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Germany: The Final Frontier... Whose True Debt/GDP Is Now 140%

Tyler Durden's picture





 

From Mark Grant, Author of Out of the Box And Onto Wall Street

Germany: The Final Frontier

“It always looks darkest just before it gets totally black.”

-Peanuts

Data Mining

Over the last several weeks I have tried to bring a more accurate picture of the debts of a number of nations to you. There has been no bias and the figures have stood on their own merit. The statistical component of the European Union, Eurostat, is quite clear; they do not count guarantees or contingent liabilities as part of any nation’s debt. We might all note that if Nestle or IBM or General Electric did this they would find their senior executives jailed for Fraud but never mind; this is the methodology of the EU which quite obviously masks the truth. The problem then is not the simple math used to obtain a more accurate debt to GDP ratio but in digging out the various guarantees, contingent liabilities and obligations of any member nation of the European Union. “Time consuming” would be the accurate words because you have to sleuth around like Sherlock Holmes to come up with the data. Yes, it is all there somewhere or another but it is nowhere all together and so must be found.

In the case of all of the countries that I have examined to date it has been on a stand-alone basis; meaning NOT inclusive of their obligations for the EU, the ECB or various other European institutions which would only increase their actual debt to GDP ratios. For the nations examined to date I concentrated on their guarantees; bank guarantees, regional guarantees, derivatives guaranteed by the sovereign, the debts of various institutions with sovereign guarantees and so forth. Each examination has been country specific because each nation has different policies. Yesterday in Boston I met with the very bright folks at Standish Mellon and promised them a more accurate appraisal of not a troubled country but of the leading country in the European Union, Germany, and so I deliver as promised.

Here we find not the usual issues with the periphery nations but obligations and guarantees for the entire European construct. The analysis of Germany, past their stated GDP and their stated debt to GDP ratio is really a study of the EU/ECB themselves to determine the size and the liabilities that are born by their largest economic member so that we can fully assess the financial condition of Germany and not blindly accept what is officially put out in the Press.

Germany

German Gross Domestic Product (GDP):                                   $3.2 trillion

Official German Sovereign Debt:                                               $2.618 trillion

Percentage of Liabilities at the European Union:                          27%
 
Percentage of Liabilities at the ECB                                           18.94%

Germany’s Percentage of the ECB Debt ($4 trillion)                    $757.6 billion

German annual cost for the EU budget                                      $46.36 billion

German Guarantees for the Stabilization Funds                          $280.6 billion

German Guarantees for the Macro Financial Assistance Fund      $211.14 billion

German Target-2 Liabilities                                                     $656 billion

German Guarantee for the EIB Debt                                        $157.29 billion

Sovereign Guarantee for KFW                                                 $588 billion

Total German Sovereign Debt & Guarantees                             $5.315 trillion

Official debt to GDP Ratio                                                             81.8%

Actual German Debt to GDP Ratio                                            139.8%

So there you have it; place your bets.
                             

 


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Tue, 03/27/2012 - 09:46 | Link to Comment Zero Govt
Zero Govt's picture

the wrecking crew (politicians and bankers) of all nations have done it again to once prosperous Germany ..and the rest of Europe... and America... and Japan

what a 'surprise'

Politicians & Bwankers: no nation too big for these vandals

Tue, 03/27/2012 - 09:56 | Link to Comment markmotive
Tue, 03/27/2012 - 10:02 | Link to Comment Pinto Currency
Pinto Currency's picture

 

Federal Debt is not nearly the whole story - here is how countries stack up :

http://www.gfmag.com/tools/global-database/economic-data/10403-total-debt-to-gdp.html#axzz1qFL9ymCH

Tue, 03/27/2012 - 10:10 | Link to Comment johnQpublic
johnQpublic's picture

We might all note that if Nestle or IBM or General Electric did this they would find their senior executives jailed for Fraud

 

substitute ' jailed for fraud' to promoted or just about anything else and you'd be closer to the truth

the big guys dont get jailed for fraud

bigger the better

example: corzine

you can add as many others as you feel nescessary

Tue, 03/27/2012 - 10:21 | Link to Comment Doña K
Doña K's picture

Freudian slip of Merkel on her recent trip to Greece:

IMMIGRATION OFFICER: Nationality?

MERKEL: German

IMMIGRATION OFFICER: Occupation?

MERKEL: No. I am here for just a few days.

Tue, 03/27/2012 - 11:47 | Link to Comment Ghordius
Ghordius's picture

LOL - really good one

 

btw, Target-2 liabilities? Eh? I was under the firm impression that the BundesBank had Target-2 Assets...

anyway, the quality of the article is visible in the fact that there is no comparison whatsoever with other countries...

Tue, 03/27/2012 - 13:54 | Link to Comment kennard
kennard's picture

"here is how countries stack up"

Your linked article does not include T-bonds held by the SS "trust fund" in U.S. government debt. It also does not net out financial services assets from liabilities to get an accurate picture of UK debt, since the UK is a large financial cent(re).

So the U.S. should move up your list and the U.K. should move down.

All of which is academic, of course, since unfunded liabilities are staggering in both of those welfare states.

Tue, 07/31/2012 - 07:26 | Link to Comment weltysparrow
weltysparrow's picture

I would have thought that's because once this all plays out those financial assets will be worth something close to zero yet the liabilities will still be 100%.

Tue, 03/27/2012 - 10:23 | Link to Comment francis_sawyer
francis_sawyer's picture

@markmotive

Yeah... & consider all of that is basically while in ZIRP... IOW ~ We're fucked...

 

Tue, 03/27/2012 - 16:42 | Link to Comment MiddletonRobert3
MiddletonRobert3's picture

my roomate's sister makes $85 hourly on the computer. She has been fired from work for 6 months but last month her paycheck was $16158 just working on the computer for a few hours. Read more here .....  http://lazyCash9.com

Tue, 03/27/2012 - 09:59 | Link to Comment Oh regional Indian
Oh regional Indian's picture

Germany is in debt only because it has to give loan money to people to buy their machines. Otherwise this most prudent of nation-states should never have been in this position in the first place. You should see Deutsche Bank's mortgage arm in India, you'd think they learned their lesson? Nope. Likewise, Mercedes Benz on Benz credit? Sure..... three payslips... approved.

Of course, doesn't help that the Vatican is still after Germany's ass for being so protestant, so end game Germany will suffer again. 

Germany/Japan/China/US: Posterchildren for a supply-side construct gone wild. Can/will not end well.

ori

social-networking-and-the-quantification-of-emotions/

Tue, 03/27/2012 - 10:03 | Link to Comment GeneMarchbanks
GeneMarchbanks's picture

Nice to see you around ORI, there is a hierarchy among the nations you mentioned ORI. I guess you can imagine that the 'victors' have set up game rules via BWIs after WWII.

Germany is and has been in self preservation mode for some time.

 

Tue, 03/27/2012 - 10:11 | Link to Comment Zero Govt
Zero Govt's picture

to be fair to "fiscally prudent" Germany twas they that 'missed' the 4% budget deficit rules of the EU that let all the other scamps of Europe through the gate

Germany has in fact recently passed a number of budgetary rules for their own national and regional Govts which if applied (in 2012-2014) will be the end of funding (pissing away) more money on Europe

Tue, 03/27/2012 - 10:31 | Link to Comment GeneMarchbanks
GeneMarchbanks's picture

Name a 'fiscally prudent' nation? Ok, now.

Stay on topic schizo.

Tue, 03/27/2012 - 11:45 | Link to Comment Gavrikon
Gavrikon's picture

Thst is an AWFULLY big "IF".

Tue, 03/27/2012 - 10:27 | Link to Comment francis_sawyer
francis_sawyer's picture

 "Germany is in debt only because it has to give loan money to people to buy their machines. Otherwise this most prudent of nation-states should never have been in this position in the first place"

Pffft... So let me understand that... The ONLY reason I'm in bad shape is because I have to give other people money to buy lemonade at my lemonade stand?

I'm A VICTIM OF COICUMSTANCES!

http://www.youtube.com/watch?v=sxAk3B_zS5k

Tue, 03/27/2012 - 15:05 | Link to Comment JPM Hater001
JPM Hater001's picture

"Otherwise this most prudent of nation-states should never have been in this position in the first place."

Agreed.  We should have just let them keep making planes.  We'd have a flying saucer by now if we did.

Tue, 03/27/2012 - 10:08 | Link to Comment Stoploss
Stoploss's picture

Whoop's there goes the apple tree!!

Tue, 03/27/2012 - 10:13 | Link to Comment battle axe
battle axe's picture

Germany was such a nice country, oh well another log on the fire of Government Stupidity....

Tue, 03/27/2012 - 10:18 | Link to Comment Gully Foyle
Gully Foyle's picture

Zero Govt

It's all of the plan moving toward one world government.

Every state has to be roughly at the same level for it to work.

Tue, 03/27/2012 - 10:19 | Link to Comment rsi1
rsi1's picture

as if debt/gdp was a meaningful ratio? its useless, it doesnt look at the assets side, its just to make it simple for average joe to believe he understands something, but really it doesnt mean anything without the remaining data of a country.

Tue, 03/27/2012 - 11:18 | Link to Comment Nussi34
Nussi34's picture

Bomb ze PIIGS!

Tue, 03/27/2012 - 09:47 | Link to Comment I am a Man I am...
Tue, 03/27/2012 - 10:42 | Link to Comment Schmuck Raker
Schmuck Raker's picture

Thanks for keeping us all informed on this critical issue.

We're all counting on you.

Tue, 03/27/2012 - 09:47 | Link to Comment Zgangsta
Zgangsta's picture

But what if you price it in gold?

Tue, 03/27/2012 - 09:49 | Link to Comment SHEEPFUKKER
SHEEPFUKKER's picture

NEIN!!

Tue, 03/27/2012 - 09:49 | Link to Comment francis_sawyer
francis_sawyer's picture

 "The Wealth of Nations" is overdue for a re-write...

Tue, 03/27/2012 - 09:49 | Link to Comment Thamesford
Thamesford's picture

Deutschland uber phallas-ee

Tue, 03/27/2012 - 09:50 | Link to Comment Tom Green Swedish
Tom Green Swedish's picture

Who gives a shit?

Tue, 03/27/2012 - 09:55 | Link to Comment Zero Govt
Zero Govt's picture

the Germans will once they realise the politicos and bwankers have wrecked their industrious country for the 3rd time in under a century

Tue, 03/27/2012 - 10:41 | Link to Comment PY-129-20
PY-129-20's picture

This is really the only thing that I fear.  We don't have that anger culture like the French. Blood will be shed. And everything we had achieved since WWII will be blown away. Berserker mode.

Tue, 03/27/2012 - 11:34 | Link to Comment Nussi34
Nussi34's picture

I will vote for the NPD (Nazos) in all elections until the Euro is abolished!

Tue, 03/27/2012 - 11:49 | Link to Comment Instant Wealth
Instant Wealth's picture

They also could channel the public anger by scapegoating capitalism itself via MSM, then install a multi-party crypto-commie regime (Regierung der Nationalen Einheit/Sozialen Gerechtigkeit or s.th. ...).

Sometimes it feels, like the show has already begun. 

Freiheit oder Tod, bitchezz.

Tue, 03/27/2012 - 12:33 | Link to Comment noses
noses's picture

ROTFL. Germans are special: They weren't even able to have a proper revolution. Not once. If you've ever been looking for trusty sheep who will never put up real resistance, look no further.

Tue, 03/27/2012 - 09:51 | Link to Comment Thamesford
Thamesford's picture

We should try this for the U.S.

Tue, 03/27/2012 - 09:56 | Link to Comment Zero Govt
Zero Govt's picture

you have ...just replace Merkal with Barny Frank

Tue, 03/27/2012 - 09:52 | Link to Comment francis_sawyer
francis_sawyer's picture

 "We might all note that if Nestle or IBM or General Electric did this they would find their senior executives jailed for Fraud"

~~~

Well, "IBM & Nestle" anyway... GE is in bed with OWEBAMA so they'd get a free ride...

 

Tue, 03/27/2012 - 10:05 | Link to Comment Global Hunter
Global Hunter's picture

1 out of 3, Buffet took about a 5% interest IBM late in 2011 :) 

Tue, 03/27/2012 - 10:18 | Link to Comment francis_sawyer
francis_sawyer's picture

Yeah ~ & I think Nestle is a Swiss based company anyway, so it looks like we're SOL...

Tue, 03/27/2012 - 09:54 | Link to Comment Subliminal messenger
Subliminal messenger's picture

The entire western world is fucked. Verify that your physical gold and silver is still there, shut down your computer and enjoy life.

When the SHTF, you will be notified.

 

Tue, 03/27/2012 - 09:57 | Link to Comment GeneMarchbanks
GeneMarchbanks's picture

'There has been no bias and the figures have stood on their own merit. The statistical component of the European Union, Eurostat, is quite clear; they do not count guarantees or contingent liabilities as part of any nation’s debt.'

There really is no 'objective' view on these matters. By and large it's all open to interpretation. Also, since politics is basically synonymous economics there isn't really much use in looking at the figures and pretending that it is a mathematical matter mostly.

Tue, 03/27/2012 - 09:58 | Link to Comment Mongo
Mongo's picture

To boldly go... where no debt slave has gone before... or whatever

Tue, 03/27/2012 - 09:59 | Link to Comment HD
HD's picture

Hogan!!!

Tue, 03/27/2012 - 09:59 | Link to Comment chinaboy
chinaboy's picture

All road leads to The Fall of Frankfurt

Tue, 03/27/2012 - 10:01 | Link to Comment Oh regional Indian
Oh regional Indian's picture

All roads lead to Frankfurt in the Fall? For Oktoberfest?

ori

Tue, 03/27/2012 - 10:09 | Link to Comment HD
HD's picture

Germany's gift to the world - Beer, brauts, and breasts.  

http://www.demotivationalposters.org/image/demotivational-poster/1010/ok...

Tue, 03/27/2012 - 10:15 | Link to Comment battle axe
battle axe's picture

Thank you HD that post put a smile on my face...

Tue, 03/27/2012 - 10:19 | Link to Comment HD
HD's picture

My pleasure mate.

Tue, 03/27/2012 - 11:21 | Link to Comment Nussi34
Nussi34's picture

The Oktoberfest is in Munoch, not Frankfurt.

Tue, 03/27/2012 - 10:09 | Link to Comment kaiten
kaiten's picture

Yawn ... What´s the news here? Show me a country whose real debt is same as the "official" one.

Tue, 03/27/2012 - 10:14 | Link to Comment eigenvalue
eigenvalue's picture

How about North Korea?

Tue, 03/27/2012 - 10:17 | Link to Comment Monedas
Monedas's picture

Punish the winners to reward the losers.....then inflate like heck (Hell) !    It's called "Aggravated Pumping" !    Monedas  2012   Deja vu again and again !

Tue, 03/27/2012 - 10:12 | Link to Comment GCT
GCT's picture

It really sucks when the gut feeling I had back in 2009 pans out.  This shit is scary to me.  Have you ever thought you were nuts for being the only one in the room not following the herd? What I fail to understand is how people think everything is hunkie dorrie.  You better learn a skill you can use to produce something people will need if and when this system implodes.  Otherwise you will be starving to death. Oh and some PM's may help you to get through it for the short term.

Tue, 03/27/2012 - 10:22 | Link to Comment Gully Foyle
Gully Foyle's picture

GCT

There are many stories a from people who have lived through a collapse.

My Ukrainian neighbor understands what happened when the Soviet Union fell and how things are very similar to day.

It isn't like it will be Mad Max or a Zombie Apocalypse.

More like living in India or China. Lots of dirt poor people clogging the streets and working for scraps.

Tue, 03/27/2012 - 10:26 | Link to Comment Monedas
Monedas's picture

What can you say about a country whose national food looks like a penis and whose national beverage looks like piss ?   Monedas   2012    Comedy Jihad Sauerkraut Fest

Tue, 03/27/2012 - 10:31 | Link to Comment Schmuck Raker
Schmuck Raker's picture

"...senior executives jailed for Fraud..."

Take a picture folks. This is the first and last time you'll ever see this word combination in public.

Tue, 03/27/2012 - 10:32 | Link to Comment Monedas
Monedas's picture

Hey, I'm a quarter German !  I can have fun with my people !   Monedas  2012   It's like Eddy Murphy saying nigger !

Tue, 03/27/2012 - 10:42 | Link to Comment Olympia
Olympia's picture

The Germans were the first who opened the “gates” of Europe to the non-Europeans. They borrowed money from foreigners to make a war with their “brothers” and they did not know who would profit from it at the end. The result is what we face today …Americans conquered Germany and tutored Europe. It was in their interest that the secondary German actors undertook this a priori lost war. Therefore, this is why they took part in the war against the Germans. They fought against those whom they had been financing to lose …Things are simple …There is no mystery in that that requires for secret information or complex thinking.


http://eamb-ydrohoos.blogspot.com/2012/02/germany-disgrace-of-europe.htm...


Whoever wishes to “set foot” on Europe and demolish it, the only thing he/she has to do is to “fool” the Germans. For a second time in less than fifty years, Europe’s idiots become the victims of foreigners and they serve their interests at the expense of Europe …it is for the second time that they take money from foreigners and they turn against their European “brothers” under their lenders’ orders …it is for the second time that the family’s fool takes “candies” from the “child abuser” of the neighbourhood in exchange to get him into the “bedroom” where the younger “siblings” sleep …In the “bedroom” which is common today due to the European Union.

Authored by Panagiotis Traianou

Tue, 03/27/2012 - 10:51 | Link to Comment Monedas
Monedas's picture

Where did you dig up that "Moron's Manifesto" ?  You are a Kommunist Kook ?  Monedas   2012   Greek Communist Liberation Front ?

Tue, 03/27/2012 - 10:52 | Link to Comment Olympia
Olympia's picture

Feel free to educate yourself further here:

http://eamb-ydrohoos.blogspot.com/search/label/ENGLISH

.

Tue, 03/27/2012 - 10:54 | Link to Comment Olympia
Olympia's picture

and if you can read German, feel free to learn more here:

http://eamb-ydrohoos.blogspot.com/search/label/GERMAN

.

Tue, 03/27/2012 - 12:20 | Link to Comment Monedas
Monedas's picture

I did like your reference to "Phoenician Loan Sharks" !  May I use it in my humorous presentations ?  I will any way !    In a hyperbolic Keynesian monetary phuck fest......it's good to be a debtor  !  To the victor go the spoils !  Print like a bitch and borrow like a whore !   It's our way of managing the world and making the world pay for all we have given !  Monedas  2012   Print, Inflate and Borrow into oblivion !  The wealthy debtor countries are hoarding gold.....they know what's coming.....they are making it happen.....and their dominance of the unwashed will be enhanced !  There's a vacuum of leadership from third world countries.....they deserve the ass phucking they will get !

Tue, 03/27/2012 - 12:37 | Link to Comment noses
noses's picture

Shit smells the same in any language. But you're right: Nothing can be so bad that it cannot be used as a bad example to help other people to learn something useful.

Tue, 03/27/2012 - 10:59 | Link to Comment Ian56
Ian56's picture

Anyone know the true GDP/Debt ratio for the UK, with all it's off balance sheet accounting and PFI's etc.?

Tue, 03/27/2012 - 11:57 | Link to Comment Instant Wealth
Tue, 03/27/2012 - 11:14 | Link to Comment Stuck on Zero
Stuck on Zero's picture

Anyone in government ever hear of GAAP?

Tue, 03/27/2012 - 12:29 | Link to Comment magpie
magpie's picture

Nothing will happen, but i can imagine voter participation dropping to around 30 % and below the next elections.

Tue, 03/27/2012 - 14:56 | Link to Comment EmileLargo
EmileLargo's picture

These figures do not include the cost of recapping their banks. At the height of the bubble, Deutsche Bank was levered at 85:1. 

Tue, 03/27/2012 - 15:30 | Link to Comment Chinese Busboy
Chinese Busboy's picture

 

No wonder America in decline. Math skills look to be seriously eroded.

Total German Soverign Debt & Gurantees / German GDP = 166.09%

$5.315 trillion / $3.2 trillion = 166.09%

Actual German Debt to GDP ratio is not 139.8%, it is 166.09% 

So it is worse than you say.

 

So sorry, if you can't do math, you can't compete.

 

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