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Confidence and the G20
The much-touted G20 meeting was a dud. As near as I can tell, nothing was accomplished.
There was some movement to enlarge the IMF. I think this is a clear sign that the deciders at Cannes have come to realize that their own central banks are not up to the tasks at hand. The thinking is that the IMF will become a lender of last resort for troubled countries in Europe.
There is not a chance in hell for this to work. The IMF has neither the resources nor the (true) backing of the member countries to put a dent into the financial disaster that is rapidly unfolding.
I got a laugh at one development. The G20 confirmed that the head of the Swiss National Bank, Philipp Hildebrand, has been appointed as the Vice-Chairman of the Financial Stability Board (FSB).
Separately, the communique had this to say about currency manipulation:
We affirm our commitment to refrain from competitive devaluation of currencies.
Our actions will help address the challenges created by developments in global liquidity and capital flows volatility, thus facilitating further progress on exchange rate reforms and reducing excessive accumulation of reserves.
What a joke. Hildebrand engineered the biggest currency devaluation of 2011! He did it with the sole objective of maintaining the Swiss competitive position within the EU. In the process, the SNB accumulated $200b of reserves. The SNB has done exactly what the G20 says should not be happening, yet the guy who called this shot gets a nice new job as a decider at the FSB. It gets better.
Sarkozy takes swipe at “tax havens”
French President Nicolas Sarkozy has spoken out against tax havens at the conclusion of the G20 summit, calling for them to be “excluded from the international community”.
At the meeting in Cannes, Sarkozy listed 11 states, including Switzerland, which – he said - do not have any legal framework governing the exchange of tax information.
"We don’t want to have tax havens any more. Our message is very clear,” the French president said.
Well, there you have it. The G20 puts the head of the SNB in a critical position while at the same time they accuse the central bank (and the Swiss banks they regulate) of aiding tax cheats. They also condemn them as currency manipulators.
And we’re supposed to have faith that the G20 is going to safely guide us through troubled waters.
Caption:
The G20 leaders discuss the size of the IMF role in the EU bailout. Clearly, there is some disagreement:
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The above picture is worth a billion words! The Obama / Merkel negotiations with Cameron biting his nails and Sarkozy looking for a quick exit.
Really don't know what you have against flagrant super-state corruption Bruce. The way you go on and on about it any one would think it's profoundly criminal, socially corrosive and highly illegal. You should know better, shame on you.
The 100th Anniversary of the Titanic is around the corner....how coincidental:
"RMS Titanic was a passenger liner that struck an iceberg on her maiden voyage from Southampton, England, to New York City, and sank on 15 April 1912, resulting in the deaths of 1,517 people in one of the deadliest peacetime maritime disasters in history."
When in doubt, blame Bush.
Bruce is completely right here, but we should make progress even when the G-20 can't. This matters because:
1. The ECB can't sell bonds for shit. See Peter Tchir's article below.
2. Duetschland declared printing money verboten.
3. Ben von Numbnuts, who loves to print money, can't play in this sand box without doing the frog walk, which leaves:
OMFG They have to do this the old-fashioned way, by borrowing money from someone who actually has it.
Best of luck with that..., and yo mommas dress you funny;)
The caption on the picture looks like they are talking penis size.... But of WHO???? Obama has a little one, and Angie likes BIG ones??
The size of the screw they are going to shove up your children's behinds.
Obvioulsy Merkle has no children, so she wants the biggest debt screw for the next generation. The guy on the right is trying to count how many illegitimate kids he has fostered while in position of power.
Sarkozy is saying in france we ran out of screws.
Angie is asking Barry about the size of an african american penis and Obama thought she meant his brain. She overestimated and he was bragging
HA! we both had the same idea at the same time, so that NUST be what they were talking about.
As collateral for the last set of loans, the Greeks have already pledged "all assets, tangible and intangible". That's a quote directly from the document. So we'll have to stop referring to it as "Greece" pretty soon. Maybe call it "Southern Germany, the sunny mountainous part with olive trees, kinda like Bavaria with ouzo"
Up to about the 1970s, sovereign debt also included something tangible as collateral (revenues from the port, etc). Then Walt Wriston at Citi began an era where sovereign debt was just "full faith & credit" of the country. Maybe the pendulum is just swinging back. Like a big swinging d*ck!
I think the Anti-Corruption Action Plan is important, after all if we tax avoidance there would be no budget deficits and if we tax corruption there would be an enormous surplus.
it doesn't matter; only one thing counts when italy decides to mess it all up; mess is not the word i want to use
Its a good thing they don't have justify travel expenses to a productivity board. Ringling Bros. has nothing over these guys.
Today in Cannes, Nicholas Sarkozy was clearly uncomfortable as US President Obama and German Chancelor Angela Merkel estimated the size of the French President's penis.
Come on, they both know the size of Sarko's penis. Both have had a little Sarko
I heard that GS was going to buy Switzerland ...
Puppets and crooks with no real power.
I am pretty sure that is just Angie and Barry comparing sizes of their genetalia.
Re: "Angie" Worth listening to at least the first couple of verses.
(And even more appropriate given your name, Lennon Hendrix)
Should add that while Barry and Angie were doing the comparison, Sarkozy poke his nose in.
What did we learn from the G20?
The US doesn't want a strong dollar, it would kill the stock market, and the stock market is the only talking point Obama and Bernanke have left.
I completely agree, all Obummer has to point to and say.... "see the economy is great because the stock market is up 100% since I took office, I am the greatest puppet of all time. re elect me and then the fun will really begin...."
It's not about having a "strong" Dollar, it's about remaining unchallenged as the global reserve currency no matter how much printing the Fed does.
In essence, what the Eurozone is trying to do is persuade the surplus nations (ex Germany) to switch a proportion of reserves from Dollars to Euros. Germany thinks that by demonstrating that the Euro is a hard currency, this makes it more attractive. Unfortunately, this policy exposes the insolvency of the banks and sovereigns unless the outside support comes in quickly. Therefore the outside world can use excuses (and good ones) such as the EFSF structure is too vague, Italy too volatile, etc to drag their feet, thus makes the situation worse.
And the fact remains - if the wealth holders in Europe are not willing to invest in the EFSF, why should the SWFs?
The dollar will be the reserve currenci euntil the Global Fiat Ponzi collapses. The DXY could be at 66 and the dollar will still be the reserve. How much pressure would the DXY need to be under to have other countries coordinatedly question the dollar's hedgemony? DXY 60, and then we will start talking.
The Reserve status has nothing to do with worth. The dollar is worthless now, yet it remains. It has to do with power, and somehow still, the US is the dominant global power. The US is losing its grasp, but slowly.
Reserve Currency...2 words: Aircraft Carriers
My 2 werdz: "Fusion bombs!"
This.
In so many discussions of currency valuations, military strength is left out of the equation.
Why did we invade Iraq? The dollar. (Hussein had announced his intent to sell oil for Euros)
Why did we invade Libya? The dollar. (Quadaffi had announced the African Dinar)
Military might preserves the dollar-basis of global oil markets, and thereby preserves demand for dollars no matter how much they are debased.
But at the root of the dollar's somewhat miraculous tenacity (because by all rights it should be worthless) is the military -- and the military's objective is the preservation of dollar hegemony in oil markets.
well said +++
Fair enough, but the Military Industrial Complex is fighting for the dollar and oil at the same time. Oil production is already on the downside, and one of these days there will not be enough oil to keep the dollar up, and then the Complex goes kaput.
Bruce where's the classic graffiti at the end? Why substitute with a pane from a comic book?
Look again at the picture and caption, its hysterical!
Differing opinions on the definition of six inches?
Right on, Bruce. Everyone loves the Swiss;)
All Men Shall Be Brothers...
Considering that Obama used to organize community picnics before entering the whitehouse and has absolutely no experience in anything to do with international finance, who the fuck would listen to him, shut your fucking pie hole you puppet and stay out of EU affairs because they are laughing at you and not with you considering the current state of US finances!
Contradictions fer sure. Just reminding the Swiss that "no EU=no Switzerland" to me. They still haven't "dealt" with Greece...and amazingly now "Greece is now dealing with them." Ooooops! Clearly the new troika is exactly as you show it: Germany, France and the US. US taxpayer backstopping the ESF? That would be interesting.
So much going on behind the scenes these days, so much lying in plain sight. Not unexpected Bruce, governments are one trick ponies.
Back to basics people. Trust what you see and touch, period. Just wait until the international corporations are mining the earth under your property without your permission or your knowledge, sucking all the fresh water sources down to nothing in order to keep expanding no matter what. Gotta keep the status quo and the infinite growth model working no matter what. Whatever, another work day for us, take care of your good employees, good friends, and good neighbors. Soon enough you will need each other more than ever.
If your thumb was a dick, how far away would you want it?
Depends on who was suckin' it.
Sounds like the "tax the rich" who will not pass any tax law without a tax code that can exclude them.
I think that the only way out is for China, Russia, and one other solvent state to step in with an iron hand to put the house in order.
But foolish hope it is. This appears to be tbts----- too big to save. I did notice that BofA had to retract the $5 charge. Big win for citizens, now if they could work on the billions on the cooked books and the trillions in bogus bets.
Sarkozy - "All your Monies Are Belong To Us"
I don't know... It's like merkel and obumbo are checking out and sizing out his dick
All the military powers are well aware that an iron hand is required, otherwise they would have done something about the numerous human rights violations around the world and in their own back yards. America can easily be tamed to serve the central planners again through another civil war (worked once already) or a draft to remove the unproductive youth as protests heat up (also worked before). The latter was great cover for the full implementation of a completely fiat currency in the 60's and early 70's. Nothing has changed in 30+ years and generations have grown weak and quite comfortable with their slavery. Good luck. Got physical assets of survival value and like-minded neighbors? You better.
Taxes will become more and more irrelevant as more and more money evaporates OR becomes useless (precisely why the "flation" debate is pointless). Sort of like every country around the world wanting to be a manufacturer when all the customers are broke, good luck with that.