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Merkel’s Back is Against the Wall… Time for Germany’s “Plan B”?

Phoenix Capital Research's picture




 

As long time readers know, a central theme to my analysis regarding Europe is that politics, not economics, rule Europe. What I mean by this is that most major decisions in Europe are determined by political agendas that ignore economic and financial realities.

 

This is at the core of the “welfare state” mentality that permeates Europe as a whole. The EU in general is comprised of an aging population that is more concerned about receiving the pensions/ health benefits/ social payouts that were promised to them by the system than anything else.

 

As a result of this, EU voters, who determine EU elections, don’t take action until what has promised to them comes under threat.

 

For this reason, EU political leaders will maintain their agendas regardless of whether said agendas go against financial or economic realities (or common sense for that matter) until these agendas begin to have real negative consequences for their political careers.

 

With that in mind, we must consider that Germany’s decision to prop up the Euro is finally beginning to arouse furor from the German population. In particular, the below story which reveals that Germany has in fact put German taxpayers on the hook for over €2 trillion in back-door EU rescue measures could be the proverbial tipping point that sends German voters over the edge.

 

German tempers boil over back-door euro rescues

 

Professor Hans-Werner Sinn, head of Germany's IFO Institute, said German taxpayers are facing a dangerous rise in credit risk from a plethora of bail-out schemes. "The euro-system is near explosion," he told Austria's Economics Academy on Thursday.

 

Dr Sinn said Germany is on the hook for much of the €2.1 trillion (£1.72 trillion) in rescue measures for EMU debtors - often by the back-door - that will saddle Germans with ruinous losses one day.

 

"It is a horror scenario," he said, warning that the euro system is splitting friendly countries into blocs of mutually hostile creditors and debtors, exactly the opposite of what was hoped.

 

Earlier this week, the Foundation for Family Business in Munich filed a criminal lawsuit against the Bundesbank, accusing the board of disguising the true scale of risk born by German citizens.

 

http://www.telegraph.co.uk/finance/financialcrisis/9215232/German-tempers-boil-over-back-door-euro-rescues.html

 

This is the last thing Angela Merkel needs right now. She’s already about to lose her primary ally in pushing for fiscal reform in the EU (Nicolas Sarkozy will very likely lose the second round of the French elections).

 

For her to now appear to be a complete hypocrite who talked of austerity in public while the Bundesbank was secretly signing Germany up for more and more EU debt behind the scenes could quickly become a MAJOR issue in German politics.

 

Remember, Merkel has been riding a wave of popularity not seen since her re-election in 2009 courtesy of her decision to play hardball with Greece and the other PIIGS: her agenda there was to offer bailout funds under fiscal requirements that were so onerous that it made it highly unlikely the troubled PIIGS would go for them.

 

So for Merkel to appear two-faced concerning Germany’s involvement in the EU bailouts could have dire political consequences for her career (next year will be a federal election year for Germany).

 

So what’s next? Merkel’s reputation as a hardliner for fiscal reform just went out the window… she’s about to lose her #1 ally in pushing for fiscal austerity in Europe (Nicolas Sarkozy)… and all of this is happening while inflation is rising in Germany and Germans are openly outraged regarding the EU bailouts.

 

In simple terms, Angela Merkel is now at the point at which she is facing potentially very serious political consequences for her policies. Which prompts the question… is it be time for her to start floating Germany’s “Plan B” (leaving the Euro)?

 

Remember, in the last six months Germany has:

 

  1. Passed legislation that would permit Germany to leave the Euro but remain a part of the EU
  2. Reinstated its Special Financial Market Stabilization Funds, (or SoFFin for short)

 

It is the second of these items (the reinstatement of the SoFFIN) that the western media and 99% of investors have missed entirely. In short, Germany has given the SoFFIN:

 

  1. €400 billion to be used as guarantees for German banks.
  2. €80 billion to be used for the recapitalization of German banks
  3. Legislation that would permit German banks to dump their euro-zone government bonds if needed.

 

That is correct. Any German bank, if it so chooses, will have the option to dump its EU sovereign bonds into the SoFFIN during a Crisis. So in simple terms, Germany has put a €480 billion firewall around its banks thereby allowing Germany to potentially pull out of the Euro if it has to.

 

Now, I’m not suggesting that Merkel will suddenly opt to do pull Germany out of the Euro. Doing that would only worsen EU relationship and arouse more anti-German sentiment.

 

However, I wouldn’t be surprised to see Merkel start threatening this in the coming weeks as German outrage grows regarding their exposure to back-door EU bailouts. Remember, her political popularity is largely due to her appearing tough on the PIIGS. She has to regain that appearance as quickly as possible in order not to face serious political consequences.

 

On that note, I fully believe the EU in its current form is in its final chapters. Whether it’s through Spain imploding or Germany ultimately pulling out of the Euro, we’ve now reached the point of no return: the problems facing the EU (Spain and Italy) are too large to be bailed out. There simply aren’t any funds or entities large enough to handle these issues.

 

So if you’re not already taking steps to prepare for the coming collapse, 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.

 

And ALL of this is available for FREE under the OUR FREE REPORTS tab at: http://www.gainspainscapital.com

 

 

 

 

 

 

 

 

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Tue, 04/24/2012 - 21:53 | 2372086 egoist
egoist's picture

It's really something to watch these gov designs always come back to bite harder than the original problem they were set to solve.

Tue, 04/24/2012 - 22:30 | 2372158 Melin
Melin's picture

It's "something" we'll get to watch over and over and over and . . .for the rest of our lives.

Tue, 04/24/2012 - 17:06 | 2371540 TahoeBilly2012
TahoeBilly2012's picture

Bono needs his little Irish ass kicked! He started this whole Euro cheerleading event with those horrible last 5 albums his old fans couldn't stand. I say let U2 bail out the EU with their Facebook shares. Even Jagger was smart enough to not get all giddy over the "Union".

Tue, 04/24/2012 - 21:06 | 2372009 Buck Johnson
Buck Johnson's picture

Bingo, also Britiain had to know what would eventually happen when you have so many dissparate countries along with economies tyring to have an economic union (that is one big reason they kept the pound).

Tue, 04/24/2012 - 16:06 | 2371299 New_Meat
New_Meat's picture

Sarajevo, 1914, a small event initiated the firing chain: interlocking treaties.

EU, 201?, a small event initiates the firing chain: interlocking currency.

- Ned

Tue, 04/24/2012 - 15:22 | 2371032 falak pema
falak pema's picture

In the current context of Euro crisis, with the probable election of Hollande in France, Merkel will have to review her options, especially in the face of rising tide of Euro scepticism and rampant populist national-socialism, aka Marine Le Pen and De Wilders.

There is an increasing trend that Germany has now gone "all in" and has to recognise it. In the context of this hypothesis, to avoid the return to Hitlerian neo-tribalism in Europe, a true nightmare for all Germans, she has now to consider the deadly option from her perspective of throwing "Austerity" to the winds and going whole hog into Keynesian hopium as will advocate Hollande, her main partner. What does this mean?...

1°  Eurobonds to go joint and several, and "damn be he that cries I'm on my own". This makes Eurozone at par with B.B in terms of saying to BRIC world : "if you want us to play ball you have to respect our Euro protection wall, money wise AND social/ecology criteria wise. As you know in the energy conundrum, Germany is deep into Alternative energies (wind n solar). So she wants China to cool it in terms of its exports of solar panels etc. to Euro zone. It will mean Eurozone/China does a deal whereby : you scratch my back and I'll scratch yours! A  continental deal where they respect each other's strategic objectives. What are Eurzone strategic objectives? HERE IS WHERE ITS A PROBLEM. WE HAVE TWO MODELS; NORTH AND SOUTH.  There is much work to be done to iron this out. It requires a JOINT German/French alliance representing each block. Is such a strategy possible in the context of PAx Americana and its priorities+ the City jungle of financialised banking power? Which have jointly very powerful arguments and lobbies, aka the Squid that runs Euro zone right now!  Nothing is more certain as France is not a trend setter. Its more a current PONZI trend breaker, in Euro zone, if Hollande comes to power.

All depends on the interactivity of US and City fire power to a possible Eurobond joint and several strategy, if Merkel is bullied into it; it is not clear how this will play out. But the first step to a french election of a President who bucks current financial hegemony could create a financial and geo political knee jerk provoking a panic mode avalanche, of which  nobody could predict the outcome.  Its a bit like Sarajevo 1914 on the political front. O'bammy and BB will want to avoid that. CAN THEY????

The first world is now fragile as hell and the lightning could fall from a number of places to upset the current apple cart. 

We are in tipping point play and every matchstick thrown on the tinder box pile of steaming, but dry manure and parched hay can have startling results! 

Tue, 04/24/2012 - 16:22 | 2371335 Jack Sheet
Jack Sheet's picture

Murkle and Ollande are just puppets like all the other politicos.

http://www.jsmineset.com/2012/04/24/esm-will-supply-whatever-money-is-ne...

Tue, 04/24/2012 - 17:04 | 2371528 falak pema
falak pema's picture

except when those who pull the strings of extend and pretend run out of reserves; the west has become very fragile financial wise and unless it rattles its military arsenal it will be pushed aside on the basis of its current momentum. Can't fool all people all of the time...

Tue, 04/24/2012 - 15:38 | 2371183 GeneMarchbanks
GeneMarchbanks's picture

A couple of things, firstly 'Hitlerian neo-tribalism' was a somewhat isolated reaction to the happenings of that period in history. A return to something of that kind isn't in the cards in my opinion although we, the people of Europe, should indeed be on guard in any case.

The energy conundrum is wholly within the very wide political conundrum since energy policy is selected for Europe by an entity that isn't in Europe. Intellectualizing on this point with 'Peak Oil' nonsense is absurd and to be entirely honest a meme pushed forward by interests. Should Peak Oil 'happen' it will be coming out of studies and interests in the OPEC countries not the West.

Lastly, the BRICS are yet another (Goldman created see O'neil) generalized package that isn't all that cohesive... yet. China could easily opt out and make the ASEAN a main platform from which to operate from. There are way too many unknowns, point being that anticipating anything here is way more complex than commentators lead on.

Tue, 04/24/2012 - 15:42 | 2371194 falak pema
falak pema's picture

see this : 

The Government's Impatience Will Kill The Economy - Business Insider

 

Read between the lines, don't be literal Gene, get the trend in an age where all is up for grabs!

BTW : I don't buy your Peak Oil knit picking, just saying. Its clear that cheap liquid, conventional  oil is now a rare commodity. Unless you have a concrete angle on this that can be checked.

Tue, 04/24/2012 - 15:49 | 2371234 GeneMarchbanks
GeneMarchbanks's picture

'conventional  oil is now a rare commodity. Unless you have a concrete angle on this that can be checked.'

As I stated, the problem is political more than anything else. Energy is also a function of price and that in turn a function of policy. Search Nabucco. We'll end up rationing on this continent to subsidize more 'liberation'.

Tue, 04/24/2012 - 15:00 | 2370971 steve from virginia
steve from virginia's picture

 

Doesn't matter which direction the Germans choose:

 - Exit the euro which is a default,

 - Defend the euro and be inundated with EU liabilities.

There is no way out at this point.

Europe is becoming a car-free zone ... by extraordinary means.

Tue, 04/24/2012 - 13:18 | 2370480 vamoose1
vamoose1's picture

Um,  does anyone stop  to  look at the calibre of these people?  set back  and contemplate.

    gensler,  at cftc,  as an  example,  i suppose with  luck,  a filthy fucking  crooked  ferret might in the general scheme of things,  not resemble one,  but somehow  he accomplishes it, and   with  considerable panache,  take a fucking look at that  fucking face,  thats all thats required, look at that kisser,   look at the viciousness,  the completely transparent dishonesty,  those eyes,   god help  us, water seeks its own  level.

  The bernank,  oh for gods sake,  kindly be serious,  the exqqquisitely trimmed beard,  kiss kiss  betrayed by fatally trambling dissembling  lips,   for fucks sake can they  not teach  these psychopaths to  lie at least somewhat professionally,  surely they  have a course at the CIA  or Homeland,  to  take, , and stop that   trembling fibber mcgee,  as you  sink  320  million  Americans in the south  atlantic, the guy could sell tickets to  himself. Actually no,  he comes free.

    I could go  on.......w.hats the point,   its going to  be peppy, The West,  seatbelt sign,   did i  have to  go to  war ,  nope  (no  disrespect to  inductees in Viet, thanks to that  wonderful  and massively conflicted communist scientist  Oppenheimer,  tuning up  the bomb in  new mexico,   untill,  he wobbled after reading a poem  that started 'I am  become death,  The destroyer of Worlds.

    he paused, thinking jesus,  i wonder if this is a real  good idea,  this could get rather serious,   such as destroying the world,   nothing serious,  any  way  they  incinerated  200 thousand brown  people and won the war. And lost their souls in the process.

   But,  he did ruin the game for a generation!! thanks Oppie,   my  maimed family members returned on  wooden  legs, tottering around, howling with  pain  on those stumps,    1945    dickless in a cou ple of extreme cases,  and got going,  those who  could,  breeding the next generation  of  fighters,  for the next  WW.

    But this guy,  thoroughly discredited,   confined me to  cadet corps,  high  school,  cuz when the hydrogen  bomb came along in  about  51,  we have to  do  some cogitating, since it rather disconcertingly  can  remove these murderous bipeds from  the face of the earth. Should have probably dropped several  dozen, leave the place to the whales.  They  seem  comparatively  harmonious.  

    id kiss his old  bones that guy ,  of course his discovery became  wildly and unintentionally  ironic, ,  thank  you but we do  manage....... we quickly adapted... but we hesitated,   so  i did not have to  put on a uniform  and go  killing naked apes,   we have to  kill someone,  thats  as we know  very much  our thing,   so  now we have little wars,  subatomic babies,   brown  people are favored,  oil  producers look  good.

    What a fucking disgrace we are. We should be eternally  ashamed to  be what we are, murderous bipeds,  i weep,  I am  one of them, thankfully too old,  or so  i hope. Rock on. 

Tue, 04/24/2012 - 14:55 | 2370938 Votewithabullet
Votewithabullet's picture

I believe homosexuals deserve a forum for their views as should niggers and fuzzy foreigners I just wish they would DO IT OVER THERE GD.

Tue, 04/24/2012 - 13:05 | 2370426 Sandmann
Sandmann's picture

The author does not understand Europe and certainly not Germany. He does not understand that the US/UK designed a system that was impervious to popular pressure because they thought (wrongly) that Hitler came to power through popular pressure. Germany had to be a good little pet dog they could stroke and kick but would never bite them. The German Verfassung is designed to imprison the German People in a web of obligations they are not permitted to alter. Article 146 promises a German Constitution chosen by the German People but Germans in West Germany had an imposed Basic Law and in the East a Soviet-imposed Constitution - now they both live under the Basic Law imposed by the US and UK.

http://www.neue-verfassung-fuer-deutschland.de/nvd/Verfg.htm

 

So how can the German People express their anger ? Violence is the only way. Their political parties are Block Parties - simply facets of the same ideological standpoint. There is no safety valve in German politics because the Allies sealed it shut in 1948 and made sure it was not opened in 1990.

Germany is a puppet state and every organ of the political structure is designed to channel Dissent into a dead-end. It is the model designed for the whole EU. Germany is the Modern European State prototype for the whole European Union. Do any Americans know that national political parties get funding from the European Union to be "on message" ? That Greek political parties received $39 million to fight the 6 May Greek Elections provided they agree to sustain the Troika Agreements ? Do Americans know how much money the EU puts into the Irish Referendum Campaign to get the answer it wants ?

The naivety of people posting about Europe and their fetishism about a Welfare State is bizarre. Americans spend far more on Healthcare than ANY European Welfare State. Britain as a society is more unequal than any European state and is on a par with Brazil - but it has the biggest Debt Burden in the world after the USA. The USA is the world's No1 Debtor  without a Welfare State. It has done it by running a War Economy with massive Weapons Spending creating huge budget and trade deficits.

So just remember we live in the Age of Oligarchs and the West now resembles Putin's Russia

 

Tue, 04/24/2012 - 16:09 | 2370977 ihedgemyhedges
ihedgemyhedges's picture

The author of this article NEVER adds anything not known to most of us on here anyway.  Like MHFT and Brusca, he just takes up a contributor spot.  And of course, he would like for you to visit his site.  Useless as tits on a boar hog.

Bring back the guy who was broke and had to go get a job.  He was funny as hell and always made a way to get some hot chicks in his posts.........

EDIT: It was Money McBags!!!  F'N AWESOME DUDE!!!

Tue, 04/24/2012 - 14:49 | 2370893 newworldorder
newworldorder's picture

RE: Sandmann

Well done and very interesting that you should point these things to us. The attached from Jim Sinclair today, illustrates your points and indicates that things will get worse for Europe.  Are the German Courts able to stop this madness?

ESM Will Supply Whatever Money Is Needed In Euroland April 24, 2012, at 10:58 am
by

My Dear Extended Family,

The European Stabilization Mechanism Treaty due to pass in July this year will take care of whatever money is required by Spain or any other Euroland nations for effective bailout. It starts with $700 billion in capitalization and has an open call for additional capital infusion with no limit placed on these calls and no further agreements required.

New additional capitalization called on by this treaty is mandatory, not elective and therefore will go to infinity.

The member nations have 7 days to pay up when ordered to by the management of the EMS who are protected against any form of attack or litigation to legislation. It will be backed by the US Fed via swaps while the US publicly denies it is adding any capital to the IMF or this new entity, ESM.

It is the mechanism for QE to infinity in Europe.

QE to infinity, properly understood, is debt monetization on steroids. Denials will be legion, but this debt monetization on steroids will not and cannot be avoided.

The advent of the ESM Treaty establishing the European Stabilization Mechanism is economically Earth shaking and recognized by almost no one out there. It cannot be otherwise, it cannot be avoided. It can de denied but it will occur.

Respectfully,
Jim

Tue, 04/24/2012 - 22:23 | 2372148 Melin
Melin's picture

I love Jim Sinclair. 

 

Is he the only one talking about the implications of SWIFT as a weapon?

Tue, 04/24/2012 - 14:43 | 2370859 GCT
GCT's picture

Sandmann I salute your natonalism but all the fucking western countries are broke and like you stated, we do not know about Germany.  Not going to argue that just like you seem to think we are broke because of our military.  You too do not know squat about the USA.  Blame who the f you like but 1948 was a long time ago. Bottom line is the same thing going on in Europe is going on here just in another name is all.

The USA is a frigging welfare state go take a look at the budget.  19% of it is defense the rest is welfare in one for or the other.  Our problem is our politicians want to tell the sheeple they are saving us, creating social justice, when they are just taking our hard earned cash and handing it to big medical corporations and private corporations.  We are more fascist then anyrthing else.

Junk me all you like but these one sided it is everyone elses fault, you do not live here so you do not know, is get fucking old.   Does the math change depending on what side of the planet your on please!

Tue, 04/24/2012 - 15:22 | 2371094 Sandmann
Sandmann's picture

Sandmann I salute your natonalism

 

Good for you....but I am NOT German

Tue, 04/24/2012 - 15:42 | 2371208 GeneMarchbanks
GeneMarchbanks's picture

Fine, Austrian or Swiss then?

Wed, 04/25/2012 - 03:32 | 2372594 Sandmann
Sandmann's picture

Not at all

Tue, 04/24/2012 - 15:20 | 2371085 Sandmann
Sandmann's picture

1948 was a long time ago.

 

So was 1787 but you Americans seem stuck with your Constitution.

Defence Spending in the US is NOT 19% - more like 29% and around 47% Tax Revenues  - you need to look in the Department of Energy and other Budgets for Defence Spend

http://www.usgovernmentspending.com/federal_budget

www.kowaldesign.com/budget/

http://www.cbo.gov/publication/42636

 

but these one sided it is everyone elses fault, you do not live here so you do not know, is get fucking old.

You too do not know squat about the USA.

 

Wrong on both counts GCT. You are the one that hasn't a clue and you make it so clear in what you write.

Wed, 04/25/2012 - 03:10 | 2372583 Lednbrass
Lednbrass's picture

I agree that defense spending is too high, unfortunately the US got suckered into paying for European defense for over 60 years and it has created serious problems for us.  It is well past time to give NATO the finger and shut down our bases over there. While Europeans love to whine about the US, they conveniently ignore the cold hard reality that the very long period of peace they have enjoyed has been purchased at the cost of the US, their own militaries are pitiful.

Can any Europeans show me a period of 67 consecutive years of peace in continental Europe equal to the Pax Americana which has cost us a tremendous amount? Im reasonably knowledgeable when it comes to history but it is a vast subject, no doubt one of you sophisticates can easily point to a similar period. Please do so.

If you cannot, you should consider downing a large glass of STFU. Your peace exists because you live in the shadow of our sword which has cost us dearly both in money and the now out of control growth of the military sector and government, both for our "protection" (which we never needed before getting lashed together with you). I for one would like to remove our military presence from Europe entirely and allow you to either return to standard historical patterns or just laugh when Ivan reawakens after a nice nap and begins dreaming of Atlantic ports again.  I submit that your societies are too weak, too old, and too advanced in cultural senility to even defend themselves any longer and you should at least have the grace to fork over a couple hundred billion a year if we are stuck having to cover you.

 

Tue, 04/24/2012 - 13:31 | 2370528 Jack Sheet
Jack Sheet's picture

Correct. It doesn't make 2 shits worth of difference who gets voted for in Germany. The die is cast. This is the 4th Reich

http://www.youtube.com/watch?v=2IRnDOtu1z8

 

Tue, 04/24/2012 - 16:41 | 2371420 YuropeanImbecille
YuropeanImbecille's picture

He is right, but you (americans and britts) fought for the joos, you killed your fellow white man for the j00s and you continue to kill us all for the j00.

So therefore when obama activates the great leap (killing of millions) you brought this on to yourselves.

 

http://en.wikipedia.org/wiki/Great_Leap_Forward

 

Disclaimer:

I am not a nazi, but yes I am an anti-semite because this equals I care about my own life and I do not accept the white-guilt self hatred the j00s try to shove down my throat.

 

Tue, 04/24/2012 - 13:31 | 2370506 stopthejunk1
stopthejunk1's picture

Well-said and mostly correct.  I would add that the U.S. has become at least as undemocratic as Germany, although via a different route.  The U.S. system also was designed from the beginning to thwart the will of the people.  What we are sold as "separation of powers" was designed to keep the common people -- the demos -- from using state power in their own interests.  The U.S. constitution values property more than people; in its original form, it even treated some of them as property.    

The elites are simply too smart for us; there is no form of government that they cannot corrupt and control totally. 

The only way out is for most people to become far more thoughtful and far more familiar with the facts of history, and to demand a second constitutional convention -- and START OVER.  However, this kind of revolutionary thought and action is contrary to our conditioned slave natures, and is opposed by every force in society.  Because of our carefully cultivated politics, media, academia and law, people care about football, beer, and getting laid, and the value of their 401k accounts; they don't know, or care, about history or the monetary system.  There's not much to be hopefull about.

Wed, 04/25/2012 - 03:40 | 2372600 View From Germany
View From Germany's picture

The elites are simply too smart for us

No. It has nothing to do with being smarter or more intelligent.

It is just far more easy for 100 rich people, sharing most the same background and interests, to communicate, reach an understanding, make decisions and thus provide a united front, than for 100.000.000, who have many differing backgrounds or interests, to communicate and reach a common ground.

That is the reason why the few are able to dominate the masses - communication.

So with the evolution of the internet there MAY be some hope...think about a sort of POLITICAL FaceBook...


Tue, 04/24/2012 - 13:04 | 2370418 digitlman
digitlman's picture

I wish this guy would just stop posting this shit.

Tue, 04/24/2012 - 13:02 | 2370410 Skip Danger
Skip Danger's picture

I think, for us Americans, our next big problem is right here:

http://www.bushongbusiness.com/skip_danger/index.cgi/page/1/md/read/id/2...

We need to concentate on that.

 

Tue, 04/24/2012 - 12:52 | 2370374 Me and my dog
Me and my dog's picture

I don't think that Germany is planning to leave Euro. One other possible reason for Germany's plan-B is that they are getting prepared for Sarkozy's loss and the total collapse of Euro. Think about the history of Euro and why Germany joined Euro in the first place. It's a not-so-well-known secret that Germany was almost blackmailed into Euro. They had their own "nuclear weapon", D-Mark. France ( and quite a few other mediterranean countries) wanted to eliminate the financial pain in the ass, the D-Mark. Germany wanted reunification and the price they had to pay was to join Euro. France will never accept that Germany would leave Euro. One option Germany has is to not accept Hollande's future plans (European treaty renegotiations and ECB lending directly to governments), let Euro die and save their own banking system without having to pay the whole price of the collapse. Euro collapse is by no means a collapse of EU. EU will likely survive but the political and fiscal unification will be a lot harder.

Tue, 04/24/2012 - 12:51 | 2370366 Bicycle Repairman
Bicycle Repairman's picture

"For her to now appear to be a complete hypocrite who talked of austerity in public while the Bundesbank was secretly signing Germany up for more and more EU debt behind the scenes could quickly become a MAJOR issue in German politics."

LOL.  Merkel is COMPLETELY expendable.  Let me warn the German people right now:  shape up or an IMF technocrat will be appointed to "get the job done."

Tue, 04/24/2012 - 12:55 | 2370387 Jack Sheet
Jack Sheet's picture

Yes, and Graham is the only one who doesn't comprehend this.

Tue, 04/24/2012 - 12:36 | 2370302 itisthetimethis...
itisthetimethisistheplace's picture
Reports also available from Graham...   Shorting The Market At The Bottom - an insiders guide of how to sell low and buy high   Drawing Solitary Lines On Charts - I explain how to draw a single line on a chart and write a 3 page essay about it.   Prepare Yourself For The 2009, 2010, 2011, 2012 Coming Crash...no wait...hold on...is 2012 this year?   Regurgitating Information - I show you how to regurgitate and re-write financial commentary so it looks almost like I know what I am talking about.   A Clock Is Right Twice A Day Report - I told you I was right about the coming financial implosion back in 2008! My investments returned 15% last year! No wait...I forgot to include my losing investments. Damn
Tue, 04/24/2012 - 12:53 | 2370379 infotechsailor
infotechsailor's picture

Why are you busting Graham's balls?  For all intents and purposes, there were crashes and stupid fateful decisions made by central banks every year SINCE 2009, so what's the big deal?

Every year the government faces massive losses in either their own, or their buddies' portfolios (goldman, et al) and they have to shuffle money and paper to kick the can 6 months down the road, ensuring a worse crash each time.

 

Tue, 04/24/2012 - 12:58 | 2370400 Jack Sheet
Jack Sheet's picture

I guess because some ZHs have been putting up with his bullshit for too long and the crap keeps on coming regardless.

Tue, 04/24/2012 - 13:18 | 2370485 itisthetimethis...
itisthetimethisistheplace's picture

Nail. On. Head.

Tue, 04/24/2012 - 13:15 | 2370466 Rasna
Rasna's picture

How do I become a ZH contributor? <sarc>

 

Tue, 04/24/2012 - 12:34 | 2370301 Jack Sheet
Jack Sheet's picture

Graham, I'm sure you mean well, but your sources are crap and you are unable to interpret them correctly.

Sinn's utterances ( he is a pariah to the political elite) and the lawsuit in Munich will have about as much effect on Murkle's politics as the indescribably worse shit in the US will have on Obama's. 

 

 

 

Tue, 04/24/2012 - 12:20 | 2370244 timbo_em
timbo_em's picture

Graham, I wish you were right but as a German citizen I believe you are wrong. Even if Merkel's current coalition falls apart, it's not going to change anything, in fact, it only get's worse. Because then Merkel and her party would build a coalition with the social democrats who openly support eurobonds. So unless the Court of the Constitution steps in the crushes either the fiscal pact or the ESM, Germany led by lunatic lawmakers is going to stay in this endeavour till the very end.

Tue, 04/24/2012 - 16:08 | 2371286 vast-dom
vast-dom's picture

Graham has the unenviable track record of being 100% wrong, when you factor in timing. I am surprised ZH gives him the time of day. Even a broken clock is right 2x every 24hrs, but this jerkoff isn't even close to ever being right no matter what time it is!

Tue, 04/24/2012 - 14:32 | 2370788 FinalCollapse
FinalCollapse's picture

Looks like the political class in Germany does not reflect the wishes of its electorate. Oh wait- we have the same here in USA...

Tue, 04/24/2012 - 12:38 | 2370323 newworldorder
newworldorder's picture

If one thinks about this - German voters (in a major european population country,) are probably the only ones left that are capable of forcing major changes to the debt based system. US voters and other Euro country voters are clueless as to what is happening and will not take action.

Should German voters FAIL to take political action in the future, then the current system will continue untill there is a world wide financial collapse.

Tue, 04/24/2012 - 12:43 | 2370335 SheepDog-One
SheepDog-One's picture

Which is something that wont just 'happen'...its already been planned.

Wed, 04/25/2012 - 02:43 | 2372561 WezTheJuic
WezTheJuic's picture

YES,

The run is in full gear.  There are so many fronts on that equation.

BUT, there are still a few pieces left that are needed before the shit storm comes.

The good thing is, as those final pieces come into place, so much more is being shown which can destroy those of whom are responsible.

Think of it this way.  This is a run on our western society, and if you want to make what-ever money/gold/silver/oil etc is left, then continue to join in that run.

Cheers sheeple,

Pens,

Tue, 04/24/2012 - 16:55 | 2371480 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

Ahhh, the conspiratory theorists. Powerful people run the world, but they can not change the laws of physics or of economics try as they may. This mess will soon be out of their control before they know it.

Tue, 04/24/2012 - 12:15 | 2370215 Zero Govt
Zero Govt's picture


"Merkel’s Back is Against the Wall"

you mean she's painted herself into a corner... silly East German socialist

Wed, 04/25/2012 - 08:09 | 2372832 bank guy in Brussels
bank guy in Brussels's picture

Fascinating, brilliant uncensored biography of Angela Merkel, per John Ward's 'The Slog'.

Biography tells about the depth of Merkel's involvement as a loyal communist when she was in the old East Germany, and her manipulation of both mates and bosses, her continued dishonesty and undermining of others to get ahead.

Especially funny about her first husband Ulrich Merkel, who supported Angela while she got her doctorate, and then she left him, stealing the refrigerator in their apartment.

As the Berlin Wall fell, Merkel quickly spun 180 degrees, became pro-American, and her current husband, Joachim Sauer, has worked for the US Pentagon military-industrial complex in San Diego USA.

Angela Merkel is also a Polish citizen with a German father, Lutheran church pastor and dedicated Communist Horst Kasner, and a Polish mother, Herlind Jentzsch.

http://hat4uk.wordpress.com/2012/01/30/revealed-angela-merkel-rigid-seri...

Tue, 04/24/2012 - 12:15 | 2370213 markar
markar's picture

Sarkozy will eake out a victory in the runoff. All he needs is a small percentage of LePen's votes to pull it off

Tue, 04/24/2012 - 22:16 | 2372135 philipat
philipat's picture

Thanks Graham but this doesn't really add much to your most recent prediction that the EU will collapse in May/June. I think that was 2012? I have an Outlook reminder set for July 1st, 2012.

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