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Brandy
I’ve been amazed at the ineptitude of the European leaders. Not just the political ones. The actions and statements by the ECB have been counterproductive. The ECB has directly contributed to the instability. The Banque de France and Bundesbank have added very little. The Finance Ministries have been worse. Where's the leadership? Are these people all idiots?
Actually, I don’t think they are. If that were the case, then how could you explain the bumbling? One possible answer is that it’s deliberate. That sounds conspiratorial. I think there is some evidence of that.
In my opinion the explosion that occurred over the past fortnight in Italian bonds could have been avoided. All it would have taken to contain the fear factor was for the ECB to have stepped into the market in a forceful manner and suck up the supply of bonds. When they failed to defend the market it led to widening spreads, which in turn lead to more sellers and finally margin increases and a crisis.
The market knew that there were milestones in spread levels that would automatically bring more selling. The ECB was also well aware of this. (Don't believe these folks are dumb, they're not) But they ignored it and day-by-day the pressure grew. After 6.75% was broached, it led to a quick collapse. It ended with Berlusconi resigning. The panic in the bond market ended the next day.
It’s been suggested in a number of publications that the ECB had a hand in the Italian blow out. As of yet there has been no comments from the government(s) involved nor the ECB.
The following is a close up of a chart created by Zero Hedge. This segment looks at November 8 through 11. The green circles are the timing of ECB interventions (note market reactions).
Notice that there was no intervention on November 8th. As a consequence, Italian 10-year bond yields went soaring past 7%. The consequence? That night Berlusconi was forced to throw in the towel. The next day the ECB initiated aggressive intervention. The lack of intervention on the 8th followed by the steady buying on the 9th, 10th and 11th was not an accident. It was a policy decision.
The following headline had it both right and wrong. The bond market did do Berlusconi in. But it was the ECB, behind the scenes, that engineered it so that it would happen.
To believe in the conspiracy concept, (the one where central banks determine the fate of political leaders) you have to ask/answer the critical question of:
Why in hell would “they” do that?
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I was going through some German periodicals. I saw this ad for a brandy distiller. In English it reads:
Everything should go well for all!
Yes, things should be even better!
Everyone should be able to work without worrying. All should be able to afford to travel, to fill their homes with beautiful things and to fulfill the heart's desires, both large and small.
That is what Germany wants! For itself and for all of the countries in Europe. Together, we will work to secure and raise the standard of living!
The ad is from 1940. The last line reads:
That is what Germany is fighting for. And only a German victory will realize the goal of a European economic community.
It does make you think. Are they manipulators or just bumblers?
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H/T: Russ Halley
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The banks would have no power over governments if everyone lived within their means.
"The banks would have no power over governments if everyone lived within their means."
......................
Leopards cannot change their spots and humans cannot alter their own human nature.
and... Those humans that do manage to contain their desire to buy useless crap or happen te be non-conformists are ostracized or worse... See Salem Witch trials or slavery because of identifiable skin color or being a Jew during WW2 Germany, or being a Japanese/American during WW2 America, ad nauseum...
The finger pointing starts as soon as something goes wrong.
Everyone needs a master, even governments. Once you figure out what is important to you, then you can live your life in spite of the games that are being played. Plan ahead.
Rather than being slain by the ECB.. I think it may be a better characterisation to say that he was only there by their good graces.
Much easier for beaurcrats to withhold support, then to actively target/undermine someone. In my experience these kinds of people tend to prefer passive aggression, there's less evidence and less accountability in the event of any blow back.
After all, they could just suggest that bond buying was withheld on that day due to some internal process review or some arbitrary internal approval that didn't take place because of travel.. etc.
The puppet masters always take the puppets down if they get too popular, or too powerful, or too cocky/arrogant. Berlusconi fell into the 'arrogant' category. It's part of the way TPTB 'guide' history in the overall direction they have been planning.
Witness the downfalls of Kennedy, Nixon, Thatcher, Saddam, Mubarak, Gaddafi (and earlier examples like Napoleon and Hitler ... whose 'invincible' armies were sent off on suicide missions against Russia in order to eliminate them after their primary purpose for TPTB had been achieved).
BK, excellent post and an example of why ZH is so great! Thanks again for your continued insightful contributions to this great community....and thanks ZH for this space that continues to invite the "awakest" minds in the world.
Look no further than the Squid Bruce, it's tentacles were involved in this and now they have another ex Squid running the show in Italy!
I've said it before and I'll say it again. Our world is no longer ruled by governments (if it ever were in the first place) but by financial instutitions. That is the reality, and this posting by Bruce is just further evidence.
because I never get tired of this quote...
"The issue which has swept down the centuries and which will have to be fought sooner or later is the people versus the banks."
Lord Acton
How can you blame the ECB for Berlusconi's downfall when everyone knows that the Squid is behind it all. Maybe the Squid chose to use the ECB and the vehicle to dispatch him, but when the scab is pulled off of every wound there is a little tenacle under there just wiggling away.
"Peter Principle" in action.
Well dressed bumblers, I say- they are playing us for fools.
Bottle of booze and a VW.
Reckless then, too!
Come on now Bruce, we all know what the truth is. By the bankers for the bankers. Fine, fatten them up, only a matter of time before they are eaten. Nothing says "high standard of living" like roasted pig.
Partly short-term thinking versus longer- or even medium-term thinking.
Berlusconi had pressured the ECB by not moving Lorenzo Bini Smaghi off the board when Mario Draghi arrived, thus depriving France of a seat which had been in essence 'promised' to them with Mario Draghi's appointment.
Lorenzo Bini Smaghi resigned on the 11th, just after Berlusconi.
Complex here with all the actors in various positions, and the ECB boxed in by inadequate responsiveness from other EU decision-makers.
But there is indeed a good question, why Europe is making decisions so shabbily despite being its rich, prosperous, well-gifted self.
By the way, BK, you do a great job here. Bruce Krasting is one of the best contributors on ZeroHedge.
Agree with all, Berlusconi tried a few moves too many
Re: why? -> human frailty, I'd say...
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Bruce, from a fan:
Here: http://www.zerohedge.com/contributed/gold-and-snb
Remember what you said about the doubly impossible peg?
Well, they did and it's holding.
And the industry screamed for it.
The ECB, and the larger EU construct, wants to have some level of collapse.....wait for it......to benefit Germany. The EU quit being about the EU awhile ago and is now about centralizing power under the great guidance of Germany with the World Oligarchs in charge above. Why did OBummer, when he was running his election, promise Government Largess to the people? Because you gain total control when a person is completely dependent on the next "hand out." Germany (a la ECB, ESF) wants these weaka$$ countries to fall into such disarray that they will, like the Germany people in the 1930s, will abdicate their freedom and sovereignity for the next financial "heroine" fix. Remember a drug dealer has absolutely "No" incentive to get his victim off the drug...he would lose his market.
Bruce, there is a PLAN and deciding when and how they play their cards is designed to give them the greatest return when you look beyond the next reporting quarter and think longer term.
What is the timing of Germany being in a full position to overtly require financial and political loss of sovereignity from the PIIGS in order for them to get their next fix? Any thoughts? Puting a timeline to your thoughts would always be helpful.
I can tell you that people on the Street in Germany have no desire to control Europe, they don't think they are better or smarter than people in France or Spain(well maybe more hardworking)
Germany is as it was in 1930's highjacked by Foreign interests who than put a Puppet at the head of Germany to consolidate their power over Europe.
Why Germany? Well for 2 simple reasons, Germany always had a large and strong economic base and German people where always largely ignorant and naive towards their leadership(it is not in the German culture to be egoistic or to question authority or to rebel) so Germany is the perfect Trojan Horse from which to control Europe
(I am not a native German so it's not like I am defending my own people)
"Why did OBummer, when he was running his election, promise Government Largess to the people? Because you gain total control when a person is completely dependent on the next "hand out."
no way, no day.
it's like raising lions. you better keep the zebra carcasses coming or you WILL find yourself on the dinner plate. Lions don't understand "Austerity" any more than people/sheeple do.
You really think Germany can absorb all of Europe's $ins? GERMANY??
as to BK's Swiss peg prediction it's only been 3 months...They're not out of the weeds yet either
My time line? I have no clue where the futures will open in two hours. That's the problem. You can't see around the corner.
As Tyler has reported (much better than I) there is Umpteen uncountable bazillions of debt in the EU that is coming due in the next 12 months. A trill?? 300b just Italy??Private sector banks too??
That's not going to happen in the current market. Something has to give. I would give it to the end of the first quarter. There has to be a roadmap that takes us around the corner by then. Or....Whats that plan B thing?
b
Plan B is to default on this debt based monetary system and for each sovereign nation to go back to printing its own debt free sovereign currency; the supply of which is controlled by a super majority law.
Permit me to issue and control the money of the nation and I care not who makes its laws. — Mayer Amsched Rothchild
A debt based monetary system will ‘always’ collapse. Until that happens those that control the money supply use it as a deflation/inflation pump to extract the wealth of individuals and nations alike.
Simple thought experiment; say you had $1 dollar 2,000 years ago and put it in a bank at 2% interest. You would have 155 quadrillion dollars now. Now given that debt based monetary systems usually start out with more than $1 in circulation it takes less time but the ultimate destination is always the same it just takes less time 10-50 years.
Only a monetary system that is based on a debt free currency (the supply of which cannot be easily changed by law) can avoid this fate. Currency then serves its primary role as just a medium of exchange for goods/services that have actual value. One stores wealth not in debt but in things that have tangible value.
The Venetians vast wealth rested not just on their trade connections, but their ability to manipulate currency ratios. The gold they bought cheaply from the Mongol looters with European silver they then forced upon the nation states of Europe and deliberately devalued silver to control those states and wipe out competitors.
F. Braudel remains unequalled in his grasp of the big picture of what is now simply being replayed in Euro-Amerika.
"Venice had deliberately ensnared all the surrounding subject economies, including the German economies, for her own profit... The fourteenth century saw the creation of such a powerful monopoly to the advantage of city states of Italy that the embryo territorial states like England, France and Spain necessarily suffered the consequences."
You simply need to substitute the words Brussels for Venice,and New York\London for Antwerp and you will see where the criminal cabal has left it's trail of slime. It's no accident that Brussels is both the headquarters of their geo-political blackmail racket AND the epicenter of satanic pedophile rings protected and patronized by the highest levels of the kleptocracy. No accident. None.(ghostly voice of demonic spawn Geithner as he roasts in hell!)
btw....while it's technically true that the Templars did not profit from interest, their scam was to place "conditionalities" on their loans, which translated into the pledging of royal revenues, the profits from which serially bankrupted the subject states. This was far more profitable than merely fleecing Muslims or waylaying caravans. Backstopping banks with public funds is merely a variation on this old theme
Nothin new under the sun.
your perception of currency as counter value of hard goods makes it a PRECAPitalisitc instrument in your analysis. To be able to invest in machines that produce greater returns later on, you have to introduce : a) time value of money b) debt to finance future returns. Like the merchants of Venice did when they brought in silk/spice to Europe or exported crusaders and kings to Holy land, based on collateral, ie debt based on hard assets. They and Genoa initiated the capitalistic system. That's how Venice became top dog, as it controlled money line, ducats, and provided debts to Crusaders against hocked collateral. The Emperor of COnstantinople even hocked his son to Venice to get them to fund his defenses. The Templars were also good as bankers. So...don't kick debt as Venetian currency was supreme AS LONG AS VENICE'S SHIPS BROUGHT IN THE GRAVY.
That's the key : you have to promise good rate of return to make your money line and the debt talk in your favour!
The current financial system HAS LOST THAT. ITS NO LONGER IS capitalistic in "merchant value added" terms; it is a total financialized ponzi. When Venice became a ponzi with no growth potential it lost its hold too...to Antwerp.
Falak Pema... I am assuming you are posting to my comments? I agree with you.
In addition, the Venetian bankers decided what geographic areas whould use what PMs for 'money'. At one point in time gold was virtually unknown in England while silver was the currency.
"a) time value of money b) debt to finance future returns. Like the merchants of Venice did when they brought in silk/spice to Europe or exported crusaders and kings to Holy land, based on collateral, ie debt based on hard assets. They and Genoa initiated the capitalistic system. That's how Venice became top dog, as it controlled money line, ducats, and provided debts to Crusaders against hocked collateral."
All good points... but, what has been lost by central bankers? Time value of money?... For the average saver there is no time value of money except when they borrow to purchase a consumer asset, for there certainly is no time value to savers that are paid a fraction of one per cent on their bank savings. But if the saver buys an auto and requires a bank loan they are certain to notice the difference on what the bank is paying on their savings and what rate of interest the bank is charging for an auto loan. Pooled saving was the basis of sound capitalism... it is gone and replaced by fiat money created by banks as loans are required. The savers have been eliminated from capitalism by banks... So, why should savers accept counterparty risk from banks that pay them nothing for using their savings? Instead, savers can buy PMs or put cash in their mattresses, avoiding bank counterparty risk.
Another problem is 'debt based on hard assets'... With the enormous amount of printing of fiat money and other debt instruments, there are waaay tooo many claims on waaay toooo few hard assets. Where clever Venitian bankers required real solid collateral for loans or for investments in crusades, modern central bankers are stuffed with fiat capital and find that there are few solid investment opportunities... but many opportunities for mal investment. So, bankers/hedgies chase alpha and what good does this do the real economy of any soverign?
No it’s not “pre-capitalist” in any way. Those that have accumulated hard assets and even excess currency ‘can’ loan them out to others. The smart ones will loan them out to individuals and organizations capable of producing more than sufficient net wealth in order to not only service the interest on the loan ‘but’ also repay the principle. In addition the loan will almost always be securitized by a hard asset or honest leverage 101.
Both monetary systems can be capitalistic.
I think you misunderstand the different natures of debt and non-debt based monetary system? In a debt based monetary system all the currency in circulation is a debt instrument. Thus ‘paying’ off the debt ‘destroys’ the money supply leading to a deflationary depression in which hard assets diminish in value relative to the currency. A high unemployment depression is the result dragging down productivity and tax base leading to death spiral, aka what we are witnessing with Greece and Italy right now.
Not to be out done, at the other extreme of the debt based monetary system is to printing ever increasing amounts of currency to cover the geometrically increase interest on the debt (i.e. the example I started with). That path eventually leads to hyperinflation. Either way you’re (explicative here).
Which is why the choices being offered to the 99% by the MSM (austerity vs. printing) are false choices. It’s like asking a person on death row their preferred means of execution.
Those that control the currency supply (i.e. the 1%) are ‘always’ front running which ever direction the deflation/inflation pump is moving next.
In their world it really doesn’t matter. Which is why those that control the money supply control your nation. Which is way all citizens of all nations ‘must’ take back the money power period.
What is truly scary is how the 1% have now somehow installed puppet banker run governments in Greece and Italy.
Correct me if I'm wrong, but Templars didn't extract interest and merely provided safe conversion of currency to debt and back to currency at some destination 'bank' (assuming you lived to collect anyway) i.e. they had more in common with Western Union than BofLynchingCountryWide.
To reply to your and the preceding comment : Templars unlike the Venetians did not use banker type Debt based finance and did not collect interest. But they did raise taxes on cowered muslim population. Being both soldiers and monks, they could rob the infidel using war, and use their "ill gotten, in terms of their monk status" gains, to promote their investments which allowed them to trade with merchants on all types of commodities : silk, gems, spices, arms, and build feudal and agricultural produce domains.
As they benefitted from trusts or donations they got immensely rich without debt, they lived frugally, and fought and died by the dozen never returning to original lands. As soldiers they did loot the caravans of their enemies. Two hundred years after their creation in 1118 they were taken out by king of france. In the 1520s they or their fellow Hospitallers, chased from Cyrpus ended up in MAlta and made it their headquarters, controlling east west trade.
During VII th crusade disaster they paid the King Louis IX's ransom of 400000 dinari to Mamelukes. Presumably they got domains in France as collateral.
Excellent observations Paul67. Excellent thread BK.
Since there is more disinformation than information offered up for daily consumption I believe we can only rely on:
1 History. (original source material, not revisionist history)
2 Human nature.
Connecting the daily dots would work IF all the dots were information and did not contain dots of disinformation.
Human nature is unchanged over time and there is more than ample evidence to back up this statement.
We can only know for certain that there is more than one group in the world that wants to print the 'world currency'. Therefore, we can also know that these groups are involved in constant economic warfare to achieve their goal of being 'the group' that has the total power of being the printer of the next world reserve currency (assuming the dollar fails in this role).
We also know that these groups have at least one idea in common: Prevent PMs from being reestablished as a world reserve currency and a true store of value. Since PMs cannot be printed they are anathema to fractional reserve banking, monetary expansion for wars, purchasing the votes of citizens, purchasing the votes of politicians, plundering the savings of workers, etc.
Economic warfare is continuous but is rarely revealed. It has been on display since the near economic collapse of 2008 only because enormous power is at risk of changing camps ...and still, we are seeing only the tip of the iceburg. Silvio Berlusconi, Obama, GPap, Merkle, and most other 'leaders of nations' are puppets to be used until they are no longer useful and then put to pasture. The puppets are at the mercy of the soverign bond holders, their own 'democratically elected' governments, and the whims of economically ignorant citizens. Only a few 'leaders of nations' have true power, and their power is not based on the votes of their citizens, bond holders or elected officials below them.
A study of Shakespears characters and a reading of real historical characters is about as close as we can come to glimpsing the unfurling of future events. The reason 'history rhymes but does not repeat itself' is because human nature does not change but circumstances do.
Snidley : “The puppets are at the mercy of the sovereign bond holders.”
No they are not at all, that’s what the 1% tell them and it’s a big lie. In fact it’s likely one of the biggest most important lies of all time.
All any nation needs to do is to pay the debt based bonds with debt free sovereign money as it comes due. Not unlike how bank gives you paper money from your account when you request it. Simultaneously you ‘increase’ the reserve requirements in the bank system soaking up any excess liquidity thereby keeping the currency in circulation near constant (important safety tip) while also as a bonus de-leveraging the banking system over time.
The entire debt based money supply as it exists now then gradually transforms into a debt free currency in circulation at the end of the process with ‘all’ nations ‘debt’ free. Banks go back to the business of making honest loans to honest people with a significant increase in stability due higher reserves. For those who still want to gamble; go to Las Vegas and use your own money.
Now on top of this nations have two choices regarding fiscal deficits and tax levels. Both ironically are the same though in a debt free currency system since nations in general are not good investments from a capital formation stand point; an objective that will once again rule the ‘investment’ markets.
While nations can still hypothetically loan money from private banks the interest rates will be set by the market which will generally ‘also’ require a security more substantial (i.e. mineral rights etc.) than just promises of future taxes.
If a nation chooses to print currency in order to spend more than it takes in then it will essentially be implementing an inflationary tax on its citizens over and above the direct taxes. Think of it as simple way to implement a VAT tax. Ideally though, the ability to print additional currency should be limited to population/productivity increases by a super majority law.
Regardless, ‘if’ a nation elects to receive a portion of its taxes in the form of inflation (printing more currency than the efficient flow of commerce requires) the benefits accrue to the citizens (ie the 99%) and not the international banking cartel (ie the 1%) as it does now.
I agree with you with regards to PM. These would ‘also’ circulate acting as check (hedge) on the printed currency supply plus would enable international trade. The key would be a floating price and free flow of PM across international boarders, ie Freegold. Because a ‘Gold’ Dollar, ‘Silver’ Dollar and ‘Paper’ Dollar are 'all' legal tender (within an market based exchange rate) there are no capital ‘gains’ or ‘losses’ that can be assessed.
Likewise the flow of PM would act as counter balance to currency manipulation by the nations of the world.
Snidley, Check out books 7 and 8 of Plato's Republic, on how oligarchy leads to democracy, which leads to tyranny. It could all have been written yesterday and posted on ZH.
(I'm still reading it, so I don't know what comes after tyranny.)
bunga bunga anarchy. Then puritan military regime, and back we go to oligarchy etc.
Christopher Story caught this German dominance line quite some time ago. He wrote extensively on the subject of the Euro-Union, warning against the Lisbon Treaty, Ireland's sign-on and the foundational nature of the German Statement you highlighted. His work can still be found at Global World Reports.com/News. Although he died still trying to warn others and was severely marginalized by corp/gov powers, most of what he spoke of has come to pass. At one point he was in a pitched battle to control his own personal legacy and most of this cyber-war is actually documented on the web (with loonies and spooks galore - loads of intrigue).
C Story's trade was financial investigator/editor and his primary publication was the International Currency Review. The New Underworld Disorder, his final book, is available through his website (posthum) and gives some genuine background to many of the players we read of today, as well as some waiting in the wings.
Very interesting stuff.
Excellent reference. CS was like a mini-ZH of his era,(minus the comments interaction) constantly churning the pool of covered up red herrings, oxygenating the dark waters of the financial cesspool to the discomfiture of everyone who matters. His death of liver cancer via injection(or possibly toothpaste-he mentioned that modus operandi as well) was one more example of what happens when a journalist gets too close to the truth.
In what was perhaps an effort at self-preservation, he began to silence himself on what he knew to be the roots of the Germanic "Black DVD" conspiracy. In some of his earlier writings he nails the Frankist-Sabbattean nexus of Satanists which morphed into the Black Ops bloated Secret Government Dulles et al set up with the help of the imported zionist "scientists" whose efforts at setting up a true Hell on Earth were critical to the task at hand - the destruction of our civilization. His voice is sorely missed.
The Germans, as with 'the Jews," will be the fall guys for the next turn of events, when systematic fraud is institutionalized and NOBODY gets out whole except the usual suspects.
Mish has something here (much more at the link):
The Telegraph notes Germany's secret plans to derail a British referendum on the EU
http://globaleconomicanalysis.blogspot.com/2011/11/will-cameron-sell-uk-down-river-for-box.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+MishsGlobalEconomicTrendAnalysis+%28Mish%27s+Global+Economic+Trend+Analysis%29
oh my God now Mish reads again from the Guardian
just look beyond the propaganda:
- the "inner core" wants a Tobin Tax
- the City of London will do anything to prevent this
- the gov of the UK wants to have a say in EUR matters and wish for EuroBonds and EuroTaxes (only in the EZ, of course)
- nobody in the EZ wants EuroBonds and EuroTaxes
the Guardian just mixes this up and serves a wonderful cocktail of half-truths and innuendos (secret memo my ass, it was quite public, just for starters) with the usual "oh my God all our historic enemies are still there" hallmark talk
- meanwhile, the fight goes on about scaring or reassuring US Money Market Funds
and just have a look at the comments section of this
"Lord Heseltine says Britain will have to join the Euro"
http://www.telegraph.co.uk/news/worldnews/europe/eu/8902450/Britain-will...
as sad it makes me: small currencies might have a hard time in this hot-money-high-speculative environment
what they couldn't get with the gun in the forties they get with the electronic fountain pen tomorrow.
you forget today that the US of A has the gun AND the electronic fountain pen...and THAT's why we are in this global mess.
Human nature is very volatile but predictable in the end, like it is said : absolute power breeds absolute corruption.
I'd go LONG on HUBRIS. But I'm no betting man. Never would run a HF, prefer zero hedging any day on things of importance.
One last piece of the puzzle for you Bruce.
There is a picture of a note written by Berceloni written on the 8th in the Italian Parliment.
http://screwtapefiles.blogspot.com/2011/11/italian-pm-ready-to-resign.html
Roughly translated ... "I understand, I resign"
It appears to be a bloodless coup by the economic hitmen.