Here Comes The Non-Boring Weekend: G7 Says "Central Banks Ready To Provide Liquidity As Required"

Tyler Durden's picture

The G-7 is in full panic mode. The organization for the prevention of harm to the Status Quo was expected to release a communique possibly over the weekend, but the speed with which one was dropped for mass circulation is stunning and confirms that its members are in full meltdown as the weekend comes. It is now certain that the G-7 will attempt some major intervention over the next 48 hours to inject a last dose of hope into capital markets, or else the Monday open will be an epic collapse.

G-7 Statement on Tackling Slowdown, Supporting Banks

“We met at a time of new challenges to global economic recovery, with significant challenges to growth, fiscal deficits and sovereign debt, stemming from past accumulated imbalances.

This is reflected in heightened tensions in financial markets.

There are now clear signs of a slowdown in global growth. We are committed to a strong and coordinated international response to these challenges.

“We are taking strong actions to maintain financial stability, restore confidence and support growth. In the U.S., President Obama has put forward a significant package to strengthen growth and employment through public investments, tax incentives and targeted job measures, combined with fiscal reforms designed to restore fiscal sustainability over the medium term. Euro area countries are implementing the decisions taken on July 21 to address financial tensions, notably through the flexibilization of the EFSF, reaffirming their inflexible determination to honor fully their own individual sovereign signatures and their commitments to sustainable fiscal conditions and structure reforms. Japan is implementing substantial fiscal measures for reconstruction from the earthquake while ensuring the commitment to medium-term fiscal consolidation.

“Concerns over the pace and future of the recovery underscore the need for a concerted effort at a global level in support of strong, sustainable and balanced growth. We must all set out and implement ambitious and growth-friendly fiscal consolidation plans rooted within credible fiscal frameworks.

Fiscal policy faces a delicate balancing act. Given the still fragile nature of the recovery, we must tread the difficult path of achieving fiscal adjustment plans while supporting economic activity, taking into account different national circumstances.

“Monetary policies will maintain price stability and continue to support economic recovery. Central Banks stand ready to provide liquidity to banks as required. We will take all necessary actions to ensure the resilience of banking systems and financial markets. In this context we reaffirm our commitment to implement fully Basel III.

“We reaffirmed our shared interest in a strong and stable international financial system, and our support for market- determined exchange rates. Excess volatility and disorderly movements in exchange rates have adverse implications for economic and financial stability. We will consult closely in regard to actions in exchange markets and will cooperate as appropriate.

“We look forward to working with our colleagues in the G20 and the IMF in the coming weeks to rebalance demand and strengthen global growth. As previously agreed, structural reforms will make an important contribution in this regard.”

 

 


Translation: the great experiment in encroaching statism, failed monetary policy and central planning continues... Until imminent failure.

 

And select soundbites of last ditch desperation courtesy of Reuters:

 

FRENCH FINANCE MINISTER FRANCOIS BAROIN

"The G7 reaffirmed its comittment to safeguarding the solidity of sovereign ratings."

"We have to get away from the idea there is only one solution for all... It's not rigour versus growth."

"It was a G7 where everything was raised. There was no dead time."

BANK OF FRANCE GOVERNOR CHRISTIAN NOYER

"There is an extreme tension on the markets, what's important is that very strong measures are taken by governments concerned."

"It was really a meeting of great cohesion and force. There was a determination by everyone to meet challenges."

G7 OFFICIAL

"The G7 sees a need for a concerted effort at global level in support of strong, sustainable and balanced growth.

"We must all set out and implement ambitious and growth-friendly fiscal consolidation plans rooted within credible frameworks.

"The G7 affirmed its interest in a strong, stable international financial system."

EARLIER COMMENTS

U.S. TREASURY SECRETARY TIMOTHY GEITHNER

"It is completely within the capacity of the stronger members of the euro area to absorb those costs. Those costs would be much, much greater for them and their economies if they sit here and do nothing and they recognize that."

CANADIAN FINANCE MINISTER JIM FLAHERTY

"I hope we would all agree we have to stay the course, that we have to go through the pain of fiscal consolidation. It's not easy, it creates stresses in some countries, but it's necessary, we have to get through this rough patch.

"There's no point kicking the can down the road. If we don't deal with it now we'll have to deal with it later and we know that these problems do not get better with the passage of time."

EU ECONOMIC AND MONETARY AFFAIRS COMMISSIONER OLLI REHN

"We support the United States in its work so that the U.S. recovery can continue, while in Europe we have our own challenges related to fiscal consolidation and restoring confidence in the European economy."

On bank funding:

"Solutions should be found from private markets, from private investors and if that is not is possible there should be national backstops in place to ensure recapitalisations or restructuring for these banks."

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scratch_and_sniff's picture

Can i also add, i think this whole thing is playing into the hands of the Germans beautifully, fair play to them, sometimes power goes where its natural home is, no need for malice to be involved(just a little tweaking). But if the Germans are so against backstopping Europe, what the fuck were they going to do if they had of won the war? Man its my unshakeable belief that the Germans have this all in the bag...look at the contenders, fuck sake: Ireland? Greece? (Italy is ok, they have 2500 tonnes of gold) what the fuck is Ireland going to do? The stupid fucks signed the lot away, they didnt even have a sovereign crisis, it was an irrelevant banking dilemma; bond holders went to bed one night accepting they were going to take a 70% haircut, and woke up the next morning to find santa had come in the form of the Irish gov promising 100%…for what? noooooooooooooo, something going on here, i can feel it in my salty balls.

falak pema's picture

I think the intent of article statement is very clear :

Flexible in AMOUNT (upto 3.5 trillion), Inflexible in Intent. (We will go the whole hog.)

knukles's picture

It's not English, it's Portugese.

Herman Strandschnecke's picture

XRAYD. I'd say it meant 'Warping'

falak pema's picture

what is the ductile strength of "flexibilization"? What is its limit of elasticity? When does plasticity defintely set in?

The honorable society of pseudo science, called the "G7 financial wizards", can be relied upon to provide us all the scientific answers. 

A true experiment in the making will tell us how this flexibilization works first for Greece, then Portugal, then Spain, then Italy. 

In the meantime as chief Chaman Triche has ordained : there will be unlimited liquidity for all EU banks...

So there...let the great euro experiment now proceed. 

Poule Mouillee's picture

falak, you neglected to mention crazing.  Crazing has already begun.

Herman Strandschnecke's picture

Is this Crazing like splitting up on the veneer with a bloating of debt underneath?

Al Gorerhythm's picture

Will Flexibization ever get Gription?

TheFourthStooge-ing's picture

Will Flexibization ever get Gription?

No, but Flexibiliquidicuritization will get Tractionalized into the Defaultranche.

 

WmMcK's picture

I've heard Au and Ag are very ductile (and malleable and fungible), but, alas, not edible.

New_Meat's picture

fp: in honor of -10 yearz:

"... What is its limit of elasticity? When does plasticity defintely set in? ... "

Hook's Law is a function of local temperature.

God love them all and the follow-on playaz'

- Ned

Clampit's picture

Another sentence example: flexibilization of capital markets will continue until moral improves.

Al Gorerhythm's picture

Or not. maybe he meant to add an "s" for morals.

Chaffinch's picture

They have no morals. It is possible they have Morrells (which is, or was, a brand of beer) hence the references to liquidity.

JupiterAndBeyond's picture

European Union = New Coke

gookempucky's picture

This reminds me of when Sherlock Holmes and Watson went camping;

During the first night Holmes wakes up around 2 am and was looking at the stars..perplexed he elbows Watson to wake up..Watson still half asleep says what in the bloody hell is wrong Holmes ? I was sleeping like a log...Holmes motions to Watson towards the sky and says ..what do you see Watson ?  Watson a little perplexed finally says WOW the stars are giant tonight..what a beautiful night, what a beautiful sky...this is what you wanted me to see wasnt it Holmes...NO Watson look harder...Watson squints his eyes and stares very hard only to say, I dont see what you are talking about Holmes...What is it Im supposed to see ? Holmes finally says WATSON SOMEONE HAS STOLEN OUR TENT !!!!!!!

juslen's picture

lol, real laughter did indeed occur on my part.

Marx_it_2_market.'s picture

Thanks for the laugh.  It was so funny that I went to verify the source.  Turns out the exact version is even funnier, and more apt in showing how details can lead one astray, something the MSM knows all too well.

“Holmes and Watson are on a camping trip. In the middle of the night Holmes wakes up and gives Dr. Watson a nudge. “Watson,” he says, “look up in the sky and tell me what you see.” “I see millions of stars, Holmes,” says Watson. “And what do you conclude from that, Watson?” Watson thinks for a moment, “Well,” he says, “astronomically, it tells me that there are millions of galaxies and potentially billions of planets. Astrologically, I observe that Saturn is in Leo. Horologically, I deduce that the time is approximately a quarter past three. Meteorologically, I suspect that we will have a beautiful day tomorrow. Theologically, I can see that God is all powerful, and we are small and insignificant. Uh, what does that tell you, Holmes?” “Watson, you idiot! Someone has stolen our tent!”

bob_dabolina's picture

Uh....are we forgetting Obama and his job plan? It's clearly going to put humpty dumpty back together again (if it's done NOW, we'll pass it and find out what's in it later)

SilverIsKing's picture

Obama, master of the "pull my finger" gag.

MonkeySmoke's picture

Now we know, fully, the reason for the attempts at keeping gold and silver under control. Should be interesting to see how gold and silver react to this news, Monday when the market opens.

jdelano's picture

That's exactly what I saw in this--they will be going after gold. Goddamn it. Now they're really pissing me off. Insurrection time.

TheFourthStooge-ing's picture

That's exactly what I saw in this--they will be going after gold.

Fuck it, let them go after gold. Let them drive it back down as much as they can. How long will it last? A week? A day or two?

The increasing desperation of the manipulation is being matched by a decreasing duration of the effects. Those who are waiting for a big dip before buying will soon be wishing they'd bought when gold was still under $2000. Those who believe that paper gold is worth something will soon be wishing they'd bought physical when it was available and an ounce cost less than a wheelbarrow full of hundred dollar bills.

 

--Freedom--'s picture

Does "provide liquidity" just mean printing money? Serious question. Does this just mean the European central banks will print money for the banks, and, if so, will the gold market react the same way it did under US qe programs?

unky's picture

Also interesting will be the EUR/USD, today at 1.36, its not very nice for you if you havent bought PMs already.

--Freedom--'s picture

Well, I'm pretty much all in on the metals. Have been waiting for a big move up before unloading some UGL to buy another couple years worth of dried goods. So I've been watching the gold market closely for the move up toward 2k.
Of course, the physical metal won't be sold at 2k.

NumberNone's picture

The CB's are screwed.  They are in a suicide pact and Greece is about to slit its wrists.  They have to keep Greece on anti-depressant cashflows because they know when Greece declares bankruptcy and kills itself...you've got 5 more countries that say fuck it and will throw their lot in with the bankruptcy suicide pact almost immediately.  Last one out is the loser...right Germany??  Can't you just feel Germany squirming and getting ready to raid the US bases for tactical nukes to kick some fucking teeth in?  "Gott im himmel, you bastards will pay for this"  It was their own poverty that drove them to military action in WWII...it will be everyone elses poverty that will drive them into action this time. 

In the end, CB's are down to printing money and praying for a miracle.  It's all they got. 

pillory's picture

zerohedge freaks me out.

waiting on the "just head for the hills" headline. (when, tyler, when?)

changing avatar to super-attractive ostrich.

Poule Mouillee's picture

If only the avatars were bigger so we could truly appreciate it.

toady's picture

You're not the only one. At least once a week I load all the weapons and the truck after reading ZH.

A day later I calm down. I'm getting pretty good. It takes less than an hour now...

mayhem_korner's picture

Nice fowl trifecta.  I personally prefer the ostrich (with a good chianti).  Little gamier than the chix or gooz.

Rodent Freikorps's picture

If you wait to hear the final "Eject" you will be alone in this airplane.

mayhem_korner's picture

Didn't recognize the new pic, RF.  Presume he's sporting a glock under the trenchcoat?

SumSUN's picture

Ohhh i get it.  They are doing more of the same at a more furious pace to solve the problems.  Brilliant!  Everyone sell your PMs and deposit your cash to help capitalize the banks!

andybev01's picture

Kind of like having a bad steering box so you move the steering wheel before you reach the corner.

Conax's picture

Sell to whom? Who ends up with the gold?

Arrrr!

Let them rage and make threats, if it gets too ugly, I'll bury it for the grandkids.

 

Lookout for some new PMs tax/regulations. They have the printing press and a monopoly on the use of force.

I have a shovel.

LookingWithAmazement's picture

"Central Banks stand ready to provide liquidity to banks as required"

No banking crisis. The doomers can go to sleep again. Boring world we live in.

Amish Hacker's picture

Right, there's absolutely no problem, but if you give us enough money, we can solve it.

Lord Welligton's picture
"LookWithAmazement" At how stupid I am. Well done. You do your education a credit.
LookingWithAmazement's picture

Believe me: TPTB can play this "game" for as long as they want. Just protect yourself and go to sleep or do something useful.

mayhem_korner's picture

Believe me: TPTB can play this "game" for as long as they want.

So thought Belshazzar and the elites Roman Empire.

The delusion of invincibility is most vivid just before its downfall...

hambone's picture

I don't even have time to read the comments - I'm off to buy more PM's.

SumSUN's picture

I would be as well, but i only have gold and silver... And some calls and puts.  I'm Maxed out!!

juslen's picture

Same here, 75% of my assets are in PM, 100% of my savings are in physical.

Poule Mouillee's picture

It's been HOURS since I did that.  I'm jonesing for more too.

BurningFuld's picture

"We support the United States in its work so that the U.S. recovery can continue" BaHaHaHa.

Aren't things continuing on a downward slant. I mean correct me if I'm wrong.

andybev01's picture

*I know man; the fell for it!!*