Germany Enters With The Grace Of A Bull In An Liquidating Cyprus China Shop

Tyler Durden's picture

When you have a few good bureaucratic central planners preserving a broke monetary regime, what can possibly go wrong? Perhaps headlines such as these:

  • Senior German Official - No Idea When Or If Cypriot Parliament Will Vote On Proposed Bailout Programme
  • Senior German Official - Situation In Cyprus Is Bad, Reasons For This Lie In Cyprus
  • Senior German Official - With No Programme, Liquidity To Cypriot Banks Is In Danger And They Cannot Open

And then Schrodinger Schauble himself:


Wait, being a participant in a monetary cul-de-sac, whose eventual end leads to a very painful and often times lethal, hyperinflationary outcome, is a wrong business model? Who could have known. Naturally, with well-wishers like these, who needs bond vigilantes?

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Quinvarius's picture

Those banks can never open.  The die was cast this weekend.  Open doors means bank runs unless there is massive printing to bail the banks out.  Pretty much, all of Europe can now see the game has changed.  The European banking system is about to die of its own stupidity and self caused bank runs.  The ECB can't figure out that a central bank exists to bail other banks out as the number one priority. 

GoldIsMoney's picture

You are right, but don't you think that it will not hit you US-citizens. You can bet it will hit you, and it'll be sooner than later.

Element's picture

That goes without saying.

ekm's picture

Well, well, well.

Question is:

When is Obama going to order Benny to stop QE which will lead to major euro banks or primary dealers defaulting on CDS payments?


Two possible answers:

1) Before attacking Iran, but it could postpone the inevitable attack.

2) After attacking Iran (when?).


It is as simple as this.

magpie's picture

they probably need a very strong dollar before going to war, especially in the Far East.

ekm's picture

They need a lot of stored oil, just like Reagan with Libya, which they do have now.

Once the attack starts, they'll flood the market with oil, same Reagan.


I'm reading bits and pieces that Bush did the same thing in the runup of 2008, but was forced to relay Iran to Obama due to the banking system seizing up, hence he released the oil into the market.


Two options IMO:

1) Continue to starve the economy without energy and keep wondering about the attack

2) Attack and crap the market and be done with it.


This has taken too long.

thedrickster's picture

But, but, the Fed is independant.

"both sides" told me so.

ekm's picture

It's the military complex who rules.

thedrickster's picture

Did you really miss the sarc there?

ekm's picture

No, I didn't. I'm just quite busy here at work.

LynRobison's picture

This is so weird. It's almost like fractional reserve banking is not a stable system. Go figure.

Kinskian's picture

Why do the Germans keeping signing on to play the bad guys in European history? Clearly Merkel looks for approval from someone other than the German people.

ThunderingTurd's picture

I said it yesterday, "there will be no voting in the morning."  Silent phone calls to Cyprus politicians were worth their weight in concrete shoes...

Carl Spackler's picture

So much for the Brussels trial balloon of having the Russians subsidize some of the EU bailout.

The Eurocrats probably thought they had out-smarted the masses and the unsuspecting neighbors with that one, but all it will end up doing is show that "the emperor truly has no clothes" and encourage Putin to be more aggressive in Euro political matters.

The Cypriot parliament rejection of asset seizure still leads to a run on their banks and a conversion to a new Cypriot currency (not necessarily in that order).  This is an example, and the Greeks are the next contestant on the Price is Wrong.

In the end, the EU creditors will still get smacked down hard...only the end-game is coming sooner than later. 


azzhatter's picture

The EU is just one big happy family. I've heard Barrosso say so. Can't we all just get along?

Eisenhorn's picture

In other news, natural gas prices in Western Europe set to skyrocket.

Quonk's picture

The Russian bear will claw it's money back (and then some)...without having to fire a shot.  Putin and the kleptocrats will not yield without a fight...after all, they worked hard to steal that money in the first place.

Scalaris's picture

The force of rearwardly penetrating solidarity is strong with this one.

Danke sehr mein Deutsch Oberherren.

Loukanika the riot dog's picture

From protest outside Cypriot parliament right now.... WE HAVE GAS FUCK YOU!!


Edward Fiatski's picture

Fuck you, SCHAEUBLE.

We'll pull an Iceland & will still remain a safe haven, you pricks.

Byte Me's picture


+9.9% Iff you're Russian...

All_Is_Well's picture

Exactly. Fuckit, make a deal with the Russians. Watch how fast the Germans change their mind.

noses's picture

I don't think Schäuble would give a flying fuck.

Actually, this time Cyprus would end as latest addition to Russia. Maybe a good idea. Russia would get all that laundered money back into its own system.



GoldIsMoney's picture

Well it's not the Germans alone, it's the socialists EC which has decided to disappropriate the bank acount holders. I just can say I wrote against it since ages. As it starts with the problem in Greece I told the Greek that they should get their money out of the Euro zone. I told it also the other EU citizens. Because I have seen it coming. If you follow this blogs, this can't be a surprise for you. You can check also "This time is different" and or Rothbards the great depressoin and you  could see that such things were done in the past also. The infamous law against private gold ownership is the counterpart the US-Americans had to "accept".

So well I always hoped for some sanity and decency, but it always was good for nothing. It's clear that the next logical step are capital controls. And everyone in the EC should be warned again, if you do not act before they are in place you are nearly completly lost. 

The only ones which were not hit. Are thos having bought precious metals, and bonds (well of course not if you bonds from Greece). 

The really biggest problem is that the owner an bond holders of the banks do not have to bear the losses. It's unbelievable that the least "risky" money holders have to bear that. I can't tell how ashamed I feel for that.