G-20 Demands German Gold To Keep Eurozone Intact; German Central Bank Tells G-20 Where To Stick It
Going back to the annals of brokeback Europe, we learn that gold after all is money, after the G-20 demanded that EFSF (of €1 trillion "stability fund" yet can't raise €3 billion fame) be backstopped by none other than German gold. Per Reuters, "The Frankfurter Allgemeine Sonntagszeitung (FAS) reported that Bundesbank reserves -- including foreign currency and gold -- would be used to increase Germany's contribution to the crisis fund, the European Financial Stability Facility (EFSF) by more than 15 billion euros ($20 billion)." And who would be the recipient of said transfer? Why none other than the most insolvent of global hedge funds, the European Central Bank.
Also, in addition to gold, the ECB had set its eyes on that other "fake" currency that DSK had succeded in protecting throughout his tenure, all his other undoings aside, "The Welt am Sonntag newspaper, citing similar plans, said 15 billion euros would come from special drawing rights (SDR) that the Bundesbank holds." Naturally, these discoveries prompted a prompt and furious rebuttal from the very top of German authorities: "Germany's gold and foreign exchange reserves, which the Bundesbank administers, were not at any point up for discussion at the G20 summit in Cannes," government spokesman Steffen Seibert said. The WSJ adds, "A plan to have the International Monetary Fund issue its special currency as a powerful weapon in Europe's efforts to contain the widening euro-zone debt crisis was blocked by German Chancellor Angela Merkel, according to a report in a German newspaper."
There are three observations to be made here: i) when it comes to rescuing insolvent countries, Germany is delighted to sacrifice euros at the altar of the 50-some year old PIIGS retirement age; ask for its gold however, and things get ugly; ii) the Eurozone, the ECB and the EFSF are dead broke, insolvent and/or have zero credibility in the capital markets, and they know it and iii) due to the joint and several nature of the ECB's capital calls, while Germany may have had enough leverage to tell G-20 to shove it, the next countries in line, especially those which are already insolvent and will rely on the EFSF for their existence once the ECB's SMP program is finished, may not be that lucky, and in exchange for remaining in the eurozone, the forfeit could well be their gold.
WSJ brings details on how German SDRs would be used as a temporary (temporary as in European financial short selling ban, and temporary reduction of initial margin to maintenance for everyone to appease MF Global clients) backstop for Europe:
The idea of using SDRs to fight financial contagion isn't new. When the collapse of Lehman Brothers in 2008 unleashed a financial crisis, the G-20 in 2009 approved a $250 billion SDR allocation to help backstop efforts to fight the spread of the crisis.
The European Central Bank has been buying euro-zone bonds in an effort to keep borrowing costs of weakened members from exploding. But the ECB's efforts are considered by some experts to be outside of its central mandate to maintain price stability. And the ECB has said that its special measures - buying euro-zone debt -- should be temporary and limited in scope. That is another reason why some people are advocating the IMF play a greater role in propping up weakened euro-zone members and become the lender of last resort.
Speaking to reporters at the close of the Cannes summit, Merkel indicated that G-20 leaders agreed in principle that the IMF and EFSF could work together, but the summit could not agree on any specifics.
"We have an interesting process ahead of us and the discussion is not yet concluded," she said.
Reuters brings more on the the logical German reaction to the EFSF and ECB's extortion attempts:
"We know this plan and we reject it," a Bundesbank spokesman said.
Seibert said several partners had raised the question in Cannes whether SDRs could be used to strengthen the EFSF but Germany had rejected this plan and discussions at Monday's Eurogroup on Monday would not discuss this topic.
The newspapers had said the issue was taken off the agenda at the G20 following Bundesbank opposition but that it would be debated on Monday at a Eurogroup meeting of euro zone finance ministers.
Why will it be debated? Because when at first you don't succeed, try, try again. Germany may be crossed off the list, but here is who is next in order of appearance. Sooner or later, Europe will stumble on that one "leader" whose gold is less valuable than their political stability, because after all, a "united", "EMUed" Europe has the biggest MAD trump card of all.
(23 votes)
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Why would they want an inedible relic?
Cuz it's shiny.
That's why my wife likes it.
I do believe, and I'm not just saying this as hyperbole, that Germany is at the point where either the people just give in and accept what they know will be a fate of massive inflation (as the ECB inevitable must hyper print euros to pay off EU sovereign bonds and recapitalize EU private and quasi-private banks, not to even mention the derivative exposure that must be satisfied held by such institutions) and falling living standards, as they are sacrificed in order to kick the PIIGS+France+UK can down the street for a year to several years at most (so, two generations of Germans' financial lives will be sacrificed to bail out the EU for a few years), OR, the German People are about to rise up against Merkel and any politician that allies themself with Merkel or anyone endorsing that the EU remain intact.
I don't see any daylight in between those two possible outcomes, as the only way that the EU can be salvaged for a few more years is by sacrificing the savings and capital of those in Germany. How can the EU be salvaged for more than a year, at best, without such a sacrifice of Germans?
Yup.
I think its the latter.
General revolt in the US as well.
WWIII is the only alternative that doesn't including hangings via lamp posts.
http://www.youtube.com/watch?v=zBGPw_LBiRA
Regards,
Cooter
I think they will take door number three.
The NY FED already has it and they aren't giving it back.
Occupy Fort Knox.
Nothing else is going on there.
Protesters get close to Fort Knox and they will make the Oakland Police look like the Red Cross. Never will they allow anyone to see the cobwebs and tungsten bars.
Most of the US govt's gold is 800 feet under the Fed building in NYC. (7,000 metric tons... Knox has 4,500 metric tons)
ONE BLOCK FROM ZUCCOTTI PARK!!!! (Gulp)
The Germans benefitted for a couple of decades by being able to cheaply export to the Piigs countries while they had a common cheap currency. If PIIGS had to use their own cheap currencies, they could never have afforded Germany's exports, and Germany wouldnt have had its great boom.
Germany accepted this inequality when it was in their favor, now their bitching when the shithawks come home to roost. The main thing from this is that no one want to give up their gold.
I would only add that if it is the position of Germany to not provide collateral to make periphery debt serviceable, then they shouldn't pressure these countries with whatever threats to not default.
All our gold are belong to you..... 9!
It would have been no problem for Germany to print money and thereby depreciate the D-mark. The money printed by the Bundesbank could have been lent to high-tech companies, students and so on at low interest rates and thereby reducing costs for households and companies. This would have been even better for the German economy.
I think that politicians in Europe now are too much concentrated on punishing Germany for its anti-Semitism in the past and toppling Berlusconi since his power in the past, and perhaps also in the future, partially has depended on nationalists in northern Italy and ex-fascists.
The most simple solution to the debt problems in Europe would be to transform the monetary union into a union with less political ambitions and more focus on solving practical problems.
My assessment is that the least painful solution to the debt problem is to print money and lend that money at very low interest rates to Italy and Spain. Especially if the EU would require that all oil must be paid in euros rather than other currencies. That would be the same policy as the United States currently is practising.
If they don´t impose a euro requirement for oil imports I guess that the result will be inflation. That will harm Italian small savers. On the other hand they have so far benefited from lower taxes and more government spending than the country actually can afford. But the political price for Berlusconi and his buddies would be far smaller if the Italians would pay for the government debt by inflation rather than by higher taxes and less government spending. And those who do not like Berlusconi´s allies prefer a solution which means a high political price for Berlusconi.
Another problem is that Germany does not like inflation and that their export companies do not need a depreciated currency like other countries do. Solutions that mean more inflation and that Germany´s tax payers may lose hundreds of billions of dollars are unattractive solutions to Germany. I suppose that is why the EU so far has chosen such solutions.
I realize that it would be bad for the US economy if the EU would require that all imported oil should be paid in euros. This would reduce the amount of USD that the world economy can absorb. Therefore, the US would have to print less or face more inflation.
However, if the eurozone would be shrunk to the countries which are most enthusiastic about the euro or need cheap, printed money to pay for their government debts, respectively, the amount of needed printed euros would be limited. Why not let Italy, Spain, France, Belgium and a few other countries continue with the euro and let other countries, Germany for instance, have their own currencies? Other EU countries could contribute indirectly to the prosperity of the eurozone by a commitment to only buy oil for euros during a transitional period.
Furthermore, I think the US should be more willing to accept a smaller eurozone that prints money in the same manner us the US.
I think that an important problem in Europe and North America is that politics is not decided by pragmatic people to a sufficient extent. There are too much fanatics. These people probably feel that lobbyists and the big media will treat them more favourably if they act like fanatics. It is not just the debt problem in Europe which is an example of that. Take the proposed attacks on Iran, for instance. They actually think that it is legitimate to nuke Iran because they are perhaps are designing some nuclear devices on the drawing board. Even though I think that it is perhaps more likely that they will attack Pakistan rather than Iran since they already have nukes and since Pakistan would be caught by surprise and since it is less unlikely that domestic, capricious radicals will be able to seize nukes in Pakistan, I still think that openly talking about creating a nuclear disaster in an oil producing country indicates that many European and American politicians do not prioritize economic stability and prosperity sufficiently but rather other, political strategic objectives. They are actually willing to sacrifice the economy for other political objectives. This is a typical hallmark of fanatics. There are European politicians like the late British minister of foreign affairs Gordon Cook and the American politician Ron Paul who either are more pragmatic or prioritize other objectives. As regards Ron Paul, he seems to be driven by a wish to return to the original principles of the American society which to me seems to have been as much freedom as possible for individual citizens and that the individual should be affected by government decisions to the smallest extent possible. Ron Paul can probably not be characterized as "pragmatic". But he does not prioritize the same objectives as most other leading American and European politicians. However, I think that his idea that the Fed should stop printing money is unrealistic, especially if he thinks that should happen instantly. I think that the US must raise import duties, impose tax breaks on domestically produced energy, reduce the oversupply to the labour market, raise taxes and cut government spending before the US can stop printing.
+ 1, very good, but I could not get your green arrow to work. Nice analysis.
DCRB - word is that posts that begin with italics, can not be 'arrowed' up or down. Breaks the javascript maybe?
Edit - appearently, sometimes breaks the 'arrow' mechanism, as the up arrow just worked on this comment.
Another edit - Another example of the leading-italics-malfunction-syndrome. http://www.zerohedge.com/news/g-20-demands-german-gold-keep-eurozone-int...
Couldn't agree more.
+1 Green from me
Thank you for your thoughtful and interesting commentary. Euros for oil, indeed.
Hey Big Slick, did you know that a part of the area under the NY Fed is foreign territory? It's in the minutes of an FOMC not so long ago(while Greenspan was in-charge).
My bet is German Gold is safe in the fourth Reich's hands. Wherever it is.
And all these CB numbers are the tip of the iceberg.
ORI
and-the-circus-rolls-on-and-on/
Mario Draghi, the new European Central Bank governor, is a Goldman Sachs alumnus. Also a former head of the Bank Of Italy. His focus and concentration is privatisations.
you mean "privations."
You both mean:
As in, provisions of real, valuable assets, culled from the aftermath of the destruction from the very explosives they've rigged the global economy with.
As it was with AIG, the Abacus/Timberwold/Hudson, and many other fiascos (or should I say fiatscos), The Vampire Squid is hoping to profit from being a false prophet yet again.
Interesting. Did not know that. Most of what I know about the NY Fed building I learned from Die Hard 3.
"Yippee kiyay m---f---r."
How you got those numbers? As far as I know there is only a bit over 8000 metric tons in possesion of US gov.
Maybe that source is not correct but .....
http://www.fms.treas.gov/gold/current.html
thanks for that........ROFLMAO with the three-decimal-place troy oz! they count all the goldust, too, huh? Am so grateful for my diligent gubbmint accountants.... so why won't they let anybody verify anything? "we" should at least know what % haircut "we" take on "our" real vs. bullshit imaginary "ownership"
Eally, cosmic,
+ 1 for each of you. Indeed, why not let some journalists and maybe an auditor and respected PM specialists go along with the .gov accountants?
<sigh/>
US Gold is at Ft. Knox (built explicitly for the purpose of holding gold) and West Point.
If you have information, with any credibility, other than your spittle-on-the-chin, please share with the community.
Regards,
Cooter
Sorry, quick correction. The US Government gold is 8k tons and is at West Point and Ft. Knox.
Perhaps you refer to private gold held by US banks, which has ownership both domestic and international. In fact, many foreign nations house their gold in New York. Total "private gold held by US banks" is 4k tons if I understand correctly.
Suckers.
Regards,
Cooter
@cowdiddly:
You mean the Fort Knox security would shoot all those people to prevent them from finding out it is just an empty building???
probly just rubber bullets, not live ammo... then the tear-gas & etc etc; round 'em up haul 'em off... no problem. It's a "national suckurity" issue, ya know?
The FRBNY probably has already LENT OUT Germany's gold...this is going to be the dirty secret of all secrets
Then the FRBNY would have to call its gold back. THAT would be an interesting thing to watch. Gold would leap...
fofoa.blogspot.com
Physical gold rarely leaves the vault during leasing.
What happens is a trading of paper claims (on paper claims (on paper claims (on paper claims))). So, when the system blows up, the gold is still right where it started and all the paper is still just paper.
Not saying physical depositors can't lose, just saying it is generally how it works with physical deposits (if you are a big boy like the US Government).
Regards,
Cooter
[General revolt in the US as well.]
It is obvious we are already in a simmering civil war, the Tea Partiers and OWSers are just choosing up sides, along with the union goons. It is a civil war over debt bondabe (i.e. slavery) of your children and grandchildren as far as the mind can see. This cannot stand, the sovereigns must default as we all know. We are just now beginning to realize that if the revolt doesn't succeed we all end up morelocks down in the mines.
http://www.futurnamics.com/civilwar.php
@CrazyCooter,
did you mean the USSA will bomb IRAN as a way out of this crisis? Another dirty trick to divert the people's attention from the immense ongoing difficulties??
Your conjecture seems to pose some legitimacy cuz the Israel has been crying out very loudly about the option to attack Iran.
Here's whatever the official bark for the mass consumption :)
http://www.haaretz.com/print-edition/news/u-s-officials-israel-refused-to-commit-to-withhold-surprise-attack-on-iran-1.393914
Hmmm, now if Iran is nuked, just which way will the fallout blow? Should be interesting.
Die Welt runs a hawkish article about the possibility of an Israeli attack on Iran:
http://www.welt.de/politik/ausland/article13701473/Israel-kann-Irans-Bom...
And, while everyone is talking about Iran, we're sending troops to Uganda. And looking at Somalia and Nigeria. Oil, people, oil! Africa is where the empire sees resources to grab.
They have many options to play their war games, it doesn't have to be Iran.
Hell if I know what they'll do. But the MSM is playing up this Somalia/Nigeria "terrorist" group that is so conveniently connected to the groups we're already at war with.
It was tongue-in-cheek.
The US will not "nuke" Iran, however I do very much expect "the west" to "replace" the government which happens to exist over the territorial area of "Iran".
Doing so will take MENA oil off line as all hell breaks lose. The powers that be in various countries will have the "excuse" they need to take "martial law" type powers and the current domestic rebellions will therefore "take a back seat".
Once WWIII gets going real good, its about starving half the world (i.e. the half that can't grow their own food with their own energy - or defend said production from hungry neighbors).
Plenty of resources to feed the beast after that happens! Just think of how many debt instruments are suddenly worth ... nothing!
I am still not sure if gold gets a front seat if this plays out as such.
Regards,
Cooter
LOL!
The awakened ones have seen it coming. The propaganda machines are in full swing.
Aren't sanctions part of war?
http://news.yahoo.com/khamenei-accuses-u-terror-attacks-iran-115214653.html
we are all living in a very sickening world... a very pathetic one full of twisting >:)
“When plunder becomes a way of life for a group of men living together in society, they create for themselves, in the course of time, a legal system that authorizes it and a moral code that glorifies it.” — Frédéric Bastiat (1801-1850)
such a cowardly act!
Except the ECB cannot print. Not now anyways. They would have to change the treaties.
because they always follow the treaties???
like especially the 'no bailout' clause... as well as the 'deficit not to exceed 3 (?) % GDP' etc. etc.
Well they obviously can, they have been shoring up bond prices after all. Despite common wisdom here though, it's quite clear that the ECB leadership is very reluctant to keep going on the printing/inflation route.
With Mario in charge? print away
So far, you mean. The Schumer has not yet hit the fan.
I wonder if anyone else noticed from that chart that Italy is one of the major holders of gold in the world? They are also in trouble.
I could see Italy being forced to sell lots of gold on the market. It's what the far east did in 1997 right before their currencies collapsed. It also crushed the price of gold for several years.
they could push there entire pile onto the market, the chinese Gov. would would be happy to trade in there 2 trillion dollars. there will be no price collapse
According to wiki/Gold_reserve, Italy at #3 position has as many as 2,451.8 tonnes (World official gold holding, December 2010).
At a price of US$1900/oz., reached in September 2011, one ton of gold has a value of approximately US$60.8 million.
So roughly Italy's gold reserve has value of app. 2452 X US$ 61 millions = USD 150 billions...
Is it enough for Italy to sell off all of its gold reserve to tackle its current financial problem? Will it be any help then? :)
I don't think $150 billion would solve Italy's problems; if they sell their physical, and remain tied to the rest of the Eurozone, and their banks remain exposed to crappy credit everywhere, they are still going to be in deep doo-doo...
but if Italy can LEVERAGE that US$150 billions into 5 or 6 times or even more, follows the Wall Street TOP banskters, it may be able to solve its messes. The very problem is to find such cash-rich fool willing to accept such scheme. Perhaps Italy should knock loudly the door of the House of Saud... =F
There are issues in Germany such as the demographic
Truth,
Maybe they'll take 'the american plan' rate and just keep working on the problem problem until it becomes like the weather as a topic of conversation.
After all the EU is the largest economy in the world and only requires free passage of goods, services, people, and a common currency to maintain its position. A supranational government was never necessary except for the pols and technicians(bureaucrats); the autonomy of sovereign states was never seriously threatened except for the obviously flawed and failed attempt voted down several times thus far.
With the effort made so far toward resolution of Greece, this oldman would not shy away from the euro were the European Union shorn of those states to weak to abide by the rules; and the common currency has been a major reason for the Union's success.
Everyone in Europe seems to understand this and, IMO, it is only a matter of time until the current farce is ended and the non-compliers skillfully placed outside the Union until they comply. It is really much simpler than anyone admits, but has to be accomplished with great diplomacy in order to maintain respect for every state and its national sovereignity.
I am no expert in any of this and also damned near ignorant of many of the details, but I am certain of one thing; there is a desire to work out these problems with respect towards each member so as not to shut the door to the future.
In many ways, I admire this attitude though, as an american, it is completely foreign to me. I wish we had all the money back that we had spent 'John Wayne-ing' with wars and threats of wars, with violence rather than with grace as the super-power we were, but-----------
We are the american union----we are different, but we are survivors enough to adapt to the new paradigm that is. Are any of the american union's states in as much difficulty as Greece, Portugal, Italy, Ireland, Spain, Great Britain-------California, Illinois, New Jersey, who else in our union has a problem? Yeah, two questions at once but I'm getting tired----please excuse me.
So the daylight you say you cannot see may be there after all----the Europeans are not stupid and bthey are fighting their governments each day-----in the streets against great violence from the other side. This has not been shown so much, even in Europe----but the street does have a plan and knows what it wants, and is fighting for it, and these are very nice human beings.
I wouldn't bet a buck on how this will resolve itself or how many generations it will take, but there are infinite ways not just the few that msm throws at us
This is going to be a long war, Truth----------------om
Thanks OM this is thought provoking stuff. However the Euro Banks are in FAR worse shape than their US counterparts - so muddling along until a diplomatic exclusion from the Euro of `non compliers` can be brokered is exceedingly problematic. The situation reminds me of a couple I once came accross who had got married under the impression that their spouse was very rich. As it turned out they were both broke and the Marriage was revealed for all as sham. They truly deserved each other!
In this case the poorer Euro states saw the Euro as a meal ticket - easy credit and good standing on the back of Germany. That honeymoon is now over. The Germans saw the Euro as a way to a more competitive currency than the rock hard DM, but their partners in the project had to start behaving like them, i.e working harder, seeking productivity gains and learning fiscal responsibility. The Germans wanted to believe that with a stable currency their new partners would achieve this. That dream is also in tatters.
So the Euro marriage is far from happy. Nobody is any longer getting from it what they wanted. Germans must be waking up by now to the fact that if they dont seek a divorce soon there will be no marital assets left at all.
The banks are in bad shape, but letting banks and sovereigns go bankrupt is not the fucking end of the world or the Euro. Guaranteeing consumer accounts up to say 100k (and similar amounts of money for pensions) if we let the PIGS go bankrupt will cost quite a lot of money, but it's not going to bankrupt the northern European countries.
What is bankrupting us is not letting the PIGS go bankrupt and bailing out the financiers rather than just the retail and pension savers.
Hell for solidarity and stability maybe we should even bail out retail savers and pensions for the PIGS (up to a point, as the Slovaks said ... it doesn't make sense for poor countries to bail out pensions in Greece a couple times higher than theirs). That would still be cheaper than what we are doing now ...
With what are you doing this "bailing"?
Sovereign debt, the economies in trade balance or trade surplus have no trouble at auction for their own debt. The EFSF has trouble because it's throwing money down financier's gullets to feed financiers ... which they of course know isn't going to work, since their gullets are bottomless. They're quite happy to offload trash on the ECB and a purely tax backed EFSF, but putting their own capital in would be silly.
The moment we stop "bailing out" the financiers (actually enriching them in collateral terms) we can get back to the fundamental issue of debt sustainability and that depends on only one thing, trade balance.
Fuking + 5 billion, Marco - The banks are pulling that scene from Blazing Saddles -- do what I want or the nigger gets it....Call their freaking bluff. We can figure out ways around needing them as they are (and should have long since). As if some non productive gambling paper-pushers were actually required to make the world go around. I don't buy it, never did, and neither should anyone else. Believe it or not, it's possible to live an entire life without bank credit - my total life borrowing at age 58 was $2k to buy a drum set when I was 20. When I paid that off - no more credit for anything everl. My neighbors and friends used to ask "how can you live like that?". I am now wealthier than all of them combined, and can now return the question with interest - and the answer is, they can't - losing homes, losing all that stuff they couldn't afford but felt entitled to - so be it - they lorded it over me when they had it and I didn't - but they didn't own it, they borrowed it and now can't keep paying. As far as I'm concerned, that crowd, and the banker-enablers can eat shit and die, the world will then be a better place - for all but them.
Why do we allow these people to war on us and win? That's what it is -- war is about subjugating the enemy, and we've allowed ourselves to be subjugated by these losers.
Time to take our lives back -- what happens to theirs is their concern, just like they said that about us when they were screwing us.
"Healthy polities but completely bankrupt banks." I agree. And instead of fixing the banks they've obliterated them...while at the same time spending more. And then scoffed at the American solution of "saving the banks while spending less on government." I'm at a loss here. Why do we care again? Now that we know Turkey is the Industrial Powerhouse for all of Europe why don't we simply allow all of Europe to throw itself off the (famous of course) bridge and we'll be friends with "Turkey and those that are friends with Turkey." Which would include Europe of course--or some close facsimile thereof--"and the other nice people."
STILL the new powerhouse Turkey in NO way can join the EU because the naively pathetic TURKS are forgetful that they're mostly MOSLEM (regardless how secular they may call themselves), their entrance into EU will just tarnish the prevailing Christian cultures there O:-)
but of course this matter can't be spoken out gracefully >:X pity on Turks
Well said reload! And you said it in excellent clarity! Nice to have a SIMPLE human language with clear thoughts here, which is getting harder to find in ZH :D seems folks here do not fond of simplicity... instead many prefer to cryptic thoughts
anyhow your statement seems to construe a mutual benefit, once upon time... yet now it's over, just woke up in tough realities.
The discussion has already become normalized: many here have lost sight of the fact that the EU is a monstrosity, a blight on the European people. It's a vehicle to enhance the power and wealth of the .01%, and a tool for them to use to fashion a world government. Many of these statists probably think they are trying to help mankind advance, but what they offer is regression, and an end to real individualism and sovereignty - both human and geographic. They've abused their citizens in erecting the whole thing, making a mockery of democracy. We should hope the whole thing crashes and burns, the sooner the better.
From your handle, buyingsterling,
May I presume that there is an additional benefit for you upon the crashing and burning of the European Union and the euro?
Normalization of the discussion is to speak the language of msm and the pandering to the masses more propaganda that it is perceived the 'masses' want to hear, read, or see in order to maintain the advertising revenues of the mouthpieces of the 1%.
We do not have a normalized view at all; quite the opposite, in fact, a view that is self-derived and independent of much of the conditioning that is the norm. We are not special, merely different, and this oldman is pleased to note that our line of reasoning---even if uninformed and naiive---seems to be more agreeable to others as time passes.
Please, we are in this together and it is not an easy thing to spend 60 years of ones life going against the grain to the extent that 'love it or leave it' is heard so often. The deal is all screwed up and so many people are held in bondage by 'newspeak' that it is difficult to find such a forum as ZH, let alone express a point of view that is intolerable to TPTB.
Anyway, real individualization is an egocentric myth that is difficult to convince americans of and out of respect for you individuality and life force, I welcome further comments from you and others that differ from my own thoughts.
We are on the same side-----------om
Reload, thanks for your comment,
One thing that has always struck me as odd is why these poorer nations were ever romanced into the European Union in the first place.
My 'theory' is that upon the dissolution of the Soviet bloc, the NATO nations did not want to lose control of the fortuitous shift and thus the Euro-expansion was given great impetus and importance. This was incidental to the message written on the wall that the system was very limited and would eventually crash, as it has done. The European nations, in alliance with the 'richest and most powerful nation on the face of the earth', played their hands well and permanently buried the 'commies' as they had been trying to do for 80 years. Prosperity broke out everywhere and the 'force' was with it, so long as the old model was strengthened.
Who would have predicted in those days that in such a short time the US would have to go to the markets for funding of its huge deficit spending and sop up all the available sources of funds, leaving a vacuum for all other nations as far as external borrowing was concerned. Now, the system is in complete chaos and no one can get it back the way it was or the way we want it; these are uncomfortable times. Something is happening beyond our perception, I believe; a new way of being and new economic model is constructing itself out of a basic survival instinct that our species requires in times such as now. Or maybe, I am just hooked on hopium beyond help----only time will tell.
Alas, this is 'think-tank' stuff and I am completely unqualified to write about it. These are just randoms thoughts that have come to me as a casual observer over the last twenty years when I lived in the forest and saw the news no more than a few days every month. My thoughts, I place openly here, as an ill-informed oldman, looking for answers to questions that are beyond my intellectual capacity.
Thank you and everyone else at ZH for being so kind and respectful om
"this is 'think-tank' stuff and I am completely unqualified to write about it"
You are quite qualified, sounds to me. Sadly the people who are most qualified ARE the average, normal, individual person who sits back and observes it all, and yet the world looks to politicians, expert economists (Krugman? i mean, srsly?), and academics as the source of information.
I have learned more about economics and society and the world from the man on the street than I could ever get from a think tank or a phD from Harvard.
Keep commenting, nobody at ZH is going to ignore you because you don't have "comma, PhD" after your name (and if they do, they're trolls anyway, so have at em).
You are the type who puts things back together when the "experts" are done destroying it all. World needs more oldmen who can see the bigger picture.
We used to have a common language and a common culture. Immigrants came here and did not demand that everything be in their language or that the country should morph into a place like where they came from.
This was before the dark times..before diversity
Agreed. And leadership is not defined as acting against the wishes and best interests of the people. Why should the hard-working Europeans be made to bailout the profliagte Greeks, Italians etc. They got themselves into this situation by totally ignoring the terms of EU membership, so let them get themselves out of it. Of course, the real issue is NOT the soverirgns but, and haven't we heard this somewhere before, the Banks. But again, why should we bail out the Banks for reasons other than that they own the politicians? Let the Bnaks fail together with their shareholders, bondholders, BoD's and managements. Then we can move on.
The problem with a true bank failure without government backstop is that if it happens in one Eurozone country you instantly get bankruns in all the Eurozone trade deficit countries and once the EU economy tanks it would spread to the others as well ... now I'm in favour of letting banks go bankrupt when necessary, but I think instantly bankrupting all banks is a little too much.
Maybe we should go to full reserve banking to make this kind of stuff irrelevant, but for the moment faith in the system needs to be preserved. I think the European stability fund should be like a FDIC for the Euro zone, that has some value.
absolutely. and as the article notes "gold and other reserves." well...in Germany those "other reserves" amount to hundred of billions of "worthless fiat denominated debt"--all of which is put at risk through "PIGG(i)E Bank" annihilation. How such intelligent "economists" can be so stupid is simply beyond me--although the term "lack of political will" has been coming up over and over. Or perhaps more accurately "the right type of political will." The problem of course is that at this point New York is figuring out the collapse of the Euro-zone has advantages as well. A massive amount of global capital has already left the Euro-zone and rather than discuss ways to grow their respective economies they're only discussing how to hold on to what they've got. Yet they themselves have been outsourcing their mfging beyond belief. What if New York simply became the bankers to those to whom they have outsourced?
Nice summary, Sunshine. That is the situation.
"Germany is at the point where either the people just give in and accept what they know will be a fate of massive inflation ... as they are sacrificed in order to kick the PIIGS+France+UK can down the street for a year to several years at most ...., OR, the German People are about to rise up against Merkel and any politician that allies themself with Merkel or anyone endorsing that the EU remain intact."
Kyle Bass agrees (see his CNBC remarks from early Oct on YouTube). He calls your option #1: "All-in"
Says the Germans will NOT go All-in. Paraphrase: "If you had relatives that were completely fiscally irresponsible, would you align with them and bail them out on your family's dime?"
The German newspaper Die Welt reports reports in its Sunday addition that a new poll shows that 71% of Germans want a national referendum on the Euro and, that 63% of trhe German people do not believe that Greece can stay in the Euro Zone. Folks, there is political trouble brewing in Germany. I am going to call my cousin's family in Germany this morning to get some anecdotal evidence in terms of their feelings on these issues.
The leadership of the PIGS obviously don't want to accept the austerity required to appease their creditors (i.e., northern neighbours), while the creditors, by withholding bailout cash are threatening the PIGS's access to future funding if they don't straighten out their own financial mess (while the ECB presumably plays middleman, buying up maturing PIGS debt so the "negotiations" can continue so long as "progress" is being made).
The resolution to all this seems clear - it obviously won't be painless politically or financially, but simpler than what is being portrayed.
Creditors recognize the inability of the PIGS to repay all of their debt & take the hit via "voluntary restructuring" thereby not triggering a credit event & CDS payout. if that means the banks have to be recapitalized/nationalized, so be it - with each country looking after its own banks.
Going forward, the funding for recapitalization of the banks and countries' future access to credit can be done via gold-backed bonds - that will enforce the necessary financial discipline on the PIGS (& everyone else) or they forfeit their gold.
If a country doesn't want to run out of gold - then they better produce something of value to trade with others and not perpetually & indefinitely consume more than they produce...
Pretty simple actually...
Oh and for the CDS holders...well, if your naked (e.g., you aren't party to an underlying bond that the CDS is hedging) then you are on your own - we aren't bailing out your counterparty.
Your plan seems very good. Responsible. I don't think we want to go down the rathole of triggering CDS payouts. Each country creditor country takes its medicine by recapitalizing its own banks.
And in the future gold-backed bonds. Pay the debts or lose the gold.
Too simple and too elegant for the politicians to accept though.
+ 1
Oh, I think NOT triggering at least some CDS payouts is both immoral and irresponsible. You are saying that those who bought them should be screwed? Why should not those who unwisely sold them, with out the stuff to back them up not catch a little of that screwing? They are the ones who caused this horrible mess - without them, the leverage wouldn't have been possible that is at the root - things would have had to adjust long before it got this bad.
Of course, it's really government's (the servants of the bankers) fault for allowing insurance to be sold without the resources to back it - in normal insurance that is already illegal, and lo and behold, the failure of insurance companies is rare -- funny thing about that.
We need to let the irresponsible fail, and those who build their world by skimming off the rest of us should not get off without penalty - we've paid, it's their turn. And we're going to be paying for a few generations - your kids too - for socializing failure, but privatizing risk. Time to turn the tables on those who have caused this evil.
wunderbar
the major problem is that the PC movement has demonized ANYone who was a nationalist into marginalization as a neo nazi. If you don't welcome 3rd world invasion and self-flagellate over sins by people who superficially resemble you, and in perpetuity, then you are a neonazi. It's pretty much that simple all over the western world.
Things are going to end up polarized like prison gangs.
TLC or some other channel is now doing a whitewash "Muslim in America," where there's one woman who is pissed that someone says she's uncomfortable on a plane with her, "get your ass off a plane, I am going to educate people like you." I wonder why that snotty muslim bitch isn't doing the educating in SAUDI ARABIA where she really should? Instead she's "educating" white people on how racist they are because they look at muslim countries and see something that is revolting. It will be more of texas sharpshooter muslims who are "just like you, see?" And those few people should make you ignore that they are pouring acid in women's faces for "honor" or hanging 16 year old girls for taking off their hijabs.
There's an entire industry set up to condition civilized people to reject what their lyin' eyes are telling them and accept a total lie. God forbid you might ever avail yourself of your brain and use a valid stereotype; there might be one bear in the woods who is really friendly and you'd hate to discriminate against him, right? That would be the ultimate sin.
link here:
German call for a referendum on the eurohttp://www.welt.de/politik/deutschland/article13701056/Deutsche-fordern-...
According to a poll commissioned by "Bild am Sonntag" 71 percent of Germans want to be able to vote directly on important decisions to Europe and the Euro. Only 27 percent oppose it.
63 percent believe that Greece won't be able to stay within the Eurozone. Only 32 percent believe that Athens can still be saved.
unfortunately, google translate did not do its job good enough, the translated page is just ugly! -.-
Here's EU's alternative: do like the US, PRINT.
EU hasn't stimulated, eased or printed like the US. US is far ahead in print & debt.
USD is backed by nothing at all - except military "muscle, a proven paper tiger.
Why then, should the EUR be backed by anything?
Oh, btw. EUR is backed by far higher productivity, infrastructure, energy efficiency and social structures than US.
US falls apart. EU prevails.
Didn't the Bernank say it was long term tradition and not money?
http://www.youtube.com/watch?v=2Dj9v9s9buk
Why yes he did.
Hyperinflation coming, they have done the money - fiat currency grab already with all the bailouts. Now is the end game grab of the gold which is what they really want from the countries.
Just look at Libya - it was about the gold and Gaddafhi wanting a gold backed currency. Where is Libya's gold now? I haven't heard a single word about what happened to it.
Libya's Gold will be held to pay for all those bombing runs by NATO. Oh and to cover Gaddahi's stock and investment loses "cough cough"
trusting rothschild is a majorly bad idea
ahem
2 years old but relevant:
http://youtu.be/7Fw1RMKWypo
@ ~6:00
"...hold on to your gold bars..."
Yeah, I know...fucking BARS?!
He is public enemy number one.
Gadaffi ate all the gold.
A Chavez moment. The U.S. needs a HUGE Chavez movement to audit our gold in fort knox...if it's even there still.
That was an epic Ron Paul moment! I especially liked when he asked,"Is gold money?"
I betcha the bernanke had all his focus on NOT shitting his pants!
yahoo reporting g-pap resigning today.......
and at 11.15 zhdge timed comments.....the story is pulled..
"Why would they want an inedible relic?"
....................................
"In extremis only gold will be accepted as payment for goods and services"
Are we in extremis yet?
http://www.321gold.com/fed/greenspan/1966.html
We've come for your tradition...and your women (in that order)