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Shocking! The ECB Has Now Doubled Its Lending To Greece
It must be quite busy at the ECB’s headquarters in Frankfurt these days as not only did the ECB kick off its first (official) round of Quantitative Easing, it’s still front-running on Greece’s rescue. In its Q&A session with journalists, ECB president Mario Draghi confirmed the ECB has stepped up its efforts to keep Greece in the Eurozone, as it has roughly doubled its lending in just 6-8 weeks time. This means that since Syriza has won the Greek elections in January, the ECB had to step in to save the Greek economy and financial system from collapsing.
This seems to show the ECB is willing to go far, very far, to keep the Eurozone united (and Greece in) as the ECB’s lending to the country is now at a stunning 68% of the GDP. On top of that, Greece wanted to be included in the ECB’s Quantitative Easing program, but Draghi has now explicitly excluded the purchase of Greek bonds as long as the threshold of 33% has been breached and the ECB will NOT be allowed to purchase Greek bonds before July/August.
The Greek situation remains extremely dire, as the ECB confessed it once again had to increase the allowed amount of the Emergency Lending Assistance to Greece by another half billion Euros. The jury’s still out on Cyprus as well as the country needs to get the thumbs up from the Troika in its fifth review.
The markets have been jubilant after the QE started earlier this week (and roughly 10B EUR has already been purchased, pushing for instance the Spanish 10 year yield to below 1% (!) ) and the value of the Euro is crumbling fast. When analysts were predicting an Euro-Dollar parity last year, almost the entire financial world was shaking its head in disbelief, but at an exchange rate of 1.07 (meaning the Euro lost approximately 15% of its value in just 3 month) that scenario is suddenly extremely realistic.
It gets even more interesting now as more voices are expressing their expectations to see the Euro lose another 20% to reach a value of 0.85 EUR per Dollar. That’s quite interesting as such a weak Euro would indeed be excellent to jump-start the economy again, but on the negative side, the American export markets would start to collapse. It would be much cheaper for foreign consumers to purchase European products compared to American products. Who do you think will either be able to sell more planes or to book a higher profit at a EUR/USD exchange rate of 0.85, Boeing or Airbus?
The expensive dollar makes it tougher for Europeans to buy stuff denominated in US Dollars. Plane tickets are much more expensive – despite the falling oil price and the purchase power of almost every European citizen will be undermined by either the strong US Dollar. On top of that, if the ECB is indeed able to increase the inflation rate again, citizens of the Eurozone will see their purchasing power erode at an even faster pace.
And guess what once again proves to be an excellent asset to protect yourself from losing purchasing power? Indeed, gold. As you can see on the previous chart owning gold would have protected any consumer in the Eurozone as an ounce of gold has kept its value. Forget about the naysayers who say gold is useless, as it has proven its value dozens of times now.
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There is so much chum in the water that I can barely see...
So Greece gets to spend without consequence, the ECB is wiring electronic ones and zeros via QE to buy bonds like the Fed and you are worried about Greece ever paying back what they are borrowing! What a joke, Greece pay back worthless electronic ones and zeros?
The Dollar is only looking strong because the Euro isn't a world reserve currency where their currency is being sopped up in trades. As long as countries like Panama, Zimbabwe, Ecuador and others use the US Dollar as their national currency to conduct monetary trades, the Dollar will always be stronger IF the ECB thinks it can act like the Fed. https://www.imf.org/external/pubs/ft/issues/issues24/
The ECB people aren't stupid, they know this as well so the only logical conclusion is that the ECB has decided to devalue the Euro in a desperate gamble to goose their economy via exports and limiting imports at the world's expense. The devaluation of the Euro means all Europeans are subsidizing sovereign debt via inflation just like in Argentina.
It is now obvious the ECB has decided to monetize most if not all of Europe's sovereign debt, in doing so everyone (individuals, governments and corporations) now has that amount of money to re-invest elsewhere. So will the excess money be invested in plant and equipment or will it be squandered / consumed via oil purchases? I wonder how the currency trader George Soros is playing this gambit?
The stage for WWIII is now fully set just like it was for WWII with trade wars, oh but we are so much more sophisticated now that we use computers to wire electronic ones and zeros.
The dollar is strong because of currency flows moving from outsie the US toward the dollar. The problem with the Euro is the folks in brussels are making policy decisions for all the different economies without also centralizing the debt and this is a sure fire recipe for disaster. The rise in the DAX underlines the fact that others are aware of this too (ie european governments are leveraged to the hilt, FAR worse than the US and big money is looking for safety). The issue with QE is that you can issue it, but you can't direct where it flows so more than likely most of the ECB debt will flow right to the dollar and should send the US market soaring when it starts to hit. Will be interesting to watch how they go about unwinding the Euro because it's not a question of if it will fail but when.
Shocking my foot. All these "shocking" stories are just that...stories. None of this means jack shit until we see 1000 point drops in the Dow, huge swings in metals and mass demonstrations with pepper gas and bullets, otherwise the frog continues to slowly boil.
Netwerk WitteGejT: “Eerst actie, en dan pas beslissen”.
http://www.nrc.nl/nieuws/2015/03/16/assad-in-reactie-op-kerry-eerst-acti...
Paus Franciscus treedt af wanneer de ontdekker van de 'Logica van de 1' een NobelPrijs wint!
http://www.nrc.nl/nieuws/2015/03/13/franciscus-denkt-nog-maar-kort-paus-...
Netwerk @MinPres: "Waarheiddelen kan besluitvorming in de weg staan"?!?!?
http://www.neurope.eu/article/love-me-tender#comment-1909687553
Tijdens de VVD-campagne voor de gemeenteraadsverkiezingen van 19 maart 2014 mocht de @MinPres niet spreken over het systeem 'Leven en Laten Leven', omdat netwerk WitteGejT eerst erachter wilde komen welke (rechts)personen een licentie van Stichting Intuïtie Trainen had bemachtigd.
And some people still think Mr Veryfuckass, especially european ass, in the shape of the fucking retards in Brussels doesnt know what he is doing.
Ahem, i beg to differ.
I thought
the new loans (by the TBTF Troika)
were for Greece to make payments (billions of Euros monthly)
on old loans,
not for the average Greek,
not for the average European.
No matter who will be "paid back",
we know who won't be.
If only Milo Minderbender could be around to see this, he would be so PROUD.
WE HAVE CONTRACTS!!!
The photo shows happy crowds desperate to play the ECB Game
http://www.ecb.europa.eu/ecb/educational/economia/html/index.en.html
Nope! Next question.
.
Oh Lord Rothschild buy me a Mercedes Benz.
Your kids all drive Porsches and I must make amends.
Worked hard all my life while my savings got thinned.
So Lord Rothschild please, just a Mercedes Benz. :-)
Oh Lord Rothschild won't you buy me a nice brand new Ford?
A nice 4x4 350 with standard tow load.
I just want to look better than all of my buds.
Oh Lord Rothschild won't you buy me a nice brand new Ford?
fixed it 4 u
MUCH better than mine! :-)
(A friend has an F-150 Lightning. I can hear it rumbling home from 2 blocks away. I like the sound ALMOST as much as the sound of a Harley Davidson.)
Not fixed imho, only "hedonically adjusted" for rednecks...
+1 to you both
You must feed your slaves so they can will keep picking cotton, and to maintain your role as "benevolent provider".
An economy cannot be "jump-started" - it's not an engine. Least of all by means of impoverishing the citizenry with monetary debasement.
Amen. I don't think it makes sense to say "I believe in capitalism" and also say "I believe we can jump-start an economy". Capitalism requires working, selling your goods or services, spending less than you got, and investing the remainder in equipment that makes your operation more efficient. Jump-starting (by government) creates PRETEND-capital out of thin air and sends it to people who lobby the government. But that PRETEND-capital dilutes and therefore lessens the buying power of the REAL capital created by the hard work of the REAL capitalists. Jump starting is not just a zero-sum-game; it's a game that destroys real capitalism.
Central Banks don't care about getting money back because they create it at will. They want something else.
What is this 'money' of which everyone speaks???
Paper promises on paper promises that can't be kept and backed by nothing but government theft from the productive members of society (stolen under the threat of violence).
TPTB will do ANYTHING to hang on to the privelege of ctrl P.
The ECB creates this "money" out of thin air by simply saying it now exists. But the ECB has to choose a currency for it to exist in, and that is the Euro.
Every one of these newly-created Euros dilutes and therefore devalues the savings of every European family which has its savings in Euros.
This dilution is also why the Euro contines to plummet - as in EURUSD plummeting.
Eventually, Europeans will decide they HAVE TO turn over the tables of the ECB Money Changers. I guess that will happen, as it happened in Palestine 2000 years ago, when enough children of enough Europeans become enough hungry.
In the meantime, perhaps a small investment in UUP is still good. One might think, gold, but apparently, "they" can manipulate gold, but can't manipulate BOTH gold and the dollar at the same time.
The same was/is said for out U$D since QE.
Dollar up, market 3X.
Dollar up? Invert the view ... if there are more dollars per assets - that is currency inflation. The money printing (QE) is gradually escaping into the real economy. The wave tops of money movements show up as peaks or asset bubbles. Eventually the visible level of the whole pool of printed USD rises to match the amount that was printed.
So you can predict the new level of the lake of currency - it still maps onto the same underlying set of hard assets (and some of those have been destroyed). So definitely currency inflation underway, at the same time as 'deflation' or reduction in actual economic activity.
Usual these two factors lead fairly quickly to hyperinflation in a country, but the US has a dyke that holds the incoming tide at bay .. or at least outside its lagoon. Lose reserve currency usage (and the percentage of world trade using USD to settle has declined markedly), and that represents a hole in dyke. The hole is getting bigger ....
How long before the dyke fails is the question?
JustUsChickensHere Dollar up? Invert the view ... if there are more dollars per assets - that is currency inflation.
----
Except there is more debt per dollars which is negating the inflationist view and why they have been wrong.
The dollar is the cleanest pile of shit, at least for awhile and the people in the EU are quietly moving their money out. Of course it will implode but only after the world economy takes a shit, though that might change considering our market genius's and their little Machiavellian plots.
(OUR U$D)
we better put on our waders as the shitgum is getting pretty deep . . .
probably therefor they dont bother:
Athens missed tax payments on assets worth billions of Greek citizens in Switzerland, according to a media report. As the newspaper "Die Welt" reported Sunday since February 2014 there is an offer of the Swiss State Secretariat for International Financial Matters to track this money and to transfer to Athens.
Greek Finance Minister Yannis Varoufakis and his predecessors had, however, never responded, as the agency has confirmed.
Die Welt: The Greek Gov’t Ignored 800 Bln In Black Money Transferred to Swiss Banks - See more at: http://greece.greekreporter.com/#sthash.gcR181eA.dpuf Die Welt: The Greek Gov’t Ignored 800 Bln In Black Money Transferred to Swiss Banks - See more at: http://greece.greekreporter.com/#sthash.gcR181eA.dpuf Die Welt: The Greek Gov’t Ignored 800 Bln In Black Money Transferred to Swiss Banks - See more at: http://greece.greekreporter.com/#sthash.gcR181eA.dpuf Die Welt: The Greek Gov’t Ignored 800 Bln In Black Money Transferred to Swiss Banks - See more at: http://greece.greekreporter.com/#sthash.gcR181eA.dpufAnd I thought I could never afford a Mercedes!
What is it I'm not seeing, here ?
Giving Greece the boot seems like a no-brainer, WIN for the EU.
A Greek exit would set a bad precedent, esecially when you consider that in real numbers, there are a lot of EU countries just as screwed up as Greece. They decided to ride the tiger and they are discovering that it's damned near impossible to get off.
Not necessarily. They are scared to death Greece will ally with Russia.
Must have missed your sarcasm mark. Otherwise I have to think is this person really this _____?
Not many care who Greece allies with. A defaulting Greece opens the door for other EU nations that are in serious monetary and budgetary crisis such as Italy and Spain. The only Russia would value is a sea port but Russia as other options on that.