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Guest Post: Draghi's Coup D'Etat And Why OMT Is Illegal

Tyler Durden's picture





 

Submitted by Blankfiend of Fibs And Waves blog,

According to Mario Draghi, OMT, or Outright Monetary Transactions, is a program of conditional bond buying targeted at specific countries to restore the perception of the euro's irreversibility and stability, and repair a broken monetary policy transmission mechanism.  Once launched, OMT has no ex ante limits, it is within the ECB's price stability mandate, and it can be halted or interrupted based on achievement of its objectives or non-compliance with conditions imposed upon the targeted national government.

I would posit that OMT is much more than what the party line states.  Here are some alternative interpretations for your consideration.  I challenge you to refute the logic of any of them.

OMT is a Eurobond equivalent, targeted toward specific countries.  Given that ECB holdings are joint and several backed by all of the National Central banks (NCB's) that make up the European System of Central Banks (ESCB), any losses on these bond purchases would be distributed among the NCB's according to their capital key.  OMT would be a peculiar type of Eurobond, with some parallels to the discard red vs. blue Eurobond schema.  Instead of being differentiated by levels of debt-to-GDP (greater or less than 60%), these bonds would be differentiated by country of issue.  For example, if Spain enters this program, its bonds would now have the backing of the ECB, while Italy's would not.  Now, the red vs. blue idea was discarded precisely because it would have established a market preference for the blue bonds (joint and severally backed Eurobonds) versus the red bonds, which would have only had the backing of the issuing sovereign.  Is it so difficult to imagine that the market would quickly develop a preference for the bonds of countries on OMT life support, to the detriment of those NOT on it?

OMT is a banking license for the ESM.  Once the ESM buys the debt of a target country on the primary market, the ECB will follow with potentially unlimited purchases on the secondary market.  This obviously allows the resources of the ESM to be greatly extended without a formal banking license or leverage scheme.  At the same time, it completely bypasses any safeguards countries may think they have in place to limit their bailout related losses.  This is, of course, due to the joint and several liabilities of the NCB's that comprise the ESCB.  Ironically, an official banking license for the ESM has been declared clearly in violation of Article 123(1) of the TFEU by no less than the ECB itself.  The OMT is an obvious scheme to bypass that "technical inconvenience."

OMT is a sham.  While I have no doubt that our beloved Italian central banker will be more than willing to purchase the bonds of program countries, I do not believe for one minute that he would have the resolve to either permanently halt or reverse those purchases if a large target country backslides on its commitments.  I am sure that the markets - and the beneficiary national governments - recognize this as an empty threat as well.  If Draghi carried through on his threat in any meaningful way, he would be abandoning the goals of monetary transmission and euro irreversibility he claims to be striving for.  This is particularly true for big countries like Spain and Italy, sort of like mutually assured destruction.  Once countries like this are on the OMT methadone program, there will be no discharging them for abuse.

OMT is fiscal policy by Central Bank fiat.  Eurobonds, ESM banking licenses, and ESM leverage schemes have all been previously rejected by various European political leaders, most notably Angela Merkel and the Finns, but also Nicholas Sarkozy.  OMT is a clever way to skirt all of those objections and concerns in order to restore confidence in sovereign European debt markets.  At the same time, it is a backdoor method of committing national fiscal authorities to backstopping potential extra-national losses far in excess of what those fiscal authorities were ever willing to commit their taxpayers.  OMT is a full-scale abandonment of the concept that a supra-national central bank should not be able to undertake measures which could subsequently force the hand of national fiscal authorities.  OMT embarks us upon the treacherous path of fiscal policy by unelected, unaccountable central bank bureaucrats.

OMT is a Credit Facility.  Let's see....  We have an unlimited program specifically designed to support the sovereign debt of targeted countries.  We have implausible revocability, dubious terms for enforceability, open-endedness regarding both time and quantity of support provided, and, supposedly, no recourse by the lender.  Furthermore, the provider of this credit is specifically willing to buy even if no one else will.  Admittedly, the credit provider will not buy on the primary market.  However, when you examine the TFEU, there are two distinct restrictions in this regard.  The commonly cited one obviously forbids the ECB from primary market sovereign debt purchases.  But the one that Draghi wants us to ignore forbids ECB credit facilities in favor of national governments.  "In favor of" is clearly broader in scope than the primary market restriction.

OMT is ILLEGAL.  Here I am beating a dead horse, as I have made this argument several times before.  But, one more time for effect:

 
OMT IS ILLEGAL AS IT VIOLATES ARTICLE 123 (1) OF THE TFEU, WHICH CLEARLY PROHIBITS THE ECB FROM ESTABLISHING A "CREDIT FACILITY ... IN FAVOR OF NATIONAL GOVERNMENTS."
 


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Sat, 09/22/2012 - 20:20 | Link to Comment wee-weed up
wee-weed up's picture

OMT = OMG

Sat, 09/22/2012 - 22:09 | Link to Comment Precious
Precious's picture

MERS was illegal too.  That didn't stop any bankers.

Since when did the law matter?  Pre Enron?

Bubbles are the general absolution of the youtopia millennium. 

Sun, 09/23/2012 - 09:09 | Link to Comment GetZeeGold
GetZeeGold's picture

 

 

Pre Enron?

 

Smartest cats in the room......until they died.

 

Sat, 09/22/2012 - 23:04 | Link to Comment whatsinaname
whatsinaname's picture

Can anybody explain this ? Beats me..  When the US Fed prints money the USD weakens, when the BOJ prints money to buy bonds the JPY weakens (atleast temporarily) and in the past used to be a lot weaker until the US QE started BUT when the ECB prints to buy bonds the Euro actually gets stronger. Why is that ? Should the Euro also not get weaker as a consequence ?

Sat, 09/22/2012 - 23:41 | Link to Comment Solarman
Solarman's picture

I think it is survival relief, plus the Europe is probably destroying more debt than is being recreated.

Sun, 09/23/2012 - 07:31 | Link to Comment Haager
Haager's picture

Some more exceptions: USD rose after Ben's announcement - it was probably too much priced in at that time. Makes me wonder what they've expected to happen?

EUR to become stronger not only against USD but against almost any other currency available after Draghi's remarks can be explained by the gain in confidence. A lot did expect the EUR to implode quite soon and a lot did move their bets on the now somewhat stronger horse. Kronors, AUD, NZD dropped remarkably after the announcement.

YEN in fact had remarkable gains against the USD after the BOJ-announcements, which can only be explained by Japanese loyalty to own Yen again whilst dropping foreign currencies.

Sun, 09/23/2012 - 00:07 | Link to Comment Nobody For President
Nobody For President's picture

OMT = One More Time

Sat, 09/22/2012 - 20:22 | Link to Comment Timmay
Timmay's picture

It's only illegal if "they" say it is....

Sat, 09/22/2012 - 21:01 | Link to Comment ParkAveFlasher
ParkAveFlasher's picture

"How come no one's in jail for wrecking the economy? It wasn't against the law.” -- Bart Chilton

http://www.kitco.com/reports/KitcoNews20120921DeC_CFTC_update.html

Sun, 09/23/2012 - 10:37 | Link to Comment Totentänzerlied
Totentänzerlied's picture

Bingo. How conveeeeeeeenient!

Mon, 09/24/2012 - 01:13 | Link to Comment All Risk No Reward
All Risk No Reward's picture

It absolutely was illegal.

Search "Federal Reserve Act Section 2A".

Look at this chart and tell us claim that "monetary and credit aggregates are commensurate with the potential to increase production":

Try "exponential to."

As for "stable prices?"  That was a crime, too.  Inflation at any rate is not "stable prices," and it doesn't matter how Orwellian the Fed gets.  Oligarch "laws" have no penalties, so they should be viewed as propaganda maquerading as laws."

But let's go tot basics.

Our debt based monetary system is a fradu - it is Debt Money Tyranny and it is run by criminals Debt Money Tyrants

Debt Money Tyranny cash flow chart PDF

http://www.keepandshare.com/doc/4638354/debtmoneytyranny-4-pdf-110k?tr=77

Spread the word...

Sat, 09/22/2012 - 20:22 | Link to Comment AUD
AUD's picture

I refute "capital key". There is no capital, so losses cannot be distributed. You're not seeing the forest for the trees. It isn't OMT that's the sham, it's the entire 'monetary' system.

Sun, 09/23/2012 - 01:52 | Link to Comment Radical Marijuana
Radical Marijuana's picture

YES!!!

It is the basic privatization of the ability to make money out of nothing as a debt that is THE SHAM!!! All the rest were just frills added to that skirt. And ALL of "economics" is now hiding behind that skirt.

The whole world has a fundamentally fraudulent financial accounting system, and it is automatically becoming more and more psychotic.  It was REALLY based on the sovereign powers to tax, and define legal tender, and back that up with violence. However, it has been able to baffle gab and bullshit its way out of that REALITY. Thereby, it became a money/murder system where everything was displaced, so that the money is based on NOTHING, while the supreme lies about how the murders were done to back that up were buried in the subconsciousness.

Of course, on another level, the even GREATER SHAM is the idea that somehow money could ever be based on anything but murder. Due to the total failure and refusal to face that FACT, civilization has been driven to split apart.

There is a very tiny group that effectively controls the government, through funding the political processes, and through professional brainwashing via the mass media that that small group dominated. That tiny group has practical IMPUNITY to murder and to defraud, without consequences. They are effectively the new royalty, to whom the rule of law does NOT apply, because they effectively control the governments, to make sure there are no investigations or prosecutions of their crimes. Metaphorically, those are the vicious wolves.

Then there is a very large group, that are bound by the law, and can not murder or defraud with impunity. Metaphorically, those are the incompetent sheep. Thus, the balancing of the social rates of robbery has broken down, and has become a runaway insanity, with an apparently breakaway part of civilization run by the vicious wolves, that are able to get away with more and more and more frauds and murders of the sheep.

THE SHAM IS PRIVATIZED FIAT MONEY.

The reason that exists and is still triumphant is that the applications of the methods of organized crime were able to eventually capture the powers of sovereign governments, and thereby, to practically more than 99% privatize those powers! Thus, the power to rob and kill, that is theoretically the channelling of the will of We the People, has effectively been taken over by a tiny group, who have gotten to the point where they OWN the rule of law, as a weapon to be used against everyone else, except themselves.

Since it is socially taboo to point out the basic facts that money is based on murder, the reality of the money system has been able to become a runaway fraud, without any checks or balances left to serve the "public good." The supreme paradoxes of triumphant militarism, or the principles of organized crime, have been able to boost themselves over the dark side of the moon, where the vast majority of incompetent sheep can not see that, and where the vicious wolves have also contracted mass sheep diseases.

There are almost ZERO realistic chances that any of that kind of radical truth will be admitted into public debates, in any significant way in the foreseeable future. Instead, one expects the breakaway part of civilization, that has IMPUNITY TO MURDER AND DEFRAUD, to escalate their mass murder of the sheep. Since the sheep are being fleeced and fleeced, the end game is far more probably going to be most of them being slaughtered, rather than any other outcome. That is especially true since almost all the opposition is controlled to keep on spouting the same old-fashioned bullshit "solutions" ... without the slightest shred of saner scientific understanding.

Sun, 09/23/2012 - 07:43 | Link to Comment Multi
Multi's picture

Not quite there. In general you get the point but you're failing in a detail.

The ability to print money IS NOT PRIVATIZED. It is the fundamental pillar of any state. Yes, you have so-called private individuals taking advantage of this public system feature, but that doesn't transform its public essence in a private one. As much as he wishes Mr. Banker couldn't be forcing us to transfer wealth into determinate fiat money system without the state force support.

One private form of money printing would be the state stealing, sorry, taxing ONLY IN GOLD and ZERO-NONE-NADA LEGAL TENDER LAWS.

So Bank of America wants to print the BoA Dollar...   sweet. You are FREE to accept them or reject them.

 

Tue, 09/25/2012 - 02:59 | Link to Comment Radical Marijuana
Radical Marijuana's picture

It is my understanding the the FED is a privately owned corporation, which can not be controlled by the Congress, unless the Congress were to change the laws ... but since the FED already controls the money supply, and the corporations that grew up around the banks dominate the funding of politics, and the flow of information to voters, it is NOW practically impossible for anyone operating within those established systems to change them. That is especially true because the banksters are able to covertly arrange to assassinate any of the politicians who become the people's champions for real change ...

Meanwhile, the best professional liars and immaculate hypocrites can easily highjack the people's desire for "change" in order to negate that desire. Within the establish systems, there are NO real choices, as the late George Carlin so eloquently stated.

The notion of gold based money is related to the conservation of matter, which relates to the conservation of energy. Since we are not aware of any human beings who can actually make energy or matter out of nothing, nor send it to nothing, we believe that there would be a ring of truth in the gold money, that would stop the runaway triumphant fraud of fiat money. However, I always then say one should expand one's understanding of energy laws, and general systems theory, to embrace a bigger overall view of money ... I.e., I am proposing an expanded truth standard in money. However, that necessarily has to deal with the limits to measurement, which exist IN PRINCIPLE, and which then requires that everything we "know" MUST be some relative lie.

Yada, yada, yada ...

Mon, 09/24/2012 - 03:44 | Link to Comment livemike
livemike's picture

Of course money could be based on something other than murder, all money was orginally.  Money is simply the good that was most tradable, which gradually grew to be valued as a means or trade rather than primarily for it's intrinsic properties.  It is only fiat money that is based on murder.  Commodity money doesn't need anyone to murder or threaten to murder to retain it's value, fiat money does. 

  Whether fiat money is privatised (it isn't) or not is not the problem.  The problem is that whoever has the ability to simply print money AND FORCE US TO USE IT AS MONEY can steal infinite amounts from us.  This has ALWAYS lead to inflation, collapse and ruin, and not "privatising" the process doesn't slow it down.  The problem is not that mafia like people took over the state, it's that the state is inherently mafia-like, and therefore anyone taking it over is going to be mafia-like.   Pretend all you want that it will be better when Don Vito takes over from Don Giovanni, but it won't.

Mon, 09/24/2012 - 03:44 | Link to Comment livemike
livemike's picture

Of course money could be based on something other than murder, all money was orginally.  Money is simply the good that was most tradable, which gradually grew to be valued as a means or trade rather than primarily for it's intrinsic properties.  It is only fiat money that is based on murder.  Commodity money doesn't need anyone to murder or threaten to murder to retain it's value, fiat money does. 

  Whether fiat money is privatised (it isn't) or not is not the problem.  The problem is that whoever has the ability to simply print money AND FORCE US TO USE IT AS MONEY can steal infinite amounts from us.  This has ALWAYS lead to inflation, collapse and ruin, and not "privatising" the process doesn't slow it down.  The problem is not that mafia like people took over the state, it's that the state is inherently mafia-like, and therefore anyone taking it over is going to be mafia-like.   Pretend all you want that it will be better when Don Vito takes over from Don Giovanni, but it won't.

Mon, 09/24/2012 - 03:44 | Link to Comment livemike
livemike's picture

Of course money could be based on something other than murder, all money was orginally.  Money is simply the good that was most tradable, which gradually grew to be valued as a means or trade rather than primarily for it's intrinsic properties.  It is only fiat money that is based on murder.  Commodity money doesn't need anyone to murder or threaten to murder to retain it's value, fiat money does. 

  Whether fiat money is privatised (it isn't) or not is not the problem.  The problem is that whoever has the ability to simply print money AND FORCE US TO USE IT AS MONEY can steal infinite amounts from us.  This has ALWAYS lead to inflation, collapse and ruin, and not "privatising" the process doesn't slow it down.  The problem is not that mafia like people took over the state, it's that the state is inherently mafia-like, and therefore anyone taking it over is going to be mafia-like.   Pretend all you want that it will be better when Don Vito takes over from Don Giovanni, but it won't.

Tue, 09/25/2012 - 04:14 | Link to Comment Radical Marijuana
Radical Marijuana's picture

Hah!  Posting your reply twice does not make it any truer.

Your view of money:

Money is simply the good that was most tradable, which gradually grew to be valued as a means or trade rather than primarily for it's intrinsic properties.

My usual sing-song reply is that all voluntary contracts are inside the context of involuntary contracts. All "TRADING" exists inside the context where there could simply be robbery instead!

Your notion about "money" begs the question by PRESUMING there is some "sovereign" power, which will uphold a "rule of law" to prevent robbery, within which free trading could occur.

Otherwise, then whatever you have to trade could simply be stolen instead. The robbers would not have to provide tradable goods in return. The robbers could simply make credible threats, or kill you, and take whatever they wanted.

After you presume that there is some "sovereign rule of law" then you are trapped within the paradoxes of enforcment. In order to enforce the rule of law, the enforcer must be the best at being dishonest and backing that up with violence, against all other groups, or else, the rule of law is null and void. Hence, Plato's perpetual problem of "who will guard the guardians," and what happens when the worst criminals take control of the government, and can direct the "rule of law" for their private benefit, as a weapon against all others?  That is what is behind what happened to the USA, with the creation of the Federal Reserve Board, and is now happening more, before our very eyes, as European reality tends to transform from a bunch of separate central banks, into one Central Banking power. ... Since the rule of law depends upon the sovereign, but the sovereign is simply the one that was the best at being the biggest robber, the entire rule of law is relative and dependent upon that!

ALL PRIVATE PROPERTY ONLY EXISTS INSIDE SOME CONTEXT OF PUBLIC VIOLENCE. THAT PUBLIC VIOLENCE IS THE ONLY THING THAT MAKES PRIVATE PROPERTY BECOME "REAL."

PLEASE NOTE, that does not mean I am against the idea of "private property" ... I am just saying what it is! I AM saying that human reality is ALWAYS based on organized lies, operating organized robbery. Private property may ensure a better dynamic equilibrium of those powers, IF the ownership of property is widely distributed. However, as the owership of property becomes more and more concentrated, then private property, and the police who enforce that, more and more become the enemy of the majority of the people which do not own much.

The idea that money evolved from bartering is basically a goofy ideal, promoted by silly and superficial people, who like to believe in fairy tales, and impossible ideals, as abstract jewel-like philosophies, to be contemplated, and then WISHED would apply to the real world. On the contrary, militarism is the supreme ideology. Money must fit inside of that!

The problem is NOT the fiat part of the fiat money. The problem is the fraud aspect of the fiat money, extremely amplified by the privatization of the power to make that money out of nothing, as a debt. However, the BIGGER BASIC PROBLEM is always there!

There are chronic political problems which are INNATE and INHERENT  in the nature of life ...

However, ENOUGH, for now, of my kind of song and dance regarding this topic. There are levels after levels of understanding theormodynamics, and information theory, behind my theory of money ... way, way more than a little post like this could discuss!

Sat, 09/22/2012 - 20:26 | Link to Comment prains
prains's picture

illegal is up for interpretation

Sat, 09/22/2012 - 20:54 | Link to Comment sunny
sunny's picture

Exactly.  More to the point, so what if it's illegal, who's gonna stop them?  Lots of things are illegal and no one lifts a finger.  Fraud is illegal and how many banksters are in jail?  How many presidents since 1950 have taken the US to war without a declaration of war by the congress, that's illegal, so what.  If you are a bankster or a politiician, legal these days is what you can get away with and apparently they can all get away with whatever they wish.

sunny

Sun, 09/23/2012 - 01:08 | Link to Comment RockyRacoon
RockyRacoon's picture

Doncha figger they could put Linda Green away in prison, after a fair trial of course, for a couple of months? 

Can't we even get that much satisfaction?

Sat, 09/22/2012 - 20:28 | Link to Comment Yen Cross
Yen Cross's picture

 "OMT"? Fed Speak for "open ended", until I break down the doors of " Parliament", and Guillotine your worthless ass?

 Draghi you better run for cover! " Boy Who Cried Wolf"!

Sat, 09/22/2012 - 20:42 | Link to Comment YesWeKahn
YesWeKahn's picture

We know that this world is ran by money.

Sat, 09/22/2012 - 20:59 | Link to Comment Yen Cross
Yen Cross's picture

" Run by $"? Click the links, and learn.

Sat, 09/22/2012 - 20:44 | Link to Comment kevinearick
kevinearick's picture

the harder they try to hide the bad bank, the more obvious it becomes...but that rail in central ca...c'mon.

Sat, 09/22/2012 - 21:00 | Link to Comment Dareconomics
Dareconomics's picture

OMT is illegal. All of the countries are lying about their fiscal conditions, and that's illegal, too. Who watches the watchers?

http://dareconomics.wordpress.com/2012/09/20/mainstream-media-still-cant...

Sat, 09/22/2012 - 21:06 | Link to Comment THE DORK OF CORK
THE DORK OF CORK's picture

Whats truely strange about this oil time (dream time) is that city states and or nation states do not have a energy hinterland which trades with other city / nation states.....

 

The energy remains outside their domestic systems of control.

 

People need to grasp this very simple but important point.....

 

www.youtube.com/watch?v=MXdKszWPk2k

Sat, 09/22/2012 - 21:08 | Link to Comment tony bonn
tony bonn's picture

laws are for the little people....banksters are too big to follow the law..

Sat, 09/22/2012 - 21:21 | Link to Comment Yen Cross
Yen Cross's picture

 Long "XAU", and "Commodity Currencies" going into tomorrow. Gaps need to be filled, with "trailing stops"!

Sat, 09/22/2012 - 21:30 | Link to Comment zorba THE GREEK
zorba THE GREEK's picture

We left the boundaries of legality when the crisis broke out in 2007-2008.

One would have to be somewhat naive to believe that technical legalities will

prove to be a deterrent  for TPTB in keeping the global Ponzi going.

Sat, 09/22/2012 - 21:45 | Link to Comment Yen Cross
Yen Cross's picture
 I expected the 23.6 fibi /dxy retrace to get done earlier last week. It came close.

   I'm big-time short "Cable"! short term!

Sat, 09/22/2012 - 21:46 | Link to Comment g3h
g3h's picture

Futile howling.

Sat, 09/22/2012 - 22:33 | Link to Comment q99x2
q99x2's picture

Bankers are illegal in the eyes of God. Or if you like, as a basis to argue for existance over non existance.

Sat, 09/22/2012 - 23:20 | Link to Comment monmick
monmick's picture

Put a little toothbrush moustache on that picture and look again...

Sat, 09/22/2012 - 23:24 | Link to Comment Blankfiend
Blankfiend's picture

Tyler, thanks for posting this.  The commentators are probably correct in their tired and jaded views that legality will not overcome expediency, but one can always hope.

Blank

Sun, 09/23/2012 - 00:00 | Link to Comment Yen Cross
Yen Cross's picture

 Tyler, who is that little fuck wad,(me -so- horny) "POSTER U-TUBE ass hole" you let post?

   Then again I get some dip shit " Cali Bond" offers ,and laugh!

   Captya us, or lay off the " asine adds"!  I'll pay for your site! The Chinese weddings are a distraction!

Sun, 09/23/2012 - 00:38 | Link to Comment putaipan
putaipan's picture

i have not yet begun to "youtoob"!

freedom to leed my ass!

(never refuse an invitation to a 'chinese funeral')

 

 

otherwise- nevermind. thanks fer postin'!

 

Sun, 09/23/2012 - 02:29 | Link to Comment Yen Cross
Yen Cross's picture

 Rubber bands! And shorting ( Norway,Sweden,Finland) come to mind!

Sun, 09/23/2012 - 03:26 | Link to Comment ebworthen
ebworthen's picture

Seems that "illegal" and other terms of "law" are words only.

The Kleptocrats and Oligarchs have made it clear that laws, rules, and treaties are fungible for them and the sake of expediency; yet written in stone for the poor citizens of the world who don't lie and steal for a living.

Sun, 09/23/2012 - 03:59 | Link to Comment Yen Cross
Yen Cross's picture

I'm OUT!

Sun, 09/23/2012 - 04:09 | Link to Comment Grand Supercycle
Grand Supercycle's picture

OVERDUE CORRECTION LOOMS.

Due to recent central bank intervention and short covering spikes, these daily charts are extremely overextended and significant correction expected very soon:

SPX, DOW, NASDAQ, NZDUSD, GBPUSD, AUDUSD, COPPER, CRUDE, GOLD, SILVER. [USD strength will return]

http://www.zerohedge.com/news/2012-12-24/market-analysis

http://trader618.com

Sun, 09/23/2012 - 05:03 | Link to Comment falak pema
falak pema's picture

Draghi printing is no more illegal than FED printing or Private bank shadow banking, including rehypothecking and Libor manipulating and sub prime scamming. 

Its one big illegal show of financial oligarchy and crony capitalism in first world. Why finger point to one aspect rather than the other. 

As many MSM and Internet articles have indicated the "sterilising" figue leaf gives a semblance of legality to ECB scamming, as its all hidden "behind back doors", the sleight of hand; whereas the FED printing is openly a gift to the rich and powerful. Its outright $ debasement and WS asset pumping.

Its a runaway financial train and all CBs are on board, to protect the private bank cabal.

Sun, 09/23/2012 - 07:55 | Link to Comment Dick Darlington
Dick Darlington's picture

Amen!

Sun, 09/23/2012 - 14:00 | Link to Comment supermaxedout
supermaxedout's picture

Mr. Draghi, Ms. Merkel and Silvio Berlusconi are the A-Team of Europe.

Draghi was chosen by Merkel and Silvio. He is their bastard.

Merkel made agreement with China to push the renmimbi to be more accepted as reserve currency. Renmimbi is soon equal to the Euro in this respect  and second to the Dollar.

http://www.reuters.com/article/2012/08/30/germany-china-yuan-idUSB4E7JG0...

Renmimbi and Euro will be pegged together. Peoples Bank of China (PBC) is going to print a wagonload or more of renmimbi., Buys at the agreed rate Euros and is using these Euros to keep the Euroland banking system afloat. ECB is selling Renmimbi bonds via European banks to the retail investors ec. in Euroland.

BTW looks how fast things develop nowadays. Renmimbi made its way to the US.  Through the market leader CME. The futures market for the RMB is now open in the US

http://www.cmegroup.com/trading/fx/usd-renminbi-futures.html

 

 

 

 

Mon, 09/24/2012 - 10:38 | Link to Comment 1eyedman
1eyedman's picture

wouldnt it be funny if most or all of the eu countries, or central banks, signed up for esm/efsf/omt conditionality req's at the same time...due to some exogenous event?     then teh ecb could fund all the govts with all the euros needed without going through each country one by one and the drama each time.  

greece is in, spain is right there, if italy and france jumped on 'to show their support' (even though they dont 'need' it and happen to already be in conditionality-met metrics) would force germany to play as part of the eurobond plan, or leave the euro itself (resulting in a war Im sure).    

the pieces are in place, just need an event to allow the ecb to take 'proactive' measures....euro to parity with us dollar, which oddly enough the us dollar is already near parity with canada, australia, and pegged to a large array of other currencies.   a truly single global (fiat) currency, controlled by the fed is at our doorstep.

Tue, 09/25/2012 - 00:17 | Link to Comment fasTTcar
fasTTcar's picture

It is called an SDR.  A peg by any other name.

Dress is it up with a gold percentage, get Russian ruble support, freely convertable to yuan and you have a fiat that will last for another 40 years.

Personally, I prefer to own stuff I can see or hold, but some people think I am crazy.

Do NOT follow this link or you will be banned from the site!