A Continent In Trouble

Tyler Durden's picture

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

Europe is in trouble.
The levitation that takes place in the early morning hours in the Euro, the incorrect counting of both assets and liabilities, massive losses hidden in securitizations at many central banks including the ECB and the riskiest of assets lined up and labeled "Risk Free" and the bells of St. Rimney's begin to chime. Unemployment at record levels, countries such as Greece, Portugal, and Cyprus that can't pay their bills without Divine intervention and economies that are rapidly shrinking even with the help of Europe's falsified accounting practices.
Ireland is no better, France, Belgium and the Netherlands are in decline and the money created by the ECB is all that separates the Continent from Depression. The problem is, the glue is cracking, stitches are coming apart at the seams and the fantasy that has been created is now day-after-day being shown to be what it actually is; a tragedy of the first order. Every reasonable game that could be played is now an historical footnote. The new games, such as seizing depositors' money in Cyprus, aren't much fun to play.
Spain is an example here; more than 95% of their pension funds are invested in Spanish sovereign debt but 100% is encroaching and the end is nigh. Ireland is running out of cash again. Portugal is out of cash. Cyprus needs about twice as much in loans as admitted. Greece has run up a bill where every new loan pays back the European banks, pays the interest on their debt while the country sinks slowly into the Mediterranean.
The IMF, once thought to be a stalwart institution, has helped to create the fantasy and they have lied and perjured themselves in a shameless fashion. Not one, not one projection for Europe has been anywhere close to the truth and yet they continue to minimize the damage. The IMF has partnered with the Europe and not only turns a blind eye but admits none of their own deceit and so is an accessory to the larceny both before and after the fact.
The investment of money in Europe is now a risk far greater than present yields can justify. Senior debt, subordinated debt, deposits; anything can now be taxed, confiscated or impounded at the direction of Brussels/Berlin. Nothing is safe!
Every scheme in Europe than can be rigged has been or is being rigged and, in the end, it will only be the fools that are left in this game. It is not the greater fools either but the mandated fools who take directions from Brussels who takes their directions from Berlin.
I cannot emphasize enough the great risk that anyone takes now by investing in anything in Europe. You can ignore liabilities, you can play pretend and not count liabilities but in the end they are still there and the losses must be finally acknowledged.

Gold gave you a head's up. The margin calls in gold quickly infected the equity markets and the margin calls in stocks gave you a second head's up. The playing field is shifting and the days of wine and roses are giving way to the days of vinegar and poison ivy.
You got the warning now please try to retain your head before the guillotine of Europe removes it from your neck.

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StarTedStackin''s picture

And Bernanke and the Obowel movement  are backstopping Europe.



We are all going down together

kridkrid's picture

Don't think for a second, however, that it isn't all going down, with or without the "backstopping" of Europe. Minus the backstop, it just goes down more quickly.

GetZeeGold's picture



No worries, they're backstopped by gold.....if they can find some.

pemdas's picture

"Spain is an example here; more than 95% of their pension funds are invested in Spanish sovereign debt..."

We will do you one better, Spain.   100% of social security pension funds are invested in U.S sovereign debt.   

sunaJ's picture

The new Hayekian critique of Keynesianism to describe the brittleness: "All fucked one and one fucked all." None can leave, but inevitably one will.

Bicycle Repairman's picture

Gold is not at the top of the value pyramid.  Death is.  The West's military and police have never been stronger.  No worries, mate.

BobPaulson's picture

And just under life/death food, shelter are all things the state can tinker with to get you to forfeit your other wealth. I think they call that feudalism.

That said I was waiting for the new and enlightening information in the article that would jump out of the page among the blatantly obvious statements. That didn't happen.

Bicycle Repairman's picture

To me feudalism means that society is completely ruled by the exact same families for generations.  And the point of their rule is control and nothing else.  Not democracy.  Not merit.  Not a growing economy.  Not betterment of their fellow man.  Just simple mindless control. 

And the talent level of your leaders is whatever pops out of the royal womb. If its a moron, then you'll suffer a moron.  An example of a feudal ruling family would be the Bushes.

agent default's picture

As long as the West does not send its military might East where it will be promptly crushed.

Bicycle Repairman's picture

The USA has 700 bases all over the world, many of them in the East.

Let the "crushing" commence.  Er, promptly?

Panafrican Funktron Robot's picture

Reliance on electricity for superiority has it's downsides.  

Bicycle Repairman's picture

Well then, the "East" just has to trip over the power cord.

RaceToTheBottom's picture

We are all Keynesians now....

kridkrid's picture

http://www.youtube.com/watch?v=7GSXbgfKFWg&sns=em - and when they can't... that's as good as money... those are IOUs.

Bearwagon's picture

It has been found 40 years ago: Gold from mercury

The philosopher's stone, the alchemists once sought, now was found by the American chemist Ronald T. Gillespie. Ordinary mercury, according to the report published in the journal "Chemistry" turns -on exposure to arsenic pentafluoride (AsF 5) and liquid sulfur dioxide - turns into a crystalline, golden shiny material. It has the chemical formula Hg2 85AsF6 shows perpendicular lines on X-ray fluoroscopy with and conducts electricity as well as gold.

From "Der Spiegel", 05. Nov. 1973

agent default's picture

WARNING:Acute mercury poisoning.

Bearwagon's picture

Thank you for giving me a hint, where all the downs originate. But I'm able to learn. So here is an addendum: DON'T TRY THIS AT HOME!

Let the downing commence   ;-)

BandGap's picture

Uh yeah. Arsenic pentaflouride, aside from being a poison, is what is commonly referred to as a "superacid".

So many ways to die here, all for the sake of s shiny substance.

Ghordius's picture

that swap story is old. the levels are now down, down, down. and imho it was used for backstopping US megabanks books in Europe

"The investment of money in Europe is now a risk far greater than present yields can justify"

meanwhile (corporate) Europe invests more than the USD one trillion of (corporate) investments done by the US in Europe

go ahead, flee the guillotine! flee the "socialist hellhole called europe!" harharhar

return to the embrace of honest US megacorps CEOs in honest USD investments!

ATM's picture

The money has to go somewhere. But where it goes is now only buys a little time before it disappears. 

dontgoforit's picture

So, screwed on both sides of the Atlantic?  No hope?  Try Bernakium - guaranteed to 'pik-u-up'!

phalfa5's picture

Ghordius  Maximus   +1000

Panafrican Funktron Robot's picture

Yeah, once again Mark Grant pushing the "Europe is gonna dieeEEeEE!!!!11!1!" meme, meanwhile:


We have $25 billion dollars of FDIC "insurance" backing $9294 billion in deposits.  Kind of blows a hole in the argument that "US banks are much safer", particularly given that the US has $300,000 billion in notional derivatives.  One might say "yeah, but the net notional is a tiny fraction of that!"

Well, how tiny?  1% net notional would be $3000 billion (3 trillion).  0.1% net notional would be $300 billion.  0.01% would be $30 billion.  All of these amounts are greater than the total FDIC insurance.

TeamDepends's picture

What favorite beverage will you be toasting with when the COMEX defaults next week?

HulkHogan's picture

Lost all my beer in a terrible boating accident.

CunnyFunt's picture

Goldschlager ... bitchez!

krispkritter's picture

Damn, beat me to it...I'll have a Silver Rum then....

Hayek FA's picture

Jack Daniels w/ Tequila chasers

Doubleguns's picture

Sam Adams Boston Lager.


 "Contemplate the mangled bodies of your countrymen, and then say 'what should be the reward of such sacrifices?' Bid us and our posterity bow the knee, supplicate the friendship and plough, and sow, and reap, to glut the avarice of the men who have let loose on us the dogs of war to riot in our blood and hunt us from the face of the earth? If ye love wealth better than liberty, the tranquility of servitude than the animated contest of freedom - go home from us in peace. We ask not your counsels or arms. Crouch down and lick the hands which feed you. May your chains sit lightly upon you, and may posterity forget that you were our countrymen!" ---Samual Adams, Aug 1st 1776


TeamDepends's picture

Superb.  We will also be having a few American ales/lagers around here.  Possibly Anchor Steam Liberty Ale.

youngman's picture

I too think there is a lot of real metal leaving the Comex...London too....its all going East...they can see the collapse of the West coming..and want to save themselves from that....they have seen or at least have learned that paper is no good.....so they buy the real metal.....and they are..I think we are all going to be suprised how much they bought this last week or so....with the price drop...India too....

BigJim's picture

Paper's no good, huh? Maybe not for us little people, but for TPTB it's been 100 years of work-free wealth beyond imagining.

If/when the USD loses world reserve currency status, I wager China will work very hard to make their own brand of fiat the new 'standard'.

Maybe they can't do this without gold... but I bet they start cheating as soon as the world accepts their currency is 'as good as gold', the way we did after Bretton Woods. 

TeamDepends's picture

Frank:  Raymond, where's the fuckin' beer?

Raymond:  It's right here Frank.  You want me to pour it?

Frank:  No, I want you to fuck it!  Shit yes, pour the fucking beer!

css1971's picture

Only got a single malt in at the moment. Which reminds me, need to go shopping.

Winston Churchill's picture

Alcohol free champagne fortunately.

I''m glad I will be sober ,and alive  to see the end of the paper games.

Everyone needs their wits in full use as this goes down

DoChenRollingBearing's picture

You are obviously not the real Winston Churchill.


Panafrican Funktron Robot's picture

Shit, I have a whole menu ready for this moment:


Boneless chicken wings + PBR

Main course:

Entire Rack of ribs

Chili Cheese fries

Jack 'n coke


Cheesecake + port


Bearwagon's picture

Double-bubble-trouble, and no end in sight. I think, I'll get me a beer, what else is a man supposed to do?

Debugas's picture

one question - when those debt nations default - will they sell their gold to get EUR or will they print more EUR ?



Bearwagon's picture

I'd say, they will just print more gold.  ;-)

Ghordius's picture

oh, an intelligent question. well, it depends. if a country does a "corralito", then it can use... the EUR as FX reserve instead of selling gold

if it just defaults and stays in the eurozone, it still does not have to sell gold

actually you could see the EUR as a big multi-optional arrangement to improve the "gold retention" of an eurozone country. it's designed this way

but don't listen to me, listen to the pundits that already see thousands of tons of european gold on the market, to the greater glory of the USD

Ghordius's picture

note in the Reuters article:

"...The island nation confirmed last week that a sale of its gold reserves was among the options for its contribution towards the rescue package, but ultimate responsibility rested with the (Cypriot) central bank.

 "In the case of the gold, it's the board of the central bank. It's perfectly understandable.. They have the final say," Finance Minister Harris Georgiades said in an interview with Bloomberg TV.

Georgiades did not elaborate on how much gold Cyprus might sell nor at what price.

Asked if the government had the support of the central bank to go ahead with the sale, Georgiades said: "It's something that will be examined soon, I hope."

A central bank spokeswoman said last week the sale of gold reserves was not presently on the board's agenda."

ATM's picture

The sale of gold is "not on the agenda" because everyone and their fucked up uncle knows it's already a done deal. They don't need to put it on an agenda.

Peter Pan's picture

Greece will soon be the new Atlantis as its economy sinks to levels reminiscent of the Nazi occupation. At least back then the populace was younger and more defiant. Today they are a bunch of sheep too scared to decide their own future.

The Dutch have more leaks in their dykes than fingers to plug them with.

The Germans are the ones that will be in real trouble. Their workers have been under the throttle for over a decade while Germany amasses huge foreign reserves. Her workers will eventually wake up to the fact that they have not shared in any of the euphoria of the last decade while at the same time being served with the bill for the damage in other countries.