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Germany Won’t Go “All In” on the Euro
Let’s consider the belief that Germany and the ECB might solve Europe’s debt problems.
For starters, this argument is absurd simply on a common-sense basis. Greece first asked for a bailout in June 2010. It’s since asked for an extension on this bailout AND a second bailout… all within a 14-month period. The fact this has occurred in such a brief period of time should make it clear how impotent the ECB (and ultimately Germany) is at fixing the situation.
Indeed, Europe’s debt contagion has now spread from Greece and Portugal to Spain and Italy: countries far too large for the ECB to bail out (by the way, the second Greek bailout hasn’t even been finalized yet so that potential crisis is still on the table).
As I’ve noted in previous issues, any and all EU bailouts and interventions hinge on Germany, the largest, most solvent economy in the EU. No German support means no bailout, and no EU (in its current form).
As I’ve noted in previous issues, Germany has had enough of the bailout nonsense. The following stories confirm this:
Investor confidence sags in Germany as ZEW index falls to minus 37.6
German investor confidence fell sharply in August on fears about sagging growth in Europe’s biggest economy, the region’s government debt crisis and the possibility of another recession in the United States.
The ZEW institute said Tuesday that its index of investor confidence dropped to minus 37.6, down 22.5 points from the month before.
The institute said the drop was due to fears about a double-dip recession in the United States and uncertainty about the global economy, coupled with Germany’s disappointing second-quarter growth of 0.1 percent reported last week.
Bundesbank questions legality of EU bail-outs
Germany's Bundesbank has issued a blistering critique of EU bail-out policies, warning that the eurozone is drifting towards a debt union without "democratic legitimacy" or treaty backing.
"The latest agreements mean that far-reaching extra risks will be shifted to those countries providing help and to their taxpayers, and entail a large step towards a pooling of risks from particular EMU states with unsound public finances," said the bank's August report.
It said an EU summit deal in late July threatens the principle that elected parliaments should control budgets. The Bundesbank said the scheme leaves creditor states with escalating "risks and burdens" yet no means of enforcing fiscal discipline to make this workable.
With the German economy slowing, the underlying tensions between the ECB and Germany are intensifying. And with Germany’s next round of elections due in late September, the chances of Germany moving to backstop any additional bailouts are diminishing by the day.
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As the majority of the german public has not yet even began to understand what is being forced upon them by their traitorous politicians, above all by that abomination of a chancelloress (together with this bust french-hungarian cockalorum) they will surely freak out completely when they realize what scheme is set up for them to once and for all crush their already didminished wealth. I would suggest that politicians and banksters alike realize what "Furor Teutonicus" signifies in the true sense of the phrase. It may seem, look as if, perhaps, that my fellow countrymen and women have gotten domesticised since the last great war, alass i fear that many, abroad and inside the country, would find themselves heavily surprised how brutally decisive those lame germans can get if it gets ugly (that is, if it hits a certain rather sensitive anger point inside the germans' wallet) here due to bailout-mania and euro-fanatism.
Germany should demand her gold repatriated from the vaults of the allied victorious powers' banksters cartel, and she should demand collateral for each and every bailout she is willing to grant in gold from exact these nations who so self-evidently "ask" for her support and in the same instant dare to loudly howl the always pleasing Nazi song against her to make her do as they please. It is an outrage to be so blatantly confronted with that boring old song again and again, one does get sick of everlasting guilt and this creates grave, silent anger, which is not what one would wish for a peaceful future Europe in a rapidly changing world.
If it is that Germany is the main power on the continent she should strongly act accordingly, without falling into old habits, and without blindly stepping into a certain well-known kind of traps.
There is some hope: As the German President today publicly questioned the legal standing of the bailout plans regarding to the german constitution one could, given the history and tradition of such speeches by german presidents, interprete this as a clear warning sign to the politicians that he is willing to withhold his signature regarding legislative plans to get these european bailout measures (and structures) into law in September. This then would imply that the whole process would have to be taken from the federal parliament to the federal constitutional court which in the end could not, by even the most liberal of constitutional interpretations, decide in favour of the current european bailout plans, given the federal judges have not all and everyone of them then been completely and utterly bribed by the eurocrats and banksters to vote in their interest.
The end game has already been made public - to the pigs that want to keep borrowing euros & live beyone their means (i.e. keep spending more than they produce) and hope someone is dumb enough to keep bailing them out, you'll need to put up some of your physical gold to get access to loans at a reasonable rate...or you can quit the euro, go back to your devalued old currency and watch as your standard of living is crushed, while your corupt politicians screw you even worse.
Germany is going to (en)force some market/financial discipline on their neighbours, who will scream and cry & whine bloody murder, but the alternative, (going back to drachmas or liras will be even more painful for them).
Reality check is coming - not going to be pretty, in fact it will be downright ugly, like pigs wallowing in mud, but if they want to avoid 3rd world status, they'll make sure they can repay what they borrow rather than lose their gold...
Simple choice, you decide.
DM uber alles, und Bundesbank,
euro is kaput.
Why not? What are they Fukking thinking? Like they should commit economoic suicide out of "Guilt"? If the remaining committed productive workers in Germany give a S#hi, they should opt of the Eurabia project being foisted on them.
It is YOUR country. Not some Islamic SHIT.
Germany will go ALL IN the Euro or it will go ALL OUT of the Euro. Take a pick. But if they leave, we'll have to do an over/under to see how long until the next Euro-war starts.
uhm the next elections (state) are 9/4 and 9/18, thats not exactly end of september.
i agree with the rest of the article though.
For someone polishing a chair with his buttocks somehwere on the USA East Coast, the author professes to have profound knowledge of Europe and especially Germany. This is fluff which you can read anywhere else in the MSM. Please spare us this bullshit and your free newsletters.
You're a fucking moron. Spare us your stupidity
You obviously haven't read the Citibank report. All is well in the world of the ECB.
Fear and Panic make poor counsellors - WB Aug 12 2011.pdf (224Ko)Fears Of Eurozone Demise Have Been Greatly Exaggerated - Citigroup http://www.wealthbriefing.com/html/css/images/dotted-border.jpg); background-attachment: initial; background-origin: initial; background-clip: initial; background-color: transparent; overflow-x: hidden; overflow-y: hidden; background-position: 0% 100%; background-repeat: no-repeat no-repeat; padding: 0px;">
Tom Burroughes
Group Editor in London
19 August 2011
News Analysis
Editor’s note: As fears about the eurozone continue, this publication is interested in different viewpoints, including contrarian ones. An example below is from Citigroup chief economist Willem Buiter, who argues that the EU has more banking and government firepower to prevent default problems than some commentators and investors imagine. As usual, this publication does not necessarily concur with the views expressed, but lays them out as part of an ongoing debate.
A former interest rate setter for the Bank of England and now economist at Citigroup claims fears about the future of the eurozone are overblown and that the single European currency will emerge stronger from recent debt wrangles.
In a note entitled Europe: Fear and Panic Make Poor Counsellors, Willem Buiter writes: “Europe never does things neatly, it seldom gets ahead of the curve and often only does the right thing when all else has been tried and failed. But it has considerable skills at lurching from crisis to crisis. This sovereign and banking crisis is likely to result in a stronger EU and euro area.”
Buiter admits that he is taking a “contrarian” view in being optimistic about the ability of EU policymakers, including the European Central Bank, to fix the debt woes of countries such as Greece, Italy and Spain. These worries, added to debt wrangles in the US, have pummelled global equity and debt markets and propelled gold to record highs above $1,800, although the metal has retreated in recent days.
“The EU and the euro area have the means to prevent disorderly sovereign defaults even when the sovereigns are most likely insolvent (Greece, Ireland and Portugal) and, in the case of Greece, already engaged in a process that will lead to a selective sovereign default – probably within a month,” Buiter, chief economist at Citigroup, said. He was a member of the BoE’s Monetary Policy Committee from 1997 to 2000.
“The EU and the euro area also have the means to prevent fundamentally solvent sovereigns (including Spain and Italy) from being pushed into unwarranted defaults through a fear-driven denial of market access – when the fear of default bootstraps itself into an actual default, through soaring funding rates or complete loss of market access… Fears of a downgrade from AAA levels, something that, since the US downgrade, is causing problems especially for France, are a less important issue.
Governments can dissolve quite rapidly over here, there could be an impasse and snap elections held in 90 days.
Like this:
http://www.nytimes.com/2008/07/07/world/europe/07iht-austria.4.14302405....
Nobody wants to be part of the Euro right now and the fan blades are not even dusty yet. I can't imagine that the mythical "political will" could last beyond one election cycle. Or there could be war... rigid ideologies have done that to Europe before.
Save YOUR FREE REPORTS that nobody cares about. Worst case we can use them for tinder.
When are the general elections in Germany : 2012-09-04 iirc...? So the Euro has 1 year and a few days left to live. Go for gold!
Wrong: No matter which major party is in power will keep the Euro.
I can't understand why the Hard Working, disciplined Germans refuse to cut their life style, pensions, etc. to Bail out the Sunny Easy-Going Olive Nations.....odd.
Hit the reset button on this massive steaming pile of shit we call the financial "markets." Totally rigged, and supported by trillions in shit paper and quadrilions in garbage derivatives that no counterparty can ever pay when it implodes. Let. It. Fail.
Bail out of the Euro and save yourselves while you still can. It's like the parents of a junkie, the time comes when you have to kick them out to fend for themselves. Stop being enablers.
Good for Germany.