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The Fool's Game: Unravelling Europe's Epic Ponzi Pyramid Of Lies

Tyler Durden's picture


From Marg Grant, author of "Out of The Box and onto Wall Street"

The Fool's Game

Bank Bonds Guaranteed by their Sovereign Nations

Spain:        79.039 billion euros        ($103 billion)
Italy:          78.032 billion euros        ($102 billion)
Portugal:    18.225 billion euros        ($ 24 billion)
Ireland:      27.707 billion euros        ($ 36 billion)
Greece:      67.244 billion euros        ($ 88 billion)

TOTAL      270.247 billion euros   ($353 billion) 

“Black markets will always be with us. But they will recede in importance when our public morality is consistent with our private one. The underground is a good measure of the progress and the health of nations. When much is wrong, much needs to be hidden.”
                                                                             -Eric Schlosser

Now in the curious world we live in today; this only came out in public as the answer to a question raised in the German Parliament. Some reflection on the nature of these guarantees, that the European Union had decided not to tell us about, causes me to think of them as “Ponzi Bonds.” These are the seeds of a great scheme that has been foisted upon us. Bonds of a feather that have flocked together and arrived with the black swans one quiet Wednesday afternoon. The quoted and much ballyhooed sovereign debt numbers are now known to be no longer accurate and hence the lack of credibility of the debt to GDP data for the European nations. Stated more simply; none of the data that we are given about sovereign debt in the European Union is the truth, none of it. According to Eurostat, as an example, the consolidated Spanish debt raises their debt to GDP by 12.3% as Eurostat also states, and I quote, that guaranteed debt in Europe “DO NOT FORM PART OF GOVERNMENT DEBT, BUT ARE A CONTINGENT LIABILITY.” In other words; not counted and so, my friends, none of the data pushed out by Europe about their sovereign debt or their GDP ratios has one whit of truth resident in the data.


If we just take the newest figures for Spain, which were released this morning, we find an admitted sovereign debt of $732Bn and a touted debt to GDP ratio of 68.5% which is up 10.7% from last year. Then, according to Phoenix Capital Research, the private sector debt is 227% of GDP while the Spanish banking system is levered 19 to 1. Danske bank points out this morning that the drop in home prices for Spain was -4.2% last quarter which marks the biggest drop ever  and they note a record high vacancy rate of 24.3% while further stating that the fall in Real Estate prices is so steep that it is equivalent to a 10% loss in GDP. In a report issued on 2/29/12 and apparently ignored by everyone including the ratings agencies, Eurostat reports that Spain has total sovereign guarantees of “other debt” which is 7.5% of their total GDP which would total around another $72.2 billion in uncounted debt. Then if we consider the “known” debt for Spain, only someone in La Mancha may know the “real” answers, we find:

Admitted Sovereign Debt                                    $732 Billion
Admitted Regional Debt                                      $183 Billion
Admitted Bank Guaranteed Debt                        $103 Billion
Admitted Other Sovereign Guaranteed Debt       $ 72 Billion

Total Admitted Debt                                         $1.090 Trillion

A More Accurate Debt to GDP Ratio               113.2%

What Difference Does It Make

Now the world is a funny place these days. We have somehow come to the conclusion that since Europe can print all of the money they want, as in the LTRO scheme, that whether the combined ECB/EU loans are $3 trillion or $10 Trillion that it will make no difference as they can print all of the money they will ever need. They can print money, they can buoy their currency through central bank purchases, they can accept collateral that has the value of a nugget of fool’s gold so that they can rig the game to their heart’s delight and everything will be just fine. Now let me assure you, after almost thirty-nine years of engaging in the Great Game let me assure you, that this type of momentary nonsense will not prevail past the briefest of times and that the truth always emerges in due course. In the same Eurostat report, by the way, of 2/29/12 we also find that Belgium’s sovereign guarantee of “other debt” is 21.3% of their GDP, for Italy it is 3.6% of their GDP and for Portugal the number is 7.7% of their GDP. This does not include any guarantees of bank debt which would also have to be added in to the totals to reflect some sort of accurate fiscal picture. Consequently, as investors, we are not in some murky place but smack dab in a carefully engineered plan of outright Fraud where we are given manipulated and inaccurate numbers in the hopes that we will fund based upon them. We are being played as suckers as I state once again that I would not put one red cent in any of the European sovereigns or their banks as none of their data is real; only a consistent illusion created for fools.

“A foolish consistency is the hobgoblin of little minds, adored by little statesmen and philosophers and divines. With consistency a great soul has simply nothing to do.”

                       -Ralph Waldo Emerson

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Fri, 03/16/2012 - 09:11 | 2261367 BLOTTO
BLOTTO's picture

...'We are being played as suckers as I state once again that I would not put one red cent in any of the European sovereigns or their banks as none of their data is real; only a consistent illusion created for fools.'




Fri, 03/16/2012 - 09:13 | 2261381 GetZeeGold
GetZeeGold's picture



It's all in the perception.


Fri, 03/16/2012 - 09:23 | 2261415 nasdaq99
nasdaq99's picture

and so just how is this different from the US not including unfunded SS & Pension liabilities???????

Fri, 03/16/2012 - 12:29 | 2262130 gookempucky
gookempucky's picture
The Fool's Game: Unravelling The European/ Worlds Epic Ponzi Pyramid Of Lies

Fixed it for you.

Fri, 03/16/2012 - 09:25 | 2261425 scatterbrains
scatterbrains's picture

That pension fund director position we promised you ? You better start believing the illusion and buy sovereigns with both fists if you want that 6 digits salary. Now shut up and get busy.

Fri, 03/16/2012 - 09:40 | 2261472 ltsgt1
ltsgt1's picture

If an illusion is consistent long enough, then it becomes a reality. However, that would only work with real growth and time to allow the lost to be buried and forgotten.

Fri, 03/16/2012 - 13:29 | 2262424 RollinsArline3
RollinsArline3's picture

my roomate's mom makes $83/hr on the computer. She has been fired from work for 9 months but last month her pay check was $18339 just working on the computer for a few hours. Read more on this web site .....  http://bit.ly/FPPP3j

Fri, 03/16/2012 - 09:13 | 2261379 Comay Mierda
Comay Mierda's picture

what about unfunded liabilities?  thats the elephant in the room

Fri, 03/16/2012 - 09:16 | 2261387 lolmao500
lolmao500's picture

Not really since they will be UNFUNDED... all that is promised by the government and corporations... pensions, etc... all of it is total lies. When the fools wake up to this, they will go Greek on their butts or submit like the good little slaves most of them are.

Hell you go in the street right now and talk to 10 people and tell them that they'll never get their pension fund and their benefits and not even 1 in 10 will believe you.

Fri, 03/16/2012 - 09:33 | 2261456 Comay Mierda
Comay Mierda's picture

I'm not so sure the govt will take the politically unpopular path of defaulting on these unfunded liabilities.  im betting they will fund them with money printing and the ensuing currency crash will be blamed on those evil chinese/iranians/russians/kony/osama bin laden's ghost/aliens/etc

Fri, 03/16/2012 - 12:41 | 2262193 WillyGroper
WillyGroper's picture

According to Berko, CONgress is kicking around a method of means testing for both SS & medicare based on ur assets. Once again, those that have saved get kicked in the nads.

Fri, 03/16/2012 - 09:16 | 2261388 Spitzer
Spitzer's picture

This isnt the US of A.


There Euro hit pieces are sure getting lame and old. The Euro continues to outshine the dollar

Fri, 03/16/2012 - 09:28 | 2261441 Terminus C
Terminus C's picture

Ah the good ole' "my shit is more polished than your shit" argument.

Fri, 03/16/2012 - 10:32 | 2261631 Nachdenken
Nachdenken's picture

You can´t polish dried turd

Fri, 03/16/2012 - 17:25 | 2263457 nohweh
nohweh's picture

Where does that leave my freshly laid steaming heap?

Fri, 03/16/2012 - 09:13 | 2261380 q99x2
q99x2's picture

If the guy on the street didn't lend those bankers anything then they don't owe them anything. The only thing they will get paid back in is green lightbulbs.

Hi I'm a banker. I'm going to give you a loan and this guy is going to pay for it. Riiiggghhhttt. Give me a break.

Fri, 03/16/2012 - 09:14 | 2261383 lolmao500
lolmao500's picture

We have somehow come to the conclusion that since Europe can print all of the money they want, as in the LTRO scheme, that whether the combined ECB/EU loans are $3 trillion or $10 Trillion that it will make no difference as they can print all of the money they will ever need. They can print money, they can buoy their currency through central bank purchases, they can accept collateral that has the value of a nugget of fool’s gold so that they can rig the game to their heart’s delight and everything will be just fine.

Just like America and Japan then...

Fri, 03/16/2012 - 09:21 | 2261408 JustObserving
JustObserving's picture

And they will keep attacking gold and silver to prolong the illusion that fiat money has value.  The more they print, the more vicious the attacks on gold and silver.

China and India will keep buying at bargain prices.

Fri, 03/16/2012 - 09:14 | 2261385 Moneyswirth
Moneyswirth's picture


Fri, 03/16/2012 - 09:18 | 2261397 q99x2
q99x2's picture

Arrest them!

Fri, 03/16/2012 - 09:19 | 2261399 Cdad
Cdad's picture

I should think it mandatory that, upon concluding the business of reading this post, one should then revert back to Jen Weidmann's comments of yesterday:  http://www.zerohedge.com/news/jens-weidmann-defends-bundesbank-against-allegations-target2-induced-instability

Because according to him, the ball has now been handed to the rest of Europe, and supposedly the PIIGS and the rest of the lot have nothing but open field to run through, thus using all of this massive Ponzi'd up debt, raised by a factor of .333% of Euro lying, to correct their economies until the end zone is reached and sheer fiscal joy is achieved.

Seriously...is the total global collapse scheduled for this afternoon?  If not, it should be.

Fri, 03/16/2012 - 09:23 | 2261403 Dr. Engali
Dr. Engali's picture

I have no idea why people don't just take their money and go home. Refuse to participate in this game.

Fri, 03/16/2012 - 09:26 | 2261431 mayhem_korner
mayhem_korner's picture



Unfortunately, "money" and "home" are both instruments of confiscation in the game.  The Matrix is everywhere.

Fri, 03/16/2012 - 09:22 | 2261411 sessinpo
sessinpo's picture

From article:

"Some reflection on the nature of these guarantees, that the European Union had decided not to tell us about, causes me to think of them as “Ponzi Bonds.”"



Every government bond is a ponzi scheme. That should be self evident simply on the basis that government does not create wealth. Governments/soveriegn nations are simply corporations that have a monopoly on the local money supply and use of force. When one understands this, one realizes that governments steal wealth from its citizens through inflation, outright corruption and through laws such as eminent domain. In very few instances is the public good served. Saying all this bad stuff about government in general, I'm willing to admit that government has done good things in a few projects such as space research that has provided the world with amazing technologies. Every government bond is a ponzi scheme because it is backed by the government and thus its tax base whether the tax payers like it or not.

Fri, 03/16/2012 - 09:24 | 2261412 ConfederateH
ConfederateH's picture

If hidden "guaranteed debt" is the issue, the US has Europe trumped.  Fannie, Freddie, Agency Debt, Munies, defined benefits for public unions, cost of maintining veterans, before we even start into Food Stamps, SS, Obamacare, etc.  And this only scratches the surface, there are also hidden guaranteed debts to overseas entities and countries.

Fri, 03/16/2012 - 09:24 | 2261423 Dr. Engali
Dr. Engali's picture

I don't think you would find to many people on this site who would argue against that point. I think the more befuddling thing is...what keeps it afloat?

Fri, 03/16/2012 - 09:34 | 2261450 sessinpo
sessinpo's picture

Dr. Engali

"I don't think you would find to many people on this site who would argue against that point. I think the more befuddling thing is...

what keeps it afloat?"



Some might suggest reserve currency and military power. These are not my suggestions.

Despite the many calls for the end and doom of the dollar which will eventually happen, one top question remains. What would replace it?

Some say PM. Some say basket of currencies. Some say a basket of commodities. Some say another single currency. The point is, the question is still unanswered, thus the US dollar remains the reserve currency. One also needs military power to back up such reserves (claims). At this point, the US still has enough military influence (compared to other nations) to be a factor in most cases.

Fri, 03/16/2012 - 09:40 | 2261470 Dr. Engali
Dr. Engali's picture

I have no doubt that the two go hand in hand, but  even more so it's the petrodollar. At some point in time you would think other nations would say screw you U.S. we are tired of you exporting your inflation to us. We aren't going to fund all your social progams and wars. We are tired of your abuse.

Fri, 03/16/2012 - 09:23 | 2261416 alexwest
alexwest's picture

here's fraud by FED GOV:

according monthly treasury statement for sept 2011(end of 2011 fin year )
total revenues - 2.300 bln $

according daily treasury statement of last day of sep 2011
GROSS taxes collected - 2.080 bln , minus gross refunds - 412 bln
equals - 1.670 bln

let me repeat - TAXES COLLECTED - 1.670 BLN, overall revenues reported- 2.300 bln



hint: its not real money , its accumulated debt masked as revenues

Fri, 03/16/2012 - 09:24 | 2261422 Aquarius
Aquarius's picture

Government sanctioned Fraud is still Fraud.

Fri, 03/16/2012 - 09:35 | 2261459 Blue Horshoe Lo...
Blue Horshoe Loves Annacott Steel's picture

Your mission, should U choose to accept it, is to print enough counterfeit money to bailout Europe.

This economy will self-destruct in 5 seconds.

Fri, 03/16/2012 - 09:41 | 2261474 rigorous
rigorous's picture

It is meaningless for the U.S. stock market.  Capitulation is happening everyday and the market goes higher and higher.

Fri, 03/16/2012 - 09:50 | 2261497 chinaboy
chinaboy's picture

Always great post, Mark.

They could have resolved the crisis the capitalist way. But they seem to prefer the mafia way: ponzi, market control... The end result does not change. In the end, they have to face the music. Only it will be bigger because they did not do it the capitalist way.

Fri, 03/16/2012 - 10:00 | 2261525 mess nonster
mess nonster's picture

Goldman Sachs loses 2.3 billion in market capitalization overnight due to whisleblowing.

The truth is a powerful weapon when the edifice is built upon lies.

When no-one will loan you money, you loan it to yourself.

This will end with guns.

Fri, 03/16/2012 - 10:01 | 2261529 slewie the pi-rat
slewie the pi-rat's picture

"marg" is in truly rare form, today

what difference does it make?  

"...as investors..."  and so on.  today, he won't put one red cent into those fraudulent EU banks, but just yesterday, it seems, he was telling us to "short" them, but couldn't say which, b/c he had someone's hand up his little puppet ass, it seemed

good thing we have "marg" to tell us TPTB are lying about the numbers, huh? 

Amazon.com: Out of the Box and onto Wall Street: Unorthodox Insights on Investments and the Economy (9781118018101): Mark J. Grant: Books

Part memoir, part investment strategy guide, Out of the Box and onto Wall Street presents a revolutionary, alternative look at the world of finance. Revealing the essential rules for preserving capital and making long-term profits, the book provides timely observations on the current and future state of the world economy and investment markets, which are sure to be of interest to anyone considering alternative and time proven ways of making money.

  • Written by Mark J. Grant, Managing Director of Corporate Syndicate and Structured Products for Southwest Securities, Inc

“Mark Grant writes with conviction, panache, and an internal radar focus used on the critical issues of evolving investment markets. I read his daily commentary and this book is just as compelling.”
— Bill Gross, Co-Chief Investment Officer, PIMCO

may i have some more panache, please, sir?

Fri, 03/16/2012 - 12:12 | 2261581 Zero Govt
Zero Govt's picture

 "Unravelling Europe's Epic Ponzi Pyramid Of Lies"

We can play that game any year in any country regards looking at the pyramid of deceipt that is Govt (local and national level)

"..as investors, we are not in some murky place but smack dab in a carefully engineered plan of outright Fraud.." 

Bwankers shouldn' t be left to run anything but counting peanuts on a desk.. with that bean-counter Rothchild cleaning the loos


Fri, 03/16/2012 - 10:38 | 2261653 Nachdenken
Nachdenken's picture

The Ponzi is the cumulative off balance sheet guarantees that iae measured and aggregated here on ZH.  The sting goes on while these off-balance sheet guarantees are never brought to book. Imaginative bookkeepingand MSM MOPE keeps the ponzi going - for now or forever ?

Fri, 03/16/2012 - 10:51 | 2261694 Olympia
Olympia's picture

Something serious should have taken place, so that the “Superpower" owes 14.5 trillion dollars. Such a "broke superpower" has never been before. The world has never seen before "World rulers" who surrender to pain because cancer medication costs. World rulers, who, when they lose their jobs, go straight to the “garbage”, have never existed not even in the years of Genghis Khan. There should be a problem somewhere and that’s what we are seeking. It’s not possible for someone to eat night and day and to risk dying of malnutrition. It is obviously that this person is severely “ill" and that’s what threatens him with death. This is the case in USA. They take advantage the resources of the whole planet and they have “managed" to be threatened today with bankruptcy. They are doing something wrong. Something is wrong in their “organism”. Some internal "cancerous" agent "sucks" all their inflow and lets them crawl to "death

The problem, as one may see, started from the place that had the power to do that and this is the center of global imperialism. It started in USA. It is there that private loan sharks made it and took a “pump” ...the American economy “pump” ...that "pump” that would allow them to interfere with the USA “breath” ...to make it “turbo” ...to make it unnatural. Why there? Because the USA have a very special particularity. They had a particularity that offered them a special “physiology” ...a “physiology” that no other national state had ever before in the global history ...not even the British empire. Even though it is a national state, they could finance national states due to its rank in global hierarchy. They could breath in an “enhanced way”, because their unnatural profits did not "blow them up", they were discarded in the form of financial assistance to the European national states instead. This means that FED kept “pumping up“ but there was a “pressure” relief “tube” that was leading to Europe

People should start getting ready for great trials ...for International Courts, where the current loan sharks shall give account. Monetarism criminals should sit on the same benches that once sat Nazi criminals. Rothschild, Rockefeller, Greenspan, Bernanke, Trichet, Soros, Buffett –and other “kids” of the loan sharking- should not sleep calmly from this point on. So, should also do their Quisling-type partners ...all the traitors who undertook power supported by the Monetarists and exercised leadership at the expense of their people ...Merkel, Sarkozy, Barroso, Zapatero, Papandreou and others.
The world is getting “awake” from “narcosis” and pity to the one who shall be found to have made the wrong at the wrong time ...pity to the who “sedated” them to “rape” them ...pity to the one who shall be found holding the criminal “tube” ...pity to the one who threatened the future of the human kind.


Global Debt Crisis by Panagiotis Traianou

Fri, 03/16/2012 - 11:45 | 2261925 Herkimer Jerkimer
Herkimer Jerkimer's picture





Now just what in the hell does "admitted" EXACTLY mean?


Would you say that to your mother, if she asked you how many bonds you had?


She'd know you'd be fibbing in a minute and give you one upside the head!



Fri, 03/16/2012 - 12:49 | 2262221 flyingpigg
flyingpigg's picture

Greek Bank Bonds Guaranteed by their Default Sovereign Nation:
Greece:      67.244 billion euros   

I guess these bank bonds can be used as collateral for participating in LTRO3?

Fri, 03/16/2012 - 14:38 | 2262764 The Reich
The Reich's picture

New European standard since last week!

Fri, 03/16/2012 - 14:08 | 2262622 JohnKozac
JohnKozac's picture

Powerful article. Thank you Marg!

Sat, 03/17/2012 - 18:34 | 2265787 futuresmkt
futuresmkt's picture

Is it possible the accelerating global consolidation and restructuring of both the industrial and financial landscape is intentionally precipating these never ending and growing crises? The political class has essentially become irrelevant but, no one notices or reports that fact. In the end, with acknowledged resource scarcity now a given, corporate power centers will fight for control by squeezing out all weaker players - competitors, organized labor and bureaucrats. While our eyes are fixed on the crisis of the day (MF Global..really?..How the @#% did that happen?), the long game is, prepare for a resource poor landscape where the "Golden rule" is the only rule. All the rest is just veneer.


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