Germany Cannot and Will Not Write the Check For Europe

Phoenix Capital Research's picture


With most of Wall Street on vacation, those few traders manning their desks are taking advantage of the low volume to push the market sharply higher on Friday. This, combined with a large move up by the Euro has pulled the entire risk trade up forcing the US Dollar lower.


This move was to be expected on some levels. Since 2002, there has been a rally from just before Thanksgiving until the second week of December. This year is shaping up to replay this move. Stocks and other risk assets were certainly oversold from the preceding week and needed a breather.


However, from a larger perspective there is no shortage of truly horrible developments in the world. EU budget talks failed to accomplish anything. This comes on the heels of failed Greece debt talks from last week (there is another meeting this week on the matter).


Meanwhile, France has lost its AAA credit rating, Spain’s bad bank plan has been dropped due to lack of interest. And then there is Cyprus Portugal and soon to be Italy’s issues to deal with.


At the end of the day, the whole issue in the EU boils down to whether or not Germany will foot the bill for everything. The fact of the matter is that it won’t. If Germany were to agree to fund things as they are (assuming nothing worsens in the EU), it would amount of over 30% of its GDP.


Never in history has one country issued a transfer of that amount to another. The single largest transfer in history (on a GDP basis) was the German Marshall Plan, which represented only slightly over 6% of US GDP (my hat's off to Dr Malmgren for this insight).


So forget about Germany writing the check. There will be political machinations and games played to maintain the house of cards that is the EU… but when push comes to shove, Germany will leave before it foots the bill for everything.


The reality is that what we are witnessing today is the collapse of the welfare states of the developed world. The real solutions (defaults both sovereign and on social spending plans) are completely unsavory from a political perspective, so politicians will do all they can to avoid what actually needs to happen.


In simple terms, the great debt implosion has begun. It will likely take several years to complete, but what’s coming will make the 2008 debacle will seem like a picnic.

This is why I’ve been warning that the 2008 was just a warm-up. It’s why the Powers That Be in Europe are absolutely terrified of what’s happening there. And it’s why those investors who do not prepare in advance for what’s coming will lose everything.

If you do not want to be one of them, you need to get moving.

We have produced a FREE Special Report available to all investors titled What Europe’s Collapse Means For You and Your Savings.

This report features ten pages of material outlining our independent analysis real debt situation in Europe (numbers far worse than is publicly admitted), the true nature of the EU banking system, and the systemic risks Europe poses to investors around the world.

It also outlines a number of investments to profit from this; investments that anyone can use to take advantage of the European Debt Crisis.

Best of all, this report is 100% FREE. You can pick up a copy today at:

Best Regards,

Graham Summers

PS. We also offer a FREE Special Report detailing the threat of inflation as well as two investments that will explode higher as it seeps throughout the financial system. You can pick up a copy of this report at:

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Tommy Gunner's picture

Germany will keep paying...  Japan, the US, the UK, will keep printing... China will keep going into hock to build more 'bridges to nowhere'...

At some point this will all stop.  There is not such thing as a perpetual motion machine

ElvisDog's picture

Well, I think that Germany paying 30% of GDP all at once isn't going to happen, but the plan appears to be to bleed the patient (Germany) over time so he provides the required amount of blood but doesn't die altogether. I see the rest of Euroland compelling Germany to provide a billion here, a billion there, until it adds up to 30% of their GDP.

Fuh Querada's picture

SUBSCRIBE !! SUBSCRIBE !! or you f****d!!

GCT's picture

Everyone in the industrial world is writing a check.  Germany is no different. I do not see anything new here.

Gordon Freeman's picture

Germany will keep paying, Graham--don't kid yourself.  

Rustysilver's picture

Arbeit Macht Frei.

walküre's picture

Germany has been subsiziding the exports into the EU for a decade now.

The cat is slowly coming out of the bag and even Handelsblatt printed this article earlier today. Only in German but written clearly and simple so that every German can read it and understand that their quality of life has largely been suffering all the while the rest of Europe has benefited.

Europe owes Germany close to a trillion Dollars in unpaid merchandise that Germany's manufacturing sector delivered across Europe. The math never made any sense.

Forget the fights in Greece and the protests in Spain. The next brush fire will erupt in Germany and it will not be pretty to watch. EU offices will get torched. EU reps will be dragged into the streets. Germany has been sold into another Versailles treaty with TARGET2.

Enough with the bullshit already.

Don Diego's picture

u sure the Germans will rise? I work with 40+ Germans and none of them seems he will do other thing that pay pay pay.

EnslavethechildrenforBen's picture

Usury is another word for foreclosures, transfer of wealth and reallocation of resources. Hang the Bankers.

Or even better, tar and feather them and light them on fire.

No Euros please we're British's picture

Put a sock in it will ya! Europe's debts and bailouts are shared - NOT 100% down to Germany. You would be more to the point and 100% correct if you reported

France Cannot and Will Not Write the Check For Europe
OneTinSoldier66's picture

Yes. I'll bet most peeps on here know that EVERYTHING is shared. It's called collectivism, or communism, or something like that. Please just don't call it capitalism.


You guys need some more IMF money from our bankrupt country for your bankrupt country? CTRL+P and whee!

Debeachesand Jerseyshores's picture

The German taxpaper is fast realizing Merkel and her Finance Minister could get Germany in a shitstorm if they relent and give Greece their lastest bribe to keep them happy until the Elections in 2013.

We know what happen the last time Germany got pissed off.

Just saying.

NotApplicable's picture

Fast? Umm... isn't it kind of late for that?

That she'd toss Germans "under the bus" was an absolute GIVEN the instant it was announced that she was being awarded the Medal of Freedom by Obummer.

Everything since has been mere theatrics.

myshadow's picture

The most I can give these posts are the probabilities of a broken clock.  When you can clear the air of your predictive record rivalling dik morris or bill krystol, maybe I'll take you more seriously.

NotApplicable's picture

It's been a while since I've seen Kristol, but surely you don't believe that Morris was sincere about his predictions, do you?

Morris' job was to help create the facade of a horse-race where none existed before.

Nothing scares TPTB like voter "apathy," as it is a sign of a failing facade. So people like Morris are trotted out in effort to create some sizzle. Sure, it cost him today, but don't worry, he's just investing in his future knowing that the Memory Hole will bail him out.

If you don't believe me, just take a look at Doris Kearns Goodwin. She screwed the pooch in a far more self-destructive manner than Morris did, yet she somehow has survived, and is once again prospering as an elite mouthpiece.

myshadow's picture

No, I have no illusions about their 'sincerity'.  Both are unabashedly craven. krystol was a palinite and is almost comedically wrong when he predicts anything.


doris makes me gag, all of that 'team of rivals' crap, is just a fig leaf for collusion with the enemy.

EnslavethechildrenforBen's picture

Next thing you know Phoenix will be telling us that our founding fathers were homeland terrorists.

What a fucking idiot.

digitlman's picture

Are you not paying attention, Graham?  So far the German Gov't has been doing just that.

No indication this will change any time soon.


OneTinSoldier66's picture



My thought when I saw this was... Since when?


Remember. Everything must be done by the collective for the greater good, of the paper money bankers.

Joebloinvestor's picture

The Ponzi scheme will be revealed for the SCAM it is when the check bounces...........


Sorry for the duplicate post.


Sticking key I guess.

Joebloinvestor's picture

The Ponzi scheme will be revealed for the SCAM it is when the check bounces...........

EnslavethechildrenforBen's picture

Germany is fucking the other countries. Usury is unpayable. Phoenix is cross threaded as usual.

Observer's picture

Each one of the players think they know what they are doing and can judge the consequences...but do they and can they? Hubris leads to debris