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Forget The "Bazookas": Here Come The "Tomahawks" And "Howitzers" - An R-Rated Walk Thru The Greek Endgame

Tyler Durden's picture




 

We have already provided much cold, hard, clinical facts on the hypothetical Greek EMU exit on countless occasions before. Yet Jefferies' David Zervos has done it with such peculiar aplomb which we have not encountered before, that we felt compelled to share with it readers. Zervos' Paulsonesque 'apocalyptic' flair shines particularly when analyzing what happens at T-0, i.e., June 16, i.e., the day before Greek election day, i.e., the last Greek free call option on physical euros if all hell breaks loose: "On June 16th why wouldn't every Greek go to the bank with a sack and ask for the cash. Why hold Euros into the 17th? By that logic why not get them out earlier in case they shut the ELA pre-election. From the north's perspective, one could argue that Merkel should shut the ELA right now. Allowing the Greek people to access all their Euros physically, while still holding the option to default on June 17th, is insane. She and the ECB would NOT be acting in the best interest of the Eurozone if they let this happen - there would be 300b in Target2 losses to split up between 16 member NCBs if the Greeks choose to leave after taking out all the Euros." So where does the chaos from a Greek bank run and exit lead us, as Zervos puts it. "The end is of course ECB printing, Eurobonds and every developed market central bank dumping massive liquidity into the global financial markets as systemic risks rise - QE, LTROs, Currency swaps, and every funding facility under the sun come into play. The path to this end game will be bumpy, but make no mistake, the developed market central banks will dump so much fiat on the system to cover the losses, that risk free real rates will plummet to levels so negative that anyone left holding cash or cash equivalents will see massive destruction of real wealth. We may have to push risk assets a bit lower from here, but the global central banks will be firing howitzers and tomahawks very shortly, not bazookas! And you best be owning some risk when those bad boys are launched!!"

Of course, owning fiat-based assets in a system that is about to be drowned in what effectively amounts to infinitely more fiat, makes one wonder: what will be the point owning risk if the "currency" in which risk is denominated becomes meaningless virtually overnight?

Which is why we are happy to paraphrase Zervos: "And you best be owning some hard, real assets when those bad boys are launched."

Extracted from Jefferies' David Zervos: No ELA, No Euros! The End!

So lets "run" through the mechanics of a Greek bank run. As the Greek people begin to smell a Greek exit and a conversion of their hard earned Euro deposits back to Drachmas, they will withdraw Euros from Greek banks. So the Greek banks will head to the BoG with some dubious collateral to beg for Euros to pay depositors. The BoG takes the collateral, gives it a minuscule haircut, and draws Euros via the ELA. This of course creates an increase in BoG Target2 liabilities. The BoG then sends the Euros to the Greek bank and the Greek bank then gives the Euros to the hard working Greek depositor standing in line waiting to empty the account.

Importantly, Greek banks ONLY run out of Euros if the ECB can justify a shut down in funding to the BoG ELA facility or the Greek banks directly. Now, as we heard last week, the ECB has already stopped OMOs with 4 Greek banks (which one could safely assume are the big ones). So the ONLY thing standing between a Greek depositor and his/her Euros is the ELA. No ELA, no Euros!! And, as mentioned above, the ECB has once before threatened to turn off NCB access to Euros via the ELA in the case of Ireland. So there is a precedent for this to happen again!

Now we have to look at the conditions under which the ELA could be turned off by the ECB. Looking back to the Irish case, it was the potential for a default on senior bank debt that triggered the ECB threats to the central bank of Ireland. As the rules stand, ELA lending can only be done to "sound" institutions. So the ECB in theory can shut down all lending, including ELA, if the NCB is failing to abide by the rules. And clearly, Irish banks that default on senior debt are easily proven NOT sound!

In the case of Greece, in the middle of a bank run, will it be hard to prove that banks are not sound? Hardly! But more importantly, the soundness of the Greek banks is 100 percent dependent on the 65b Euro capital injection coming as a part of the previous government's agreement to the MoU (Memorandum of Understanding, or what Tsipras calls the Memorandum of Barbarity).

That 65b is the ONLY reason why Greek banks have a chance of being deemed sound. Without the 65b, there is no way anyone could claim the BoG is lending to sound institutions and there is no way the ECB could continue to authorize the BoG to lend under ELA.

And that takes us squarely to Mr Tsipras, SYRIZA, the MoU/MoB and the Greek election. It will be very easy for Merkel and company up north to lay out a case for an ELA shut down for the BoG if the MoU is discarded by the Greek voters via a win for Tsipras! In a sense, Merkel's phone call on Friday to the Greek president was just that. It was actually the same call that was made to the Irish president a while back - and of course the Irish balked, caving to the German demands. At that time however there wasn't an Irish presidential vote. This time, with Greece, Merkel's message is really to the Greek people. And what is that message exactly? Vote for Tsipras and I turn off the Euros. Or, in other words, choosing Tsipras means choosing to leave the Eurozone. Of course, Greece could vote for Tsipras, discard the MoU, repudiate the dni8ceebt (including Target2 debts), still use the Euro and stay in the EU - but they would become Montenegro! The chances of that however are zero. The Greeks will want to print and control their destiny if they get cut off. No ELA will almost surely bring back the Drachma. And doing so would, in Merkel's view, be the choice of the Greek people. At least that's how it will be sold to the rest of Europe.

The problem for Merkel is that the Greeks will understand this and run the banks BEFORE June 17th - it is happening right now. On June 16th why wouldn't every Greek go to the bank with a sack and ask for the cash. Why hold Euros into the 17th? By that logic why not get them out earlier in case they shut the ELA pre-election. From the north's perspective, one could argue that Merkel should shut the ELA right now. Allowing the Greek people to access all their Euros physically, while still holding the option to default on June 17th, is insane. She and the ECB would NOT be acting in the best interest of the Eurozone if they let this happen - there would be 300b in Target2 losses to split up between 16 member NCBs if the Greeks choose to leave after taking out all the Euros. If she gives the directive to shut off the ELA early she will at least keep the Target2 losses to 150b. And she will be telling the Greek people that if they vote for Tsipras, their Euros in the bank will not be available. This is a dangerous game for sure! But this way she can also blame the Greek voters for an exit, and hide behind ECB rules that imply access to funding can only be done to sound institutions. With this strategy she can have the Greeks decide on the 17th to keep the MoU, get the 65b and have access to their 150b Euros OR abandon the MoU, watch their Euros turn to Drachmas and leave the Eurozone. She didn't kick them out, they chose to leave!! Of course the few weeks leading up to the election with ELA turned off and a multi week Greek bank holiday would make for some crazy headlines.

As I said in Friday's piece, deciding what to do with the ELA for the BoG as we head into the Greek election "is the most important decision in the history of EMU". By turning it off, Merkel might scare the Greek people into complying, as she did with the Irish. By leaving it on, she makes it much easier for the Greeks to vote Tsipras and leave the rest of the zone to pay. She also makes it much more likely she will have to cave to Tsipras' demands.

The stakes are high, and while the decision is crucial for Greece, and their creditors, there are even bigger second order issues in play. A Greek run will certainly cause the Spanish and Italian folks to question the access of their respective NCBs to ECB funding and the ELA. It will be VERY hard to argue that Italian banks are sound if 100s of billions in deposits flow to Germany! And why wouldn't every Eurozone resident put their hard earned money in the safest bank possible if we start to see Greek depositors threatened? As soon as retail sniffs that there is a chance of a loss, a full scale Eurozone bank run ensues. If the Germans can turn off the Greeks or the Irish, could they turn off the Italians?

The Germans have tried to play hard ball for 3 years. Every time it backfires and the Fed and ECB have to ride to the rescue with bazookas. My money is on the Germans going to battle with Tsipras. And in the end we create a Greek exit and a bank run throughout the periphery. The endgame looks like what I described in the commentary entitled "Angie ain't it time we said goodbye". In that analysis the Italians and the Spaniards, through the chaos of bank run and Greek default, force the Germans to wrap their debts via Eurobond or some sort of system wide European bank deposit scheme. In actuality, the Rajoys and Tremontis of the world may even try to incite a run in Greece - it gets them the German wrap they have always dreamed of! Using Greece as a pawn in the big Eurobond chess game is dangerous, but likely effective!

So where does the chaos from a Greek bank run and exit lead us. The end is of course ECB printing, Eurobonds and every developed market central bank dumping massive liquidity into the global financial markets as systemic risks rise - QE, LTROs, Currency swaps, and every funding facility under the sun come into play. The path to this end game will be bumpy, but make no mistake, the developed market central banks will dump so much fiat on the system to cover the losses, that risk free real rates will plummet to levels so negative that anyone left holding cash or cash equivalents will see massive destruction of real wealth. We may have to push risk assets a bit lower from here, but the global central banks will be firing howitzers and tomahawks very shortly, not bazookas! And you best be owning some risk when those bad boys are launched!!

 

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Mon, 05/21/2012 - 17:04 | 2448838 SHEEPFUKKER
SHEEPFUKKER's picture

Something that is not worth saving must be let go. 

Mon, 05/21/2012 - 17:15 | 2448872 Race Car Driver
Race Car Driver's picture

The only wealth which you will keep forever is the wealth you have given away.

- Marcus Aurelius

Mon, 05/21/2012 - 17:21 | 2448894 francis_sawyer
francis_sawyer's picture

Here come the pea shooters & potato guns!... Run for your lives!

Mon, 05/21/2012 - 17:28 | 2448908 Shocker
Shocker's picture

We have been talking about Greece and others for months now. If the problem was solvable don't you think it would of already been done?

The problems Globally and in the US are so major, there is no 'real' solutions.

Things can work towards getting better, but not until we actually come up with some real long term solutions.

Even though we talk about Greece, others all the time, talk should also be about what is happen in the US economy.

http://www.dailyjobcuts.com

-

Mon, 05/21/2012 - 20:54 | 2449354 GeorgeHayduke
GeorgeHayduke's picture

The collapse in Greece gives people a scapegoat to blame instead of coming to the realization that much of the so-called economy of the past 20-30 years or more (likely since at least that buffoon Reagan) has been an unsustainable, paper shuffling fraud.

Maybe the mantra of endless growth really is just a myth and Greece with its well known ancient mythology is a perfect place to kick off the death of this modern mythology. The myth likely will die hard with many apologist economists and ideologues fighting to keep the myth alive, but reality really doesn't care about that. The final outcome is inevitable.

Mon, 05/21/2012 - 22:19 | 2449547 tempo
tempo's picture

Never let a crisis go unused...More Government, more regulation, controls and power for the elite. They always win.

Tue, 05/22/2012 - 02:33 | 2450004 the tower
the tower's picture

"Maybe the mantra of endless growth really is just a myth"...

Maybe?

Every man and woman on this planet driving a car, owning 3 iDevices, going on 3-4 holidays a year? Really? 

The West has been great at keeping wealth to itself, "defended" it with all it's might. Many of the wars "fought over oil" were actually wars to destabilize regions with the sole purpose to set them back so wealth stays concentrated in the West.

This has ended. Wealth is spreading therefore the game is over. Growth is not endless, a new system is going to replace the old. This is the time we live in.


Mon, 05/21/2012 - 17:32 | 2448919 HarryM
HarryM's picture

Custards last stand perhaps

but they are going down swinging and have no choice but to take us down with them

I suspect the market may recoup everything lost in the last 4 weeks by the end of this week.

 

Mon, 05/21/2012 - 18:14 | 2449022 Betty Swallsack
Betty Swallsack's picture

Not sure what fight custard was involved in.  Perhaps a cafeteria style food-flinging fest.  General George A. CUSTER's famous fight had to do with a kerfuffle at Little Big Horn.

Mon, 05/21/2012 - 20:48 | 2449339 unrulian
unrulian's picture

Custard was a pussy

Mon, 05/21/2012 - 20:52 | 2449349 disabledvet
disabledvet's picture

But Mustard wasn't. That Colonel did in the Library with a candlestick from what i hear...

Mon, 05/21/2012 - 21:04 | 2449378 francis_sawyer
francis_sawyer's picture

@unrulian

anyone who can quote Sam Elliott gets a +1 from me...

Mon, 05/21/2012 - 23:40 | 2449697 HedgeCock
HedgeCock's picture

Yeah, everyone knows custard is soft.  

Mon, 05/21/2012 - 21:19 | 2449416 akak
akak's picture

"Custard's Last Stand" --- sounds like a great name for a chain of ice-cream shops to me!

Mon, 05/21/2012 - 23:54 | 2449721 StychoKiller
Tue, 05/22/2012 - 02:40 | 2450033 tenpanhandle
tenpanhandle's picture

One on every reservation.  Speciality - scalped macaroons and shaved sniz.

Mon, 05/21/2012 - 18:24 | 2449053 El Tuco
El Tuco's picture

Sometimes all you got left is your style.....so if you're going down for the count make it good....

Mon, 05/21/2012 - 19:51 | 2449208 HungrySeagull
HungrySeagull's picture

That may be so.

The open wound channel the size of a soft ball will be rather difficult in the morning though.

Make em hurt enough so that they will remember you and think twice about doing it to some other schmuck.

Mon, 05/21/2012 - 20:00 | 2449240 francis_sawyer
francis_sawyer's picture

I was always kind of fond of the 'Triple Lindy'...

Mon, 05/21/2012 - 20:15 | 2449277 The Limerick King
The Limerick King's picture

 

 

Doomsday in Europe is soon

Banksters will print to the moon

You better get gold

The kind that you hold

It's gonna be handy come June

Mon, 05/21/2012 - 21:09 | 2449391 francis_sawyer
francis_sawyer's picture

I lived in Italy for 12 years (Umbria)... The E45, which cuts up central Italy from Terni to Cesena had this little patch that was always closed for about a 12 mile stretch... As you exited for the detour, there was a sign that said "APERTO GUIGNO" (open in June)...

Nobody ever knew which June they were talking about... After 12 years, I moved back to the US... 5 years later I went back to visit & the sign was still there & the road still wasn't open...

Patzienza!

Mon, 05/21/2012 - 22:34 | 2449582 THX 1178
THX 1178's picture

Apocalypse Europe is nigh

Money printing will certainly be high

You better buy silver

The kind you can... uhhh

I'll never be good as you (sigh)

Tue, 05/22/2012 - 02:49 | 2450045 tenpanhandle
tenpanhandle's picture

 

 

Apocalypse Europe is nigh

Money printing will certainly be high

You better buy silver

The kind they don't deliver

and be a good ol' boy drinkin whiskey & rye

 

Tue, 05/22/2012 - 05:51 | 2450155 Mitzibitzi
Mitzibitzi's picture

Apocalypse Europe is nigh,

Money printing will certainly be high,

But when they come for your gold,

They'll smugly be told,

My boat sank, so now it's bye bye.

Mon, 05/21/2012 - 22:34 | 2449585 potlatch
potlatch's picture

I'll go with Achilles' Last Stand -- aka "the wheelchair song" . 

 

Custard Pie is too happy a song for this matter we are... wait, how come I am thinking of Led Zeppelin?

 

 

Mon, 05/21/2012 - 17:34 | 2448928 Sudden Debt
Sudden Debt's picture

Let me give you my account number my dear good friend and just go nuts :)

Mon, 05/21/2012 - 18:21 | 2449047 Gully Foyle
Gully Foyle's picture

Race Car Driver

GENEROSITY
Zen master Ryokan (1758-1831) lived austerely and simply in a little hut below a mountain. One evening a thief visited the hut only to find nothing there to steal. So he went off into the night. Ryokan caught up with him: “You may have come a long way to visit me, and you should not return empty handed. Please take my clothes as a gift.” The bewildered thief took the clothes and slunk away. Ryokan sat naked, watching the moon. “Poor fellow,” he mused, “I wish I could give him this beautiful moon!”

Mon, 05/21/2012 - 21:02 | 2449375 BigJim
BigJim's picture

Later that evening Ryokan froze to death.

Mon, 05/21/2012 - 22:37 | 2449591 potlatch
potlatch's picture

umm, yes?  and your point is?

Mon, 05/21/2012 - 17:07 | 2448848 YesWeKahn
YesWeKahn's picture

X rated materials garranteed once Greeks are leaving the euro.

Mon, 05/21/2012 - 17:07 | 2448850 bob_dabolina
bob_dabolina's picture

Germany leaves eurozone goes back to the marc. Remaining ez nations issue euro bonds.

Win-Win.

Mon, 05/21/2012 - 17:15 | 2448882 walküre
walküre's picture

Germany is lucky to come out alive a 3rd time when this shit show is over.

Same as it ever was.

Mon, 05/21/2012 - 17:30 | 2448914 ATM
ATM's picture

Ain't going ot happen. The hwole point of the Euro was so that the German's could control the funding source for their exports to the rest of Europe. They were sick and tired of lending to the Greeks, Italians, Spanish only to be paid back with worthless paper.

The end result is going to be a Federalization in Europe and money printing. Lots of money printing.

Mon, 05/21/2012 - 17:42 | 2448922 bob_dabolina
bob_dabolina's picture

They were sick and tired of lending to the Greeks, Italians, Spanish only to be paid back with worthless paper.

worthless paper vs. worthless promises; same diff/no diff

In my thesis the Germans would be lending to nations backed by private/public investment via eurobonds.

Win-Win

Mon, 05/21/2012 - 17:58 | 2448988 Segestan
Segestan's picture

If only they had demanded payment in Gold, no need to deal with these clowns . Instead they have a foreign power holding their gold. Oh well,  I quess that was one of the casualties of losing a war.

Mon, 05/21/2012 - 18:05 | 2449005 francis_sawyer
francis_sawyer's picture

They shoulda given Oppenheimer a few more black beauties... Oh well...

Mon, 05/21/2012 - 21:50 | 2449491 Marginal Call
Marginal Call's picture

If they had demanded payment in gold, then they don't sell any Mercedes or BMWs to Club med.  It defeats the point of vendor financing, which is to keep selling shit even though everyone is broke in the hopes they can pay some day.  No vendor sales = bust.  Vendor financing = can kicking.  Club Med default = vendor bust.

Mon, 05/21/2012 - 18:46 | 2449082 bobola
bobola's picture

(posted 3 hours ago online)  Secret €100bn aid props up Greek banksBy Ralph Atkins in Frankfurt;

http://www.ft.com/intl/cms/s/0/a7087224-a360-11e1-ab98-00144feabdc0.html

There has been no official announcement. No terms or conditions have been disclosed. But Greece’s banking system is being propped up by an estimated €100bn or so of emergency liquidity provided by the country’s central bank – approved secretly by the European Central Bank in Frankfurt. If Greece were to leave the eurozone, the immediate cause might be an ECB decision to pull the plug.

Extensive use of “emergency liquidity assistance” (ELA) to help banks in the weakest economies has been one of the less-noticed features of the eurozone crisis. Separate from normal supplies of liquidity and meant originally as a temporary facility for national authorities to use when banks hit problems, ELA proved a lifesaver for the financial system Ireland and is now even more so in Greece. As such, it has given the ECB – which has ultimate control over the facility – considerable power to determine countries’ fates.

Mon, 05/21/2012 - 19:11 | 2449124 Master Pimp
Master Pimp's picture

now we are talking!

See Tyler, no german arschenhalle can touch our deposits!

We greeks are the supreme pimps of finance!

do you see what happens with JPM CEO and CIO> They are all Greeks!

At the end of the day, Germany still owes as hundreds of tonnes gold, war reparations, etc!

our  money is insured by the ECB so you can all say anything you want, but they are obliged to guarantee our deposits up to 100K

we were paying isurance premium all these years

ECB and Budesbank can go sodomize each other, oK?

Greece is the last land responsible for the current economic mess!

Bundesbank knew the consequences of their queer euro experiment right  from the start

It is all a fascist plan to steal our trillion dollar oil and gas!

but at the end, German banks and industries are going to take it up the arschenhalle!]

and tsipras will rim with him fist schauble and merkel

 

Mon, 05/21/2012 - 19:45 | 2449197 crouton
crouton's picture

+1 Brüno

Mon, 05/21/2012 - 19:14 | 2449132 trebuchet
trebuchet's picture

this was reported on bankingnews.gr over the weekend

 

EFSF is stepping in with liquidity assistance which will rollover ECB funding /keep ELA open so atm it looks like people are playing musical chairs with their money to cover the growing withdrawals from Greece. 

 

The article commented on "whay wait till the 17th/16th/15th?" The answer is the unecertainty of whether the govt/currency holds.

 

but the end game is clear for all: not enough eurodeposits ACROSS europe to cover the capital needs, so yes, more liquidity pumping is coming. 

I said this a week ago, oh well.... 

 

 

Mon, 05/21/2012 - 22:24 | 2449556 RockyRacoon
RockyRacoon's picture

Oooh!  A prophet.  Tell us what is happening next week so we can prepare.

Mon, 05/21/2012 - 23:22 | 2449667 MsCreant
MsCreant's picture

Youse a funny Rocks!

Mon, 05/21/2012 - 19:36 | 2449178 BKbroiler
BKbroiler's picture

They were sick and tired of lending to the Greeks, Italians, Spanish only to be paid back with worthless paper.

Right on.  Talk about a plan that backfired.  Contagion is a bitch.

Mon, 05/21/2012 - 20:33 | 2449306 eaglefalcon
eaglefalcon's picture

The Germans could have demanded a collateral for the loans. Dismantling the Acropolis and moving it to Pergamon museum would be a good plan.

Mon, 05/21/2012 - 19:42 | 2449192 Umh
Umh's picture

Are you really saying that everyone in the Euro except Germany is an idiot?

Tue, 05/22/2012 - 08:29 | 2450325 goldinpenguin
goldinpenguin's picture

The PIIGS have been pulling down the euro aiding German export pricing.If the Euro goes blooey and the Germans have to go back to a Mark on steroids (the Uber-Mark) then the Greeks and the other little PIIGS will have pulled the Germans into the pain fest. It's German jaw-boning vs Greek black mail.

Mon, 05/21/2012 - 17:08 | 2448851 CPL
CPL's picture

Can't click the buy button on buying gold fast enough on kitco.com.

Mon, 05/21/2012 - 18:59 | 2449109 Shocker
Shocker's picture

The tax kills the deal everytime, same with shipping prices.

Mon, 05/21/2012 - 17:11 | 2448857 GCT
GCT's picture

Tyler good read but this scenario will not play out until the USA elections are over.  The Fed and the ECB will print behind closed doors to support Greece so this does not implode on Obama's watch.  To note they would do this if a repub was in office as well.  This G8 meeting our great president told Europe he will back the Euro and do his best to keep Greece from defaulting.  Of course this is on us the taxpayers back.  They are going to keep this charade going as long as they can, but definitely until the elections are over.

Just my thoughts on this.

Mon, 05/21/2012 - 17:31 | 2448917 ATM
ATM's picture

and then they will push the detonator button!

Mon, 05/21/2012 - 18:40 | 2449076 MsCreant
MsCreant's picture

We said this about Bush, that as soon as he was out of the saddle, they would let it fail on Obama's watch.

Mon, 05/21/2012 - 19:02 | 2449116 Rainman
Rainman's picture

yea, and Obama doubled down with voodoo health care that nobody understands and nobody can pencil. The gangsta never balanced a checkbook in his life !

Mon, 05/21/2012 - 20:59 | 2449366 CPL
CPL's picture

That's what the 2008 elections were about.  Wag the dog long enough.  Bush Sr was a master at it, how long did he run the CIA and VP, that's power there.  For good or bad, it should be recognized that Bush Jr. had the the old cold war spooks helping out a bit.

Mon, 05/21/2012 - 19:15 | 2449135 trebuchet
trebuchet's picture

lots going on behind closed doors, you are right

Mon, 05/21/2012 - 20:07 | 2449262 El Oregonian
El Oregonian's picture

This stuffed pig is bleeding out so bad I'm not sure if it can go past June 17th, let alone past the November elections. Just sayin'.

Mon, 05/21/2012 - 20:20 | 2449287 American Dreams
American Dreams's picture

Ever hear of postponed or cancelled elections due to global instability.  Happend before, yes?

know your enemy

Tue, 05/22/2012 - 06:02 | 2450159 Mitzibitzi
Mitzibitzi's picture

Why would they give a crap about the elections? Since the US (and pretty much every other country in the world) can only vote in the establishment-approved candidates, anyway, it doesn't make a rat's ass worth of difference who is sitting in the comfy chair. The guy hasn't got any say in anything important, anyway. Hasn't had for years. No more than Diamond Dave Scameron does in the UK.

The only reason I can see for wanting to keep Obama in the chair for another term, or at least part of one, is so they can 'blame it on the black guy' - "See what happens when we let the voters decide who's in charge! You idiots elected this guy TWICE! We're suspending elections while we fix it, ya bunch of maroons!"

Mon, 05/21/2012 - 17:13 | 2448860 Race Car Driver
Race Car Driver's picture

.

Mon, 05/21/2012 - 17:12 | 2448865 Rainman
Rainman's picture

Napalm is much preferred when you want to really fire up great swaths...covering all bases so to speak

Mon, 05/21/2012 - 20:02 | 2448959 francis_sawyer
francis_sawyer's picture

The molotov cocktail is the local drink...

& all she wants to do is DANCE!

Mon, 05/21/2012 - 17:12 | 2448867 tawse57
tawse57's picture

Last week it was all panic as it looked like Greece would default or be kicked out of the Euro, makrets fell and a banking crisis worse than Lehmans looked a certainty.

Today, after the G8 meeting of the weekend when nothing was decided, it is like it is panic over and the markets are bouncing.

Bizzare!

Mon, 05/21/2012 - 17:33 | 2448921 Jake88
Jake88's picture

Bizarre is the new normal

Mon, 05/21/2012 - 18:03 | 2448998 resurger
resurger's picture

And Alice is now buying gold in Wonderland!

Mon, 05/21/2012 - 20:18 | 2449284 El Oregonian
El Oregonian's picture

That is why they call them SHEEPLE! They follow the crowd and their memory is not so good.... BRING ON THE SHEERS!!!

Mon, 05/21/2012 - 17:18 | 2448875 walküre
walküre's picture

This week is the final week for the Eurovision song contest. Hosted by Azerbijan in the capital Baku.

I think the concept is to have VISIONS of EUROS and expressing yourself in a song and dance. How cute.

http://www.eurovision.tv/page/baku-2012

Forget AI and AGT, the next Superstars are found right now in this Eastern European metropolis.

It sounds like one huge convention of Borat's cousins.

Who needs to worry about currency when you can trade your sister for a few goats.

 

Mon, 05/21/2012 - 17:28 | 2448907 Doubleguns
Doubleguns's picture

I got boar goats, whats your sister look like. Got a picture.

Mon, 05/21/2012 - 17:33 | 2448924 walküre
walküre's picture

I will take your oldest goat with 3 legs for her

http://www.ethiopianreview.com/album/albums/userpics/10001/azeb-mesfin-g...

Mon, 05/21/2012 - 17:41 | 2448949 Doubleguns
Doubleguns's picture

Wow thats really ugly!!!

Mon, 05/21/2012 - 17:43 | 2448954 walküre
walküre's picture

Ok, I get you.

Any two legged goat?

Tue, 05/22/2012 - 10:33 | 2450882 Doubleguns
Doubleguns's picture

That would be your sister.

Mon, 05/21/2012 - 17:34 | 2448927 tawse57
tawse57's picture

There are lots of rumours going around that many EU countries will vote for Greece in the Eurovision, no matter how good or bad their entrant is, as a symbol of unity with the Greeks. It will be interesting to see how Germany votes.

Small problem for the Greeks if they do win it - the winners have to hold the next competition in 2013.

They wouldn't be able to afford it!

BBC is now reporting the danger of bank runs in Europe spreading suddenly.

Mon, 05/21/2012 - 17:37 | 2448936 walküre
walküre's picture

They only got a year to build the facilities.

Remember the Olympic building desaster?

IT WILL NEVER HAPPEN.

Mon, 05/21/2012 - 19:21 | 2449138 trebuchet
trebuchet's picture

people out hunting for who has the 2nd round exposure to GREXIT, and shorting it.

 

Watch French and Allianz stock 

 

http://www.bloomberg.com/news/2012-05-15/allianz-likely-to-cut-bank-holdings-boersen-zeitung-says.html

Mon, 05/21/2012 - 19:47 | 2449198 Global Hunter
Global Hunter's picture

not sure who or what organization decided that Azerbaijan was now Europe (edit they are Turkic people/language influenced by Persian and the country borders Iran)

Mon, 05/21/2012 - 17:17 | 2448885 the 300000000th...
the 300000000th percent's picture

Buying physical at gold shops with CASH, track that, Utah data center

Mon, 05/21/2012 - 17:40 | 2448938 Floordawg
Floordawg's picture

Can't buy (over $1k) here in NYC without showing an I.D.

Mon, 05/21/2012 - 17:56 | 2448981 JustObserving
JustObserving's picture

Is that just for gold or for any purchase over $1000?

 

Tue, 05/22/2012 - 02:08 | 2449956 BorisTheBlade
BorisTheBlade's picture

Stay below the radar, buy in <$999 snippets regularly if you want to allocate more than 1k to gold.

Mon, 05/21/2012 - 17:48 | 2448967 Marginal Call
Marginal Call's picture

You had a good strategy going until you posted it on the internet.

Mon, 05/21/2012 - 19:49 | 2449205 Global Hunter
Global Hunter's picture

I will throw them off the scent and distract them from our fellow ZH poster:

I am very rich (broke) and I just bought a years supply of gold (quinoa seeds).

Mon, 05/21/2012 - 20:23 | 2449289 American Dreams
American Dreams's picture

LOL they just did.  LMAO

Mon, 05/21/2012 - 17:19 | 2448893 shuckster
shuckster's picture

From an economical standpoint - it makes much more sense to nuke Greece than it does to let them reneg on tehri loans

Mon, 05/21/2012 - 18:15 | 2449027 noses
noses's picture

Something along the lines of "some Chinese was test driving a Tsar Bomba using a C17 Globemaster someone donated for the cause"?

Mon, 05/21/2012 - 18:51 | 2449096 Wood
Wood's picture

Yes, dust off and nuke them from orbit. It is the only way to be sure.

Mon, 05/21/2012 - 22:47 | 2449605 Unique Snowflake
Unique Snowflake's picture

cept we all know how that worked out.

Mon, 05/21/2012 - 19:23 | 2449147 trebuchet
trebuchet's picture

not really, insurance payouts kill that option. coz the insurers go belly up

Mon, 05/21/2012 - 20:25 | 2449292 American Dreams
American Dreams's picture

Act of war, policies exclude this 99% of the time.

Mon, 05/21/2012 - 21:57 | 2449505 Marginal Call
Marginal Call's picture

Which is why insurers will favor war vs. global warming.  Most posters here don't believe in it, but insurance companies sure as shit do.

Mon, 05/21/2012 - 21:54 | 2449498 Marginal Call
Marginal Call's picture

Vaporized people can't collect.  The only insurers that go belly up are the one's that get bombed.

Mon, 05/21/2012 - 17:19 | 2448895 GCT
GCT's picture

The 30000  all depends on the dollar amount you spend.  They will track you if you go over cash or credit limit when buying physical from a local coin shop.

Mon, 05/21/2012 - 17:29 | 2448910 Doubleguns
Doubleguns's picture

visit more than one coinshop.

Mon, 05/21/2012 - 17:21 | 2448901 cossack55
cossack55's picture

I hope they bring both the 175 Howitzer and the 240 How out of retirement.  Great flame FX.

Mon, 05/21/2012 - 17:57 | 2448903 The Swedish Chef
The Swedish Chef's picture

`Tis the problem they have: if a trillion Euros of LTRO1&2 gave us six months of bull market, how much for indefinite bull market? 

 

It seems not so long ago that we got used to the word with the silly amount of zeros, trillion, perhaps it´s time to acostume oneself to "quadrillion".

Mon, 05/21/2012 - 17:26 | 2448905 max2205
max2205's picture

What's my savings account going to be devalued to?

Mortgage rates to 1%...that'll do it!!

Mon, 05/21/2012 - 17:40 | 2448946 CrashisOptimistic
CrashisOptimistic's picture

Why in hell would you, as a bank, lend mortgage money at 1% for 30 years if you can buy a 30 year Treasury at 2.8%?

Mon, 05/21/2012 - 19:16 | 2449136 j0nx
j0nx's picture

It's not like it's real money or anything. The bank just conjures it up on a computer screen. It's not as if the bank's reserves could ever cover it anyway. It's all a sham.

Mon, 05/21/2012 - 17:36 | 2448913 Flounder
Flounder's picture

TD thanks for sharing.  I know we're in trouble when ZH has 93000 followers on Twitter while Nicole Polizzi aka "Snooki" has 4.9 million and lets not forget the millions who can't pass the reading test or do addition.

Mon, 05/21/2012 - 17:51 | 2448971 IndicaTive
IndicaTive's picture

Just go to Walmart. Many teachable moments for the kids.

Mon, 05/21/2012 - 19:19 | 2449140 j0nx
j0nx's picture

And there's your ratio of who gets it to who doesn't. 1 in 60 or so are not sheep. The rest are blissfully bahhhhing their way obliviously through life unaware that NY and DC are stealing their asses blind.

Mon, 05/21/2012 - 17:32 | 2448918 Doubleguns
Doubleguns's picture

global central banks will be firing howitzers and tomahawks very shortly, not bazookas!

No problem, I have a gold and silver shield.  Bring it on!!!

Mon, 05/21/2012 - 17:34 | 2448925 Floordawg
Floordawg's picture

RISK ON!

(it will be about fucking time!)

Mon, 05/21/2012 - 17:35 | 2448930 bullionbaron
bullionbaron's picture

Will there be anything worth holding besides Gold and Silver once the public realises what's going on?

http://www.bullionbaron.com/2012/05/good-chance-gold-and-silver-have.html

Mon, 05/21/2012 - 19:21 | 2449143 j0nx
j0nx's picture

If it comes to that then the only metals you had better be holding are brass and lead.

Mon, 05/21/2012 - 22:07 | 2449526 Captain Benny
Captain Benny's picture

Provide the lead to enemies, save the brass to reload :)

 

In all seriousness, lead is easy to acquire/melt.

Mon, 05/21/2012 - 17:37 | 2448935 barliman
barliman's picture

 

Mutual Assured Destruction ...

... only works as a deterrent when the other side has something to lose.  What does Greece have LEFT to LOSE?

The latest agreement has them surrendering ALL of the nation's gold to the banks. Their economy is in tatters and coming more unraveled as each day passes. The previous "unelected" representatives made a deal with the Devil that will only get worse as things proceed along the current path.

Suddenly the polls show the party they just voted OUT of power gaining in popularity? Who with skin to put in the game wants to buy into THAT fantasy?

The G8 meeting time could have been more profitably spent as a G7 meeting without Obambi. Did any of the other leaders have anything to gain by spending the time over here? (Even Hollande does not gain anything from schmoozing Obambi - he was already elected by the French fantasizing Growth is something they can just demand ... instead of working towards)

The M.A.D. avenue left with ANY leverage is Germany being willing to leave the EU/euro behind.  Anyone saying anything else (i.e. pressing ctrl-infinite-P ) is only going to accelerate the rate of decline.

Summary: The EU/euro game is OVER. There are no winning moves left. If Angela Merkel truly had balls ... Germany would quit the EU/euro tomorrow.

barliman

Mon, 05/21/2012 - 18:04 | 2449000 Debugas
Debugas's picture

they have their deposits to lose (around 160 billion euros or so)

Mon, 05/21/2012 - 19:24 | 2449153 barliman
barliman's picture

 

uhmmmm ... did you read the all of the artiicle?

The EU/ECB/IMF freezing ther Greeks out of their accounts would GUARANTEE a massive run on the banks in the rest of the EU.

BOOM. Game OVER!

barliman

Mon, 05/21/2012 - 17:38 | 2448937 ebworthen
ebworthen's picture

Eurozone bonds!

That's the answer!

Paying 1.5%!

CALPERS and the FED will be first in line.

Mon, 05/21/2012 - 17:43 | 2448953 alfred b.
alfred b.'s picture

 

   Both Germany and Greece ought to opt out of the Euro, and leave the borderliners to themselves.   These top and bottom countries already see themselves as enemies...one is too strong and the other too weak, they have nothing in common and they will never agree on anything.   Eventually that's the way it will work itself out; but the politics of it will drag it out longer than it really should.

   As for the others left within the zone, watch for the euro to be around par w/usd.

 

Mon, 05/21/2012 - 17:52 | 2448974 barliman
barliman's picture

 

If Germany leaves EU/euro ...

... the most massive of currency swaps (Fed)/LTRO/EFSF/ESM/etc/etc/etc will not be able to do better than 1 USD =  2 euro's and that won't hold up for a quarter.

barliman

Mon, 05/21/2012 - 17:53 | 2448976 apberusdisvet
apberusdisvet's picture

If Greece goes, it will be a Long Hot Summer in the US; will the elites dump Obama, if he falls 10 points behind?  Will another false flag attack be necessary?  Will the CFTC finally nail an emasculated JPM?

So many other questions; so little time to keep stacking.

 

Mon, 05/21/2012 - 17:52 | 2448977 reTARD
reTARD's picture

Can they even afford "Tomahawks?" Because each "Tomahawk" requires a monster box of silver. JPM would have to naked short silver (then cover and repeat) even more than they already do.

Mon, 05/21/2012 - 18:22 | 2449045 Clint Liquor
Clint Liquor's picture

Are you sure Tomahawk Missiles can't use a Silver Certificate from Perth Mint? I heard they have printed a mountain of them.

Mon, 05/21/2012 - 20:04 | 2449256 reTARD
reTARD's picture

True about "you don't own it unless you hold it" and hence it is self-defeating to actually buy paper silver in today's world where counter-party risk is the name of the game. But no, the Tomahawks cannot use silver certs but instead actual physical silver.

Mon, 05/21/2012 - 17:59 | 2448989 tawse57
tawse57's picture

BBC Newsnight talking about the dangers of a bank run on banks throughout Europe and the UK.

Mentioned Target II - the ECB mechanism through which EU and UK banks exchange money with one another. They vote twice weekly whether to keep lending to Greece and had to up the amount last week by 10 billion to 100 billion.

Newsnight says that a Greek and Spanish bank run could spread throughout the EU rapidly.

Mon, 05/21/2012 - 18:12 | 2449020 jmcadg
jmcadg's picture

Just watched that too. The Lloyds Banker was not convincing of how safe depositors in Santander currently are.

I also heard a Santander 'bigwig' try to convince on BBC Radio 4 that deposits were safe. I wasn't convinced, neither was a Kent Councillor who had pulled Kents £3m overnight deposits out of Santander.

Bank runs are on. Last out loses most.

Mon, 05/21/2012 - 18:27 | 2449058 tawse57
tawse57's picture

I have 31K with Santander and felt safe re the UK Govt guarantee but that Lloyds guy spooked me out.

Mon, 05/21/2012 - 18:03 | 2448997 Piranhanoia
Piranhanoia's picture

So Pig Jeffries, and pig David Zervos are advising the Nazi's shut down Greek access to their own money deposited in banks propped up only for the benefit of the Germans to better enhance the ersatz screwing the people of Greece?  

Hey Zervos,  you are begging to be impaled and mounted for public humiliation.  You probably don't know you are a psychopath, so I am looking forward to pictures of your surprised look with a pike up your ass sticking out of your head like a german battle helmet.

Mon, 05/21/2012 - 20:05 | 2449260 Master Pimp
Master Pimp's picture

Right on mate!

But I think at the end even he does  not approve of his bullshit and says that instead ECB will resort to QE of all sorts despite German Bundesbank inflation hysteria

Mon, 05/21/2012 - 18:08 | 2449010 jmcadg
jmcadg's picture

Just buy, boat accidents happen frequently.

Mon, 05/21/2012 - 18:17 | 2449037 Tuffmug
Tuffmug's picture

Bank runs will be stopped. Default is not an option. The Drachma is not an option. With a multi-TRILLION dollar world debt-fiat PONZI scheme hanging in the balance, will TPTB allow a piddling Greek debt of 400+ billion to trigger it's potential unravelling? To allow the Greeks to escape the debt trap via default and the Drachma would not only lead to immediate losses and market turmoil but to the more dangerous and destabilizing example for the other PIIGS to follow of a Greece unsaddled from debt that is THRIVING as Iceland is. That is the true CONTAGION that the TPTB fears!

Merkel is bluffing with shitty cards and Hollande and the G8 told her to fold. The Greeks overwhelmingly want to continue to suck on the EU's tit. They don't want the Drachma either. While we can expect in the next month a grand farce played out of "Will the Troika cut them off or won't they?", it is inevitable that some last minute magical refinancing fix will materialize to "save" the Greeks from default and keep them within the Euro fold of the debt enslaved.

A PONZI is a PONZI is a PONZI! All Ponzi's are kick the can down the road schemes. This fiat and debt Ponzi won't die and collapse even though I and many on this board wish and pray for it. Why? Because the interlocked central bankers of the world won't let it collapse. They will continue to LTRO and QE to create just enough cash to keep the Ponzi going. They will continue to allow and encourage fraudulent accounting (Mark to Fantasy) and perform selective bailouts to hide the insolvency of the system. They will continue to suppress gold and silver prices to hide their manipulation and keep people locked into the fiat money system. The Japanese have been doing it for twenty years. Now the rest of the world will follow their lead.

We have been Zombiefied! Only a political revolution which crushes the central bankers will stop this Ponzi. Don't hold your breath for a market crash, creative destruction which flushes the system clean, and the rebirth of free market capitalism. We've got many more years of painful centrally planned economic manipulation and political corruption coming. We're just frogs on a slowly warming pot on Bernanke's stove.

Mon, 05/21/2012 - 20:18 | 2449283 El
El's picture

Nah...didn't you hear? There's a firewall. /sarc

Mon, 05/21/2012 - 20:46 | 2449333 barliman
barliman's picture

 

Merkel is the only one with cards.

Germany is the only country that can leave the EU/euro at will.

Belief is the key to any Ponzi scheme. As soon as people stop believing, the ponzi is dead because the people want their money OUT of the Ponzi.

Forbidding bank withdrawls is the equivalent of pouring gasoline on a fire.

Default is always an option. It has happened many times in the past.

It is happening NOW.

barliman

Tue, 05/22/2012 - 02:00 | 2449937 Tuffmug
Tuffmug's picture

The poor, confused, bamboozled, average Greeks still believe just as most every other person on the planet! Do you still use a fiat currency for transactions? Then you believe! Do you store your wealth in an account or assets denominated in units of fiat currency? THEN YOU BELIEVE!

You can't get your money out of this PONZI because THE ENTIRE WORLD CURRENCY SYSTEM IS A PONZI! Fiat money is unsound money and every country in the world has switched to a fiat currency. It only has value if 1) people believe it has value and will trade and transact with it and; 2) only holds it's value if you TRUST AND BELIEVE that your central bank and it's satellite banks will not expand that fiat money supply beyond the asset base of the country and destroy the store of value that those fiat bucks in your pocket are supposed to represent.

Bank withdrawals won't be forbidden.  Greek banks will be pumped with money to pay all comers.

Default and the Drachma? The Greeks don't want either. In the past they did so but they didn't have a rich EU Uncle they wanted to continue sucking off of. 

Mon, 05/21/2012 - 22:01 | 2449481 Element
Element's picture

Don't be ridiculous, bank-runs stopped in the USA during the last Depression, but only after about 8,000 banks went belly up in the preceding 5-years or so.

The FDIC only appeared after the banking system was already a smoking crater. surrounded by financial and economic ruins.

i.e. FDIC and Govt policy did nothing to halt the default > bankruptcy > bank collapse spin-cycle.  They just came swanning-in at the very end of the implosion, and hystorically pretended to have been the ones that stopped it.

They lie you see.

"... A PONZI is a PONZI is a PONZI! All Ponzi's are kick the can down the road schemes. ..."

No, they do actually stop in the end, and we are getting to that.

"... will TPTB allow a piddling Greek debt of 400+ billion to trigger it's potential unravelling?..."

Painfully hubrist and misguided, the TPTB won't make that decision, it isn't theirs to even make. The Greek people will make it, it is their decision, and no one can prevent what they will choose to do, or to not do, to addrees their immediate emergency concerns.

" ... but to the more dangerous and destabilizing example for the other PIIGS to follow of a Greece unsaddled from debt that is THRIVING as Iceland is. That is the true CONTAGION that the TPTB fears! ..."

You forget that the people in the PIIGS are watching all this even more intently, they know they are next, and I guarantee you TPTB are going to be looking for a safe harbour to hide in, rather than calling the shots as this public debt-deflation capsize unfolds.

Mon, 05/21/2012 - 18:33 | 2449061 slewie the pi-rat
slewie the pi-rat's picture

how is your howitzer today, howie?

deal or no deal?

Mon, 05/21/2012 - 18:38 | 2449072 letitgo
letitgo's picture

TD, you seem to think that if you say it long enough and loud enough the Germans will eventually enter into some kind of printing mega-operation, but it in fact never seems to happen.  Despite all the weakness in the euro, the German economy is still kicking along nicely and inflation is still not north of 2.5% -- I see no evidence of currency and savings destruction since you started saying they'd give into printing a year or so ago.

Has it occured to you guys that European voters typically have more money tied up in deposit accounts than in stocks, so it would be politically very unpopular to destroy cash savings in order to float the fake economy (stocks)? It's not a US kind of situation where your average Joe cares about the stock market because his pension is invested in it.  Germans detest inflation and want their government to run a tight ship so their benefits are assured and meaningful.  At the end of the day, Merkel is a populist, so I just can't see her pulling out the bazooka if the consequence is high German inflation (which it presumably would be).

 

Mon, 05/21/2012 - 20:01 | 2449245 Tyler Durden
Tyler Durden's picture

Far be it for us to espouse what Mr. Zervos has proposed as the ultimate outcome as the ethically right one. Sadly, in a world controlled, until the grand reset occurs, by various banker interests, the only resolution will be dramatic inflation of assets, and thus debt, which as you correctly point out, means far more pain for Europeans, which collectively have 3x as much deposits as US savers, and is the primary reason why Germany is far more concerned about runaway inflation than the US.

Which reminds us to put together an apples to apples comparison of the US and European banking systems.

Finally, while we wish Zervos is incorrect, the unwinding of events to this point, which has taken place as we predicted back in early 2010 almost to the dot, means that the banker playbook will sadly by followed to the dot. And even sadder, is that it is more or less along the lines of what Zervos expects. In that frame of reference, the political career of one German chancellor will be promptly sacrificed if it means the greater good of a few thousand "chosen ones" whose net worth must be preserved at all costs.

Tue, 05/22/2012 - 10:38 | 2449369 barliman
barliman's picture

 

Tyler,

Mr. Zervos analysis reminds me of the old story about the fellow who jumped from the top of the Empire State building. At every open window, all the way down, people heard him shouting, "So far, so good"

The moral of the story: Prognostication is known to be a fatal fallacy.

Let us remember what Mr. Taleb taught us about swans and how it feels when you miss a step - there is likely more coming than we can foresee and even a missed step will cause the bravest of hearts to skip a beat.

barliman

Tue, 05/22/2012 - 05:16 | 2450136 letitgo
letitgo's picture

Glad to see you admit that savings patterns in Europe are very different to those in the US, but I still don't think you're aware enough of how different the German political setup and mindset is. There is no party in Germany that simply panders to elites like politicians regrettably do in other countries. If they're there, they're in Angie's party and if she gets sacrificed then it will be for the SPD and Greens in coalition or an SPD-led grand coalition.  Those left-wing parties are even less likely to sacrifice the interests of the majority for the elite than  Merkel and Schauble who are themselves very austere people not in the pocket of the elites.

Tue, 05/22/2012 - 06:52 | 2450200 Non Passaran
Non Passaran's picture

How are they not in the pocket of the elites? If they aren't they would have allowed Grrece to go busy 2 years ago.
Most of the rescue money is going to private banks while public liabilities are increasing. And the EU is a project of the elites for the elites to begin with.

Mon, 05/21/2012 - 18:46 | 2449077 bsdetector
bsdetector's picture

"Reflation of all the world's economies" is a poor choice of words but that is how the scheme will be touted. The reflation is not to spur economic activity its to protect the debt based assets that are vaporizing by the day. And reflation will not be delivered with shock and awe. It is going to be sinister. The minions are not going to announce the money printing. They have been practicing their stealthy ways with hypothecation and re-hypothecation for awhile now. All of a sudden we are going to be awash with liquidity. The good times will seem to be back but for how long no one can know. The 1% will earn quadrillions while the lower "percenters" will seem to have more too. Gold will not rise since all of the central bankers that matter will still control it. The only way this scenario will not happen is if Germany holds its stance on the Euro. Hey, what the heck, my guess is as good as anyone else.

Mon, 05/21/2012 - 18:41 | 2449078 narnia
narnia's picture

This whole article falls apart in the last two paragraphs.   

Mon, 05/21/2012 - 18:42 | 2449080 Big Ben
Big Ben's picture

I think that Merkel doesn't want to "fire the first shot". So my guess is that ELA access will remain open as long as Greece honors its agreements. Even though this means that euro-based 'collateral' may suddenly become drachma-based collateral worth much less when Greece leaves the EMU. But since there is the potential for the ELA to suffer huge losses on Greek collateral, I think the ELA window will snap shut the very second that Greece deviates from the Troika's roadmap.

Mon, 05/21/2012 - 18:46 | 2449086 Roger Knights
Roger Knights's picture

"So where does the chaos from a Greek bank run and exit lead us. The end is of course ECB printing, Eurobonds and every developed market central bank dumping massive liquidity into the global financial markets as systemic risks rise - QE, LTROs, Currency swaps, and every funding facility under the sun come into play."

But what if Germany's Constitutional Court says NO to backing up this money printing? That would put an end to the game of kick the can.

Mon, 05/21/2012 - 20:38 | 2449318 Day_Of_The_Tentacle
Day_Of_The_Tentacle's picture

I thought that the German Constitutional Court had already deemed Germanys participation in the ESM unconstitutional. I haven't got the link, but I have definately read that somewhere. The ruling was based on that the governors of the ESM were not elected and they would have immunity, if memory serves me right.

Mon, 05/21/2012 - 23:21 | 2449664 Roger Knights
Roger Knights's picture

That court hasn't ruled yet on LTROs, which were designed to get around the court's previous ruling. It had hinted that it would frown on such dodges if they were enacted--or at least it would require parliament to explicitly accept them.

Mon, 05/21/2012 - 18:46 | 2449088 MsCreant
MsCreant's picture

Will California have to leave the dollar next? 

Mon, 05/21/2012 - 18:58 | 2449108 bsdetector
bsdetector's picture

That is a good question in the sense that its an acknowledgement that something needs to happen with California's problems. We know that it will not be allowed to fail. The question to be answered is how can one front run the solution.

Mon, 05/21/2012 - 20:02 | 2449203 malikai
malikai's picture

Work for the governor?

Mon, 05/21/2012 - 23:19 | 2449658 MsCreant
MsCreant's picture

Get a really good set of knee pads and a spitoon?

Mon, 05/21/2012 - 20:36 | 2449309 Amish Hacker
Amish Hacker's picture

Maybe leave the dollar and leave the Union, too. Secession has always been debated here, usually with suggestions that Northern California, with its abundant water and forests, should ditch all those weird, thirsty people in the South. Or even that the North should join with southern Oregon in a separate state, as was done ceremonially in 1941. Several counties "seceded" one day a week and proclaimed themselves to be the state of Jefferson. (http://en.wikipedia.org/wiki/Partition_and_secession_in_California)

You could argue that California has already printed its own currency, in the form of warrants, when there was no money in the state checking account. Kind of like an IOU, but an involuntary one, used to pay state contractors and give people their tax refunds.

Mon, 05/21/2012 - 22:25 | 2449559 Bolweevil
Bolweevil's picture

+1 for State of J reference

Mon, 05/21/2012 - 23:44 | 2449707 MsCreant
MsCreant's picture

As the bullshit mounts, it is possible many states may make a similar decision. I never knew about this kind of thing (or check out the movement in Hawaii http://www.freehawaii.org/) until I started looking into the history of the economy. Seems there are some things they leave out of a highschool and college education.

Mon, 05/21/2012 - 18:47 | 2449090 ArrestBobRubin
ArrestBobRubin's picture

And little old silver, just sitting there quietly, all nice and polite at 28.50 per ounce.

Not for loooong.....

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