that the EMU needs to be broken up in some way are the "meme alpha adopters", and they are pitted against massive MSM propaganda. The average fairly intelligent person in Southern Europe tends to think the euro is just "a currency", "only money", different bits of paper with different colours from previously. I know, I've asked almost everyone I could in Spain, Greece and Italy from businessmen in towns to artists in remote villages.
You have to remember that most people don't understand the realities of a European currency union. Up until very recently, the academic intellectual attitude in Britain was that British people who had concerns about the euro were "racists" or "xenophobes", who, literally, *didn't like foreign kinds of money purely because it was foreign*. This ideological hammer really battered EMU dissenters.
Now, people who realise the EMU will, as forecast by all those supposed "xenophobes", destroy European countries, impoverish millions and probably lead to civil conflict or maybe a larger pan-european war are like people extoling the values of the internet back in 1990 -- it means nothing to most people until the reality turns up in their homes.
QuietCorday - - - Myers-Briggs has done some interesting work researching human temperment and personality. The vast majority of people aren't 'Big Picture' or long term thinkers. They prefer to deal with the more immediate - - and what they consider 'practical'. They prefer to deal with what they can actually touch, or see in their own personal lives. - - They aren't stupid. They are often very good at 'thinking on their feet' and adapting to circumstances. But if you talk to most people about long term economic matters their eyes glaze over and they don't hear you. In addition, a large number of people are very conservative, 'follow the rules' types. They can't imagine the level of criminality going on at the 'highest' levels in business and government offices - - because its not something they would do personally. And if the criminals wave a national flag and appeal to patriotism, many people are easily swayed.
So all we can do is keep talking to others. Perhaps we will plant ideas for the future that they may come to recognize and appreciate. For most, they will have to feel the impact on themselves and their own families before they will respond. We can only hope that response is not to a demagogue.
Food For Thought
You mentioned this in your post:
"As a result of this, central banks have begun resorting to more and more “verbal intervention” or promises to “act” without ever acting."
In this case I'm referring to FED action in particular:
In view of the fact that the FED is not audited, and they can act without alerting anyone, ultimate power,... how can we be sure that the "entities most closely aligned with the FED and Israel" are not receiving behind the scenes assistance? Like, long the stocks of companies with a pro-Zionist bent and short those that oppose their dominance (or at least they get NO support). Who's to say it doesn't work this way in view of their power hungry, no holds barred, anything goes, LIBOR, MERS, Metal Rigging, MF Global, Oil and Gasoline rigging, and other scandals?
The successful companies, with the power to access the capital markets on the "Best Terms" and pro-Israel to a fault, how can this be a co-incidence. A well disguised Quid pro quo? How does a Netanyahu get 29 standing ovations when speaking to Congress, without this kind of non-verbal, "FED" power, back-up?
Beats ME?
How exactly does the PPT work, who choses the winners and losers, based on what exactly? I'll bet that some companies, that are not friendly on the foreign relations front with Israel, can be "naked, shorted into oblivion", or "access denied" when approaching the capital markets, and if need be a new "Board" and Management put in place, with implied promises of " Easier Access" to the markets and support once in place. nothing in writing of course.
There are a lot of possibilities, and I would put nothing past them in their quest for "monetary" domination, and it ties in with their false superiority complex.
Jimmy Carter once famously forbade his chief economist Alfred Kahn from using the term "recession" so Alfred substituted the term "banana" and explained in a congressional hearing what was causing the banana, how deep the banana would be and how long it would last.
But, you can make this shit up.... And be right
You shouldn't have been reporting for the last several months. According to you we should have collapsed by now.
Here is an explanation and prediciton from 1940 over German Europe...
http://www.germanywatch.blogspot.co.uk/2012/08/europa-germanica-1940.html
This post is just as much Dog Krapp as all of his others. Yes, we too can cite Reuters.
So.
What is the FX trade prior to Sept 12?
This is partly true. When central banks take on the bad loans of their clients as collateral for new loans (via discount window operations or so-called 'money printing') the CBs and ordinary lenders become equally bankrupt. They are so for the same reason: leverage.
The leveraged central bank is indistinguishable from its ruined clients. The outcome is the entire insolvent monetary system not just a few banks here and there. Without a solvent entity within the system there is no lender of last resort. The outcome is bank runs.
That there are currently bank runs across the length and breadth of Europe indicates others have come to this conclusion. As more defective collateral or no collateral at all is offered to the central banks, liquidity in the form of deposits vanishes.
The CBs is powerless to act as its folly has precipitated the crisis in the first place!
New debts are taken on to service and retire older debts, there is not enough credit left over to support industrial enterprises which must have endless credit themselves to function. Where there is no credit, there is no industry ...
Europe ... USA ... Japan ... China ... all going, going, gone.
Draghi: "I will do absolutely, positively whatever is needed OR not needed (!) and I really, really, REALLY mean it this time." I believe the man... but haters gonna hate.
Entao tu tambem se Lembre esse palavres:Sem(zero)pre fome?Ou foi nao existem mensaloa,,ambulancias?Deus passou Brasil?E ficou?E verdade??A Cara com nove Bracos,o Cocumelo do Rio? ou foi dedos,uma Lula e Uma Lula?Bicho ou Homem,Cachoeira or Waterfall?Quem vai cair,eu aposta uma nota de Once Reais, que, Cachoeira nao vai cair!!!
Na boca de um politico, nao existem um palavrinho de verdade,Banceriros equal!
É hora de você tomar o seu medicamento, Lula.
Yes, GS is hyperbolic and early. But the evidence is beyond obvious: EU politicans take useless incompetence to dizzying new heights. When Merkel was asked by a very serious person about the EU break up she replied that "but we cannot abandon our European Dream"? WTF is that, if not dellusional.
Dreams don't hold countires together, shared economics, shared destiny and shared culture define a nation state. This will turn out to be a nightmare. Various people have tried to unify Europe so many times, the historians have lost count. But we know it has always been with the same catastrophic results. The problem is they see the Napoleon and the Thrid Reich as being different from the EU. But its really the exact same thing, with less overt violence. This time violence is economic, just ask the Greeks how benevolent and enlightened it is.
This will take some time to play out. This generation of politicians is committed to the dream, no matter how impossible it is. So they will not stop or get out of the way until something really terrible happens. Then they will be thrown out.
Summer ends in 3 days.
World ends in 15
It is naive to assume merkle or any politician within her sphere of influence with do anything other than move the EU agenda forward. Her plea " is that everyone weigh their words very carefully." can be read as "stick to the script". I would take odds that the court, if not already owned, is under extreme pressure to circumvent constitutional obstacles, clearing the way for a more heated public whose opinion is at a clear disadvantage because of the ruling. Astounded will be an understatement if the court deep sixes merkles/eu plans in favor of Constitutional/sovereign integrity.
Sure, stick to the script. The only prpoblem is this isn't a movie, its real life and real life doesn't have a script. If the EU has has a script, then it isn't real, it's either a fantasy or a dream, take your pick.
Let me ask you, how desperate do things have to be that a politician asks a central banker not to use certain words during public appearances?
The answer: very, very desperate.
You underestimate Frau Dr. Merkel. All the these comments (Weidmann, Alexander Dobrindt including her own comments) are just staged by beloved Angie girl. Mutti Angie is very clever.
Weidmann is her man of trust and 100% loyal to her. And the CSU guy Alexander Dobrindt is also just preparing the stage for Angie girl.
Its just propaganda preparing the stage for Angies real message. And this message is: "Escape Forward" towards the USE because it cant stay as it is now and going back is also no option.
maxedout,
You are quite right, Ms Merkel is a brilliant politician.
So why no going back on USE? My take: Ms Merkel grew up in the former East Germany and speaks fluent Russian. Further, she meets unofficially with Putin and Medvedev, and understands perfectly well that when the US empire unravels, Russia will dominate Europe, economically as well as militarily. While in the world of politics and diplomacy she cannot speak her real agenda, I believe that Ms Merkel beleives that the best way to preserve some kind of decent future for the people she serves is to pursuade Europe to present a united front to Russia.
Putin holds most of the good cards here: Europe is utterly dependent on Russian natural gas, and he has a pretty good grip on his region while Ms Merkel is struggling with a sack of cats. Nontheless, she's playing the cards she has brilliantly.
Underpants Gnomes:
Step 1: Get underpants Step 2: ? Step 3: Profit
ECB:
Step 1: Bailout Banks Step 2: ? Step 3: Recovery
At least the gnomes have the underwear...
The can will be kicked back to the German legislature by a GCC that is like our SCOUS & Chief Justice Roberts; bought and paid for and too scared to stand up for what is morally and Constituionally right, e.g. ACA.
In short they are political scum without the balls to deserve or honor the seats in which they sit.
AMDG
When or if Europe goes back to more Nation state like units of control it will produce unexpected results.... the capital exports coming out of the Eurozone since 1980 /1987~ will come to a full stop.
Killing the BRICs stone dead.
Yep, and that is the strategic LAN and goal that underlies all Fed actions.
EU falls => BRICs fall => US remains on top.
The ONLY fix/way out for the US is by 3 simple steps:
#1 dramatically increase immigration to right size the demographics
#2 increase the "cheap labor" pool to the economy (see #1)
#3 start making the massive #s in the 50% who don't pay fed taxes start paying taxes.
PS, free health carhews the lynchpin for TPTB/cabal. Thats why the Republicans really didn't fight against ACA like it was a life or death of linerty issue. Because once the people's health care is taken care of, the "poor" will have their health care, food stamps and public housing.
There is no longer any real argument to stop from federally taxing the 50% who currently don't pay federal taxes.
Not sure I agree, but if those are indeed the only options let it fall. Having to tolerate more parasites to pay for current parasites is insanity.
LOL. Good one.
US is NEVER EVER going to be BACK ON TOP.
The US has no real allies left who gave two shits if 4 planes hit NYC or better yet, Tampa tomorrow.
You are an ignorant one. China will go the way of the FSU.
Hmm..
Sounds like they're planning a 30% devaluation of the EUR.
They will have their 30%... after they get the bailout. Don't they have "Pay-Day Loans" over there? How many car titles can you bundle?
Good catch, but I read that as 30% on each round, so more or less..., 30% compounded;)
Got lead and a still?
I want the silver U.S. dollar back.
...somebody sure wants silver lately
The majority of Germans......want the Deutsche Mark back"
What total and utter bollocks.
The 5 Germans I just asked said "you gotta be kidding" (or german words to that effect).
C'mon ZH, send these waffling prevaricators back to wherever they came from!!
LOL...5 Germans! For your sake I am hoping you are a sarcasm guy like MDB.
I wonder if Germans are as dumb as Americans (or at least, fed as much propaganda) ?
Forsa asked more than 5 Germans and found that indeed a very small majority actually do want it back. http://www.reuters.com/article/2011/10/05/us-eurozone-germany-mark-idUST...
Hmmm so just who are these 5 Germans that you asked?
Prevaricator, a person who speaks so as to avoid the precise truth.... you reference 5 Germans as a "demonstration of "truth""... now just who is the prevaricator?
Graham Summers says:
« ... the end of the EU as we know it. » ... Euro Doom Doom Doom ... and please buy my newsletter
Music group R.E.M. says:
« ... It's The End Of The World As We Know It (and I Feel Fine...) »
http://www.youtube.com/watch?v=_eyFiClAzq8
blah blah the world is ending blah blah something else is ending
the mad hedge fund tool was better than Graham
Does anyone buy his POS newsletter?
I was, But i ordered a pizza instead
Graham Summers has a certain mindset that appeals to other like-minded people. Emotion precedes logic... Not that Graham Summers is illogical, no, his mental frame dictates his perception as it does for you, me and just about everyone else. Zerohedge is based on a mental frame as CNBC is based on an opposite frame.
Agreed! It's always been "the world's about to end" for one reason or another.