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"Graccident" Will Trigger The Demise Of The ECB And The World's Toxic Regime Of Keynesian Central Banking
Submitted by David Stockman via Contra Corner blog,
It is not surprising that in a few short months Yanis Varoufakis has proven himself to be a thoroughgoing Keynesian statist. After all, what would you expect from an economics PhD who co-authored books with Jamie Galbraith? The latter never saw an economic malady that could not be cured with bigger deficits, prodigious printing press “stimulus” and ever more intrusive state intervention and redistribution.
In what is apparently a last desperate game theory ploy, however, Varoufakis has done his countrymen, Europe and the world a favor. By informing his Brussels paymasters that they must continue to subsidize his bankrupt Greek state because it is the only way to preserve the European Project and vouchsafe the Euro, the Greek Finance minister blurted out the truth of the matter, albeit perhaps not intentionally:
“It would be a disaster for everyone involved, it would be a disaster primarily for the Greek social economy, but it would also be the beginning of the end for the common currency project in Europe,” he said.
“Whatever some analysts are saying about firewalls, these firewalls won’t last long once you put and infuse into people’s minds, into investors’ minds, that the eurozone is not indivisible,” he added.
He sure got that right. People who believe in democracy and economic liberty anywhere in the world should pray for a Graccident. During the next several weeks, when $1.8 billion in IMF loans come due that Greece cannot possibly pay, there will occur a glorious moment of irony for Syriza.
If it holds firm to its leftwing statist agenda and takes Greek democracy back from the clutches of the EU/IMF apparatchiks, Syriza will strike a blow for democracy and capitalism in one great historic volte-face. That is to say, defiance of the Germans and the troika would amount to a modern monetary Marathon; it would trigger a thundering collapse of the ECB and the cancerous superstate regime built upon it in Frankfurt and Brussels—–and, along with it, cast a mortal blow upon the worldwide Keynesian central banking regime, too.
The hour comes none to soon. In a few short years under Draghi and in the context of Europe’s fiscal and economic enfeeblement, the ECB has been transformed into a hideous reverse Robin Hood machine. So doing, it has gifted financial gamblers and front-runners with hundreds of billions of ill-gotten gains in the euro debt markets.
In the days shortly before Draghi issued his “whatever it takes” ukase, for example, the Italian 10-year bond was trading at 7.1%. So speculators who bought it then have made a cool 350% gain if they were old-fashioned enough to actually buy the bonds with cash. And they are laughing all the way to their estates in the South of France if their friendly prime broker had arranged to hock these deadbeat Italian bonds in the repo market even before payment was due. In that case, Mario’s front-runners are in the 1000% club and just plain giddy.

While it is extremely difficult to think of a reason that would justify such wanton redistribution to financial gamblers, the ECB rationale is so astoundingly threadbare as to be laughable. In a word, Draghi and his minions claims that Europe’s economic torpor stems from too little inflation and too little borrowing by private households and businesses. Hence, they have no choice except to drastically falsify prices in Europe’s entire $20 trillion bond market in order to rekindle 2% inflation and get economic growth off the flat line.
Oh, puleeze. The Eurozone economies have had no problem whatsoever in generating an ample quotient of inflation ever since the inception of the single currency—-as if that had anything to do with the growth of real production and wealth anyway.
In fact, the european CPI has gained an average of 2.1% per annum during the last decade and one-half. Self-evidently, the temporary flattening of the inflation curve in the last year is a consequence of the plunge of oil and other commodity prices, not anything that could possibly account for Europe’s languishing growth rate.

In fact, the euro area core CPI is up by nearly 1% during the last year, and has gained about 1.5% per annum during the past eight years during which time global oil prices have soared and collapsed twice. Quite simply, low-flation is a myth invented by the Keynesian money printers to justify massive monetization of the public debt.

So there is really nothing behind the low-flation mantra except the spurious argument that consumers will defer purchases unless assured that prices will continue to rise and eat away at their paychecks.
No, Mario, European consumers are not spending owing to the fact that their incomes are not growing. Household “demand” is tepid because take home pay everywhere in the eurozone is being eviscerated by high taxes. And consumers are not borrowing because their balance sheets are already saturated with more debt than they can sustain.
Indeed, private sector borrowing nearly tripled during the decade before the financial crisis. That it has flattened out since then only means that the supply of credit worthy borrowers has been exhausted, not that there exists some mysterious economic malady that can be cured by the ECB’s printing press.
Stated differently, even after accounting for the stagnation of loan growth in the last few years, private sector loans outstanding still represent a 6.0% per annum gain since 1997. And that compares to an average nominal GDP growth rate in the eurozone countries of just 3.3% annually. At some point, every debt addicted economy runs out of balance sheet runway——a condition that Europe attained long ago.

The good thing is that this whole misbegotten euro project cannot survive the impending Greek default. The ECB alone is now on the hook for $138 billion of Greek liabilities—–an amount that is equal to the remaining deposits in its entire banking system. Needless to say, when the impending “Graccident” explodes onto the front pages, there will be pandemonium at the ECB, and in Brussels and capitals throughout the 19-nation Eurozone.
Did the German politicians and voters really understand that their Bundesbank representatives in Frankfurt were not ferocious watchdogs of monetary rectitude after all; and that in crab-like fashion they backed their nation’s central bank into $35 billion of liabilities——–debts that are owed by a Greek banking system and central bank that is hopelessly insolvent?
No, the Greek banking system is actually such a complete financial zombie as to make the US savings and loan industry of the late 1980s look like a paragon of financial health in comparison. For crying out loud, most of the Greek banking system’s so-called “capital” consists of deferred tax assets; and the collateral posted for its $87 billion of ELA loans consists of the debt and guaranteed bonds of a Greek government that is self-evidently insolvent.
Never has such a gargantuan scam been pulled off in plain sight by official national and superstate institutions. Never has a central bank accepted such outright financial trash as collateral for massive advances to its member banks.
Yet week-by-week the clueless apparatchiks in Frankfurt have been metering out a couple of billions of ELA funding to keep the Greek banking zombie alive. When the scam finally blows, there will be a witch-hunt in the halls of the ECB’s grandiose new $2 billion palace like Europe hasn’t seen in generations.
Source: @FGoria
The fact is, the ECB can’t survive the coming Graccident. It will not only be technically insolvent, but, more importantly, it will also be stripped of every vestige of credibility. How in the world, it will be demanded, did Draghi and his clueless posse loan $138 billion to the massively insolvent banking system of a bankrupt economy which is on the verge of economic and civic anarchy?
Moreover, it will also become swiftly evident that there was no Draghi miracle at all—-just a giant, preposterous con job. Accordingly, the front runners parade of the last three years will turn into a panicked selling rout among the fast money gamblers who have made a killing on paper, and the dim-witted bond managers and European bank investors which went along for the ride.
The truth is, Europe is a socialist fiscal time bomb waiting to explode. There is not one honest price left in the European sovereign debt market, including the 10-year German bund trading at 58 bps. Its all been an illusion conjured by the foolish Mario Draghi, who had no clue that all that soaring peripheral debt about which he was taking endless victory laps was actually being rented by the day by heavily leveraged speculators with their fingers on the sell button.
In short, when the taxpayers of Europe wake up to the $350 billion euros they have loaned the bankrupt state of Greece, and when the feckless politicians of Spain, Italy, Portugal, France and much of central Europe discover they can’t fund their bloated state budgets with 1% money after all, the financial furies will be unleashed throughout the continent.
Nor is there any hope for escape. The euro-19 area is now close to having a 100% debt to GDP ratio, and that’s flattered by German surpluses from an export boom that is rapidly cooling, and the fact the for a few quarters Mario’s printing press has conferred huge interest rate subsidies on their depleted fiscal accounts.

The pending Graccident will puncture that illusion, tipping most of Europe into acute fiscal crisis and political upheaval of the type that has already roiled Greece and was starkly evident in Spain’s elections last weekend. The odds that the European superstate and the ECB’s Keynesian monetary regime will survive the resulting upheaval are, thankfully, somewhere between slim and none.
And there is a silver-lining, too. Someday the historians will point to the image below and say that the end game of Keynesian central banking started here. It could not commence too soon.
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Will it be a derivative WMD that brings down the house, or perhaps something almost comically mundane?
What differenece does it make?
<-- Haus Wins This Round
<-- Ghordo Wins This Round
We'll see who prevails this go around (what is this round 3?) with this Greek Drama.
There is the Ghordo side, which is more of a statist position re; Euro-anything, and then there is the Haus side of things, which is things that can't work won't position.
Time will tell. I know back in 2012 I was sure it was the end, and I could very well be fooled again.
I downvoted myself, as I think when Grexit happens, Mario Draghi will turn on the printing presses to a scale not seen in Europe since Italy in the 50s. People will be begging him to do it to "save the EuroZone;" he'll give another "whatever it takes speech" and will never be able to turn off the printing presses as he wallpapers over direct debt write offs and CDS calls for the next few years.
Euro will fall against the dollar, as equities re-rally off flash-crash lows. Danes break their beg, and the Swiss renig on the Schengen to impose border controls, preventing their population from shopping in Germany/France/Italy/Austria and importing the stuff without paying eyewatering customs duties on it.
Yields will spike in the FIIPS (France, Italy, Ireland, Portugal & Spain) and then Mario Draghi will slam them down with newly printed Euros. Expect a few larger funds to go tits up when he does this. The unconvered short position will be very temping for many chasing yields in a post-GREXIT environment.
Bundesbank takes a bath in Target2 losses which then requires a bailout from either the ECB or the Bund.
It will be a shitshow, but I bet the EURO survives to see another day. This is the "firewall" they keep talking about.
Watching Monsieur Hollande explain to the French taxpayer how close to $100 billion in French assets disappeared overnight will be excellent.
Political chaos will reign, and it will be the beginning of the end for Euro-Rainbow Land, but not for a few years.
Haus, I honestly can't follow you in your train of though
sometimes you seem to be more intent to picture me as a cartoonish alter-ego completely opposed to what you think, and I fear it isn't so
take the article, for example. here: "The truth is, Europe is a socialist fiscal time bomb waiting to explode"
first, "the truth" is complex. second, "socialist" is a... matter of degrees. and of stereotypes, in this case an American stereotype about "Europe"
third, the treaties. if the author wants to talk about "socialist fiscal time bombs", he ought to mention the Fiscal Compact treaty, eh?
Draghi is already pulling a damn rabbit out of the hat. We are having that damn Q€, aren't we?
except that nobody, particularly here on ZH, is mentioning facts about that operations. relevant facts, like on which balance sheets those assets and liabilities are going to be placed. 20% the ECB and frigging 80% on the NCBs
you are fixated by the ECB's/FED's left hand: the FX "value" of the EURUSD. that's the wrong hand to watch while the magician is doing tricks
remember one thing: the EUR is a synthetic monetary alliance currency. it's... a tool, designed for a purpose. designed for currency war. designed for price stability even during a currency war
further, you are fixated with propaganda from overseas, including that funny "Euro-Rainbow Land"
context. keep the damn context in mind. the ECB is designed to react. The real action is what the FED does. It did Q1, Q2, and arguably Q3 and Q4
and now... pause. and this very pause is draining the whole planet, like a receding tide after a damn flood. the game of exporting to others inflation and deflation... at will
the ball is in the FED's court. China is waiting. for an SDR of her taste. or for gold. or for an AIIB's SDR-like currency. We'll see what happens about... the FED's rates
While I have too much going on at work right now to address this fully at the moment, I'd like to take issue with one thing if I may --
------
and now... pause. and this very pause is draining the whole planet, like a receding tide after a damn flood. the game of exporting to others inflation and deflation... at will
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and now... pause. and this very pause is draining the whole planet, like a receding tide before a tsunami. the game of exporting to others inflation and deflation... at will
Fixed that for you.
you handle it as if it was the first time, and sorry, it is not so. this is a trick the FED has done several times. Ask the Rest Of The World. Ask Turkey. Ask Brazil. Ask Argentina. and so on
sure, the waves are nominally "higher", this time. but may I remind you the trick of putting the damn global* reserve currency at rates of oven 15%?
(*) "global", as in Other People's Problem
If Greece leaves and defaults -- it will be the largest bankruptcy since the USSR. It swarfs Lehman and is comparable is total debts owned which must be written off to Lehman, AIG & Bear Sterns combined.
The wave will be much, much, much higher this time, with CB's have little to no ammo left.
Greece is no more a basket case fantasy of Ponzi extend and pretend baseless fiat horseshit than any other Western nation.
As soon as "insolvent" Greece is booted another country will instantly take its place.
The only thing that holds the world financial fiction together is fear.
Fear will not prove sufficient.
aren't you changing subject? I'm talking about the USD and it's effects on the whole world, and you are talking about Greece and a possible exit
meanwhile, the EuroSystem national banks are building up... their idea of "plenty of ammo". which in a fiat environment... is an exercise of political will
in short, you firmly believe in a crash, and then look out for possible sources. yes, a crash is possible. no, it's not a given
meanwhile, which national banks, in a monetary alliance or not, are best poised for a return of the gold standard? the "big three" eurozoners
we'll see if China is going to get it's golden or SDR cake
Pray tell, can I go to the ATM and pull out cash from the "political will" banking system? That would be great.
well, I did. as in the example down about the T2 balances. a fiat currency is "political will". every single IOU that a sovereign issues unbacked is pure political will
particularly if that sovereign collect taxes with that IOU as instrument
Haus-You are incorrect Lehman went broke on $660 Billion in liabilities.
The Greek debt is around $400 billion
btw, how do you take a Target2 loss? that money... is working, and it's not theirs
as a reminder, I myself contributed to that T2 imbalance. it's easy. my money left country A and is now, even though originally Country A's credit creation based on assets there, Country B's credit
hey, it's still my damn money, not Country A's or B's
Target2 has been argued as being just an irrelevant statistical device. I disagree, it's a relevant... statistical device. But only if properly understood
for the matter of a possible exit of the Bank of Greece from the EuroSystem... it is irrelevant
Whenever you look at the Target2 Balance Sheet, all those assets owned by the BB are IOUs from other Eurosystem Central Banks.
There is a credit on the customers account in Germany, even though the money that created that credit has gone back to its country of origin at the central bank level via an IOU.
Don't fuck with me re; Target2. Unless Herr Sinn posts on ZH, I guarantee I know more about how T2 works than anyone else on here.
you really believe what you wrote? ok, I'll try again with a more detailed example
Ghordius buys a farm in Greece. downpayment: € 100'000 from a Spanish bank account. credit of € 900'000 from a Greek bank, based on Greek land collateral
>>> Target2 balance: minus € 100'000 Spain / plus € 100'000 Greece
Ghordius sells the same farm, years later, for € 100'000 more, and transfers HIS credit to a bank in Germany
>>> Target2 balance: minus € 100'000 Spain / plus € 100'000 Greece and minus € 200'000 Greece / plus € 200'000 Germany
since T2 "balances" level out, the end result is minus € 100'000 Spain and minus € 100'000 Greece / plus € 200'000 Germany
It's still money that a damn German bank owes Ghordius, isn't it? originated in the Spanish and Greek credit systems, aka banking systems. now, if Greece leaves the EuroSystem...either the BundesBank says it's a legit EUR credit or not. At which point does the BundesBank "have to accept a loss"? What T2 really says is where credit goes, not who owes to whomYes, you're correct, but I don't care at all about YOUR account. It, in the grand scheme of things is completely meaningless.
When you bought that farm from a Spanish Bank account, if based on Greece's capital share -- the 100.000€ removed 100.000€ from the Spanish banking system without some additional 100.000€ flowing into the sytem to take its place (thus keeping liquid capital in nations approximate to their share of the Eurosystems total capital base) -- Greek Central Bank, after crediting the cash back to the account holder in Greece would be forced to transfer it back into the Spanish Banking system, as if the transaction (from a central bank's point of view) never happened to be replaced with an IOU from the Spanish Central Bank. Thus the liabilities from the Spanish Central Bank go up by 100k and the assets for the Greek central bank go up by 100k. The asset is a debit and the liability is a credit, and it balance.
If the inflows and outflows of the Greek central bank quickly went into another country (say the previous owner of the farm just bought a new BMW) -- you'd have another calculation based on the idea of preserving liquidity in the various Eurosystem member states.
The Target2 system is there primarily to prevent too much "cash" getting concentrated in certain nations at the expense of others. (Thus inflation in one nation and deflation in others)
In the case at hand re; Germany, becauase it is seen as a "safe haven" the cash flows into Germany, whether it be from Grandma and Grandpa Popadopalis moving cash into DB, or Jose Martinez purchasing a Bosch toaster dramatically exceed outflows. Thus, the transaction looks like this;
Cash goes from individual bank account in Spain to Bosch's German bank account. The cash flows from the Spanish bank account to the Spanish Central Bank to the ECB to the BB to the German Bank account. Now there is an additional 50€ or so say in the German banking system that wasn't there before, and 50€ less in the Spanish banking system. In the EuroZone, Bosch toasters are not currency, so thus from a banking point of view you have one side of the transaction (Germany) which has increased by 50 and the Spanish has decreased by 50.
In order to correct this imbalance, the BB sends that 50 back to the ECB, who then sends it back to the Spanish central bank, and then the Spanish central bank sends an IOU directly to the BB for the 50€ from the toaster. Thus at the end of the transaction the parties are as this;
Bosch Germany + 50€
BB + 50€ IOU (asset) from Spanish Central Bank
SCB + 50€ IOU (liability) to BB
Jose MArtinez + Toaster
And at the end of the transcation the Spanish financial system is the same size as it was before. The German system increased by 50.
If the Spanish central bank goes bust, then all those liabilities get wiped out, and the BB has to begin to seriously impair its assets on its balance sheets, thus requiring a bailout to retain liquidity.
Tell me I am wrong.
You are wrong, since the BB don´t gets an IOU from the Spanish Central bank (or any other Euro CB) via Target2, but from the ECB.
btw, since when is the BundesBank shortened to BB? My old mind finds that confusing, too. I have to think every time about Brigitte Bardot, instead of the BuBa
Think it´s okay if everyone understands what you mean. And who is that Brigitt Bardot you are are talking about? ;)
you are making an unnecessarily complicated example which I find confusing, and imo confusing the "purposes" and the accounts
Mr. Sinn's point, as yours, is that the BundesBank has an "asset", in the form of a credit to the Spanish and Greek national banks (through the ECB)
but whatever has been lent... has actually been mostly created by national banking systems (with collateral, btw)
further, in my example, I'm the damn creditor. the EuroSystem owes... me
and since the EUR is a fiat currency... how am I ever to collect? they can bitch as long as they want about who is going to repay me... I can't collect
and that's the reason why it's completely irrelevant, and it's all a senseless accounting principles bitching. a fiat central or national bank can't go bankrupt, it only can become... impotent
if we had a gold standard, it would be a different matter, and T2 balances would have to be matched with... gold
but this is not the case, is it? so your treatment of a national or central bank in regard to "impairment of balance sheets" is... ahistoric. as in "never happened this way"
all based on the fundamental point that those who are the creditors of this whole affair... are like me in legal possession of a fiat IOU balance... that can't be "cashed in" in specie, only exchanged for it
"There is the Ghordo side, which is more of a statist position re; Euro-anything..."
can't say I know which of your two sides I should vote for. in fact, I don't see your "Ghordo" side
statist? me? compared to what? I am very sympathetic to anarchism. I'd be an anarchist, if I thought it would... work. this hasn't been proven, yet
just as a reminder: I am a small entrepreneur. I produce. and I demand things from politics: rule of law, a legal level ground, price stability in the eurozone and balanced budgets
if that is statism, well, yes, I am for it
meanwhile, I comment from my point of view. which is that of a small entrepreneur in the eurozone looking at things with an "Austrian School" perspective
No prison time because they were helping the little people
Baaaaawwwwwhhhhhhh!
Throw those pathetic Greeks out of Europe already. They are just worthless liars and cheaters. What are we waiting for?
Yawn. Your macro seems to be stuck on repeat.
I think it will be a combination of mendacity, psycopathy and a financier Farse Frag!
Graccident will not happen, it will be triggered...
Not to bring religion into it, but no one listened to Noah or believed his warnings.
A catastrophic flood is coming. And most ain't prepared.
Nothing will happen. This article is full of sensationalist hyperbole.
Add Italy + Spain + France to see the full impact on the weakest banking systems......
At least for the first week.
The 2nd week will get interesting.
EU, like the US and Japan, are really facing the end of a flawed system erroneously premised on eternal growth...driven by faulty assumptions about population growth. This population growth providing ever more consumers, investors, home buyes is now as dead in the water as the advanced economies are. The following article focuses on US but same-same happening across nearly all advanced economies. '08 was just the start and things about to get far more difficult as population trends play out.
http://econimica.blogspot.com/2015/05/2008-was-tremorwhy-main-event-is-still.html
Due to the stupidity of the plebs there will be yet another powergrab and the cycle restarts.
not sure, you cant restart a cycle without actually building something with value and I dont see the West doing it....unless you mean the cycle will restart in China, where they at least have factories....then perhaps yes
Grexit, Graccident, Grimplotion, .... it won't happen. They will chicken out because they are politicians. The only thing that politicians won't chicken out is WAR.
Agree. The only thing they will do is 16 book entries (for the memberstates) and take the debt on their book and the game goes on.
by German surpluses from an export boom that is rapidly cooling
Yep
The Fourth Reich and the Madame Fuhrer being hoist well and properly on their own petard.
Trying to stuff Russia wasn't such a good idea Merkel.
Self respecting Russians have delivered your bile right back
http://russia-insider.com/en/politics/2014-german-russia-exports-decline...
"The fact is, the ECB can’t survive the coming Graccident. It will not only be technically insolvent, but, more importantly, it will also be stripped of every vestige of credibility."
With approximately 10,000 tons of AU on the asset side of the ledger, insolvency isn't and won't be an issue for the ECB.
Stockman is completely right in his analysis. What is even worse is that the biggest creditor to the Greeks is the EFSF. Unfortunately the amounts stated are promises and not payed upfront were other members must fill the gap if other insolvent countires do not have the means. So actually it is worse. I fully agree to Haus Targaryen that the ECB will print into oblivion the euro is saved another day but it is the beginning of the end for the Euro as other will demand the same treatment.
There will be no Grexit there will be a Dexit as Germans etc will be fed up with constantly backing up people that do not want to take their medicine but are also incapable of doing so. The ECB must be sued for mismangement and not holding onto its charter.
He's completely wrong and overly generous in describing Draghi as "foolish"
Lots of adjectives come to mind, but 'foolish' is not one of them.
p.s. In most Slavic languages, 'Dragi' (pronounced 'Draghi') means Dear or Expensive. You might say that the EU cannot afford Dragi Draghi.
So banks go bankrupt, debts are written off.
The ECB is creating more money to backstop this. This money is entering the system while the debt is disappearing. So where is the problem except that the banks do loose their biggest cash cow.
The ECB is prepared for the storm to come. Other central banks might not.
Throw those pathetic Greeks out of Europe already. They are just worthless liars and cheaters. What are we waiting for?
What are we waiting for?
Probably a new Treaty as currently there is no mechanism to do this. And of course a new Treaty will need to be ratified by all 28 countries. Do Turkeys vote for Christmas (Thanksgiving)? So we are probably waiting for ever.
It's the pathetic German financial cartel that needs to be thrown out of Europe. Go back to the Deutschmark and wallow in its glorious revaluation (until your export industries become bankrupt).
Don't you mean "What is Putin waiting for?" I sure would like to know. Things aren't going to get better in Europe till the Russian flag is flying in Berlin and Frankfurt over the smashed remains of the Reichstag, Buba and ECB.
Then, maybe, Israel will get that USD500 billion you bastards still owe the Jews for killing for sport and taking everything they owned. If you want to talk about deadbeats, let's talk about that.
Nobody outside Germany owes Berlin a pfennig. On the contrary, you owe the long-suffering subject nationalities of the Fourth Reich big.
Must be a German banker aka the biggest suckers on the planet.
One thing is for sure : If this banksta debt system collapses all over the world the solution will be like in the 1930s : Central bank take over of the casino and more statist intervention in infrastructure investments; the Casino will be shut down and regulated just like then. That is what History teaches us and denial is not a solution.
Can the market system resolve this issue any better? We all know what the "so called" Market really is! And it is now creating a back lash all over the developed world!
If this trend continues in an uncontrolled spiral as this poster pretends then the Oligarchs (the 0.001% and their hangers on) will be skinned to their bare bones in the name of "general good" and investment re-appropriation via taxation to kick start infrastructure investment where its needed most, all over the world.
You libertarians who defend personal riches and financial inequality now going viral since Lehman collapsed, whence the Casino's sick bonanza now veering on financial fascism, (whatever false nosed logic you use to deny that and say the contrary), will have to realise that the Great Gatsby age #2 of neo-liberal Reaganomics has played out its course. The invisible hand is now just as much a sham as Communism was.
We need balance between democracy; aka redistribution; and private initiave to keep the Republic vibrant. We ALL know that !
Will the world survive such a big financial reset? Time will tell !
The fact that no nation now has ALL the nuclear arsenal is one sobering thought for ANY dictator to play at Hitler or Mussolini.
Irony of ironies, Oppenheimer's toys may have cut the ground from under the feet of anybody wanting to play at Dr Strangelove. On the other hand miniaturization of these instruments can make the dirty bomb a more common occurrence.
Nothing comes easy to man. Capitalism will have to re-invent itself and...its been done before!
In the meantime Man has to find a new non fossil based energy paradigm as THAT is the key to his very survival on Planet earth.
The money line has to be a MEANS and NEVER a END in itself that it has become, cos it then kills humanity.
Unless you believe the HUMANOIDS will take over the world run by the Google type elitist cabal !
FIRSTLY, do you have a mouse in your pocket? I can not stand people who IMAGINE they are a delegate for some IMAGINED group fantasy. RE: "We ALL know that ! "
You collectivists always do this.
Stop rallying everyone under your sick psychosis imaginings.
Collectivism has enough blood on its hands already.
Secondly, your rant veers into innanity. You do realize this right????????
TRY FOCUSING NEXT TIME.
---------------------------------------a
"We ALL know that ! "
the we all know that is not a phrase about libertarian farts, its about history : Jefferson and the Constitution said that as what you call "collectivism" they called "nation"; as did Lincoln. A nation is built on values and democracy is one of them. A two tier society is not democracy its feudalism. I speak for myself and nobody else so when did God tell you that I had an imaginary group in my pocket?
You guys only fish for flying dolphins or moby dicks that are inventions in your Robinson Crusoe minds that only function in never never fantasy. Step out of denial and enter the real world.
If I veer into "innanity" you should "show" that and not "blow" dat!
Bloomberg reports: FIFA arrests! [AKA SQUIRREL!]
Plebs, pay no attention to the financial meltdown in progress.
Football/soccer may be played in a different venue!
OMFG!!!
For the 331.4bn reasons you quote Grexit, Graccident or Granything else won't be allowed to happen.
The rest of the EZ will back down, give Greece the next tranche and reschedule Greece's debts.
Of course, the other PIIGS will say "Me too" - but that is next week's problem.
to me this piece clearly demonstrates why greece will NOT be a problem.
1) the pain is spread out evenly so the political will to bailout the creditors would be a breeze. it's amazing how fast political maggots can agree to shit like that in the middle of the night.
2) greece is small potatoes in the overall scheme of things.
the biggest "problem" for eu banker maggots imo is the precedent that will be set if it goes badly for them because other eu nations, particularly heavily indebted nations with shitty economies, are watching.
I just wonder, does anyone in greece still have ANY bankdeposits left ?
In case there is somebody, WHO IS THAT FOOL ?
Well, some Greeks still do get an income, and that tends to be paid in monthly. You need to keep some money in an account to pay household bills, credit cards, groceries. And businesses need to bank proceeds often at the end of the day. Those who could, took unneeded capital out of the Greek banking system a long time ago. Either abroad or under mattress. Burglars are probably having a field day. But it's impossible (or at least very difficult) to get by in daily life with a bank balance at zero, even if your "real" balance is negative due to mortgages, credit card debt, etc.
Nobody who counts. The hundred-odd people who do count for anything got their money out a long time ago. Their only concern is which one of them NATO will crown the nigger-king of Greece when the pretense of self-government has been shattered once and for all by strategic bombing.
All good things must come to an End, Wait a minute, the ECB was never a good thing, and that also means the US Federal Reserve will live on forever.
The official inflation rate in the EU was and is a lie. The middle class has seen its purchasing power melt away thanks to unlimited credit from 2001 to 2008 and the subsequent policies to stop the UE carcass decaying into oblivion.
There will be very hard years ahead, but the slow death under the EU regime is no longer an option. Syriza, or Podemos in Spain, may not be explicitely anti EU - how could they be? Brussels is the wet dream of any left politician - but their policies are far more than the euro can bear.
Now get that grease off those guillotines.
Do you hear that Mr Draghi? That's the sound of inevitability, that's the sound of the death of the EU. Goodbye, Mr Draghi..... -- Agent Smith
It is impossible to say 'when' gold goes higher and fiat collapses, and you cannot predict the 'who', the 'where' or the 'how' - but it is equally inevitable.
We live in a world where government statistics tell us home prices are up 10 percent, food prices are up 10 percent, health care costs are up 10 percent, rents are up 10 percent -- but inflation is only 1.2 percent.
Exactly. Europe can't service all that debt and pay Russia a good price for its oil, allowing Russia to rise to a developed world standard of living. That's why the Fourth Reich is trying to steal it.
Probably not.
Black swan is Japan. Manipulating the Yen from 75 to 123 is cause for IMF to replace the Yen with Yuan in SDR basket later this year.
Funny I always though the Euro was just a financial wet dream propagated by a lot of wishful thinking that 2+2=5 by nations full of shopkeepers, beach goers, and beer lovers. I could never see how it was really going to change anything.
A general observation: What struck me about Stockman's column is his repeated expectation that when the grand folly inevitably falls apart, the Keynesian recklessness and inherent economic impossiblity of it will become apparent to all, and thus assure the demise of its managers, their proteges and the Keynesian Economic model itself. I suspect that it will become apparent mostly only to those for whom its inevitability is already apparent.
Statements will ensue that "mistakes were made", this and that were "unexpected", etc., but the same maestros of the current global economy will not perish, though their appointed managers almost surely will be "retired". Whatever system is put in place to replace the failed one, after many conferences culminating in a big "historic" World Economic Summit somewhere, will again be rigged to best serve those benefitting from the former system, even if it incorporates some kind of modified gold standard (the wisdom of which may become conventional wisdom). Of course it will be rigged, since the same controllers as now will orchestrate it, which means that it will assure predetermined winners and losers. That's just how they roll. It could be a better system, less regulated, more free and more financially sound (after the enormous debt abrogations settle), or it could be even more authoritarian.
However, there are major cards yet to be played, which could negate all predictions of the demise of Keynesian central banking - an economically crippling attack on the USA or the EU, world war or other major global catastrophes. Such events would, I think, serve to strengthen, rather than weaken, the hold of the global elite. Most everyone would be much worse off, of course, but that hardly matters in such calculations. Then worldwide political upheavals, repression, civil and regional wars, etc., leading to an unknown result.
Although I maintain a long-term optimism, I cannot help being skeptical of Stockman's more hopeful near-term expectations.