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Philipp Bagus On the LTRO and True Role of Central Banks
As you know, back in December the ECB conducted a 3 year LTRO operation that drew far more interest than anticipated. The operation saw banks draw a Gross (net liquidity injection was ~210 Billion Euros) ~490 Billion Euros from the ECB (and not according to plan, turned around and parked it back at the ECB instead of buying up shitty bonds).
Bagus on the LTRO:
"If you're a Greek government you don't tax you just spend, you pay with writing paper government bonds, you give it to the bank, the bank gives you money, the bank takes the government bond goes through the ECB as collateral and receives euro's and can expand the money supply"
On the true purpose of central banks:
"You could easily solve this moral hazard by saying ok the ECB does not accept government bonds as collateral anymore. But then of course all governments would collapse...You have to think that for central banks, one of the main purposes is to finance governments, so if you stop this financing they go bankrupt immediately"
On Euro bonds, or rather, the EFSF and the blatant redistribution of wealth:
"We had this from the very beginning of the euro because there was the implicit guarantee for all government debts of the eurozone, all could issue debts that could be supported by the ecb and the stronger governments. So now we get this redistribution that existed from the beginning of the eurozone that gets more and more explicit. The euro bond would be the most obvious symbol of this redistribution"
And for late night laughs, the ECB's balance sheet growth -- ze debt is not a problem.
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Anyone know why the ECB's balance sheet was expanding so fast pre 2008?
The purpose of the "privately owned" Central Banks is for the continued survival and growth of the Central Bank.
Bail out the owners and put the cost on the taxpayers. Maintain the petrodollar at all costs. Continue massive payoffs (campaign donations) to politicians for favorable legislation and settlements. Create a new reality with the owned MSM for the sheep so they dont know they are walking to the slaughter (a nice slowly curving path with no bright lights or shadows and a conveyor that gently brings them up, just before the stunner hits em. TY Temple Grandin).
The twin mandates are a fraud and only used to support the above...
If the Europeans wait until after Greece defaults (??) to introduce a euro-bond it will be too late.
Philipp Bagus is absolutely correct but leaves out the part where central banking moral hazard exists to finance industrial enterprises that cannot pay their own way. Otherwise there would be no need for the debts in the first place.
The Germans and others have number fright.
There is no other way to sustain the status quo without the use of more debt, of even bigger numbers and yet larger numbers still. What matters is the costs associated with the larger numbers but these costs multiply when the lending is slowed for any reason. Right now the EU is facing costs it would ordinarily not face with a hundred times as much debt or a thousand.
The EU believes the only costs that matter are the Greeks and the other poor countries but the German debt costs are multiplying like rabbits, too. What the Deutschlander doesn't understand is that German industries cannot pay Greek finance debts. These industries cannot pay for themselves ...
... they all need more and more debt to stay alive. All are going to learn the hard way.
Remember the good old days? When it was just lawyers that were despised?
Dog
ze debt is not ze problem, but ze price stabilllity...........
Did I tell you the one about my old grand dad plowing his corn & cotton fields back in the 20's with a mule to feed his family? And he only had one good hand. Now he was a real man. These bankers aren't men. They're useless asshole parasites.
Did he have one foot too?
But I do agree with the stuffs about bankers.
And one testicle. And you're just jealous, start a bank.
OMG Europe is so fucked.
And the Rothschilds smile :0)
Life is suppossed to be full of ups and downs. The Rotheschildes live like walking dead. They are cursed to control the world's money. What a boring existence.
I've seen research showing the rich smile a lot less than the non-rich.
It's really simple. Greece is defaulting. Outside bond issues are prohibited in New Issues. The ECB has a huge balance sheet, and the melt down in spreads has begun! Per Tyler!
The key to their plan is the redistribution of wealth.
Rob from the tax payers and give to the none tax payers - and give it tax free.
The redistribution of wealth is UPWARDS.
Militarism and weapons profiteering, bankster handouts, and the enabling of health care fraud, drug prohibition "wars", and other forms of racketeering are the means to achieve UPWARD distribution of wealth.
Only the gullible believe the elite's divide-and-conquer propaganda that the basic problem is that workers and the poor are getting "too much".
Don't leave out the graft and skimming's... the taking of that part of the wealth as a commission to the government, bankers and all their support networks that feeds their expansion and enables the debt to grow to unimaginable and unsustainable size.
Alexander Hamilton on a National Bank
comment was directed at Hamilton's idea for a central bank, mercantilism and government control of industry. True, Jefferson wanted an agrarian society, but he advocated minimal forms of economic government coercion. He did think agrarian life tended to be more moral, love-filled and simple(most people? who know farmers would tend to agree). Jefferson's model would have allowed capitalism which would include whatever the market demanded
NOW WE HAVE THE TRONOCRATS WHO WILL DESTROY ALL
http://www.youtube.com/watch?v=Oy7IFSS-F0I&feature=related
AND NOT ON BEHALF OF THE PEOPLE. OUR FOUNDING FATHERS MUST BE ROLLING OVER IN THEIR GRAVES . THE BEARDED WONDER/PROF B ... ALONG WITH THE BOE, BOJ, CANADA, ECB et-al AND LEAST WE FORGET MARIO (an antitrust economist)... ALL OF WHO COULD TAKE SOME ADVICE FROM THIS SIMPLE "SHORT" CLIP.
Jekyll Island redux.
It always starts with Europe.
no, it does not. The ECB is following the FED.
I know that this is anathema for most readers of ZH, but the purpose of the ECB is to soften the impact of the FED/Global Banking Cartel/USD reserve currency power and problems on the countries of the eurozone.
Without this damned LTRO we would have a further destabilization of the eurozone, the bonds market would be even more in trouble and so on. Stabeeleeetee is about getting there without shocks.
Go back to the Nixon Shock (it's our currency and your problem). Remember the FX speculations on the Deutsche Mark? It made european trade and production a hellhole.
And no, a gold-backed EUR is not possible as long as King Dollar rules.