The ECB - EUR22 Trillion Is Missing

Tyler Durden's picture

Via Mark J. Grant, author of Out of the Box,

The ECB: The Missing Assets/Liabilities

“To treat your facts with imagination is one thing, but to imagine your facts is another.”
                        -John Burroughs

Yesterday I published the assets/liabilities of the European Central Bank as provided by them. I provided some analysis that I thought was relevant as I also asked all of you to look at the numbers yourself. To be quite open; I was stunned by the data they provided and shocked by the implications. I had not seen the data in any other source or commented about by anyone and the subject, while admittedly complex, and perhaps made more complex by design, is a huge wake-up call for anyone investing in Europe.

The ECB lists, as of the end of the 1st quarter of 2012, 16.304 trillion Euros ($ 21.032 trillion) in assets and 17.334 trillion Euros ($22.631 trillion) in liabilities. It is right there in black and white as I showed in the ECB provided data that I presented yesterday. However when you get to their consolidated balance sheet you find the numbers they bandy about in public to be a ledger of 3.240 trillion Euros ($4.00 trillion) and you catch your breath and pause. Utilizing normal American accounting practices this variance would be impossible and yet here it is; staring us all right in the face.

“Europe has put a ‘stop payment’ on our reality check!”
                       -The Wizard

I can report that I did hear from a number of large institutions yesterday that also looked at the numbers themselves and were stunned. Conversations were held, questions were asked and I think an accurate summation of the conversations was that everyone was in some state or another of astonishment. The numbers were not my numbers after all and while many good issues were raised in terms of how to properly analyze the data that was presented there was a clear sense that we were being duped by the European Central Bank and played for suckers.

“Reality is the leading cause of stress amongst those in touch with it.”

                     -Jane Wagner

Forget that the liabilities are greater than the assets and forget that that both have increased rather appreciably in the last several years and just concentrate on the size of the numbers presented and then ask the central questions; who is responsible for these assets and liabilities and where are they counted? We know that they are not counted at the ECB as they are not a part of their consolidated balance sheet. You may ask how this is possible and I re-print, once again, the applicable note from the ECB:

Recognition of assets and liabilities

An asset or liability is only recognized in the Balance Sheet when it is probable that any associated future economic benefit will flow to or from the ECB, substantially all of the associated risks and rewards have been transferred to the ECB, and the cost or value of the asset or the amount of the obligation can be measured reliably.”

So there is the rationale, like it or not, but then where are these assets/liabilities counted? We are talking about $21.032 trillion in assets here and $22.631 trillion in liabilities which are larger numbers that all of the GDP of Europe. We can surmise that the ECB does not count these loans, securitizations and collateral as they belong to a given nation or a bank guaranteed by the nation or the securitization is guaranteed by some country but the rub is the country doesn’t count them either. When a European nation reports out its debt to GDP ratio I knew that they did not count contingent liabilities and I knew that government backed bank bonds were not included and I knew that regional debt guaranteed by the government was not included but this, and the sheer size of it, had lain underneath everyone’s radar.

Think of it; twenty-two trillion dollars worth of assets and liabilities and accounted for nowhere. No need to worry anymore about Target2; a mere tuppence at one trillion dollars, a decimal point. Just exactly what these assets and liabilities might be is anyone’s guess. Just which nations generated them is also anyone’s guess as no data or explanation is provided. Just what any country’s real debt to GDP ratio might be if these assets/liabilities were included in the equation is also anyone’s guess but I think it is safe to assume that the numbers would be off the charts; far off the charts.

“Illusions commend themselves to us because they save us pain and allow us to enjoy pleasure instead. We must therefore accept it without complaint when they sometimes collide with a bit of reality against which they are dashed to pieces.”
                        -Sigmund Freud

You know, these are not blue fairies or gnomes or elves that have gone missing. These are twenty-two trillion dollars ($22 trillion) of loans and securitizations and mortgages that are found and accountable for by no one. These are real assets and real liabilities that have been turned into cash by the ECB and it causes me to wonder just how accurate the Money Supply numbers are for Europe with this amount of cash being pumped into the system. I also wonder what anyone’s real balance sheet looks like and I wonder what kinds of losses are being incurred and by whom. To be quite forthright, and in my opinion, this seems to me not just the rigging of the game or the gaming of the system but something far past that; something out beyond the realm of the credible and of real world experiences.

This is what we are investing in when we buy European bonds? This is where we are putting our client’s money? I don’t know; they may have gone mad but I have not.

Have you?

“An error does not become truth by reason of multiplied propagation, nor does truth become error because nobody sees it.”
                    -Mahatma Gandhi

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
GetZeeGold's picture



That's all? That's not so bad.

CPL's picture

It's nothing but a huge deflationary flag, that's all.


22 trillion disappearing like that.  THey should check the Aussies couch.   It paid out 335B yesterday.

GetZeeGold's picture



Do you want the last Big Mac......or the 22 trillion?

Stackers's picture

Aaaand its .... was never here ?

Manthong's picture

What's the big deal?
It’s not like your talking real money.

Short Memories's picture

would you like that in 2 x 10 trillion EU notes and change or all in change?


CPL's picture

I think people will be asking for it in silver or gold now.  Dracma's, Lira, peso's...anyone actually trust these people to manage a cat fight?

hedgeless_horseman's picture



"We can surmise that the ECB does not count these loans, securitizations and collateral as they belong to a given nation or a bank guaranteed by the nation or the securitization is guaranteed by some country but the rub is the country doesn’t count them either."



"No bars, no burglar alarms. They should be prosecuted for incitement."


-Seldon Mowbray

dbomb12's picture

Maybe they should ask Donald Rumsfeld

Rumsfeld admitted to $2.3 trillion missing on September 10, 2001 (the day before 9/11)



Uber Vandal's picture

I was thinking that myself.

If we had 911 to get our minds off of the missing $2.3 trillion, I shudder to think what is in store for the next distraction....

CPL's picture


Banana is my answer.

fonzannoon's picture

Dow futures have dropped 6 points on this incredible news.

CPL's picture

Yup....1.5X the national debt of the US disappears and it's not part of the fundementals of the market.


Fiat Currency doesn't matter for nothing if they don't deal with this.

Sudden Debt's picture


It's right here below:

>>> € <<<

voila! All legal and digital as you ordered it!

Now what was that question about the FED's assets? How much is all I need to know!

CPL's picture

Thanks Sudden Debt,

Someone quickly forward this to the ECB, let them know we found it.


Good job Junior Financial Detectives, now if you spin your decoder ring to blue, the secret message from our sponsor should fill in the gaps.

lesterbegood's picture

I set my decoder ring to blue and it tells me that 'All the world is a fiction'?

mckee's picture

"Drink your Ovaltine"

hannah's picture



It's right here below:

>>> € <<<



look i am a central bank.....


















that wasnt hard at all...! free money for everyone.

SheepRevolution's picture

Let me correct that for you:



hannah's picture

only 999,999,999^ that the best you got sheep...!!!!


999,999,999^infinity^infinity squared....!



MrSteve's picture

Per the BIS, the notional amount of derivatives at the end of 2011 was $ 1,524,140.9 billion.

Translated into English, that's One Quadrillion, Five hundred twenty four Trillion and One hundred-forty billion dollars.

$22 Trillion is just a dust bunny under the couch for this system, no worries. The Central Banks of Earth are backing all this with their taxpayers' bondage.

Better to worry about where to park when you next go to the gold coin & bullion store.

See the BIS data, chart 23A, at:

dmger14's picture

Seems to me numbers get so big that deflation will overwhelm the best efforts to inflate, or the inflators will resign to deflation as it becomes too silly or unacceptable by the public to continuously bail out the financial system.

Abiotic Oil's picture


So when the subroutine compounds the interest, right, it uses all these extra decimals places that just get rounded off. So we just simplify the whole thing and we just round it down and drop the remainder into an account that we own.
So you're stealing.
Ah, no. No. You don't understand. It's, uh, very complicated. It's, uh, it's, it's aggregate so I'm talking about fractions of a cent that, uh, over time, they add up to a lot.
Ok. So you're gonna make a lot of money, right?
Ok. That's not yours?

Well, it, it becomes ours.JOANNA
How's that not stealing?
I don't think, I don't think I'm explaining this very well. Um, this Seven Eleven, right? If you take a penny from the tray - JOANNA
From the crippled children?!
No, that's the jar. I'm talking about the tray. The penny's for everybody.
Oh, for everybody. Ok.
Yeah, well, those are whole pennies.
Right. I'm just talking about fractions of a penny here, but we do it from a much bigger tray. A couple of million times. So what's wrong with that?


NewWorldOrange's picture

Reminds me of the time Donald Rumsfeld said the Pentagon was missing $2.3 trillion (literally on the even of 9/11.) Now we're talkin' $22 trillion...inflation is a bitch.

Terminus C's picture

hopefully there is no directly related war inflation as well... What is ten times Iraq and Afghanistan...?

BigJim's picture

10(Iraq + Afghanistan) = Iran

becky quick and her beautiful mouth's picture

europe is nothing but a giant version of musical chairs. at this point in the game, there's only 1 chair left. i would think the music is going to be shut off shortly.

NewWorldOrange's picture

Don't underestimate their ability to build new chairs, or investors' willingness to sit in them.

Dr. Engali's picture

I think you mean casinos and addicted gamblers. This "market" hasn't seen investors for years.

Oh regional Indian's picture

Truth though is that if you take the black budget/underground moneyflow/petrodollar complex into account, 22T is nothing. And if you think the two streams (overt and covert) do not mix, one word: Laundering.

Every big bank does it, 24 hours a day.


It's an accounting error, is all.


LawsofPhysics's picture

Correct.  Shit only gets real when real goods and services fail to get delivered.  How are things in India on that front?  Standard bribes for moving new equipment into China have been about 30% of the value of the equipment in question would appreciate some information on the take in India.

Oh regional Indian's picture

LOP and CPL below...

India is in a twilight zone. Very on edge because the entire ITES industry depends on western wealth to function. And we all know how that is going. So for th efirst time in a long time, wage freezes and no hockey stick hiring curves.

Money spigot is wide open and we have a long way to go down to ensnare the whole billion plus.

A home loan or a car loan are in the 12-18% range, depending. Yup, ZIRP is a long ways away in India.

That is what makes me feel that India is going to see some growth if war does not ensue. To many sheep to round up yet, at which TeeVee is doing a fine job. MSM is crap and no one (hardly anyone) is asking the right questions.

If they are, it's on TeeVee where they are outgunned.

On the up-side, there are still a lot of sheep to round up. Collapse will be bad but not DISASTEROUS. Damn farmers want to keep farming. 


And the bribery situation is flexible, but overall there is a tightening. Big people are being rounded up, the created money men (bag men) are being fed to the lions, slowly but surely. Change in the air, but more of a One World Gov. note to  the change, not open/new.

Definitely a key axis, it has to be, with a sixth of the world's population.

Thanks for asking, India is still deeply mis-understood.


CPL's picture

Thanks ORI.


We're on the spaceship called earth and the media attention is universally USA biased, with 1/6th the worlds population and 25% of the goods production (clothes, food, car parts, ammo), it's a juggernaut with China that is never paid much attention.  Truth be told I have to read Pakistani newspapers to read Indian news and vice versa for Pakistan/other 'stan news.  Everything news wise is getting thin with rolling blackouts, or lack of fuel or the reporters just vanishing.


Let's hope to hell a war doesn't break out.

CPL's picture

I'm curious as well on what's happening in India.  The government there is rounding people up now and the media is becoming useless.


Front pages of news papers are starting to look more and more like Entertainment magazines.

GMadScientist's picture

Before or after the fistfight for the last chair resolves?

Darth Rayne's picture

Similar situation to USA. However, there are no chairs in America.

Cunnial's picture

Haircut anyone?

LawsofPhysics's picture

When there is no rule of laws and contracts and fraud is the status quo, possession is the fucking law.

 Nothing changes until real consequences for bad behavior are restored at all levels of society.

FYI- having you bonus go from 50 million to 10 million is not a real fucking consequence.

Start executing fuckers for theft over a million and watch how fast things turn around.

Stupid fucking sheep.

Anton LaVey's picture

I advise you to watch this video to improve your usage of the work 'fuck':

LawsofPhysics's picture

How are things in mom's basement?  

Good call though, I wonder if any of those comics I bought 25+ years ago are actually worth something.  Probably worth more than quite a few sovereign bonds now, certainly worth more than the fiat sticker price I paid.

Reptil's picture

I'm not rying to be a dick but what kind of "hero" doesn't dare say fuck in his video about fuck you, just because he's afraid of an R-rating given by someone else?

pfff fuck dat

CPL's picture

Yeah I run out of shoes to throw at the tv when CNBC is on as well.


They will be first against the wall.

SafelyGraze's picture

"When there is no rule of laws and contracts and fraud is the status quo, confiscation is the fucking law."

that seems harsh

LawsofPhysics's picture

And how has that worked out in the past? - FAIL.

Totentänzerlied's picture

"Nothing changes until real consequences for bad behavior are restored at all levels of society."

...This has never been the case in any human society with a population of more than 500 people. You live in a fantasy world whose history is delusional nostalgia and whose future is wish-fulfillment and projection.

"When there is no rule of laws and contracts and fraud is the status quo"

Gee, you mean, like, always - here in reality and not your romantic Enlightenment imagination?

"Start executing fuckers" blah blah blah

Here's one for you, "He that is without sin among you, let him first cast a stone". Bases on the frequency with which you repeat, nearly verbatim, your fascinating proposals and enlightened opinions, may I presume it is you who is without sin, and thus, you who should first cast a stone - lead by example.

Panafrican Funktron Robot's picture

Seems like there should be an 11th commandment, applied to you good sir:

"Thou shall not rationalize criminal behavior just because it causes less cognitive dissonance."


"Thou shall not be such a fucking pussy, and consider that even the supposedly wimpy French managed to have a "heads roll" period to purge the diseased elements of society."