Here’s the REAL DEAL NO BS Situation with Europe (Warning What Follows is EXTREMELY BAD).

Phoenix Capital Research's picture


Here’s the REAL DEAL NO BS Situation with Europe (Warning What Follows is EXTREMELY BAD).


The media is rife with misrepresentations and analysis of the EU. Here’s the real deal.


  1. The ECB is tapped out. Having provided over €1 trillion in funding via LTRO 1 and LTRO 2, taking on over €700 billion in PIIGS debt putting its own solvency at risk, it simply cannot launch another LTRO scheme for the following reasons:
    1. Those banks accepting LTRO funding are being punished by the market, thereby indicating that ECB funding is no financially toxic to a firm’s reputation in the market place
    2. The positive effects of LTRO 2 lasted only one month compared to several months for LTRO 1. Thus, we find that with each additional intervention the benefits are shorter lasting.


  1.  The Federal Reserve cannot step in. I know the blogosphere is rife with claims that the Fed will just print and print and print to save the day. The people writing these claims fail to see that:
    1. The last time the Fed printed (just $600 billion at that) food prices hit all time records and revolutions erupted around the world.
    2. Back home in the US the Fed came under massive political pressure forcing it to go on damage control mode (Bernanke’s town hall meetings and opening the Fed to Q&A sessions)
    3. This is an election year. The Fed has done all it can to support Obama’s re-election (for good reasons: Obama re-elected Bernanke and the GOP is targeting the Fed as a major issue). If the Fed launched some massive printing campaign, Obama will certainly lose.


  1. The IMF cannot step in because:
    1. It’s ultimately a US-backed entity
    2. The political environment in the US will not tolerate a bailout of the EU (see the negative political reaction to the Fed’s moves to lower Dollar swap costs during November 2011).
    3. This is an election year: how many times has the IMF asked for additional funding and been rejected?


  1. Germany is politically fed up and monetarily tapped out:
    1. Merkel’s political party is getting destroyed in state elections due to her support of the EU. And Merkel is running for re-election in 2013.
    2. Merkel is committing political suicide by continuing to put Germany on the hook for Europe’s problems. Speaking of which…
    3. Germany is already on the hook for over €1 trillion in EU losses… and the ECB has made it so that it can roll the losses from its PIIGS portfolio back onto National Central Banks (AKA the Bundesbank).
    4. Inflation is showing up in Germany and becoming a political issue: see recent union demands (and success) for pay raises.
    5. The German constitution does not permit the creation of Eurobonds.
    6. If Germany permits additional bailouts or funding it will lose its AAA rating, leaving Europe without an AAA rated large economy to fall back on.


  1. China cannot be a savior:
    1. Having pumped its system full of liquidity it now faces inflation at the same time as its economy is slowing. This in turn means…
    2. That China’s Government is starting to lose its already tenuous control of the populace. As a result…
    3. China will be focusing on domestic issues rather than saving Europe (when was the last time the “China to back the EU” story appeared in the media?)
  2. Germany and others have already taken steps to prepare for a break-up of the EU. In Germany’s case:
    1. It’s re-instated its emergency bailout fund providing €480 billion in potential assistance to Germany banks in case of a Crisis.
    2. German banks will be permitted to dump their EU bonds into the emergency fund if need be.
    3. German corporations with operations in Greece have put clauses in their contracts to allow for the acceptance of the Drachma.


  1. The ECB has taken similar actions permitting it to roll back the losses from its PIIGS holdings onto National Central Banks.


  1. Spain is on the verge of a banking collapse. Its efforts to deal with an insolvent banking system by merging crappy banks and shifting losses onto its public balance sheet are proving to be absolute failures due to the fact that:
    1. Total Spanish banking loans are equal to 170% of Spanish GDP.
    2. Troubled loans at Spanish Banks just hit an 18-year high.
    3. Spanish banks need to rollover 20% of their debt this year.
    4. Spanish private sector debt is nearly 300% of Spanish GDP.


In plain terms, having spent two years and hundreds of billions (even TRILLIONS of Euros) dealing with the EU Crisis, the powers that be over there have backed themselves into a corner from which they cannot escape. Let me be blunt:




It’s game over for that idea. And the idea that one bankrupt nation (even Germany sports a REAL Debt to GDP of over 200% when you include unfunded liabilities) prop up several others is ridiculous.


And all of this is happening at the precise time that Spain is about to implode.


This is the REAL DEAL for Europe. Anyone who has some kind of counter-argument to these points either doesn’t understand the political environment we’ve entered (even Central Banks are fed up with bowing to political pressure from politicians) or is simply hoping that by ignoring these realities they (the realities) will go away.


They won’t. Europe’s banking system as a whole is at risk a la 2008. And it’s nearly four times the seize of the US banking system.


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.


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:


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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BlackSwanCrash's picture

i hear what you say. never this, never that. what i would say is never underestimate the power of FEAR. We might see some extraordinarily coordinated QE if a real panic ensues.

Not that it will do any good.

MeelionDollerBogus's picture

Caveat Emptor - for the low, low cost of buying a Romney President the Fed & IMF can be all-aboard for sending Obama under the Failward Campaign Bus.

michael_engineer's picture

Who in their right mind would want to bail out anyone or any country or any bank now that we are at the peak of the Hubbert curve and the forward looking view is for less, not more?

ThinkInvesting's picture

Pretty dreary, but very possible. Important to note that the US debt-to-GDP is %350. Japan is 228%.

Fish Gone Bad's picture

For some reason people think that a big debt-to-gdp actually matters.  On paper it matters, but in extend and pretend world where there are really no other options, it appears to not matter one bit.  Is the magic debt to gdp number going to be 500%?  1000%?  more? I honestly just do not know.


sessinpo's picture

You're lucky Mike Tyson bit off Holyfield's ear. Otherwise he'd sue you for using his "real deal" slogan.

NEOSERF's picture

Where are the demonstrations and riots...if things were as bad as they seem to be in Europe, shouldn't people be in the streets or is the iphone the new pacifier...perhaps people have learned that a new boss is just like the old boss and no boss can fix this system...too complex for the avg. 9th grade educated pensioner on the street I guess.

falak pema's picture

There is no entity on earth that can bail out the USA....there fixed it.

I find your onion soup gets thicker and thicker but no better in taste. Humpty dumpty is all over the place in first world. And just as broken on all three fronts. Do you really think by pulling Eurozone down if it won't play ball the US will better survive its own financial shortfall growing larger every day. Take a trip on the Maid of the Mist, before it s gets junked at Niagara falls! It might freshen up your mind.

Satan's picture

Right now I'm at a cafe in Genoa drinking a 6 euro beer, the place is packed with lunch guests ordering wine and lobster,traffic is mental, lots of laughter in the streets and all in all a pretty good vibe around town. there are 4 ATM machines that I can see, none of them have queues.Life is good. What you non Europeans need to realize is that 2 world wars were fought in the streets, Cities were bombed killing civilians in their thousands...nobody is scared of a financial crisis in the grand scheme of things. The world just keeps on turning. I'm having another beer.

fockewulf190's picture

Please allow me to introduce myself I'm a man of wealth and taste....

Have fun Satan. I'm sure you'll soon be in Spain chugging a cervaza watching the crowds of broke youth having a blast under a baking sun. Might be a bit on the cool side for what your used to.

dasein211's picture

Yeah, I thought they would have learned that after the hundred years war, the French revolution, world war I, etc.. It's sounds more like your due for another reset more than it sounds like you're ok. But whatever. Next round of beer and lobster is on the taxpayers everyone!!!!

blunderdog's picture

You should try the salami while you're there.  I hear it's the best.

Nothing To See Here's picture

Keep watching the 5 o'clock news and soccer games. Once SHTF, you'll be the first one to complain about black swans and how unpredictable this thing was...

orangegeek's picture

And what happens in Europe will follow here in the US.


Primary wave 3 down is under way.  We should see the SP500 below the March 2009 lows.

Freebird's picture

You know the girl with the ugly best friend scenario, makes her look prettier...gotta love ZH

Edit post caffeine fix: wrong analogy but maybe you get my gist.
ZH the best on the planet. Grahs irrelevant.

Nussi34's picture

Eurozone (EZ) unequal European Union (EU) unequal Europe

EZ = 17 countries

EU = 27 countries

Europe = 51 countries

supermaxedout's picture

Poor Anglo Anericans, for them each time there is a problem with a currency they think the world is going down.

If you want to know what is going to happen you have to ask a contintal European. They have all the experience in these countries when it comes to currency problems or currency catatrophies.

My best guess is the follwoing:

Greece is going bankrupt, the Greek banks are going bust, maybe also some other European bank.  The ECB will do nothing except make the small saver whole, to say all savings acounts or deposits upto 50,000.- Euro are going to be refunded by the ECB via one of their flexible instruments or a new one.

That is more or less all. The Greeks are continuing to use the Euro because they have  lot of experience with soft monies like the new/old/new Drachma whatever name is given to a thing what has no chance ever to materialze. The Greeks like stable money (the population) because they know how their elite has been stealing from them in the past via inflation which simply means money printing. Nowadays the damage done by these crooks is more a problem for the whole EU population.

So everybody is just continuing to use Euro, where is the problem. The Euro is unofficial the currency also in other parts of Europe, especially on the balkan. Turkey is also a stong Euro lover and gold of course

As long as the Euro curency is stable which means not inflated in a way like the US Dollar or the Pound ther is absolutely no problem. Money is money important is only it is accepted from the counterpart, whether its gold or silver, a fiat curency backed by a strong economy like Northern Europe or by something like the US war machine backing the Pound and Dollar. Its all money and good as long it is accepted. The Greeks are going to have Euros in their pocket and will use it as long its a good money. Its that simple. Only an idiot would throw his savings away as long it is a good money..


MeelionDollerBogus's picture

America's in the driver's seat. When Americans riding in the car say it's going to crash, and they're gonna die, you best pay attention.

Gavrikon's picture

"As long as the Euro curency (sic) is stable which means not inflated in a way like the US Dollar or the Pound ther (sic) is absolutely no problem."

That's an awfully big assumption, don't you think? 

therearetoomanyidiots's picture

A doctor is his (or her) own worst patient....

LULZBank's picture

Money has to be printed and it will be printed. Rest is just excuses and pretexts so that the sheeple does'nt catch on to the fraud.

Smart analysts and talking heads know this, but they still try to keep the explainations and analysis complicated, so that the sheeple constantly relies on them and looks up to them.

The only useful thing, is if you can predict WHAT is going to happen, in terms of eventualities and WHEN its going to happen, to make some fiat money off it, in the meanwhile.

Octupu's Garden's picture

"The last time the Fed printed (just $600 billion at that) food prices hit all time records and revolutions erupted around the world."

Sure: food prices - revolutions positive correlation is somewhat accepted to hold true. But taking it this far, it's a full new mechanism to destabilize authoritarian regimes, in that case - print in the name of democracy.




NEOSERF's picture

There isn't bad inflation because the money that gets printed ends up right back at the source within being shuttled around electronically between banks and central never makes it to the street except for the bank run issue...there are no loans so there is no monetary expansion in the real world...

therearetoomanyidiots's picture

Another fool that believes some world revolution leading to anarchy or communism or tyranny will be a good thing...and that he'll be immune from the suffering. 

Anton LaVey's picture

Gosh, that the most steaming pile of drivel I have seen in a long time. And that says a lot.


The ECB could start LTRO III - or LTRO IV, or V, or VI... it does not matter, these days they don't even have to crank up a printing press, they just create trillions by pressing a couple of keys on the keyboard.

The real problem is POLITICAL WILL. And, especially, political will to put the bankers under control. (Hard to stop people who gave you millions for your election, know what I mean?)

readyforit's picture

Liquidity does not = Solvency

LULZBank's picture

Liquidity does not = Solvency

Why not? Cash is also an asset, no? 

If I have a bad business model but a good friend of money can always print and bail me out, I can stay liquid and solvent for eternity.

Only thing is Confidence or the lack of.

therearetoomanyidiots's picture

Remember the wheelbarrows full of cash to buy a loaf of bread?

fockewulf190's picture

Ask any Zimbabwian how it feels to be a trillionaire.

xtop23's picture

It'll be 2008 all over again just on a more grand scale and it won't be Paulson pointing the gun at congress.

The numbers will be much larger but in the end politicians will blink just like last time.

Then the hurting begins.

Outright QE in 2012 I don't think is likely, 2013 ...... not looking good.

Sounds like a good time to buy my neighbors moped Larry Crowne.


Bear's picture

They may be able to hold out until ... Obama will have more 'flexibility' then

tabasco71's picture

Your reference to Obama's on-air faux pas just made several things come together for me.  Obama's Harvard education and administration should certainly be able to work up the pressure on a global economy to the extent where people are screaming for a saviour to be re-elected.  And he's already dropping the hints that he is the man for the job,, gimme a break!! Is it possible this is all a re-election campaign?

Joe A's picture

Mr. Summers writes all these things and concludes with "come and get your free report on how to survive the European bank collapse, lalala". It is just a promotional speech for his website and has been promoted as such for the last several weeks on ZH. Does ZH really wants to be the promotion circuit for some organisation? I got a solution for the European bank crisis: the US banks owe the European banks around 2.4 trillion dollars. How about paying that back?

eclectic syncretist's picture

Talk about over the top pessimism.  There's no sense of balance here, and you'd have to be crazy to invest on this guys take of things.  He's just selling a bad attitude. 

Bear's picture

Paying back ... you've got to be kidding

fleur de lis's picture

None of these fraudulent organizations has the slightest intention of paying anything back.  The whole point was always to overextend lending and borrowing to create dependancy systems, then wait until enitire economies get built around them, then pull the rug out and play dumb. The money they siphoned away to their accounts and fronts cannot be traced. It's gone. 

Just the usual and customary scam, take a walk through any slum or gangland and it's the same thing. This is just at the government level so the populace thinks it's dealing with responsible, accountable professionals with their best interests in mind. Nothing could be farther from the truth.

Does anyone really think DSKahn is competent or responsible, or that he ever had the best interests of France in mind? So how did he get to preside over a massive monetary fund and squander heaps of other people's money in an overpriced NY hotel threatening maids? Did he have to account for that? Did it affect his lavish lifestyle? Of course not, and he's just one. He's one of the thousands of ignorant welfare queens controlling the money supply and convincing us that we need them. 

All of it is a scam, and everything is moving along on schedule as planned. The only way out is to do what Iceland did -- tell the scammers that we owe them nothing but a jail cell, exit the fraudulent systems of their creation, and go back to local and cultural monetary systems. The world was just fine with that for thousands of years.

It will be tough at first but it can be done. Putting it off will only make it tougher for us and allow the scammers more time to steal and hide more money. Iceland is only one example and there will be more because this scam is unsustainable. The sooner we find the exits the better. 

Hobbleknee's picture

"the GOP is targeting the Fed as a major issue"

No, Ron Paul is targeting the Fed.  The GOP is fellating the Fed.

Darth..Putter's picture

So the US will be going through currency felation. 

the tower's picture

The REAL DEAL for Europe is that all countries will go back to their own currency, alongside the Euro. This already is in place. SEPA will be completed 2014 and will include Iceland, Liechtenstein, Norway and Switzerland. All national payment products will be replaced by SEPA products.

So, for business - and for those who want to use the Euro in private transactions - the Euro will go on as the preferred currency. For countries the local currency will provide the much needed (monetary and political) relief.

Bastiat009's picture

"The last time the Fed printed (just $600 billion at that) food prices hit all time records and revolutions erupted around the world."

Linking QE to North Africa's "revolutions" is extremely daring and probably hard to prove. 

mind_imminst's picture

"claims that the Fed will just print and print and print to save the day"


The FED WILL print and print and print. You can bet your bottom dollar on that. Will it save te day? Of course not. But the FED WILL PRINT.

therearetoomanyidiots's picture

Yeah, f**k the US, we need to save the world, even though printing will make things worse, we'll save th  world.  Wait...

hedgehog9999's picture

I suspect given all those negatives markets somehow will bounce  significantly at least 'till end of 2012 "The Mayan prophesy year".

2013 will be a really bad year, perhaps even Nov/Dec 2012......

I am starting to get a good feel Gold/silver/PM's are going to bounce strongly from about here............................which means the risk trade will come back for a few months..................notwithstanding Greece and Spain and all else mentioned above...........

Toxicosis's picture

Come on Graham are you really telling all of us that the FED really gives a shit what happens to food or energy prices.  They have caused this crisis, are perpetuating this crisis and will undoubtedly push this crisis to their advantage to the ultimate conclusion of hyperinflation.  Suffice to say these fuckers have been loading up on gold for quite a long time.  I wonder why they would do such a thing?  Perhaps to control and own the majority of the currency they damn well know will be re-established in one form or another. Graham these people are the crisis coordinators, to think otherwise is sheer idiocy.

marathonman's picture

I think the bigger goal for the Fed and the ECB is to make things so bad that we will accept the new SDR as a solution to this currency debacle.  The SDR, the special drafting right, will be administered by the BIS and will effectively allow a small handful of bankers to control the entire world.  NWO for all the people.  Completely unaccountable and unnecessary, but how better to gain control of the entire worlds' labor?  Don't think the Fed is in it for us.  They got bigger fish to fry.  They'll just fry us first.

zerotohero's picture

Fogetaboutit - I just shit gold bricks all day long.

printmoremoney's picture

Japan has been borrowing from itself for 23 years. The FED is just getting started, warming up. No bread lines in Japan, eh? Shit, the YEN is almost a reserve currency.

Computer money has no limit. As long as the Sheeple believe, the magic will never end. Where  I live, the local currency is 1,000 for a freaking coke. 

You will pay $1,000 for a coke and not blink an eye. The shit used to be a fucking nickel folks. Maybe not in your lifetime, but in mine it was.

Death by a thousand cuts, you won't feel a thing. Go watch Idol and relax.

Numbers, yada yada.

Peace On Earth Goodwill Towards Men

Savyindallas's picture

Japan borrowed from themselves  -from reserves and money in the Bank. We are borrowing from outsiders  -and now from the Fed. Isn'nt there a significant difference?