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Draghi's QE Plan In Jeopardy After IMF Suspends Aid For Greece Until New Government Is In Place

Tyler Durden's picture




 

Things for Europe (and liquidity addicts around the globe) just got a little more complicated. Earlier today, moments after the failed Greek presidential vote pulled the forgotten topic of a Grexit up front and center, the IMF announced that it is suspending financial aid to Greece under its huge rescue program until a new government is formed. RTE quotes IMF spokesperson Gerry Rice who said discussion on the completion of the sixth review of Greece's bailout will resume once a new government is in place. Mr Rice added that the holdup in the program would not impact the country's finances in the short term.

According to RTE, German Finance Minister Wolfgang Schaeuble said Greece must stick to agreed economic reforms regardless of the outcome of the election. In a statement, Mr Shaeuble said "these tough reforms are bearing fruit, they have no alternative."

And while the symbiotic relationship between Greece and Europe has been well-known for a long time, with Europe pretending to fund Greece (when it was just paying the interest and maturities on Greek debt held by official European entities), and Greece pretending to reform (when it was really just resting), the charade has now been put on indefinite hiatus:

A negotiating team from the "troika" of creditors from the EU, IMF and European Central Bank, had been due to resume talks in Athens next month to wind up the €240 billion bailout and agree an interim, post-bailout programme.

 

In a bid to reassure international partners, Syriza leader Alexis Tsipras has sounded a more moderate tone recently, promising to keep Greece in the euro and negotiate an end to the bailout agreement rather than scrap it unilaterally.

 

But he has stuck to his promise to reverse many of the tough austerity measures imposed during the crisis, reversing cuts to the minimum wage, freezing state layoffs and halting the sale of state assets.

There are two reasons why this is an issue: first, as we reported back in October, according to S&P absent substantial external capital inflows, Greece will be in default within 15 months. Actually make that 12 months now:

S&P estimates Greek financing needs for the next 15 months to be at EU43 billion. ... S&P estimates Greece will draw EU5 billion from intl bond sales, EU20 billion from internal mkt, EU12 billion from official lenders inluding the IMF in next 15 mos. S&P also forecasts Greece will repay EU3 billion in bonds held by investors who refused to participate in 2012 debt writedown, and if it doesn't then Greece will following Argentina in being held in "contempt to court" fo cramming down foreign law covenants.

The second reason is far more serious for the market permabulls everywhere, because in a world in which all the upside is due to central-bank driven multiple expansion, suddenly the ECB's QE which everyone is convinced will take place in Q1, has been put on hiatus as there is no way the ECB can commit to monetizing Greek debt at a time when the IMF may halt the check kiting scheme, whereby IMF funds the ECB using Greece as a pass-thru. What's worse: even the mere threat of a debt moratorium by Tispras whose prime ministerial campaign will be based on a platform of ending austerity and renegotiating the Greek bailout, means Draghi's hands are tied as the Bundesbank will declare check and mate on the Goldman apparatchik at the ECB should he engage QE only to see Greece exit the Eurozone and crush the ECB's monetization scheme when Europe is not a true federalized entity.

In any event, while the algos simply refuse to accept reality, or their math PhD programmers are just too dumb to grasp what happened today, things in early 2015 are already shaping up quite volatile. And perhaps most important, the Syntagma riot-cam, which has been in storage for the past two years, may finally make a come back.

 

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Mon, 12/29/2014 - 15:19 | 5602192 ZerOhead
ZerOhead's picture

Maybe Victoria Nuland can engineer a coup and install former GS alumni Demetri Apocalypsopoulos as Prime Minister.

The Parthenon would make a for great drive thru souvlaki joint...

Mon, 12/29/2014 - 15:29 | 5602233 Pool Shark
Pool Shark's picture

 

 

IMF: "No more money for you until you 'democratically' elect the government we want you to have."

 

[Funny; we used to call this 'Extortion.']

 

Mon, 12/29/2014 - 15:44 | 5602297 ThroxxOfVron
ThroxxOfVron's picture

I still call it extortion.

 

I also find it interesting that 'democracy' lends moral authority to expropriation in some instances and not to others...

 

Mon, 12/29/2014 - 15:50 | 5602316 OpenThePodBayDoorHAL
OpenThePodBayDoorHAL's picture

When Berlusconi didn't do what the illuminati wanted, they said "now is not the time for elections, now is the time for actions" and installed Goldman as the new Prime Minister. If that is not the Squid grabbing sovereignty I don't know what is, The Citi Cromnibus coup in the US is our equivalent, grovel, chumps, we want to gamble and we need you to foot the bill when we lose.

Face it folks the banksters control everything, the only way to change that is to put down the clicker and pick up a pitchfork. Since you won't do that, just shut up and take it like a man. Or should I say take it like a quivering mass of jelly.

http://failedevolution.blogspot.gr/2014/12/chiles-turn-with-power-of-peo...

 

 

Mon, 12/29/2014 - 16:03 | 5602377 44magnum
44magnum's picture

BUT BUT BUT the world will not function without them ripping us off!

How do you make them pay? No death ,no prison just make the fuckers POOR

Mon, 12/29/2014 - 17:06 | 5602630 OpenThePodBayDoorHAL
OpenThePodBayDoorHAL's picture

LOL a downvote LOL, stay on the couch and choose a cheaper brand of catfood you loser

Mon, 12/29/2014 - 15:43 | 5602291 Alea Iactaest
Alea Iactaest's picture

Source: Sputnik News.

 

OK

Mon, 12/29/2014 - 15:37 | 5602263 rycK
rycK's picture

Although you cannot accuse the Fed of any form of failure at this point, while they flagrantly ignore the future and keep mum about the terminal debt load we labor under, you cannot accuse the Fed of not exercising the obvious opportunities of well-executed politics of the liberal sort either. IF the goal of politics is to win in the short run and hope that the chaotic outcome of some future fiscal calamity will fall favorably on the leftist side then this is a double win for the banksters.

 

There is power, and then there is power backed up by $trillion dollar printing capability. The 'rich' can always be 'taxed' and social justice restored from their loot as the progressive thinking trends onward. That theory has worked for decades for the left. 

Mon, 12/29/2014 - 15:52 | 5602317 LawsofPhysics
LawsofPhysics's picture

Yes, but it has been a long time since societies in the western world experienced real scarcity.

FYI- the "power" of that printer only works if everyone accepts your paper.

hedge accordingly.

 

Mon, 12/29/2014 - 15:53 | 5602324 no more banksters
no more banksters's picture

"The 'rich' can always be 'taxed' and social justice restored from their loot as the progressive thinking trends onward. That theory has worked for decades for the left."

That's exactly what the left is currently trying to do for a start in order to recover from the ongoing retreats against the plutocracy which dissolved nearly every conquered social benefit for the majority.

Mon, 12/29/2014 - 16:00 | 5602364 ThroxxOfVron
ThroxxOfVron's picture

"That's exactly what the left is currently trying to do for a start in order to recover from the ongoing retreats against the plutocracy which dissolved nearly every conquered social benefit for the majority. "

 

Another propaganda belching fool...  There is no right or left: there is only the duopoly of vested interests.

Mon, 12/29/2014 - 16:12 | 5602401 no more banksters
no more banksters's picture

"There is no right or left: there is only the duopoly of vested interests."

Not exactly, but that's what they want you to believe.

Mon, 12/29/2014 - 15:13 | 5602181 Dr. Engali
Dr. Engali's picture

Reality is for dopes. The steak in the matrix is tender and juicy. Plug in and BTFD.

Mon, 12/29/2014 - 15:29 | 5602230 kliguy38
kliguy38's picture

exactly.......keep buyin' the dip..... they want you to get rich.......they'll ALWAYS have your back.......they love you because your a prole.......just like them.....oh wait........BWAAAAAAAAAAAAAAAAAAA

Mon, 12/29/2014 - 15:12 | 5602182 FieldingMellish
FieldingMellish's picture

Like an underage date at the Prom, always promising but never delivering.

Mon, 12/29/2014 - 15:13 | 5602185 rycK
rycK's picture

 

 

"...as there is no way the ECB can commit to monetizing Greek debt at a time when the IMF may halt the check kiting scheme,..."

 

Exactly,

 

The  €240 billion bailout is money chucked into the latrines. There is no way that Greece wil cut government significantly and no way they can adhere to any IMF demands on spending and tax revenues. This is hopeless. 

Mon, 12/29/2014 - 16:13 | 5602413 Alea Iactaest
Alea Iactaest's picture

Or hopeful. Depends on where you're sitting.

Mon, 12/29/2014 - 15:15 | 5602187 KnuckleDragger-X
KnuckleDragger-X's picture

Draghi has a plan? I mean besides shoveling bullshit in truck load quantities. They all seem to run under the Alice in Wonderland premise that whatever they say is true because they say it. As for the IMF, their power is only good if everybody plays along.

Mon, 12/29/2014 - 15:18 | 5602200 i_call_you_my_base
i_call_you_my_base's picture

Bring on the muthafuckin' summits!

Mon, 12/29/2014 - 15:23 | 5602213 buzzsaw99
buzzsaw99's picture

...they have no alternative.

yeah motherfucker they sure the hell do too

Mon, 12/29/2014 - 15:23 | 5602215 petkovplamen
petkovplamen's picture

THis is ALL happening because the EU is afraid that an anti-EU party will get into thre Greece government who might even vote to leave the EU.

Mon, 12/29/2014 - 15:30 | 5602220 yogibear
yogibear's picture

Goldman Sachs (Draghi's master) will appoint a technocrat bankster to Greece to steal the remaing assets in the country.

Mon, 12/29/2014 - 15:36 | 5602264 Sirius Wonderblast
Sirius Wonderblast's picture

Why do I feel like Tsipras has been got at?

Mon, 12/29/2014 - 15:54 | 5602323 First There Is ...
First There Is A Mountain's picture

Never mind the Grexit and any other comparatively trivial matters that may crop up between now and Draghis epochal announcement ushering in an era of EZing 4 Eva. The Q-Eurozone bailout will commence forthwith. Whatever the workaround, the printing, monetization extravaganza is a done deal. Bank on it.....

Mon, 12/29/2014 - 15:55 | 5602339 MrButtoMcFarty
MrButtoMcFarty's picture

Here is hoping some Statists and Banksters get shot in the face for the new year!

Mon, 12/29/2014 - 15:57 | 5602341 ebworthen
ebworthen's picture

Bring back the Drachma!

Double resort costs!

Molon labe!

Mon, 12/29/2014 - 15:57 | 5602353 falak pema
falak pema's picture

If Greece defaults what will be the size of impending hair cut on the Euro and world banks ?

200 Billion or 500 billion E ? 

Its somewhere in that range. 

Mon, 12/29/2014 - 16:14 | 5602422 Alea Iactaest
Alea Iactaest's picture

Not counting derivatives.

Mon, 12/29/2014 - 16:29 | 5602470 falak pema
falak pema's picture

derivatives are not for sovereign, it's for the hangers on between themselves; zero sum game; if he defaults. 

But the new state needs balls, as it can't go back to the market for more. 

Mon, 12/29/2014 - 16:05 | 5602385 wmbz
wmbz's picture

Just a little poorly staged drama, everyone knows the pumps will keep running!

It's make believe money anyway.

Mon, 12/29/2014 - 16:15 | 5602421 escapeefromOZ
escapeefromOZ's picture

I hope the Greek people wake up and stop being sucked dry by the EU . It's time to make an offer the Troika cant' refuse  : either default and pay nothing or no default with only 2% of the debt repaid . Take it or leave it EU !

Mon, 12/29/2014 - 16:17 | 5602436 Ewtman
Ewtman's picture

It is deflation, not inflation, that will first ravage the global economy causing massive debt destruction and creating political, economic and social unrest. Current events bear out this long term picture… and so does global economic data.

 

http://www.globaldeflationnews.com/deflation-rearing-its-ugly-head-in-su...

Mon, 12/29/2014 - 16:25 | 5602458 falak pema
falak pema's picture

Punctured barrel and Lady lagarde gets the jeepers creepers.

Mon, 12/29/2014 - 16:26 | 5602465 QECapital
QECapital's picture

I'm sure an "emergency" government will be put in place for this

 

Mon, 12/29/2014 - 16:27 | 5602467 irishlink
irishlink's picture

What Economy ? The Irish finance minister declared Greece as a one or two product economy. .... Olive oil and Feta cheese. What will the squid do with that ? Gorge itself?

Mon, 12/29/2014 - 16:34 | 5602494 Atomizer
Atomizer's picture

IMF is baiting Greece to remain under EU. All da free money you can receive, as long as you allow us to instill our new IMF government.

Mr Pano - Financial "Crisis" in Greece

Mon, 12/29/2014 - 17:09 | 5602645 roadhazard
roadhazard's picture

funny stuff

Mon, 12/29/2014 - 16:48 | 5602560 Atomizer
Atomizer's picture

Brilllant statement.. It made me grin, that someone is actually catching on. Thank you!

monetizing Greek debt at a time when the IMF may halt the check kiting scheme

Mon, 12/29/2014 - 16:51 | 5602567 q99x2
q99x2's picture

Is Greece going to default?

Mon, 12/29/2014 - 16:55 | 5602588 Atomizer
Atomizer's picture

No.

Mon, 12/29/2014 - 21:53 | 5603621 Escapedgoat
Escapedgoat's picture

BUT I hope so.

Mon, 12/29/2014 - 16:52 | 5602570 tommylicious
tommylicious's picture

fuck you fuckers!

Mon, 12/29/2014 - 16:57 | 5602590 Catalonia
Catalonia's picture

"I can make you rich beyond all measure. I will make you warlord of all Greece. You will carry my battle standard to the heart of Europa. Your Athenian rivals will kneel at your feet if you will but kneel at mine."

Mon, 12/29/2014 - 18:08 | 5602876 Crisismode
Crisismode's picture

 

 

MOLON LABE!

 

Mon, 12/29/2014 - 17:12 | 5602660 ThirdCoastSurfer
ThirdCoastSurfer's picture

Syntagma or Stigmata?

Mon, 12/29/2014 - 18:03 | 5602861 Fuku Ben
Fuku Ben's picture

Carrot and the stick

Do what we tell you or no soup for you!

Mon, 12/29/2014 - 18:32 | 5602967 MEFOBILLS
MEFOBILLS's picture

Draghi and his henchmen are from a long line of well heeled con-artists:

The mechanism:  1) Make all countries subordinate, by forcing them into international money - they must use purchasing power as circulating money issued from foreign "international" masters.  Make that medium Credit, as that is the modern method.

2)Sovereign Countries must make bonds that are a future promise to pay by harnessing taxpayers.  In the U.S. that promise is 16'th ammendment.

3)Give those newly created sovereign bonds to a private Bank somewhere in Europe.  Said bank then hypothecates new Euro's from nothing.

4)Spend new Credit Euro's into Greek money supply, probably on political favors in order to keep the population happy.  Greek citizens then have a temporary suge of Euro's from which they use to buy BMW's and other goods from their European trade partners.

5)Goods flow into Greece, and former Credit Euro's flow out in direct correlation.  Countries like Germany that have trade surplus now grab all of the former Credit Euros flowing in Greece's money supply.

6)Those credit Euro's make their way to a German or other European bank, maybe even the same bank where the Bond is now held.  Former Greek Credit Euros can become savings in Germany while Greece falls further into debt due to usury, as debt instrument grows with every tick of the clock.

7)Greece types up another Sovereign Bond to roll over former bond.  After all Greek expanding productivity cannot pay the demands of the debt instrument. The former bond has usury that now becomes principle of the new bond.  Rolling over interest in this way should be illegal, and it makes interest compound, and the interest equation goes exponential and outside of nature.

Bond then demands the exponential in the form of labor energy and Goods from Greece.   Greece citizens and laborers must prostrate themselves in order to grab Euro's out of a shrinking money supply to pay for growing bond demands.  Greek government will not lower prices and beat their citizens to make prices low, in order to compete for shrinking Euro credit money supply, to then pay non-Greek bond holders.

In order to satisfy debt instrument, former banker who created the Euros, will now demand real property.   Give me an island they say.  Or how about some of the former paid for commons, and then we can put tolls on commons, and make rents forever!  My family and their cronies will live happily every after on a rent scheme.  How about some slaves.  Your daughter looks good.  It's good to hypothecate with simple keyboard entries and control the world!

Lots of bad players in this private money scheme the world is in thrall to.  At its root, it is a con game wrapped up in in a veneer of law to give it a patina of respectability.

No way NO how, can expanding debt instruments be paid.  The only way is a harvest mechanism, and this harvest in order for debt instrument to be ripped up.  To cancel debts, some sort of demand is made by bond holding creditor upon debtor.  

The exhange, or equal sign is made unequal through rent mechanims.  It does not matter if unequal mechanism is  debt instruments, or if it is metal, or if it is ledger money.  It is unequal exchange buried as as sytem feature in our money.  Financial capitalism itself has defective money, and new money systems must come on line, or we will cycle in and out of war and bondage.

All dielectics are false choices, designed to dupe the unwary.  Left vs Right is latest canard.

Proper government has been usurped to become the sword arm of these money power criminals for almost 3,000 years since the Neolithic period.  Most government are either dupes are paid hirelings of money powers.  The church is usually well meaning types that get duped.

Money power must come under legal and moral control, and it is not nearly as complicated as con artists like Draghi would have you believe.

___________________________________

Here is an excerpt from Babylon Woe, which describes how far back the con goes:

http://www.jrbooksonline.com/pdf_books/the_babylonian_woe.pdf

 

If there was no silver, why then ! there was no money, and prices fell. Substitute gold for silver, and history seeming to fast repeat itself, we have the condition of the European world of the last 2000 years. If there was no gold, Why then again ! There was nomoney !

Hence was able to develop that conspiracy against mankind most exemplified by a continuous propaganda of hate against all authority: in pre-antiquity and antiquity against the many city gods, and in relatively modern times against the kings that rose out of the ruins of that which had been Rome.

As those controlling totally the economic life of a state through monetary creation and emission, must have felt that kings and gods were more of a nuisance than anything else, the instigators of this conspiracy in whatever place and era, obviously were those who first did the business of bankers; the controllers of values, and consequently the economic life of the states wherever the precious metal standard was used. 

Wed, 12/31/2014 - 18:10 | 5610510 sidiji
sidiji's picture

this article is stupid.  ECB QE isnt for the greeks, it is and has always been for the EU as a whole...which means for the major economies of Germany, France, Italy, Spain....if you dont know at least that much you dont know squat.

ECB will do QE b/c the europe money interests want a big slice of the government money...just as they got in Japan, and US and UK...same old story, richer will get richer since they control all the levers of power.

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