This page has been archived and commenting is disabled.
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.
»
- 37384 reads
- Printer-friendly version
- Send to friend
- advertisements -
Thanks for commenting. I think I got the general gist. It wasn't easy.
"That a fund that would receive an impact force of a billion euros, can not even borrow three billion euros, is the reason why Merkozy eye on the German gold. Investors simply have no interest in the EFSF."
"...would receive an impact force of a billion euros.." - I think you made a typo there - the intention is to take the 3 billion Euros and leverage them up to 1.4 TRILLION Euros for the EFSF [Europe also needs to rollover some 3 trillion Euros worth of debt in coming months but that is a different issue ...]
I find myself wondering whether people have finally wised-up about the games that the central bankers play and therefore, the bankster games (like the EFSF) are doomed from this point forward
or, if the EFSF is the exception to all the other games the banksters play - ie, the EFSF is so patently absurd in all aspects that it is receiving the reception it deserves but other, more elegant bankster games will still have a chance of fooling the sheeple going forward
time will tell ...
What to expect from a transfer of the gold reserves from U.S., GB and F to Germany? Well, first the obvious, that Germany, if required, may actually have the gold. The myth that you can everybody found by googel also that the strongest economy in Europe are not enough safe space to work and therefore had to distribute the gold on the three victorious powers of WW II believes, except you, Germany, and probably nobody everyman. Also, your assertion that the transport to Germany devour vast amounts of taxpayers' money and not quite caught. Who gives away billions to foreign countries, also has the money to bring home the gold, if he has the will and permission. Probably lacks the German governments of both. One must assume that the victorious powers want to keep the German gold German hostage for good behavior under control.
About time Germany said no.
I suspect this is international political theater; you really think they have the gold? Someone should demand it just to see if it is still accessible by the German people's governmental representatives. It's what all the cool countries are doing!
Rock on, Chavez!
I am curious to know how much gold Rothschilds and his illuminati pervs and murders are hoarding. We know he counts his "BARS."
demand it just to see if it is still accessible by the German people's governmental representatives...
Thankfully for Germany, the NY Fed has employed the services of MERS to track and trace true ownership of their assets.
What could possibly go wrong? Ownership is in the cloud.
(Kinda like "check's in the mail")
"What could possibly go wrong? Ownership is in the cloud."
something analogous to the cloud computing... local storage is not required :D
big brothers will cater your needs... everything is just fine, until something bad happens
@Ganja: Nice comment!
EFSF. Everyone's fucked... Send fiat!