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The Eurocalypse: Economic Face Of Europe Looks To Get A Black Eye, A Busted Jaw And A Fiat Collapse
First, a quick historical synopsis of where I'm coming from. If you have followed me regularly, then feel free to jump down to the next bold heading to get started - all others please read on...
I have been warning of the collapse of the European banking system, the Euro as we know it, and periphery states of the EU for going on three years now. What many thought was tomfoolery back then, is thought of as prescient now - reference the Pan-European Sovereign Debt Crisis series which started in late 2009. I then went on to explicitly query Is Another Banking Crisis Inevitable?, of which I believe most of the realistic among us already know the answer.
Walking through European bank collapse is not enough, even through we did it in detail through BoomBustBlog, reference The Anatomy of a Serial European Banking Collapse, a nearly guaranteed scenario. If one were to even come close to marking the EU banks' books to reality, market prices, or anything in between, the Lehman situation would look tame in comparison!
As excerpted from the subscriber document (click here to subscribe): The Inevitability of Another Bank Crisis
You see, you can avoid reality for but so long, primarily because reality is... well, reality! What happens when reality hits bank asset prices and liability values...
Now, since we have finished that quick traipse through recent history as a summary of events and opinion, let's move on to the topic at hand. Last week, ZeroHedge posted a scathing article on the IMF's "Global Financial Stability Report", as excerpted:
...especially as pertains to Europe's insolvent banking system. The most notable finding of said report is the admission that the IMF was only kidding when it said six months ago, in April of this year, that the worst case outlook now has European banks deleveraging to the tune of $3.8 trillion through the end of 2013, or over the next 14 months: now this number is 18% higher, or a gargantuan $4.5 trillion (12% of bank assets). This is how much debt Eurobanks will need to shed in a "weak policies" case in which Europe continues to delay implementing fiscal reform, aka austerity, as per Figure 2.14. Even the baseline (and this being the IMF it means it has zero chance of happening) scenario is not much better, at a revised $2.8 (7.3%) trillion in deleveraging.
Although it seems as if Tyler is being a smart ass, he couldn't be farther from the truth. Reference my piece Lies, Damn Lies, and Sovereign Truths: Why the Euro is Destined to Collapse! concerning the accuracy of the IMF's baseline scenarios...
image005.png
And back to the ZH post:
....Breakdown of IMF deleveraging forecasts for the three scenarios, of which the realistic one is highlighted:
-
- Under weak policies, the withdrawal of foreign investors accelerates to twice the pace seen since 2009. Periphery spreads widen by about one standard deviation above the baseline.
The biggest loser here, as in every other category: Germany, which will end up seeing €2 trillion in TARGET2 claims which in turn will never be satisfied as the system merely accelerates its collapse into a debt supernova.
EXACTLY!!! BINGO!!! Now, we are all starting to come to the BoomBustBlog way of thinking, aka, REALITY! In the beginning of this year, I penned The Biggest Threat To The 2012 Economy Is??? Not What Wall Street Is Telling You... In short, this piece made clear that Germany poses the biggest threat to global harmony for 2012. The widely accepted belief that Germany is economically bullet-proof and somehow immune to malaise effecting the periphery as long as it does not attend the bailout party is fallacious, indeed. Please click the afore-referenced link for the full story on Germany and why some should consider the "Bund short play". Back to Tyler...
The big picture, of course, is that even the IMF now concedes Europe is in a closed loop Catch 22: unless European countries manage to restore "foreign" confidence which in turn would mean putting their fiscal houses in order, something which has proven absolutely impossible in Europe absent such one-time gimmicks as LTROs and otherwise hollow confidence boosters as ECB warnings to not fight the ECB (which work until they are tested, but first need to be activated, ahem Mariano Rajoy), the banks will be forced to delever even more, which would mean the ECB would have to "onboard" even more of their debt as nobody else will, which means even more foreign creditor flight, which means greater deposit outflows, which means more ECB intervention, until finally, the ECB is the only player in town...
Ah, yes! The Truth gets outed... I went through this in EXPLICT detail throughout 2011-12. Reference the following:
- On Your Mark, Get Set, (Bank) Run!
- ECB As European Lender Of Last Resort = Institutional Purveryor Of A Pan-European Ponzi Scheme
- The Anatomy Of A European Bank Run: Look At The Banking Situation BEFORE The Run Occurs!
- The Fuel Behind Institutional “Runs on the Bank" Burns Through Europe, Lehman-Style
- European Bank Run Watch: Swiss Edition - BoomBustBlog
- European Bank Run Watch: Spaniard Edition - BoomBustBlog
- Bank Run! Italiano Style? - BoomBustBlog
- French Bank Run - BoomBustBlog
Back to that Tyler piece:
...a process which can be visualized (in progress) in the following capital flow image, especially Figure 1.7:
At the point when the ECB is the sole owner of all European financial debt (and sovereign debt via repo), the endgame for the fiat system will finally be here, as the only thing more dangerous than the ECB will be all other central banks which will have no choice but to follow suit and monetize everything in the global race to debase currencies, and monetize ever more budget deficits in a world in which the rich increasingly preserve their wealth, and refuse to pay taxes (converting financial assets into hard ones), having finally grasped the endgame.
I couldn't have said it better myself... Okay, maybe I could have, as I rearticulate - ECB As European Lender Of Last Resort = Institutional Purveryor Of A Pan-European Ponzi Scheme
Tyler ends the piece in stylish fashion: "As for the immediate task at hand: how European banks will deleverage to the tune of $4.5 trillion over the next 14 months, Europe has our blessings." Oh, they may need a little more than your blessings, and they may even get a little more than your blessings as well, to their chagrin. My next post will wrinkle some feathers - The Economic Face Of Europe Will Look A Lot Browner If The UAE Plays Its Cards Right! Stay tuned...
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Jennyfer from PaydayLoans@
Eurocalypse Now... Niiiiiiiiice! Crisis just brings out the best in some people. Good one Reg!
LoFidelity Allstars - Battleflag (written by Prince)
Your construction
Smells of corruption
I manipulate, to recreate
This air, to ground saga
Gotta launder, my karma
I said hallelujah, to the sixteen loyal fans
You're gettin' down on your muthafuckin' knees
And it's time for your sickness again
Come on and tell me what you need now
Tell me what is making you bleed
We got two more minutes and
We gonna cut to what you need
So one of six so tell me
One do you want to live
And number seven tell me
Is it time for your muthafuckin' ass to give
Tell me is it time to get down on your muthafuckin' knees
Tell me is it time to get down
I'm blown to the maxim
Two hemispheres battlin'
I'm blown to the maxim
Two hemispheres battlin'
Suckin' up, one last breath
Take a drag of the death
Hey Mr. Policeman
There's a time for getting away
There's a time for driving down the mother fuckin' road
And running from your ass today
Now tell me if do you agree now
Or tell me if I'm makin' you bleed
I got a few more minutes and
I'm gonna cut to what you need
So one of six so tell me
One do you want to live
And number seven tell me
Is it time for your muthafuckin' ass to give
Tell me is it time to get down on your muthafuckin' knees
Tell me is it time to get down
Got a revolution behind my eyes
We got to get up and organize
Got a revolution behind my eyes
We got to get up and organize
Got a revolution behind my eyes
We got to get up and organize
You want a revolution behind your eyes
We got to get up and organize
The dollar has already been ruined but it can get worse - the dollar and its corollary tumor, a global flaming pile of debt doodoo continues to facilitate the shift in world resources to the smallest sliver of humanity through the government/banking syndicate, I mean central planning partnership. Those of us who have not been invited to membership in the elite thugs' society may want to consider working outside of a dollar-denominated economy. We don't need no stinkin' dollars. Every day we transact in dollars we tighten the noose around our own necks. A big mwah hah hah for the uber thugs of the world; unless it stops working.
Where are the best places in the world to live outside this self-destruction?
This is an incredibly cogent financial analysis, but at the practical level please tell us in concrete terms WHAT is going to happen to a Senor Jose Merda working part time in a flamenco factory in Barcelona and WHEN.
The "endgame" is anything but the finale. The "elite' are siphoning the wealth of the world in order to establish their masterpiece kingdom. All these piddly banks and sovereigns must be crushed, and they will be.
Good eye, Reggie.
TYLER????? Anonymous??
Anybody here had seen this:
from http://www.youtube.com/watch?v=GMKyq4YgtKI
..
Imagine we start a Fight Club.
Imagine the System is built upon lies.
Imagine we purchase a USB drive.
Imagine we take it to our workplaces.
Imagine we pretend we have to work late hours.
Imagine we accumulate all sort of evidences about illegal deeds.
Imagine Conscientious insiders worldwide begin to expose all lies.
Imagine we code an extremely simple interface so that anyone can do it.
imagine we all synchronize our clocks to act at the same Time, on the Winter solstice, The 21st of December 2012 at eleven minutes past eleven local time.
On the 5th of November 2012 TYLER will be out of beta testing.
TYLER is a massively distributed and decentralized Wiki pedia style Pee two Pee cipher-space structure impregnable to censorship
TYLER will gather an unprecedented number of the best hackers and coders ever to develop its structure from scratch, from the lessons learned from the Freenet, TOR, G N U net, e-Mule, Bit Torrent I2P, Tribler and related projects
From the 12th of December 2012, to the 21st of December 2012, people all over the world upload the evidence of illegality corruption and fraud They have gathered To TYLER
Imagine we Leak it all
Imagine...
well, for starters, nine eleven was an inside job.
That is missing the ENTIRE point.
Something that happened over 11 years ago is keeping you and all the other truthers BLIND to the future.
We need to get friends and family to SEE CURRENT FIAT FIASCO - they can see that and understand that with CURRENT examples that can easily be proven true day in and day out everyday of the week, whereas 9/11 inside job requires a major input of information that most people can't fucking fathom anyway.
/rant
And then what?
Wish I knew, but I keep stacking my silver and red wines until something happens.
Please delete.
A beast is a good analogy. If you look at governments as entities you will observe that they function in many ways like living organisms, like a hive with a hive mentality, with self defense and growth being prime directives, so you needn't expect any actual downsizing coming voluntarily. Rather, self-preservation will drive them towards further increase. They will be hiring and expanding. Any attempt at reining in an out-of-control government will be met with shocking violence, and it will devour all economic resourses available. Subject populations will be crushed. Governments will have to be burned out like colonies of fire ants.
Somehow they will find a way to finance whatever debt they need to. After all banking has been as scheme from the start, and I mean ever since the first jeweler decided he didnt have to carry all the gold that was being put in his safekeeping. The real question isnt really wether the banksters get the money they 'are owed', the question is how long do the actually productive members of society keep financing their demands.
What fools...just print the hell out of the euro and buy some helicopters...just like Ben. Heck our debt to GDP is lot higher than spain! We are building the mirage....it feels so good.
You didn't watch the docus recently posted.
If you did you would understand that more debt is crucial for the system to continue. Because money is debt.
But we are surely in some kind of endgame in the monetary system, it cannot take on much more debt.
And the issue of printing money, this system needs a dollar that depreciates, since the FED was created down 96%. This is nothing to get upset about, because our living standards has gone up greatly at the same time. The point here is that the current monetary system needs it to function properly.