• Sprott Money
    05/06/2016 - 06:03
    The US, in its own decline, is showing this same self-destructive tendency. The worse things get, the greater the inclination of the citizenry to say, “Carry on, everything’s fine.”

Germany Is Cornered

Tyler Durden's picture




 

Via Mark J. Grant, author of Out of the Box,

Germany: Backed Into the Corner
 
 
 
Several recent releases of data bring the problem into focus; a sharp focus. With Ms. Merkel in China trying to buoy the European position China announced that exports to the European Union declined 16.2% in July with sales to Italy falling off the cliff; down 35.8%. These are not small variations or figures just slightly off the consensus opinion but disastrous numbers that clearly indicate the deepening recession that is taking place on the Continent and there will be quite serious consequences that come from a fall-off of this magnitude.
 
 
 
This morning the Consumer Sentiment numbers were released for Europe and the number was 86.1 down from 87.9 in July and far worse than the median forecast of 87.5 and the worst number, in fact, since August 2009. In Germany, once thought to be almost invincible and somehow outside the recession that is raging in Europe, the crisis is just beginning but it has commenced and it is clearly indicated by the newest data which shows that Germany has begun the descent down the rabbit hole with the rest of its brethren. Unemployment increased in Germany, which was reported out this morning, to 2.9mm people and it was a greater drop than had been forecast. German capital investment fell 0.9% in the second quarter, factory orders were down 7.8% from a year earlier, business confidence fell for the fourth straight month and growth slowed to 0.3% as all of the EU-17 reported a -0.2 contraction.  
 
 
 
Europe, economically, is in serious trouble and as the situation worsens the tide has run out for Germany. This is an early call and not one for any hedge fund to trade on as I am looking further down the road but as Greece, Portugal, Ireland and Spain have demonstrated; the day of the Jackal is coming. We now find a Europe that is as divided as the American elections. We have a bi-polar condition where France, Greece, Italy, Ireland, Spain, Portugal, a slew of smaller countries and even the ECB are sitting in one corner of the boxing ring and where Germany is virtually alone in the other with perhaps Austria handing Germany the wet towels. I would assert that Germany is now trapped and that she has lost control of situation first by the way the game has been played and second by the limitations of her capital. A careful examination is called for and an explanation made.
 
 
 
The rhetoric has been the same; an irreversible Euro, an irreversible European Union, an independent ECB and a greater good for each and every country in Europe. This has been the glittering neon sign since 1999 and it flashed a kind of reality up until the time when the electricity began to sputter and certain parts of the sign went dark. Now with so much of the sign black, repairs are not only called for but demanded by the countries no longer in prosperity but in decline. During all of this time Germany waved the flag along with everyone else but when the crisis began in earnest Germany chose to still wave the flag and to staunch the flow of blood by demanding austerity, greater fiscal control and consequences for the use of their money. This ploy worked for a while until the recession deepened, the politics as a consequence in many nations began to get ugly due to the various cut-backs in social and civil programs and the troubled nations in Europe began to line-up to demand what had been promised; an economically united Europe in both good times and bad. Consequently we now stare at a reality where Germany is backed into a corner which will either result in Berlin being forced to say “No” or refuse to fund or leave the EU or allowing herself to be dragged down to the same cost of funding and the same standard of living as some median for the entire Continent. Greece, Spain, Italy and the use of funds by the ECB are going to force Germany to make some very tough decisions where local politics will dictate the choices and none of the possibilities, not one, bode well for Germany or the German people. 
 
 
 
Sometimes when I hear various people speak about the ECB I am amazed by their viewpoint. The ECB is not some alien nation found in another universe. The central bank is owned by the central banks of the nations in Europe and they are accountable for her profits or losses with Germany being accountable for about 22% of the balance sheet. There seems to be a certain fantasy in the markets that the ECB can do this or that without consequences, without losses and without anyone being accountable. Where this fairy godmother viewpoint comes from I don’t know but it is without doubt a fantasy with no basis in the real world. I can assure you that the ECB is now full of so many foul smelling securitizations, of so many loans that have soured and of so much collateral that has an actual worth of perhaps the paper upon which it is written that the stench will eventually fill the nostrils of the ratings agencies and an ever widening group of investors that are choosing to steer clear of Europe. The ECB is one flash point of the European dialogue because troubled Europe is demanding that its resources be used to not just bail them out but continue their standard of living and lower their cost of funding but there is a consequence to this and the Germans know it which is that it is a disguised kind of Eurobonds where a monetary transference takes place with the ECB as the conduit. This is important to understand so I repeat; the poorer nations are demanding that the ECB buy their debt and lower their cost of funding so that the ECB becomes the vehicle for a transfer of wealth from Germany to the rest of Europe.
 
 
 
Besides the ever growing rift at the ECB you have three consequential nations demanding Germany’s money which are Greece, Spain and Italy, in the not too distant background, which is why Italy has sided with the troubled countries and then you have France, where I wonder if she is not going to propose some scheme soon to benefit her finances. Greece wants the next tranche of $50 billion and then she will ask for more and then Spain is playing the game of charades where she contends it is just her banks and with $22.5 billion pegged for her regional debt and pleas coming shortly that will be more than 100% larger, I estimate, Spain is trying to do everything possible not to engage the Troika and an actual examination of her devious financial position so as to avoid any kind of peek at reality which would drive Spain, in my opinion, over the cliff. Then Italy, utilizing the most recent data available, is contracting more than any other significant nation in Europe so that her turn in the begging line is coming soon.
 
 
 
Make no mistake; Germany is now in the corner, will have to make some very difficult decisions and she is trapped beneath the banner which she has long waved. The German economy is only $3.55 trillion and she is being asked, in fact demanded, to turn over her capital to support the rest of Europe which will cause a serious decline in her own finances if she undertakes the task. I can smell the air; I think you will soon find a politician in Germany who is opposed to the policies of Ms. Merkel and who will rise to power based upon “Germany for the Germans” just as Austria has now stated that no more of their money is going to be used to bail-out other countries and that Austria has reached her limit.
 
 
 
All of this is also defined by a very warped time-line. The problems are now, the recession is now, the economic difficulties are now and the solutions that have been proposed are one to three years out. The markets tend to get confused here but there is a huge divergence between the seriousness of the problems residing in the “present” and the proffered answers perhaps found in the “future” which would take years to accomplish if accomplished at all. I point specifically to a change in the European treaties, or a change in the structure of the ECB, or any new scheme for monetary transference, or some kind of central oversight of all of the European banks or a central fiscal authority for all of Europe or any number of other plans that have been trotted out in hopes that they might stick or mollify the markets. The solutions are years out; the crisis is now and this is one of the central problems of this unfolding drama.
 
 
 

Germany is in the box and I am afraid that is now Frau Pandora and not Frau Merkel who owns the key.

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Thu, 08/30/2012 - 09:06 | 2749173 GetZeeGold
GetZeeGold's picture

 

 

Is this where we open fire?

 

Thu, 08/30/2012 - 09:17 | 2749195 Rubicon
Rubicon's picture

Not until you see the whites of their eyes laddie!

Thu, 08/30/2012 - 09:35 | 2749232 Dalago
Dalago's picture

They will shit on EVERYone's chest.   Don't knock it till you try it.

Thu, 08/30/2012 - 09:49 | 2749276 Popo
Popo's picture

Historically speaking, war comes next.   Every time.

Thu, 08/30/2012 - 09:54 | 2749290 Deo vindice
Deo vindice's picture

Those who put Germany into the corner should beware. Wise old king Solomon said:

"He that passeth by, and meddleth with strife belonging not to him, is like one that taketh a dog by the ears." (Proverbs 26:17)

It also means that once they have hold, they will not easily let go.

Thu, 08/30/2012 - 11:10 | 2749541 caconhma
caconhma's picture

Germany political elite is just paid mercenaries of the zionist banking mafia. They are slave masters of German people.

The only question  to be answered: how long will German people take this shit? After all, they are the descendants of the great people who destroyed the mighty Roman Empire!

Thu, 08/30/2012 - 11:59 | 2749703 Totentänzerlied
Totentänzerlied's picture

And what exactly did they do when Old Fritz's generals led millions of them to their utterly pointless deaths and economic ruin, ditto (minus the deaths) the Weimar Republic, ditto Hitler and his generals, ditto (with fewer deaths) the Soviet occupation + rape, ditto East Germany for 40 fucking years???

Slaves. Shall. Serve.

Thu, 08/30/2012 - 12:56 | 2749888 dugorama
dugorama's picture

i have never heard or read anyone say Germany = Zionism.  Ever.  THAT'S a fresh perspective.

Thu, 08/30/2012 - 11:04 | 2749517 chunkylover42
chunkylover42's picture

Germany leaves the Euro.

Thu, 08/30/2012 - 11:22 | 2749579 FinHits
FinHits's picture

A small correction, as this 22% liability share error has been repeated many times now: German ECB Eurozone-key is 27.1%.

The 22% share is of ECB equity, but one should note e.g. Britain and Sweden don't share profits or costs even though the own tiny slivers of ECB equity.

Thu, 08/30/2012 - 09:45 | 2749260 Seorse Gorog fr...
Seorse Gorog from that Quantum Entanglement Fund. alright_.-'s picture

I just knew you were going to get in here 1rd!

Thu, 08/30/2012 - 14:02 | 2750104 Zeilschip
Zeilschip's picture

So to summarize, Germany is trapped in a corner?

Thu, 08/30/2012 - 09:07 | 2749174 Stoploss
Stoploss's picture

Adios Angie, now fuck off. Forever.......

Thu, 08/30/2012 - 09:08 | 2749177 GetZeeGold
GetZeeGold's picture

 

 

Do please leave the checkbook.....we could use the money.

 

Donka!

 

Thu, 08/30/2012 - 09:10 | 2749178 Ar-Pharazôn
Ar-Pharazôn's picture

everytime you make a /sarc comment i LMAO

 

;)

Thu, 08/30/2012 - 09:18 | 2749200 OttoMBMP
OttoMBMP's picture

“Germany for the Germans”

Be assured this will not happen. Will not be allowed to happen. Is not according to plan of TPTB.

Germany has been and will be run by the German members of the international power elite. The rest is noise.

Thu, 08/30/2012 - 09:26 | 2749215 Blasé Faire
Blasé Faire's picture

"Germany for Germans" is a historically sensitive and scary topic.  Different phrasing may help... but if that's the tagline, I agree, I'm not sure it will happen.

Still, it's rare that the biggest kid in school gets bullied.

Thu, 08/30/2012 - 09:39 | 2749242 OttoMBMP
OttoMBMP's picture

Mmmh, I think I know what you mean. But actually scary would be "World for Germans" or something.

Thu, 08/30/2012 - 10:04 | 2749328 WhiteNight123129
WhiteNight123129's picture

Otto, I think you are too pessimistic! THe situation does not need a Germany for Germans just German money for the Germans, without nationalistic overtone... That is politically quite palatable as opposed to a Germany for the Germans.

Thu, 08/30/2012 - 10:16 | 2749336 monad
monad's picture

Pick your religious crime syndicate. It was never "the Germans"... at least not after the Pope armied up. Gott mit uns...

Thu, 08/30/2012 - 10:09 | 2749343 Ar-Pharazôn
Ar-Pharazôn's picture

TPTB is perhaps

 

TOO PIG TO BAILOUT?  :P

 

joking.....

Thu, 08/30/2012 - 10:09 | 2749344 Ar-Pharazôn
Ar-Pharazôn's picture

TPTB is perhaps

 

TOO PIG TO BAILOUT?  :P

 

joking.....

Thu, 08/30/2012 - 09:14 | 2749186 The Wizard of Oz
The Wizard of Oz's picture

NOBODY PUTS ANGIE IN THE CORNER!!!!

Thu, 08/30/2012 - 11:17 | 2749565 Panafrican Funk...
Panafrican Funktron Robot's picture

Yay @ the reference lol

 

The funny part about the discussion of the Euro is the assumption that individual countries matter at all here.  The following are the actual players for world currencies/power:

Barclays

Lloyds

RBS

HSBC

JPM

Deutsche Bank

These entities control everything.  Everyone else (including even Goldman) are bit players.  When people start whispering that Morgan Stanley is the next to fall, it's probably a good idea to listen, because they sure as fuck aren't in the club.  

Thu, 08/30/2012 - 09:07 | 2749176 Ar-Pharazôn
Ar-Pharazôn's picture

if you can, buy only stuff that comes from your country!

 

stop buying CHINESE

 

start buying american & european!

Thu, 08/30/2012 - 09:27 | 2749219 hannah
hannah's picture

so how do the chinese buy anything if they cant buy chinese...?

Thu, 08/30/2012 - 09:33 | 2749228 Ar-Pharazôn
Ar-Pharazôn's picture

do i look chinese?

Thu, 08/30/2012 - 09:41 | 2749250 Vincent Vega
Vincent Vega's picture

But I love Chinese food.

Thu, 08/30/2012 - 12:14 | 2749753 Element
Element's picture

gah!  .... so ... you're ... like a ... cannibal then?

Thu, 08/30/2012 - 09:12 | 2749180 Death and Gravity
Death and Gravity's picture

The German-bashing is tiresome. Inevitably som smug c*** will make an, at best, thinly veiled Nazi reference to disparage anything and everything German.

The responses from the PIIGS countries with their own irresponsible spending and economic behavior, now that that hourse of cards is tumbling, has been to violenty demonstrate (inevitable with some banner or poster with some swastikas on them), and demand moar dosh from the Germans, because theyre "rich", because "they got us into the trouble", and if all else fails, because they were nazis (or probably still are).

Sorry, amigos. Such hostile demeanor simply does not deserve bailing out.

Thu, 08/30/2012 - 09:15 | 2749189 Ar-Pharazôn
Ar-Pharazôn's picture

i totally agree, Germany already payed enough for what happened in WWII.

 

i am still waiting USA paying back North American Indians for 400 years of murders, torture, rape, etc etc

Thu, 08/30/2012 - 09:18 | 2749198 GetZeeGold
GetZeeGold's picture

 

 

400 years of....

 

Man....how the time does fly.

 

Thu, 08/30/2012 - 09:31 | 2749227 Dr. Engali
Dr. Engali's picture

I don't recall murdering, raping , or torturing any  American Indians.

Thu, 08/30/2012 - 09:34 | 2749229 Ar-Pharazôn
Ar-Pharazôn's picture

i hope that your comment was sarcastic.

 

if not it's better if you back to history school, but not in the USA

Thu, 08/30/2012 - 09:36 | 2749233 GetZeeGold
GetZeeGold's picture

 

 

Are you an Indian chief? If so.....can I get any free crap from the casino?

 

Thu, 08/30/2012 - 09:41 | 2749249 Ar-Pharazôn
Ar-Pharazôn's picture

lol...

Thu, 08/30/2012 - 09:37 | 2749238 Ar-Pharazôn
Ar-Pharazôn's picture

if you go back*

Thu, 08/30/2012 - 10:53 | 2749484 4horse
4horse's picture

if you go back*

2Germany  . . . ? . . . 4Who

 

If you want to know my strategy, look at a map*
                                                                             -napoleon

http://landdestroyer.blogspot.co.uk/2012/08/nato-terrorists-target-syria-algeria.html

With the US now openly arming, supporting, and literally "cheering" Al Qaeda in Syria, it is clear that the "War on Terror" is an unprecedented geopolitical fraud perpetuated at the cost of millions of lives destroyed and an incalculable social and economic toll. NATO, with full knowledge of the consequences is literally carving out of North Africa and the Middle East, the so-called "Caliphate" Western leaders had held over their impressionable people's heads as the impetus to perpetually wage global war. Torn from the pages of Orwell's 1984, an artificial war has been created to carry forward corporate-financier machinations both abroad and domestically. The so-called threat to Western civilization is in fact a foreign legion of Western corporate-financier interests, executing Wall Street and London's foreign policy on a global scale where and in a manner traditional Western forces cannot.

NATO's terrorist blitzkrieg across the Arab World will not end in Syria. It will continue, if allowed, into Iran, through the Caucasus Mountains and into Russia, across China's western borders, and even across Southeast Asia. The price for ignorance, apathy, and complicity in supporting the West's so-called "War on Terror" will ironically reap all the horrors and then some in reality, that were promised to us if we didn't fight this "Long War."

 

http://landdestroyer.blogspot.co.uk/2012/08/bombshell-us-neo-cons-state-department.html
Despite the fact that organs such as Kavkaz Center operate in the service of terrorists who advocate the destruction of Russia, their activity alone is not altogether significant if seen in a vacuum.  Rather, it is the association of these types of individuals and organizations with the US State Department and US intelligence that makes them particularly insidious.  One such entity that bears scrutiny is the American Committee for Peace in the Caucasus (ACPC) -Brzezinski. Perle. Kristol.  Abrams.  Adelman. Kagan- previously known as the American Committee for Peace in Chechnya

 

the American Committee for Peace in Chechnya!

 

Over 30 years of supporting global terrorism - the Neo-Conservative establishment had created Al Qaeda in the mountains of Afghanistan in the 1980's and has since used them as both provocateurs and a terrorist "foreign legion" everywhere from Serbia, to the Caucasus Mountains, to Iraq, Libya and now Syria . . .
....
The paternalistic role of the US intelligence establishment in the ACPC is made all the more evident when one examines some of the more well known members of the ACPC including former National Security Advisor Zbigniew Brzezinski, former Pentagon advisor Richard Perle and other top neocons such as William Kristol, Elliott Abrams, Kenneth Adelman, and Robert Kagan – the last two being closely associated with the inner circle of the Romney campaign. What becomes apparent in even a cursory analysis of these figures is that, despite the preponderance of neoconservatives, the top members of the ACPC are pulled from both the liberal and conservative establishments.  Therefore, one can see how the ACPC represents a bipartisan consensus within the US imperialist ruling class – a consensus of aggression against Russia.  What should be even more concerning to political observers is that, given the very real possibility of a Romney victory in November, Russia may see a surge in separatism and violence supported overtly or covertly by the ACPC and a future Romney administration.

Thu, 08/30/2012 - 10:59 | 2749504 Ar-Pharazôn
Ar-Pharazôn's picture

read the chat between me and Engali and you will understand what i meant

Thu, 08/30/2012 - 09:39 | 2749239 Dr. Engali
Dr. Engali's picture

No it's not sarcastic I nor anybody I know did not rape, torture, ,or murder any American Indians. So I nor anybody I know are responsible for any actions that happened in the past.

Thu, 08/30/2012 - 09:42 | 2749252 Ar-Pharazôn
Ar-Pharazôn's picture

that was why i said Germany already payed enough

Thu, 08/30/2012 - 09:49 | 2749275 Dr. Engali
Dr. Engali's picture

Completely understandable. No harm no foul.

Thu, 08/30/2012 - 09:43 | 2749257 Ar-Pharazôn
Ar-Pharazôn's picture

i think i made me hard to understand, i m not born english speaker.

 

we agree on the same subject

 

 

Thu, 08/30/2012 - 10:06 | 2749333 Cranios
Cranios's picture

I think he's serious - he hasn't murdered or raped any American Indians. Neither have I.

Are you saying that you have done that? Because most of us haven't.

Thu, 08/30/2012 - 10:11 | 2749352 Ar-Pharazôn
Ar-Pharazôn's picture

hahahahaha

my point is that if you ask Germany to pay for WWII you can easily ask USA to pay for Indians.... nothing more

Thu, 08/30/2012 - 10:32 | 2749412 giovanni_f
giovanni_f's picture

Nothing to pay to the Indians. _They_ have to pay. For being allowed to be privileged members of the insanely! great! freeeeee! aaaaaameerican! democraciieeeee. Yippiee.

Thu, 08/30/2012 - 10:33 | 2749423 Stuck on Zero
Stuck on Zero's picture

Who will pay for the poor immigrants who were slaughtered by the violent indian tribes?

 

Thu, 08/30/2012 - 10:41 | 2749447 Ar-Pharazôn
Ar-Pharazôn's picture

lol

Thu, 08/30/2012 - 10:41 | 2749445 msmith9962
msmith9962's picture

Doent everybody owe everybody else reparations of some sort for war/genocide/oppression?  I dont know but I'm sure some folks here could name some people/nation that has a clean history.  Cant we call it a wash?  Sounds a lot like this.

 

http://www.youtube.com/watch?v=I5QwKEwo4Bc

Thu, 08/30/2012 - 10:43 | 2749450 Ar-Pharazôn
Ar-Pharazôn's picture

exaclty mate,

 

past is past. those kind of argument can only lead to more stress in the already stressed situation

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