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The Bundesbank Replies To The ECB

Tyler Durden's picture


Did the German Bundesbank roll over and die as Die Welt suggest, by yielding to the will of the ECB and Goldman? Or is it merely setting the stage for the inevitable German referendum? Many claim the Italian head of the ECB won today in his ever escalating confrontation with the last remaining German on the ECB governing council, although in reality he is merely doing what he has already done twice before. The outcome will be the same: abject failure to contain the crisis which will not be resolved until and if Europe succeeds in creating a united, Federal state, with one bond issuance authority. That will never happen: after all, 17 European states will never hand over their sovereignty to a third party, especially one which is backstopped by German cash. But it can pretend. In the meantime, Buba will not quietly go, instead it has already stated what it thinks, and what it thinks is that what the ECB is doing (once again) is "tantamount to financing governments by printing banknotes" and that monetary policy is now subjugated to fiscal policy. Full text of the Buba's response below:

"In the most recent discussions, as before, Bundesbank President Jens Weidmann reiterated his frequently substantiated critical stance towards the purchase of government bonds by the Eurosystem.


He regards such purchases as being tantamount to financing governments by printing banknotes. Monetary policy risks being subjugated to fiscal policy. The intervention purchases must not be permitted to jeopardise the capability of monetary policy to safeguard price stability in the euro area.


If the adopted bond-purchasing programme leads to member states postponing the necessary reforms, this will further undermine confidence in the political leaders’ crisis-resolution capability. This underscores the crucial importance of ensuring both credibility in the promised conditionality and the resolute determination to immediately terminate intervention purchases if the underlying conditionality is no longer assured.


The announced interventions in the government bond market carry the additional danger that the central bank may ultimately redistribute considerable risks among various countries’ taxpayers. Such risk-sharing, however, can be legitimately authorised solely by democratically elected parliaments and governments.”

And here is the biggest irony: by doing everything in its power to keep yields artificially low and markets artificially high, the ECB is removing any urgency by Spain, Italy, Greece, actually scratch Greece, and all other countries with unsustainable primary and other deficits, to fix their problems. Which is of course perfectly understandable: why should politicians risk their careers with socially unpalatable deleveraging (please don't call it austerity) programs when they can just continue doing what they do, keep getting reelected, and hope and pray that the ECB will punish all those bond vigilantes who understand that this particular game will not have a happy ending.

In other words, in 3, 6, 12 months, all economic indicators in Europe will again deteriorate, budget deficits will be greater, and economic viability will be even more hindered, but at least the stock markets of the world will be at all time highs, and hedge funds will avoid one more quarter of redemption requests, even as every country is careening toward disaster. Because unless Spanish, and soon Italian depositors, reverse the outflow of their money from local insolvent banks and into the core of the Eurozone, then today's ECB action has achieved absolutely nothing. In that sense: all Draghi is desperately trying to do is restore confidence in these two fulcrum countries. He can only succeed if he generates enough inflation to 'inflate' away the trillions in bad debt held by domestic banks. However, in the process he will also set off the great inflationary firestorm that sees Germany shift from "9" to 'auf wiedersehen', not to mention Brent in EUR to all time records, coupled with a food price crisis.


It is this that the Bundesbank is lamenting: the ever greater trade off of meaningless short-term market gains in exchange for long-term broad collapse and potentially hyperinflation. Sadly, nobody else is, or will be until not even all the world's central banks can control the fate of the bond and stock markets any longe.

* * *

Finally, here is the intro paragraph from the first official response in German Welt:

Financial markets cheer the death of the Bundesbank


ECB President Draghi breaks with brazen principles of German monetary policy. The central bank is pumping unlimited money in the bond markets. Stock markets cheer - for Germany, the nightmare begins.

Read on here.


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Thu, 09/06/2012 - 11:53 | 2768463 nope-1004
nope-1004's picture

Draghi is impotent, but for now, enjoys taking center stage and ramping algos.

Germany is in the drivers seat.



Thu, 09/06/2012 - 11:56 | 2768474 slaughterer
slaughterer's picture

In-trade needs a new rubric:

"Weidmann will resign before Rajoy"

Place your bets. 

Thu, 09/06/2012 - 12:42 | 2768551 BaBaBouy
BaBaBouy's picture

Print My Bitchez, PRINT Your Digital Dollars ...

That Game Is Sorely Coming To An Ugly END.

The Chinee and Indians know it, the TOP .01% Know It, while the American and

EU Middle Class are still clueless and out to lunch on the matter...


GOLD $50K ...

Thu, 09/06/2012 - 12:48 | 2768670 zoggl
zoggl's picture

Do you think Germany, after destroying Europe in WWII, will be held guilty to destroy Europe again? No - They will print. And: The world has choosen to run on Fiat money, why should Germany not print? It`s only Paper, so what. You have to like this system, your PMs will appreciate it.  

Thu, 09/06/2012 - 13:14 | 2768764 walküre
walküre's picture

You're settling for short term gain and a confusion of historical facts.

Thu, 09/06/2012 - 15:52 | 2769234 zoggl
zoggl's picture

Short term gain? PMs are a long term store of wealth ..... PMs are stable during times of impoverishment of the masses by inflation. I don t understand your argument "confusion of historical facts".  

Thu, 09/06/2012 - 14:14 | 2768945 Sandmann
Sandmann's picture

How did Germany destroy Europe in WWII ? By invading Poland ? Well the USSR did that too munder the Molotov-Ribbentrop Pact. The USA declared itself neutral on 2 September 1939 - yet Poland only existed because Woodrow Wilson wanted it to exist. It is hard to say Germany destroyed Europe....what was that Europe ? An Anti-Semitic dictatorship in Poland which cancelled Jewish passports; a Fascist dictatorship in Hungary and Romania and Spain. It was hardly a happy and settled Europe.......anyway what is this "Europe" ? It is about as much "Europe" as it is Brazil and Venezuela and that space between Mexico and Canada being "America" - one economy, one language, one people

Thu, 09/06/2012 - 16:19 | 2769301 zoggl
zoggl's picture


Destroying Europe: Bombing, murdering, occupying, invading all neighbors, France, Austria, Italy, Poland, and many more (WorldWar) ..... There was no political European union at that time of course, but the impacted regions were the same. And Germany was the!! aggressor against everybody. Part of the plan to create the political European Union was the integration of the Germans into a group with shared interests, to avoid wars, which makes sense. The big countries ask now for a bail out. What would happen if they don’t get it because of the Germans? They would blame Germany of course. I’m not saying this is right, I’m just saying this would happen. Germany will be blamed for the destruction of the political European union and nationalistic tensions will raise. As I said above, this is why they will print anyway. Germany does not want to be guilty and exposed and they also don’t want to destroy their own export markets which feed them.  


Fri, 09/07/2012 - 02:33 | 2770760 Ar-Pharazôn
Ar-Pharazôn's picture

wait wait wait...... Germany destroyed Europe?................


so define destruction cause they left Western Europe pretty much ok, other thing is Eastern Europe.

Thu, 09/06/2012 - 12:47 | 2768669 saturn
saturn's picture

It seems rather that Germany is impotent until they leave the eurozone and will issue a call to assemble a new competitive union against the old one.

Thu, 09/06/2012 - 16:32 | 2769350 caconhma
caconhma's picture

Germans leaders are just paid-agents of the zionist banking mafia.

The good news: this is the death of the present puppet Germany created following the Germany WW2 capitulation.  With Germany's economic collapse, EU and NATO will follow. The next after will be US$ as the reserve currency collapse followed by a present US economic/political system disintegration.

Thu, 09/06/2012 - 11:59 | 2768488 bank guy in Brussels
bank guy in Brussels's picture

Merkel is quietly but effectively backing Draghi in order to save the German banks, pension funds, and insurers.

The Bundesbank is doing the job of whining and complaining that is needed for political cover in Germany, but as Ambrose Evans-Pritchard in the UK Telegraph says, Merkel will ignore the Bundesbank.

The ECB Board is nearly unanimous ... including support from one of the key Germans.

The can has been successfully kicked ... ZeroHedge is over-playing the 'Germans vs Latins' theme, that is really a mock argument for domestic political show in Germany

The UK Telegraph has this well-covered


Thu, 09/06/2012 - 12:05 | 2768511 nope-1004
nope-1004's picture

The can has been successfully kicked

Exactly, with no solution forthcoming.  It's all a farce, as there is no way in hell all 17 nations will embrace one bond for all - won't happen.  There are only 2 solutions:  Dissolution and default, or inflation and civil unrest. 

The first affects US banks bigtime, the second it too close to home for the EU.  Draghi is being pulled 2 directions and has no ammo.


Thu, 09/06/2012 - 12:20 | 2768563 LawsofPhysics
LawsofPhysics's picture

So Merkel chooses inflation, why, because it worked out so well for the Germans before?

Thu, 09/06/2012 - 12:23 | 2768578 eddiebe
eddiebe's picture

Obviously not, but because that's the way her vampire masters and buddies live off the lifeblood of their serfs.

Thu, 09/06/2012 - 12:24 | 2768581 john39
john39's picture

the germans are not the issue... merkel serves her masters... her political career is subject to sacrafice at any time, like the rest of them.  don't think in terms of national interest, the banker cabal is in full control

Thu, 09/06/2012 - 12:28 | 2768591 Manthong
Manthong's picture

Those with their hands on the levers of financial and political power do not care what the people think. The system will be preserved regardless of the levels of counterfeiting required. That goes for their crimson caped constitution court accomplices in Karlshruhe, too. If a something like opposition or referendum happens to threaten the system, the levers will be used to concoct an economic catastrophe to coax compliance and cooperation from the commoners.  

Thu, 09/06/2012 - 14:37 | 2769040 Peter Pan
Peter Pan's picture

What is truly scary is that we could be in for a period of extended misery without any real resolution for DECADES like Russia and China were under full on communism.

Thu, 09/06/2012 - 15:24 | 2769148 nevadan
nevadan's picture


In a word: expediency.  Politicians and bankers will always make the expedient choice. 

Thu, 09/06/2012 - 12:22 | 2768576 Yen Cross
Yen Cross's picture

Might I add, that the ECB buying isn't the issue. We all know Germany will vote for that to happen next week. Germany will "NOT" allow wonton spending by the ECB without Troika like constraints on the "INSOLVENT" E/U members that receive bailout money! That in itself is why the ECB will be ineffective. One rule for all will never apply. greece is already pissed off over the ECB not taking a haircut during it's bailout. [ example]They(ECB), had bond seniority, and now they won't with new bond purchases.

 nope-1004  arrow up for you.

Thu, 09/06/2012 - 12:32 | 2768608 Rip van Wrinkle
Rip van Wrinkle's picture

Only one solution in any event.


Civil unrest. Period.

Thu, 09/06/2012 - 13:08 | 2768746 Poundsand
Poundsand's picture

It's like the people in this boat.  Riding along, feeling like everything is going great.  The driver seems to stand there in total control, quicly reacting to ever changing conditions on the lake (watch his throttle hand) and then.....

Watch this video and you tell me who the chick in the middle is, and who the driver is, and who the woman who easts the windscreen is in the world of finance.



Thu, 09/06/2012 - 12:28 | 2768594 CCanuck
CCanuck's picture

The only thing the Telegraph covers well, is the bottom of a bird cage.

Thu, 09/06/2012 - 12:34 | 2768623 AurorusBorealus
AurorusBorealus's picture

This has been my take on the thing all along as well.  I think many hard money people viewed Merkel and the Bundesbank as the only rational actors in the herd, and overestimated their hard money musings out of sympathy for the position.  As I have said in the comments on here several times, more is at stake than a monetary union; if Germany does not hold with the South, Russia will, after centuries of trying, finally have their foothold into Western Europe, by moving in to pick up the financial tatters of the Mediterranean countries (as Russia is already doing in Cyprus, and likely soon in Greece).  This is an unthinkable outcome for most Germans (remember the East / West German split?) and most Finns, Norwegians, Swedes, Austrians.: the culmination of the fears of many generations of Western Europeans.

The Americans are no longer a stable ally; they have been mesmorized thoroughly by Israel and the influence of zionist money on American elections.  Continental Europe is very much on its own in this crisis, and the German leadership fully understands that to turn their back on the rest of the West is to condemn the whole of Europe.  Furthermore, there is the very immediate issue of German pension funds, banks, and insurers, as you point out.

Thu, 09/06/2012 - 13:16 | 2768772 PontifexMaximus
PontifexMaximus's picture

You got it. Merkel want's to be reelected, she doesn't care about the decision of Karlsruhe, because the ECB is on a "higher" level than the BuBa. And J. Weidmann makes gute Miene zum bösen Spiel, as Goethe would say. Draghi (GS) is the winner. Whether you like it or not, it's a matter of fact. The London HF crowd does not like him at all.

Thu, 09/06/2012 - 14:19 | 2768961 Sandmann
Sandmann's picture

Hjalmar Schacht was a Director of the Danat before the Reichsbank. At the Danat he covered up the secret non-performing loans to President Hindenburg's son and the dodgy loans to Nordwolle which brought down the bank - he emerged at the Reichsbank working for Adolf Hitler and ended up in a Concentration Camp. The secret loans to Hindenburg's son were the blackmail tool used by General Schleicher and why Hindenburg had to remove him with Von Papen and Hitler in 1932

This path is very familiar to Germans.....Draghi is treading a path trodden in 1920s Germany

Thu, 09/06/2012 - 12:55 | 2768687 gatorengineer
gatorengineer's picture

Please tell that to the Bots........  My score card is Draghi 10E9 German taxpayer 0.....

Thu, 09/06/2012 - 14:21 | 2768976 Peter Pan
Peter Pan's picture

Draghi is soaring high along with the markets.
But like Phaethon in Ancient Greek mythology he is destined to lose control of the sun chariot and like Icarus the wax that holds his wings together will melt when faced with the grim realities of gargantuan debt, unemployment and galloping defcits.

Thu, 09/06/2012 - 11:53 | 2768468 mammoth mo
mammoth mo's picture

So this is another step on the road to the end.  Merely a footnote.


Thu, 09/06/2012 - 11:56 | 2768478 101 years and c...
101 years and counting's picture

im willing to bet german court rules the ESM illegal, one day before ben says no more printing.  who will say they were lucky enough to buy 1430?

Thu, 09/06/2012 - 12:02 | 2768480 Monedas
Monedas's picture

Bundes Bunden Bruder Banken !                      Did I mention ....       ???

Thu, 09/06/2012 - 11:59 | 2768489 Jason T
Jason T's picture

 i sincerely feel I've become dumber and dumber in my ability to gage how this all turns out month to month.  this is getting way too complicated frankly.  

Thu, 09/06/2012 - 12:32 | 2768610 12ToothAssassin
12ToothAssassin's picture

Obfuscate, disinform and distract. Mission Accomplished.

Thu, 09/06/2012 - 14:20 | 2768967 Vince Clortho
Vince Clortho's picture


The Central Planners Club is going to do what benefits them. Period.

It is currently in their interest to print ludicrous sums.

The MSM then distracts and mis-informs the public to sow confusion and create the illusion that the guys on top are doing the right thing.

Rinse. Repeat.

Thu, 09/06/2012 - 12:33 | 2768612 ZeroIQ
ZeroIQ's picture

I'm with you.. I'm afraid rational thought doesn't help you understand the mind of a schizophrenic, as his world doesn't work according to reason and logic. There are always an unlimited amount of unrational thoughts and behaviours left, although you think you have seen them all.

Thu, 09/06/2012 - 11:59 | 2768490 Bastiat009
Bastiat009's picture

Draghi works for a bank. This bank is making lots of money because of him. No one seems to care. I have yet to hear one head of state or government says that central banks are destroying the economy. Until then ... 

Thu, 09/06/2012 - 12:00 | 2768492 Boilermaker
Boilermaker's picture


Thu, 09/06/2012 - 12:01 | 2768499 spekulatn
spekulatn's picture

"We are single-digit years away from the most profound market clearing moment" --Hugh Hendry,  May 2012



Thu, 09/06/2012 - 12:02 | 2768502 fuu
fuu's picture

<-- Gold fails to hold $1700 today

<-- Gold sticks $1700 today

Thu, 09/06/2012 - 12:17 | 2768554 Vincent Vega
Vincent Vega's picture

My gold has '50 dollars' stamped on it.....just sayin'

Thu, 09/06/2012 - 12:23 | 2768562 fuu
fuu's picture

Good times.

Thu, 09/06/2012 - 12:22 | 2768574 Uber Vandal
Thu, 09/06/2012 - 12:29 | 2768597 jowenchrist
jowenchrist's picture

I be love'n to stack my silver ... just love'n it...

Thu, 09/06/2012 - 12:55 | 2768691 Bastiat
Bastiat's picture

I'll give you $55 and pay for delivery too.

Thu, 09/06/2012 - 14:01 | 2768906 Vincent Vega
Vincent Vega's picture

Thanks but there is a $1,700 bid, away. (not that I'm looking to sell).

Thu, 09/06/2012 - 15:37 | 2769189 fuu
fuu's picture

Going to be close.

Thu, 09/06/2012 - 12:03 | 2768503 fourchan
fourchan's picture

i didnt even look at cnbc today. the cheerleaders on there must be screaming in glee.

Thu, 09/06/2012 - 12:04 | 2768508 elwu
elwu's picture

The Goldman Sachs Acolyte Draghi did what he was ordered to do by Lloyd Blankfein.

May it cost the German taxpayers what it wants.

In the medium run this spcializing of ClubMeds debt will disintegrete the EU, not just the Eurozone

Germany will get closer with Russia.

At the end of the day, even war in Europe becomes possible again, thanks to Mr. Draghi and his brothers on arms.

Thu, 09/06/2012 - 13:31 | 2768817 hombreloco
hombreloco's picture

Sir, remember this is all THEATRE. The Goldman Strangle is meant to Greenmail Europe into a Centralized Authority. Countries will pledge their all to avoid the supposed 'inevitable'. It will unfortuately work, because people want to believe it is all due to stupidity and malfeasance; they just can't believe this is all done on purpose with stated ulterior motive.

We here in the States had better call the Banksters bluff very soon. Because as this all pans out, we will see the same thing happen here as time draws near for the renewal of the Fed's US 100 year banking charter, (2013). An 1812 Redux is at hand.








Thu, 09/06/2012 - 16:47 | 2769399 caconhma
caconhma's picture

"Germany will get closer with Russia." You don't have a clue about Russia. It is about to collapse and disintegrate. Rutin is the Russian's Saddam Husein.

The Germany future is together with China to split Russia. Then, there will be a new powerful world axis.

Thu, 09/06/2012 - 12:04 | 2768513 kaiten
kaiten's picture

Italy runs a primary surplus. Just for your information.

Thu, 09/06/2012 - 12:05 | 2768519 mirac
mirac's picture

Someone should dress Draghi in drag and throw him into Berlin...

Thu, 09/06/2012 - 12:18 | 2768523 q99x2
q99x2's picture

Germany had like 4 out of 10 of the best cities in the world to live in last year. If you are going to rob a country what better place to do it.

Plus if bankers know more money is going to be coming in the first thing they'll do is figure how to get that new money out before anyone else does. Doesn't matter that it is conterfeited to buy bonds.

Thu, 09/06/2012 - 12:08 | 2768525 eddiebe
eddiebe's picture

German banksters will drag Germany's politicos to the printing press no matter how much foot dragging and whimpering that those 'leaders' exhibit.

Thu, 09/06/2012 - 12:10 | 2768536 WaEver
WaEver's picture

Can someone explain ELA to mr Weidemann.....

Thu, 09/06/2012 - 12:18 | 2768545 poor fella
poor fella's picture

"He regards such purchases as being tantamount to financing governments by printing banknotes"

C'mon, everyone's doing it!!

Thu, 09/06/2012 - 12:17 | 2768552 MillionDollarBoner_
MillionDollarBoner_'s picture

Surely with this move Draghi is abrogating bond issuance authority?

Go figure.


Thu, 09/06/2012 - 12:17 | 2768555 ParkAveFlasher
ParkAveFlasher's picture

How do you say, "nein", in Italian?

Thu, 09/06/2012 - 12:21 | 2768573 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Italians never say no.  They only say yes.  Thus why Italians have so much fun!

Thu, 09/06/2012 - 13:56 | 2768892 walküre
walküre's picture

Italian's wear their shoes with heels at the front.

Fri, 09/07/2012 - 02:55 | 2770776 Ar-Pharazôn
Ar-Pharazôn's picture


Thu, 09/06/2012 - 12:24 | 2768565 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Germany will villify the ECB in the end, saying righteously "We told you so."  That will be after all hell breaks lose. 

Germany is as much to blame as anyone else though.  If they really didn't want the ECB to create such economic monetary policy they would leave the Zone and its fiat euro.  But what they want is the destruction of Europe so they, or rather the corporations that institute and finance the governments and their politicians, can inherit the landscape.  The lanscape will be a scortched earth policy, where people work for $2 a day while anyone who owns a stake in a corporation lives high on their hogs.

This was the plan since year Zero:  Institure corporations so to sabatauge the people and their pesky Republics.  Then the people will be at the will of the corporate elite and the corporations will own the land and rule the day.

Order out of chaos, after all.

Thu, 09/06/2012 - 12:21 | 2768571 floor
floor's picture

Draghi and Merkel are one and the same and Jens is playing the game.

Only thing Germany is doing, is kicking the can, bying time in order to get as much billions as possible out of the PIIGS. ( well forget about the 'G', nothing left there)

Remember Target 2? About 728 billion for Germany by now and they want it back, at least as much as possible.

(The Dutch only want their 123 billion euo back, and believe me, they need it)

So this theatre will be going on until Spain (or Italy) actually has the balls to leave euroland or when Angela  thinks it's been enough, and not one day earlier.

Thu, 09/06/2012 - 12:29 | 2768599 MillionDollarBoner_
MillionDollarBoner_'s picture

When - and only when - the printing (or ECB limitless bond buying = same thing) begins in earnest, Germany will return to the DM.  Until then they will continue to suck the PIIGS dry.

Its great living next to a hyper-inflationary economy so long as you have a solid currency of your own. You simply pop across the border and snap up assets for cents-on-the-dollar from people who are desperate for any currency but their own. After all, your own government can't ass-rape you so bad if you are holding "real" money, right? Check out "When Money Dies" by Adam Fergusson for the details.

Germany has every incentive to keep the ponzi going until maximum stress is reached - that way the pickings will be so much juicier. It also has the added benefit of keeping German exports competitive through the ongoing weakness of the failing Euro.

When the time is right she can neatly step aside into the safety of the new DM and reap the rewards.

Weimar? It's payback time !;o)

Thu, 09/06/2012 - 12:44 | 2768659 Danielvr
Danielvr's picture

You wish! A German exit would be the end of the eurozone simply because no other country will want to (or can even afford to) carry the burden of its southern states without Germany.

And so, all eurozone nations would return to their old currencies, many would default, and Germany would have to say Auf Nie Mehr Wiedersehen to all the euros that it ever loaned to Greece, Portugal, Ireland, Spain, Italy, etc. The impact of that on its own financial system would be disasterous.

Thu, 09/06/2012 - 13:05 | 2768707 floor
floor's picture

That's why Angela is kicking the can, first get as many billions back as possible and than..................

It's going to cost all European countries, also the northern, point is to make it cost as little as possible and in the meantime have everybody pay.

Thu, 09/06/2012 - 12:21 | 2768572 tahoebumsmith
tahoebumsmith's picture

Meanwhile back in the Mother Land also known as England, the Olympic hangover has set in and has seen it's third quarter decline in a row? While all eyes are in the EU, England, Australia and China are in full crash and burn mode. Oh what will they do when reality sets in and they run out of canvas to paint such pretty pictures on?

Thu, 09/06/2012 - 12:24 | 2768580 This is the end
This is the end's picture

Tyler you are funny, Germany has fully endorsed everything out of the mouthpiece Draghi. Do you think he is allowed to say hi without getting permission from Merkel? Germany will continue to say tisk tisk and talk like hawks but print as many Euros as necessary. Other than talk show me one time where they actually did one hawkish thing. They have crossed every line in the sand they have put down. There will be one federal European state with Merkel as the head. That is the idea.

Thu, 09/06/2012 - 12:28 | 2768590 ekm
ekm's picture

This is a clear victory for Merkel and Weidmann.

They know nothing can solve european problems and collapse is not only inevitable but MUCH NEEDED.

The only real issue is who is going to be blamed for it in the World Media. At this point ECB is taking all the accolades, hence ECB will take all the shit when all fails.

Merkel "retreated" few weeks ago when Monti and Rajoy set her up. The reason: She didn't want Germany to be blamed for the much needed collapse.

Everything as per plan. Germany is not blamed. That's the whole point. The bomb and the fuse is in ECB's hand. Merkel and Weidmann are having quite a nice dinner, right now.

Thu, 09/06/2012 - 12:35 | 2768627 CrashisOptimistic
CrashisOptimistic's picture

It seems unlikely that they care more about blame than they do several hundred billion in German Euros that will be drained by this debacle.


Thu, 09/06/2012 - 12:38 | 2768636 ekm
ekm's picture

Germany is Germany. They can handle the euros, they can't handle the international blame. It's a national phobia, natzi for this and natzi for that.


I am even amazed that Draghi and the board fell in Germany's trap.

Thu, 09/06/2012 - 13:59 | 2768902 walküre
walküre's picture

How is Germany not going to get blamed when the country decides to either a) leave the Euro or b) stop Draghi's printing madness?

Elaborate your POV because I fail to see how that is possible and I'm looking at this from every possible angle. But maybe you've got it?

Thu, 09/06/2012 - 12:59 | 2768704 poldark
poldark's picture

Merkel wants EU fiscal and political union, she has made no secret of the fact.

She has got to tread very carefully until the elections next year then it will be full steam ahead for USE.

Thu, 09/06/2012 - 12:30 | 2768601 Rathmullan
Rathmullan's picture

One Word: Ausfahrt. Get used to it, it will be bandied about quite a bit in the year prior to Merkel's ouster late next year.

Thu, 09/06/2012 - 12:32 | 2768609 CrashisOptimistic
CrashisOptimistic's picture

It really is astonishing that Germany is allowing themselves to be outvoted by thieves wanting to pick their pockets.

Thu, 09/06/2012 - 13:06 | 2768734 ArrestBobRubin
ArrestBobRubin's picture

Astonishing? Just who is it that you think runs the joint and has been picking the German pocket for most of the last 100 years? Take another look at Versailles, and who and what was behind it...

Wake up.

Thu, 09/06/2012 - 12:34 | 2768622 JR
JR's picture

The bankers are destroying their hold on the governments.

It’s all now coming apart and the more they twist from ZIRP to NIRP, the more the printing, the closer they’re getting to losing it all.  The numbers and quicksand politics are far beyond what they can understand or control. The numbers are off the charts and each truthful report, rather Greece (unemployment 24%) or Spain (going to a complete bailout) or the U.S. (“worse off since January 2009 since we have expanded Federal government debt by 50.47%”), shows total Goldman-controlled central banking chaos.

In the US, it’s an election year, and the Goldman-controlled NY Fed has gone all out to hold the stock market in a chaotic economy so the bankers can keep their incumbents in place in the Congress; they are not going to endanger the market place and startle the 401(k)ers into looking for alternate candidates.

While “the sky is falling" over the banker-controlled West, the bankers, IMO, are destroying their own house while playing for time, losing both the financial and political games; I didn’t think they would go this far afield just to get a short-term bounce.


Thu, 09/06/2012 - 14:08 | 2768930 walküre
walküre's picture

Well, in their control destruction they managed to create themselves incredible WEALTH.

LOUIS XIV would be ASHAMED AND JEALOUS at how much WEALTH the bankers have created for themselves!

Money talks, bullshit walks. Who has the money? LOUIS or the bankers?

Thu, 09/06/2012 - 14:58 | 2769086 JR
JR's picture

If you’re willing to go to the block, like Louis XVI, then you can steal and grab as fast as you can. The unprecedented grab for wealth from the bankers will be short lived because they are too hooked on the power drug to understand where they are headed.

As Controller General Turgot warned Louis XVI when he refused to stop the Court’s excesses:

“Do not forget, Sire, that it was weakness that brought the head of Charles I to the block.”

How is Louis’ stealing from the French peasants and middle class different from Citigroup’s secret grand larceny of $2.5 trillion ($2,500,000,000,000) in taxpayer funds provided by the Fed’s first $16 Trillion in Secret Bailouts after Citi’s massive high-risk losses? Shades of Marie Antoinette’s let-them-eat-cake is today’s fatherly advice from Citi to savers that if they want to retire at age 65 they’ll either have to invest in high-risk or drastically increase their personal savings or there will be no cake! That’s classic French Revolution.

And to think, Citigroup's $2.5 Trillion in free dough to cover high-risk gambling losses amounts to 31% of the total $8 Trillion of the people's hard-earned savings in bank accounts and certificates of deposit -- kept there for "safety"!



Thu, 09/06/2012 - 12:36 | 2768632 Danielvr
Danielvr's picture

"In other words, in 3, 6, 12 months, all economic indicators in Europe will again deteriorate, budget deficits will be greater, and economic viability will be even more hindered"

Well, for now we seem to be fine here in the Old World. Remember, we're playing global leapfrog and next up is the USA with its $16 trillion deficit and its Jan 1 deadline, which will either bring A) massive tax increases or B) dramatic spending cuts or C) massive QE. Or more likely, all of the above. Let's see what that does to the US bond market and to the dollar and, inversely, for the euro.

The current geo-financial situation is strangely reminiscent of Carl Bark's Donald Duck story, "Statuesque Spendthrifts". We'll just have to see who turns out to be Scrooge McDuck and who ends up as the Maharadja of Howdoyoustan..


Thu, 09/06/2012 - 12:48 | 2768673 Dollar Bill Hiccup
Dollar Bill Hiccup's picture

The way things are going, it will bring SPX 2000 ...

Thu, 09/06/2012 - 12:55 | 2768688 floor
floor's picture

Even Bernanke isn't that stupid to stretch option C to far.

US wages are deflating which is why for Bernanke to really go the Inflation/Hyperinflation way litterally means he is paving the road for civil war.

Inflation also does not just squeeze the american people who already have little money, they squeeze margins of businesses operating in the country - when company margins get squeezed, they can increase sale prices, but I can quarantee you that they will not be actually hiring new people - this means unemployment will stay high, which is literally a large deflationary in or at itself.

Thu, 09/06/2012 - 12:38 | 2768638 RiskAverseAlertBlog
RiskAverseAlertBlog's picture

What's really funny is that, the Bundesbank is no less insane than the ECB with its insistence on "necessary reforms." What chauvanism to say the German way to bury Europe in misery is better than the ECBs.

A united, federal state of Europe could work if it were modeled on a Hamiltonian conception of a credit system. Trouble is those who prop up Her Royal Bankruptcy will never allow it, which is why the U.S, Russia and China should jointly point their nuclear arsenals at London and remove a centuries-old global troublemaker from the face of the planet. There is where the rope Europe has been given to hang itself is made, this that the U.S., Russia and China likewise be readied for their march to the gallows.

Thu, 09/06/2012 - 12:43 | 2768649 El
El's picture

I realized how far the sheep mutation had spread when I saw a dozen Democrats at the DNC tell Peter Schiff that a federal law should be passed outlawing corporate profits. Doomed just doesn't quite cover what we are.

Thu, 09/06/2012 - 12:42 | 2768653 Renewable Life
Renewable Life's picture

Mr Assad in Syria thought he and his daddy where the masters of their universe for a long time, Gaddafi too, the Soviets thought they where too, this shit will work its self out in the street, like it ALWAYS does!!!! And there won't be a banker to be found within a 1000 miles when it does!! But until then, they will strut around in their $5000 suits and feast on the sheeple of the world!!

What I get a kick out of, is these fucking bankers in Europe and the US still think its 1999 and they don't any competition in the world! They think no one has as big of guns and as much money as they do!!!! The biggest threat to Russian power is a unified Europe, backed by a healthy US, the biggest threat to Chinese power is the same thing!!! Libya, Egypt, and Syria don't happen without massive money, weapons, and resources from the outside!! And those were just appetizers!!

This whole printing press, banking bullshit, is just a side show, as each world power attempts to carve up their territory in the NWO! There are 4 (China, Russia, EU, US) bad ass motherfuckers all living on the same block now, when their use to be just one!!! This shit will be settled in the street, sooner then you think!!!!

Thu, 09/06/2012 - 12:46 | 2768665 Dollar Bill Hiccup
Dollar Bill Hiccup's picture



Thu, 09/06/2012 - 12:49 | 2768676 boiltherich
boiltherich's picture

American reply to ECB, "we will now be forced to proceed with a monumental QE3," and that is why US equities are up 2% so far post Draghi statement.  This is a gift (or possibly a submission to) the Fed and Benny B.  By the way, a 2% rise in US equities in a fifteen minute window... shall we do the math?  About 20 trillion market cap up 2% is an increase of at least 400 billion dollars worth of net stock buying in a few minutes.  This is a massive bet that the Fed is going to announce a QE3. 

Thu, 09/06/2012 - 12:58 | 2768699 Bastiat009
Bastiat009's picture

Germans are just talk. No actions.

Thu, 09/06/2012 - 13:01 | 2768712 CharlesH
CharlesH's picture

"Such risk-sharing, however, can be legitimately authorised solely by democratically elected parliaments and governments.”

Give me a break. This will become nasty the coming years :) Starting @ 2013

I bet in the near future they will come out for their failures and didnt know. "Ich habe es nicht gewust" :)

Thu, 09/06/2012 - 13:03 | 2768721 poldark
poldark's picture

Merkel wants full fiscal and political union, she has made no secrfet of the fact. She has to tread carefully until after the elections next year. Then it will be full steam ahead for USE.

Thu, 09/06/2012 - 13:13 | 2768758 floor
floor's picture

Forget it, times are changing and for instance even the Dutch by next year are going to realize that since the euro, private debt has risen 3x.

Only businesses that prospered by the euro are the multinationals and now it is pay back time for the people, I don't think so.

Thu, 09/06/2012 - 14:00 | 2768909 walküre
walküre's picture

Germany is supposed to carry 27% of the burden and has 1 vote.

Same as Malta which carries 0.14% of the burden.

WHAT THE FUCK???? Who let this happen and why are they not in jail?

Thu, 09/06/2012 - 15:22 | 2769143 WTFx10
WTFx10's picture

rothschilds, the same owners of the USD

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