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Goldman Calls For QE In Europe: "How Far Can The ECB Go In Using Its Balance Sheet. The Short Answer Is: A Lot Further"

Tyler Durden's picture


Even as the eyes of the world are currently frozen in a spot in time from ten years ago, and Wikileaks is making doubly sure of this by releasing the entire record of Metrocall pager (remember those?) intercepts starting at 9:55 am on 9/11/01, the world itself continues onward, and especially those who determine its global policy of "Prevention of Harm to The Status QuoTM" are busier than ever this weekend. Chief among these is and always has been the one financial firm which has infiltrated "sovereign" decision-making more than anyone in history: Goldman Sachs, whose alumnus, incidentally, is about to replace Jean Claude Trichet at the helm of the world's largest and most undercapitalized central bank (yes, a central bank can be undercapitalized - read on). Which is why the following note just released by Goldman's Dirk Schumacher is of particular attention. Mere hours after Goldman economist Sven Jari Stehn said that FOMC "easing at the September meeting is very likely—around 75% according to our model", Goldman is now taking on European monetary policy, and specifically the question of further quantitative easing, across the pond, where printing money has always been a far more touchy subject than in the US, courtesy of the German experience with hyperinflation (when gold soared, but apparently accoding to just released brainstorming by that intellectual titan Paul Krugman, for the completely wrong reasons: see gold is now a deflation hedge according to the Nobelist, and has nothing to do with debasing currencies - the NYT columnist just debunked 2000 years of logic and common sense). As a result, the key line in the Schumacher note is the following: "How Far Can The ECB Go In Using Its Balance Sheet.  The Short Answer Is: A Lot Further." To be sure, this is not surprising: after all Zero Hedge first predicted that following the latest market trouncing on Friday, in the aftermath of the ECB's admission of failure on Thursday (who can forget Ze Price Stabeeleetee), see "ECBCTRL+P: The Next Steps In The European Implosion", but we are nothing but a simple blog, which predicts what will happen but certainly does not set policy for a corrupt and failed regime. That's Goldman's job. And what is stunning is the brazenness with which it does it now. To sum up: to Goldman both the Fed and the ECB have to engage asap in yet another episode of bonus-preserving currency debasement, middle class be damned. And, we have very little doubt, they will.

Amusingly, Goldman is magnanimous enough to let us know that this policy will result in the ultimate end of the ECB either through its terminal loss of credibility as a monetary policy setting venue, or, and this is Zero Hedge's take, Germany's decision to say enough, and reinstate the Bundesbank as the ultimate mechanism of monetary decision-making... Yes, that would be DEM decision-making, not EUR.

Yet following that brief detour, Goldman proceeds to discuss the inevitable outcome of such a concerted approach, with the rhetorical question: "How to recapitalise the ECB and the national central banks (if needed)." (Yes, the ECB's endless viability is not guaranteed, someone please notify Roubini). Alas, it will be more than needed, especially after reading Goldman's conclusion, which makes the strawman of currency, Eurozone failure all too clear, should the ECB not engage down this suicidal path:

Given the capital position of the ECB and the limited possibilities for recapitalisation, one could argue that the SMP cannot be expanded much further. But, as already mentioned, the ECB’s implicit exposure with respect to peripheral sovereign debt through the collateral posted by banks is already very large. To be sure, the ECB is marking its collateral to market prices and the losses would be significantly lower than the nominal figures suggest. But it is easy to see how these haircuts would be insufficient in a sovereign default involving any of the bigger countries.


Thus, the argument that the ECB should not increase the SMP further as this may risk its financial health ignores the fact that the ECB is already heavily involved. Moreover, halting the SMP could lead to a similar or even bigger threat to the ECB’s financial health if this meant that a potential liquidity crisis for one of the bigger Euro-zone countries could turn into a disorderly default.

And there you have it: while the world is caught in teary-eyed ruminations over the past, the seeds of a far more painful, and certainly tearful future, were just planted by none other than the bank which always ultimately gets what it wants, no matter how disastrous the implications of its policy are for everyone but Goldman.

The full must read note from Goldman is below, which very appropriately comes on the "10 year anniversary" - 10 years which have seen the American experiment peak, and begin its slow grind into historical irrelevance. Following Goldman's advice should merely precipitate the downward slope and at least make the pain that much briefer.

From Goldman Sachs:

Potential and limits of the ECB’s balance sheet

Like other central banks around the world, the ECB has used its balance sheet in various ways over the past couple of years to stabilise the financial system and  prevent a systemic event involving either a credit institution and/or the government of an EMU member country. This has led many to ask how far the ECB can go in using its balance sheet.

The short answer is: in principle a lot further. But the ECB has to take into account two constraints: its price stability mandate and its financial health. Neither of these two constraints is currently binding. Moreover, the ECB’s financial health is only a constraint to the extent that it could endanger the ECB’s credibility. While a central bank’s credibility is one of its most valuable assets, the ECB may be forced at some point to risk some of its credibility in order to prevent a serious financial crisis. Moreover, with respect to a further expansion of the SMP, the ECB is already significantly exposed to peripheral sovereign debt through its refinancing operations.

Monetary policy in crisis times

Central banks around the world have resorted to a broad range of ‘non-conventional’ measures in order to support growth and stabilise the financial system. Providing sufficient liquidity to the banking sector, for example, was crucial in the early stages of the crisis and central banks have used their balance sheets aggressively so that
funding problems for banks would not turn into wider problems for the whole financial system.

The measures taken by central banks have differed according to the institutional and operational framework of each central bank, as well as the underlying financial system. One important difference has been the varying degree to which central banks were willing to expose their balance sheet to financial risks. Asset purchases made by the Bank of England, for example, were undertaken by an off-balance-sheet vehicle backed by government guarantees. Assets purchased by the ECB, however, are sitting on the ECB’s balance sheet, which implies a higher degree of financial risk for the ECB.

Renewed tensions in peripheral debt markets have now led the ECB to reactivate its Securities Markets Programme (SMP) and the ECB has bought a total of around €130bn of peripheral debt. In our view, these actions by the ECB were dictated by circumstances and form part of its responsibility as a ‘lender of last resort’.  Nonetheless, they raise the issue of how far the ECB can go in using its balance sheet and what, if any, the limits are.

The ECB’s balance sheet has grown strongly with the non-conventional measures

The ECB’s balance sheet stood at around €2trn at the end of August. Table 1 shows a breakdown of this balance sheet into its main categories. The numbers in the first row of the table show the figures for August 2011, and the figures beneath refer to January 2008. As this comparison shows, several items have increased
substantially in size since the start of the crisis.

The box below explains each main item on the ECB’s balance sheet in more detail. But one characteristic of the balance sheet’s liability side is of particular  importance in assessing the ECB’s ability to use its balance sheet. This refers to the fact that the ECB can finance its asset side through the issuance of non-interest-bearing and nonredeemable debt (central bank reserves it can generate at will and which therefore do not constitute a liability in the economic sense). Because of this, the ECB has a much greater degree of freedom than a commercial bank when it comes to the overall size or composition of its balance sheet.

A central bank’s balance sheet grows over time. This is because a growing economy needs a bigger stock of base money, which in turn implies a bigger central bank balance sheet. It is therefore no surprise that the ECB’s balance sheet has increased significantly since the inception of the Euro (Chart 1). The expansion of the
ECB’s balance sheet, however, hasn’t been steady. While it grew more or less in synch with the overall economy from 2000 until 2008, the increase since the onset of the crisis has been much faster (Chart 2).

There are several drivers behind the strong increase in the ECB’s balance sheet. The rise in the gold price, for example, led to an automatic increase in gold holdings (the value of the ECB’s gold holdings has more or less doubled over the last three years). More important, however, was the surge in liquidity provision once the ECB switched to full allotment in its refinancing operations, coupled with an increase in the duration of long-term refinancing operations, in the middle of 2008.

Overall lending to Euro-zone credit institutions increased from less than €500bn before the collapse of Lehman to around €800bn in the fourth quarter of 2008 (see Chart 3). More recently, the ECB’s covered bond program and its SMP have contributed to the overall increase in its balance sheet. The purchases under the covered bond program have been stopped at around €60bn, whereas the SMP remains active, with cumulated purchases since inception of around €130bn.

How much more can the ECB’s balance sheet grow, or change in composition? Quite considerably

Both the increase in the size of the ECB’s balance sheet and the change in its composition—more outright purchases of debt instruments under the covered bond program and the SMP—prompt us to ask: how much further can the ECB extend its balance sheet? The short answer is: considerably further. However, the ECB has to consider two constraints.

Constraint number 1: Price stability

The ECB’s “main task is to maintain the Euro’s purchasing power and thus price stability in the Euro area”. The size of the monetary base is, at least in the medium term, one deciding factor in the inflation outlook. The ECB therefore needs to take into account the medium-term implications for inflation of an expansion of its balance sheet. An unlimited increase in the monetary base would at some point translate into strong credit growth that would eventually lead to an overheating economy and a deteriorating inflation outlook.

The ‘price stability’ constraint, however, is less binding at the current juncture than during normal times. The ECB views its ‘enhanced credit support’, which is reflected in its increased balance sheet, as an important mechanism by which to ensure that its interest rate signal is correctly transmitted across the Euro-zone such that it can fulfil its mandate. There are no signs that the strong increase in base money has translated into a similar strong increase in broader money aggregates or credit to the private sector (Charts 4 and 5).

What is possibly more important than the fact that the increase in base money has not yet ‘spilled over’ into broader monetary aggregates is the ECB’s ability to expand its balance sheet and at the same time offset the potential inflationary implications through so-called sterilisation. The purchases under the SMP, for example, had no effect on the monetary base, as the ECB, through one-week fixed terms deposits, has absorbed broadly the same amount of liquidity that was injected into the
banking system through the purchases.

Overall, a potential conflict with the ECB’s price stability mandate is unlikely to prove a real hindrance for a further expansion of its balance sheet, or a change in its composition, if this were deemed necessary. This is not because the ECB might be willing to compromise on its price stability mandate. Rather, we think that there is, for the time being, no conflict. And, if there were a potential conflict, the ECB has all the necessary tools to separate its balance-sheet operations from pursuing its mandate.

Constraint number 2: Financial strength

The other constraint the ECB faces when it expands its balance sheet is its own financial strength. However, financial strength is again a less clear criterion in the case of central banks than in the case of regular commercial banks. We need to distinguish between two dimensions of financial health: the first concerns a central bank’s ability to cover its expenses, while the second refers to the value of a central bank’s assets vis-à-vis its liabilities.

A central bank could potentially run into financial trouble if its expenses were to overshoot its income. However, as long as its expenses are denominated in the  currency it issues, a central bank can never face a liquidity problem in the same way a commercial bank can. It could, in principle, simply create the money needed to pay its expenses. Any inflationary implications of the excess liquidity generated by such an operation could be dealt with through liquidity absorbing measures.

A central bank also faces fewer constraints than a commercial bank with respect to balance-sheet insolvency (the value of liabilities exceeding the value of assets). Negative equity does not necessarily prevent a central bank from operating; indeed, central banks have in the past continued to operate with negative equity.

Credibility matters

To be sure, the above considerations are rather theoretical, and it is reasonable to assume that the ECB will pay—and already is paying—special attention to its financial strength when using its balance sheet to conduct its ‘non-conventional’ measures. This is not so much because the above arguments do not apply in the case of the ECB but rather because the ECB’s credibility and independence may suffer if the general public were to see its financial health as weak, or if it were to become
technically insolvent.

Credibility, the belief of the general public that a central bank is willing and able to fulfil its mandate, is a necessary prerequisite for a successful implementation of monetary policy. It is easy to see that the trust of the general public would suffer if a central bank were considered not to be in a position to protect its own balance sheet. Moreover, the ECB’s independence may also be brought into question if a weak financial position were seen to be limiting the ECB’s room for manoeuvre. Thus, although a significant loss that had the potential to deplete the ECB’s capital would not imply that the ECB could not operate normally, the potential loss of credibility means that the ECB will take the ‘financial health’ constraint seriously. This is not to say that this would be binding to the extent that the ECB would rather risk a systemic event than have to show a weak balance sheet. But it nonetheless reduces the ECB’s flexibility in using its balance sheet.

Finally, we also need to take into account the link between the price stability and financial strength constraints. If the ECB’s financial strength were to suffer to such an extent that a recapitalisation were needed, it could ‘print the money’ to recapitalise. This may in fact be the only option if these losses came from defaulting sovereign bonds, implying that governments would not be in a position to recapitalise the ECB. Recapitalisation through ‘printing money’, however, could prove to be inflationary, or at least perceived to be inflationary, which in turn would reduce the ECB’s credibility even further. The important point here is that these constraints could at some point reinforce each other.

A lot of exposure to peripheral debt already

In order to assess the ECB’s financial health in the face of the Euro debt crisis, we need to compare its capital with the exposure of the ECB to peripheral sovereign debt.

One open question in calculating the ECB’s capital is whether the revaluation account should be added to the €80bn of capital and reserves. Given that the revaluation account currently stands at more than €300bn, this would increase the ECB’s loss absorption capacity significantly. We are, however, sceptical about the extent to  which one should add the revaluation account to the capital position. After all, the revaluation account is meant to provide a buffer against future FX movements. Using these unrealised gains to offset losses under the SMP, for example, would imply an increase in the ECB’s risk with respect to FX developments.

Calculating the ECB’s exposure to peripheral debt is not straightforward either. There are two sources of exposure for the ECB and the national central banks with respect to peripheral sovereign debt. The first is the direct exposure through the SMP program, which currently stands at around €130bn. The second is the indirect exposure through banks that posted peripheral sovereign debt as collateral. Not all the data needed to calculate the ECB’s exposure to each peripheral country are published. Moreover, it is difficult to say at what level the ECB has bought peripheral debt and what haircut was applied with respect to the collateral posted. That said, ECB lending to credit institutions in the periphery provides us with an upper bound. In the case of Greece, for example, the ECB has lent more than €100bn. The respective figure for Ireland is similar and the exposure with respect to Portugal is a bit less than €50bn. Again, not all of this lending is necessarily backed by Greek government debt. But the figures nonetheless show that the ECB could face significant losses in the event of a default.

Overall, while it is difficult to come up with an exact calculation of the relative financial health of the ECB, it is easy to see that a systemic event involving one of the bigger peripheral countries could wipe out the ECB’s capital.

How to recapitalise the ECB and the national central banks (if needed)

The ECB would first try to cover losses through its monetary income in the event that losses would exceed income and would lead to a depletion of capital to the point where recapitalisation was needed. If the income were to be insufficient the ECB would have to rely on the national central banks for recapitalisation.

The national central banks in turn would try to raise the needed funds from their monetary income. The combined profit of the national central banks stood at around €12bn in 2010 (Chart 7), which suggests there are limits to the national central banks’ ability to recapitalise the ECB. Moreover, given that the assets acquired under the SMP are distributed among the Eurosystem, national central banks will be similarly hit by such a systemic event.

The national central banks would in that case need to ask their national governments for recapitalisation but, given the stretched fiscal situation of Euro-zone governments, this would not be a real option in the event of severe  losses for the ECB. Moreover, having governments to ask for recapitalisation would also carry the  threat of a loss of independence.

A systemic event could threaten the ECB’s financial position, with or without the SMP

Given the capital position of the ECB and the limited possibilities for recapitalisation, one could argue that the SMP cannot be expanded much further. But, as already mentioned, the ECB’s implicit exposure with respect to peripheral sovereign debt through the collateral posted by banks is already very large. To be sure, the ECB is marking its collateral to market prices and the losses would be significantly lower than the nominal figures suggest. But it is easy to see how these haircuts would be insufficient in a sovereign default involving any of the bigger countries.

Thus, the argument that the ECB should not increase the SMP further as this may risk its financial health ignores the fact that the ECB is already heavily involved. Moreover, halting the SMP could lead to a similar or even bigger threat to the ECB’s financial health if this meant that a potential liquidity crisis for one of the bigger Euro-zone countries could turn into a disorderly default.

Quid-pro-quo is important, not least because of credibility

All this is not to say that the ECB should not carefully consider whether to expand its balance sheet or not. Besides the risk to its financial health, it also needs to consider whether the return on investment in terms of a policy response from governments is high enough to compensate for the risks. ECB President Trichet made clear in yesterday’s press conference that the Central Bank expects governments to play their part. After all, the ECB’s credibility is not only endangered by a weak financial position. Being able to take a firm stand against governments will also determine how the general public views the ECB.


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Sun, 09/11/2011 - 12:04 | 1656248 Motley Fool
Motley Fool's picture

Print,print,print! - GS

Sun, 09/11/2011 - 12:31 | 1656370 ratso
ratso's picture

Seems like this latest missive from GS is a refutation of a rumor report from GS last week the the EU was in an imminent state of collapse that was purportedly sent to GS high end clients.  So much for the rumors and counter thrusts.

Sun, 09/11/2011 - 14:06 | 1656709 Soul Train
Soul Train's picture

Marvel at ironies we come across in life.

Like the moniker Goldman to identify that  despicable business  enterprise - Goldman Sachs.

Sun, 09/11/2011 - 15:07 | 1656912 dlmaniac
dlmaniac's picture

Like the ol' man Sinclair puts it: Global QE to Infinity!!!

Sun, 09/11/2011 - 17:04 | 1657268 Michael
Michael's picture

What if all the aristocrat oligarch families had to give up their ownership interest in all the worlds major banks and central banks for their crimes against humanity?

Would the world be a better place?


Sun, 09/11/2011 - 12:05 | 1656254 The Alarmist
The Alarmist's picture

Yeah, bonus pool was looking a bit thin for this year.

Tue, 09/13/2011 - 13:21 | 1664299 The Alarmist
The Alarmist's picture

You need NIBBT for 50% of NIBBT to be meaningful.

Sun, 09/11/2011 - 12:11 | 1656283 M.B. Drapier
M.B. Drapier's picture

Deja vu, yes? - apart from the new Goldman order to make it so, of course.

Sun, 09/11/2011 - 14:47 | 1656855 Mike2756
Mike2756's picture

Do they really have that much pull over there?

Sun, 09/11/2011 - 16:29 | 1656987 gmj
gmj's picture

They helped make the mess.

How Goldman Sachs Helped Greece to Mask its True Debt,1518,676634,00.html

Mon, 09/12/2011 - 07:20 | 1658834 M.B. Drapier
M.B. Drapier's picture

Not fully that much; I was partly being flippant. To start with, it seems the banking industry's first preference is for Eurobonds rather than ECB money-printing: banking-aligned figures like Jean-Claude Juncker and GS alum Gavyn Davies have been pushing for it since late 2010 at least. And needless to say they haven't got Eurobonds, at least not yet, so they're certainly not all-powerful. But of course the chance that the banks will scoop some kind of (additional) cross-border bailout grows greater as the day of doom approaches. Presumably the GS seal of approval will, at the minimum, provide useful cover for ECB figures who want to go for broke with debt-buying. And it can't hurt GS specifically to have their old boy running the ECB.

My main point was just how very similar it sounds to what Buiter was saying since 2009, except with more of a smiley face painted on.

(I am not an expert on anything.)

Sun, 09/11/2011 - 12:11 | 1656285 Deadpool
Deadpool's picture

the US dollar is an IOU, the Euro is a who owes you...

Sun, 09/11/2011 - 12:29 | 1656357 WestVillageIdiot
WestVillageIdiot's picture

The Euro is the greatest currency ever devised by mankind.  Just ask Spitzer.  Where are you, Spitzer?  We need you here to defend the Euro. 

This all sounds so negative for gold and silver.  Just ask your fellow Americans.

I find it funny how we have been so completely brainwashed in measuring our wealth in dollars and Euros but not in AU and AG.  The minds of the average American want nothing to do with that discussion. 

Sun, 09/11/2011 - 13:12 | 1656540 DaBernank
DaBernank's picture

"The Euro is the greatest currency ever debased by mankind."


Next stop, Zee QEeeee (but disguised by balance sheet manipulation)

Sun, 09/11/2011 - 15:12 | 1656928 Spitzer
Spitzer's picture

Can somebody post a chart of the first asset on the ECB balance sheet ? Meaning gold ?

Sun, 09/11/2011 - 16:08 | 1657076 DaBernank
DaBernank's picture

Europeans know there is a difference between the gold of combined "Eurozone Central Banks" and the gold holdings of the ECB. Around 10,000 tons for the Eurozone (if you include what's physically in NY & London, which I wouldn't, possession being 9/10 of ownership). The individual European countries will NOT give any gold to ECB bureaucrats when the going gets tough.

Around 500+ tons belongs to the ECB, they could sell it to China and raise enough capital for 1/5 of an Italian bailout. Strong Nationalism can manifest itself in a few months over here, nobody has allegiance to the Eurocrats, nobody except the Eurocrats themselves.

Sun, 09/11/2011 - 16:21 | 1657107 DoChenRollingBearing
DoChenRollingBearing's picture

Let's say the Europeans have it at their word, the 10,000 tonnes of gold.  And that they can get any / all from the Fed when they want.

Let's also stipulate that the ECB DOES have some of that gold (as I remember Trail Guide FOFOA explaining that all founding members had to chip in 15% of their gold to get into the Euro).  I may be wrong, but's just assume for this little exercise.

Finally, let's assume that WE have our 8000 tonnes.

OK, now let's take some (this a scenario, OK?) action!  The FED and the ECB, to inflate away their debts, offer to BUY gold at a high price ($5000 or $10,000 per oz).  Bang!  The POG shoots up (the CBs have some 40% of the gold out there -- correct me if I am wrong guys)!  And stays up...  Or goes much higher.  Freegold.

Debts extinguished -- poof!

Who gets hurt?  Lots pf people.  But, the main sovereign debts are almost all gone!  Many of the Bad Guys also take it on the chin (paper gold peddlers especially, a loathsome bunch really).

Who wins?  Holders of gold. Gold is CHEAP now.  IMO of course.

The dollar and Euro would both survive, but would be relegated to currency status only (as the Euro is now) with no pretentions of being a preserver of wealth.

Sun, 09/11/2011 - 16:43 | 1657195 Spitzer
Spitzer's picture

All 10,000+ tons,  line one of the ECB balance sheet.

Sun, 09/11/2011 - 17:09 | 1657261 falak pema
falak pema's picture

Gold reserves = 700 billion USD at 2000. The overall debt of private banks is 2500 billion euros, with PIIGS. 50% write off is = 1200 billion euros or 1700 billion USD. 

Both Citi and GS say that the ECB balance sheet can support a EFSF of 3.5 trillion Euros. 

Citi's Willem Buiter: There's A Big Third Option For Europe That Nobody Is Thinking About

The market and ZH doesn't buy it for obvious reasons. But this is the rationale of the ECB. With some PIIGs being defaulted, as of next week, Greece,  it'll be shake rattle n roll time world-wide this coming autumn/winter.

Sun, 09/11/2011 - 18:54 | 1657710 HitTheFan
HitTheFan's picture

The ECB now has 65% of its reserves in gold. It can afford to print, gold will rise versus the Euro, net net no real effect to the ECB. Euro citizens can hedge their bets by buying physical gold.

Sadly, America cannot afford to bust the paper gold market by revaluing its 'gold assets', as gold would immediately leap to unimaginable heights.

it'll happen eventually anyway, as the dollar disappears.

But the Euro is different, as is Sterling, where its gold reserves have doubled in just four years!

Sun, 09/11/2011 - 12:14 | 1656286 PulauHantu29
PulauHantu29's picture

Mo' Bonuses for GS Execs is what we need....he he he...yeah, b-o-n-u-s-e-s.

Yachts need remodeling...BMWs need tune -ups.....Alimony and on and on.....

Sun, 09/11/2011 - 12:30 | 1656360 WestVillageIdiot
WestVillageIdiot's picture

Lithuanian hookers don't work for free.  D'uhhh. 

Sun, 09/11/2011 - 12:31 | 1656373 Everyman
Everyman's picture

No, but they are cheap!

Sun, 09/11/2011 - 13:58 | 1656681 knukles
knukles's picture

And really fucking skanky! 
Serious as a heart attack, they're prized for happily doing things  western women will not even vaguely consider in this life time. 

Sun, 09/11/2011 - 14:29 | 1656794 GeneMarchbanks
GeneMarchbanks's picture


As an East European I'm a little saddened at your accusations of our 'hookers'. Clearly Puritanical restrictions have left you angry and confused. I'm sorry that you are not being satisfied by western women, but clearly you have immense problems if you are looking for conservative prostitutes.

Hookers are people too ;)

Good day to you sir.

Sun, 09/11/2011 - 15:30 | 1656981 pan
pan's picture

Hear hear!  If I am going to spend my federal reserve notes on a hooker instead of Ag, I want to experience growth of some kind..knowledge, technique, etc.  

Sun, 09/11/2011 - 16:24 | 1657115 DoChenRollingBearing
DoChenRollingBearing's picture

Ha ha!

+ 1

Sun, 09/11/2011 - 12:37 | 1656402 I am Jobe
I am Jobe's picture

How about American Hookers- SBUX and a MCD meal maybe?

Sun, 09/11/2011 - 13:02 | 1656499 sewerpickle
sewerpickle's picture

daz rite mahn.....itallwys treet my starfux tew mcpuzzy

Sun, 09/11/2011 - 12:20 | 1656314 Deadpool
Deadpool's picture

the whole thing adds up to German unification of the Euro block as America has done in NA and China in the ASEAN. when the blood coagulates (aka "dust settles") there will be Renimbi, US Dollar and German backed Euro competing for petrodollars. get with the program. Au and Ag for the brilliant among us 'cuz China is gonna back theirs with it.

Sun, 09/11/2011 - 12:30 | 1656367 WestVillageIdiot
WestVillageIdiot's picture

Is Germany really large enough to accomplish such a thing? 

Sun, 09/11/2011 - 12:50 | 1656454 Deadpool
Deadpool's picture

Yes. Ask France, Russia, Poland, Chech, north Africa and Britain of what they are capable of. Last I heard Bandenburg was no a French or Russian name.

Sun, 09/11/2011 - 13:46 | 1656639 PY-129-20
PY-129-20's picture

Ever heard of Kaliningrad?

Sun, 09/11/2011 - 16:27 | 1657123 DoChenRollingBearing
DoChenRollingBearing's picture

Which Russia will NEVER give back.

PY!  Whatever became of that notion / plan / idea that Russia wanted a corridor (for a rail line?) through Poland to connect up Kaliningrad with the rest of Mother Russia?

Sun, 09/11/2011 - 14:12 | 1656733 Prometheus418
Prometheus418's picture

The Prussian ethic is still alive in German culture- even here in the states.  Don't discount the power of that.  Germans will quietly work for the benefit of the state and their people, even through wars and famines.  No protests, few complaints, and continued production even through the gates of hell.  When the time comes for war, there will still be no protests, just that quiet, intense and unyeilding effort applied to creating another war machine.  No one can say they haven't seen it before, and things are not different this time. 

The Germans and the Japanese are the most dangerous people on the face of the planet, and have been for centuries.  Both are basically peaceful ethnicities when left in homogenous groups and allowed to trade freely, but when the chips are down, Germans will organize in a single block with a single minded intensity to crush anyone who gets in their way.  Same with the Japanese.  A German factory worker will finish their shift with two broken legs, and a Japanese salaryman will kill himself on command.  Discipline and warrior culture the likes of which the rest of the world will never understand (though at times, the English have come close.)  It's no wonder they were allies in WWII.

The biggest change in this go-round is that the US is not necessarily the "good guy" and there is a large, mostly homogenus block of Germans and Scandinavians in the upper midwest.  Might throw a monkey wrench in TPTB's plans, especially considering that it is one of the few areas left in the US that has factories that can compete in the global marketplace.

Sun, 09/11/2011 - 14:20 | 1656763 Green Leader
Green Leader's picture

"The Germans and the Japanese are the most dangerous people on the face of the planet, and have been for centuries."

I'd bet my silver coins on the Khazarians.

Sun, 09/11/2011 - 14:26 | 1656782 BigInJapan
BigInJapan's picture

You've never been to Japan, have you?

I suppose it's the salarymen that will march off to war, then, because last I checked, there werent too many 18 and 19 year olds around here with whom one might raise an effective army. Additionally, the young men here are largely purse-carrying, eyebrow tweezing pussies who are afraid to go out in the rain lest it make their foundation run or ruin their hairstyle.


Japanese Army... what a joke of an idea. 


Sun, 09/11/2011 - 16:05 | 1657069 PY-129-20
PY-129-20's picture

Have been for centuries? Whaaaat?

Germany did not even exist. There were hundreds of little German principalities. The HRR as a whole was weak, not united, not anything. In the meanwhile our neighbours conquered the whole world - Portuguese, Spanish, French, English - even the Dutch. Like Italy (who was in a very similar position) we never had many colonies. Even Belgium had a bigger colony in Africa than what Germany had.

Now you might be angry about Prussia. But I'd say that you were somewhat happy when a certain Prussian Baron appeared in 1778 in the Valley Forge.

You are describing a characteristic of the German (Prussian) population and I think that even many Germans would agree with you. Still, it is not correct that Germans always followed their masters. There were also riots in Germany and also a revolution ( ) But 1848 - a first step towards a democracy - failed and many were forced into exile (aka emigration to the United States).

A great part of the American population is of German origin. About 50 million people. A part of my family emigrated in the 1860s to America from Prussia. The mother of George Washington was of German origin.

just take a look at this map

You could even argue that many English are of Germanic origin. Anglo-Saxon - ever heard of Saxony? Of the Sax? Angles from North Germany and Denmark

You are ignoring that many Germans today are pacifists. They don't want wars at all. There are even people like me who are strictly against any German intervention - not in Afghanistan, not in Kosovo, not anywhere else. Just an army to defend ourselves, but not more. You are also ignoring that at the end of WWII my nation was on the brink of collapse - regions were lost forever (like Kaliningrad - also known as the Prussian town Königsberg - birthplace of the great philosopher Kant), cities were in ruins, millions dead, economy was destroyed, the nation divided, everyone hated us and shame about what we had done - and it was our own fault and we had deserved a great part of this. For 40 years the nation was divided - can you imagine that? And it is still sometimes problematic for us.

Germans were not the first and unfortunately not the last that commited mass murder. It has happened basically in every culture on this planet. It happened in Cambodia - in Serbia - in parts of Africa - in Russia - China - Turkey and in many other cases. Of course each case is different.

Bertolt Brecht warned Germans that if they ever dared to wage a third world war - they would cease to exist - he used Carthage as an example (because it was destroyed after the Third Punic War).

Unfortunately I've never been to Japan. Like Germany, people have not forgotten their past. And why should they? Yes, we had great warriors before. Although it is not true that Romans never conquered Germany - they did. South Germany was occupied by Romans. But they failed to conquer the rest for a longer period. It was never totally occupied.

You are only mentioning the warrior aspect - but what about music? What about philosophy? What about our scientists?

Music: Bach, Beethoven, Haendel, Wagner - and the Austrians Mozart (his father was German), Haydn, Bruckner, or Mahler!
Philosophy: Kant, Hegel, Schopenhauer, Nietzsche, Heidegger, Adorno, Leibnitz

The S2 was the first process-controlled computer, invented by Zuse. First patented automobile was built by Benz. The printing press was invited by Gutenberg. The first jet powered aircraft; Geiger counter - you still use Fahrenheit! Chip card - x-ray -

What I am trying to say - no, not that Germans are superior, but it is absolutely wrong to say they are just dangerous. Sure, we've done terrible things. But so have many other nations. I wish we would not have done such atrocities. It's just part of human behaviour.

There is more about Germany than just thirteen years. Germany is not the same country anymore that blindly followed a Fuehrer or a Kaiser. You have to look at the circumstances of that time and why some Germans (not all of them) voted for all of this.

You also have to consider that not all of them were heroes. I'd love to see you - having a wife and five children - would you risk their lifes? (You know what Nazis did to traitors?) - no, one of my grandfathers had that problem. He loved his nation, voted for SPD at the time - a forester (actually a Förster) - a veteran of the first world war. He knew what war was like - you think he was happy to go to WWII - he was not. While on the front, they killed one of his children (ever heard of T4?) - you think they were happy about this? And I am not denying here that some Germans were happy to do all of this...

Sun, 09/11/2011 - 16:32 | 1657149 DoChenRollingBearing
DoChenRollingBearing's picture

Green for keeping it real.

Sun, 09/11/2011 - 16:10 | 1657083 DaBernank
DaBernank's picture

Japanese Robot Army FTW!

Sun, 09/11/2011 - 15:55 | 1657045 disabledvet
disabledvet's picture

If only you knew, hehehehehe. IF ONLY YOU KNEW!!!

Sun, 09/11/2011 - 12:20 | 1656316 oogs66
oogs66's picture

how about letting them default and dragging down the bankers who made stupid decisions and then pick up the pieces?

Sun, 09/11/2011 - 12:32 | 1656377 WestVillageIdiot
WestVillageIdiot's picture

I love good standup comedy.  That was excellent.  When you have good material you can't miss.  "Did you hear the one about the Wall Street financier that was held accountable?" 

Sun, 09/11/2011 - 12:40 | 1656419 Fish Gone Bad
Fish Gone Bad's picture

No I didn't.  But I did hear the one about an optician who fell into a lens grinding machine and made a spectacle of himself.

Sun, 09/11/2011 - 13:05 | 1656516 WmMcK
WmMcK's picture

Two women were walking through the woods when a frog called out to them and said: “Help me, ladies! I am a stockbroker who, through an evil witch’s curse, has been transformed into a frog. If one of you will kiss me, I’ll be returned to my former state!” One woman took out her purse, grabbed the frog, and stuffed it inside her handbag. The other woman, aghast, screamed, “Didn’t you hear him? If you kiss him, he’ll turn into a stockbroker!” The second woman replied, “Sure, but these days a talking frog is worth more than a stockbroker!”

Sun, 09/11/2011 - 13:42 | 1656623 snowball777
snowball777's picture

Should've just stepped on the ribbity motherfucker.

Sun, 09/11/2011 - 16:51 | 1656672 falak pema
falak pema's picture

The poor little bird sat shivering in the cold as the winter wind froze her fragile rib cage and made looking for food, pieces of straw, anything worth nibbling,  an impossible, frozen wet dream.

The kindly cow saw the shivering bird on the frozen ground and dropped her load of hot goo onto the bird. "There, that will keep you warm" said the cow, as it wagged its tail in fond goodbye. 

As the bird bathed in its newly found warm, oozy nirvana blanket and dozed off into dreamy world of summer splendor, a lean, mean fox came by and saw the bird all hunkey dorey as it snuggled up good, fluttering its feathers to show its sense of total comfort.

Out came the bird from her warm blanket and in it went into foxy's hungry mouth. The bird had paid the price for moving her wings where she should have stayed stone dead to avoid attracting attention.

Morality : He that drops his load on you is not necessarily your enemy, he that pulls you out of deep shit is not necessarily your friend. 

Next time your banker phones you to sell you a loan, an opportunity of a lifetime, think fox and warm blanket.

Sun, 09/11/2011 - 12:44 | 1656429 Translational Lift
Translational Lift's picture

Bankers are the biggest pussies in the world....They can dress in sharp suits, talk with authority (like they know WTF they are doing), take all sorts of wild-ass chances with OPM and when they fuck-up they cry and want someone else to bail out their sorry asses!!  I say drown them all like the sorry rats they are!!

Sun, 09/11/2011 - 15:04 | 1656903 TeamDepends
TeamDepends's picture

Next time Bernanke speaks we should make him wear a pink tu-tu.

Sun, 09/11/2011 - 12:21 | 1656324 Steroid
Steroid's picture

The ECB is soon to be sucked dry by GS! Are they infiltrating the Bundesbank already?

Sun, 09/11/2011 - 12:38 | 1656411 Fish Gone Bad
Fish Gone Bad's picture

Tired of sucking the United States dry, GS moves on to Europe... 

Sun, 09/11/2011 - 15:43 | 1657021 gmj
Sun, 09/11/2011 - 12:57 | 1656478 rufusbird
rufusbird's picture

What is the Vig they get on the deals they syndicate now? Like two percent of Gross?

Sun, 09/11/2011 - 13:24 | 1656576 Deadpool
Deadpool's picture

they are in collusion.

Sun, 09/11/2011 - 15:59 | 1657054 disabledvet
disabledvet's picture

Infiltrating? They already run it! Hehehehehehe.

Sun, 09/11/2011 - 12:22 | 1656329 Deadpool
Deadpool's picture

oogs66...we are the bankers. don't wish them ill. they hold all the cards and we need them alive...limping and spitting blood, but alive. without them we have no commerce and we start burining furniture for fuel. I for one don't miss the stone age.

Sun, 09/11/2011 - 12:28 | 1656352 juslen
juslen's picture

I sure hope you are joking. The longer they are alive the less real savings Americans will have. I don't know about you, but my parents worked their whole lives to save.. if the bankers get their way their entire life savings will be erased through inflation.

Sun, 09/11/2011 - 13:03 | 1656442 Deadpool
Deadpool's picture

Not "erased", transferred to them. They look out for themselves as you and your parents should have.


oh dear people, banks are nothing more than branches of central banks. follow the money (aka fund flows) and see they turned net buyers of gold in 2010. the fiat currency game is over and they knew it before you did (hopefully today is not your graduation day). the end game is here and they can't bleed you slow with fees anymore so it's time to steal the whole system. heard of collateral for sovereign bail outs? what other collateral is there but gold, Greek mortgages?  Remember the Nazis left for Argentina with their gold and lived a long healthy lifestyle? now multiply that my trillions and you see what is going on. your savings it at risk. the only central banks that matter are US, German (aka Bundesbank) and China. My money/gold is on US and Germany coming out on top because China is late to this party. Germany/US successfully ripped of UK at $300/oz so it's not like this is unprecedented. Knowledge is power and a terrible thing to waste.

Sun, 09/11/2011 - 12:31 | 1656369 Everyman
Everyman's picture

I call bullshit on that.  We don;'t "need" anyone this corrupt.  If we "need" these fucks for "commerce" then we need a new commerce system.

Sun, 09/11/2011 - 12:34 | 1656382 WestVillageIdiot
WestVillageIdiot's picture

I think it was a joke but it is a valid concept.  Co-dependency often results in a slave fearing the loss of his master. 

Sun, 09/11/2011 - 13:06 | 1656518 monoloco
monoloco's picture

It seems like governments are suffering from Stockholm syndrome when it comes to banks.

Sun, 09/11/2011 - 13:43 | 1656629 snowball777
snowball777's picture

Falling for the "if you take me off life-support, I'll kill you" routine does make one question their intelligence more than usual.


Sun, 09/11/2011 - 16:34 | 1657156 DoChenRollingBearing
DoChenRollingBearing's picture

Especially over and over.  Good observation.  Have a green on me!

Mon, 09/12/2011 - 06:23 | 1658816 e-recep
e-recep's picture

I think it's rather called the "kickback" syndrome.

Sun, 09/11/2011 - 14:13 | 1656735 The Deleuzian
The Deleuzian's picture

Agreed 100%, why does everything have to be 'collusion', 'rip off's', 'nazis', 'bankers' and their fucking excuses and bailouts...This is the exact reason why the moral fabric of the US is dead and buried.....


Sun, 09/11/2011 - 14:39 | 1656824 Deadpool
Deadpool's picture

You need them the same way you need a job to work for wages. Those wages are in dollars created by the central bank and distributed to your local central bank branch, unless you are a farmer or whore and work for sustenance or satisfaction. No banks mean no money in circulation which mean you work on your knees or with your ass in the air for food. I choose low interest charging banks, thanx.

Sun, 09/11/2011 - 18:13 | 1657527 snowball777
snowball777's picture

I deny your assertions that we need these banks. Surely we can find a few people able to perform compound interest calculations who aren't insane gambling addicts to pass the helm to?

Sun, 09/11/2011 - 12:51 | 1656459 LawsofPhysics
LawsofPhysics's picture

Bullshit.  Another fear shill.  Do what we say because well life would be just "terrible" otherwise.  What, people will actually have to know their neighbors and take responsibility fort their communities?  Sounds horrible < sarc off >


Let the system collapse so that compensation can find its way back to people who are actually worth a shit.

Sun, 09/11/2011 - 13:05 | 1656514 Deadpool
Deadpool's picture

-5? is that the thanks the messenger gets? no surprise really. Noah's ark only had family and animals on it. ever wonder why? good luck, suckers.

Sun, 09/11/2011 - 14:17 | 1656757 The Deleuzian
The Deleuzian's picture

Deadpool:  The decepticon metal planet is far from here...Go there! 

Mon, 09/12/2011 - 06:21 | 1658813 e-recep
e-recep's picture

No! Bankers and financiers need the guillotine and they will get it.

Sun, 09/11/2011 - 12:24 | 1656338 jkings1
jkings1's picture

Another one day wonder rip your face off short covering rally in the making for Monday?

Sun, 09/11/2011 - 12:34 | 1656384 WestVillageIdiot
WestVillageIdiot's picture

Buy calls on LULU and retire to Aruba. 

Sun, 09/11/2011 - 12:54 | 1656450 plocequ1
plocequ1's picture

I perdict the Dow will be up 500pts by 3:30 and by 3:45, ZH will call it risk compression, No volume , corrupt market or something like that. Risk compression be damned

Sun, 09/11/2011 - 12:28 | 1656356 Lazarus Long
Lazarus Long's picture

at least they are kind enough to provide  us with evidence for their trial.

Sun, 09/11/2011 - 12:29 | 1656359 Everyman
Everyman's picture

Why is anyone listening to ANYTHING that Goldman SUX has to say on the economy ow what countries need to do?  These are the pricks that robbed us blind on bailouts, mad bad investment vehicles and they damn well know what is in those "assets" that these fucking countries hold because Goldman SUX made the damn things!  THEY DON'T want 'em!  Of course they want more QE.  REALLY?  What the fuck do you think these stupid corrupt wasteoids would say?  They want more fuckin' money!  These fucks deserve a bullet in the fuckin' head!

They can't do QE anymore.  Simple as that.  The debt is too big for this "balance sheet" crapola.  Only bankers think of "balance sheet" solutions, and they ought to go to jail for thinking in those terms, instead it is "the way we do business".  Fuck 'em!

When the ECB's position is "weakened" that means that Goldman SUX is on the line for losses.  And the stupid fuck Lolyd Blankfiend ought to take it HARD up the ass, repeatedly!


It would do the world good it GS was destroyed...BY WHATEVER MEANS NECESSARY, an that includes all the subs, and all those associated with this steaming pile of corruption. 


Can't wait til these pukes are "all against the wall".  Pretty close now.

Sun, 09/11/2011 - 12:47 | 1656441 rocker
rocker's picture

Because their goal is to rule the world.

Sun, 09/11/2011 - 12:57 | 1656481 LongOfTooth
LongOfTooth's picture

"...Why is anyone listening to ANYTHING that Goldman SUX has to say on the economy ow what countries need to do?..."

Know thine enemy.


Sun, 09/11/2011 - 13:09 | 1656528 Deadpool
Deadpool's picture

don't hold your breath and I'll take the over on that. they are the game and you are a pawn or I should say your savings is the pawn. Banks don't lose they just change the rules. Bank holiday, currency controls, margin hikes, devaluation. You can't win you can only work.

Sun, 09/11/2011 - 18:18 | 1657555 snowball777
snowball777's picture

Worst "motivational speaker" evah.

Sun, 09/11/2011 - 12:33 | 1656363 bbq on whitehou...
bbq on whitehouse lawn's picture

Getting your dog to flush would be easier then getting the greeks to pay 4 euros per 10+ feet on all there property.

Ecb pluging in numbers is easy getting the world to use a toilet, paper and flush is as easy as getting your dog or cat to do the same.

Non of these plans can work because those with the power and money only want more not less, everyone else will just adapt to the lower purchaseing power of their currency or have a political class BBQ.

The only easy answer is also unacceptable. Banks need to die and the Ceo and Board also. Since thats unlliky to happen. There is only one option.

Everyone other then bank will die.

Either the banks die or you do. End of story.


Sun, 09/11/2011 - 12:30 | 1656364 DeadFred
DeadFred's picture

"And what is stunning is the brazenness with which it does it now"

Sometimes in a managerial position if one's minions are too dense or unruly to follow subtle direction, one must be more DIRECT.

Sun, 09/11/2011 - 12:32 | 1656366 X.inf.capt
X.inf.capt's picture


they print, print, print


PM's and other portable, tangible assets

Sun, 09/11/2011 - 12:33 | 1656368 Hansel
Hansel's picture

Goldman begging for more printed money is not news; it's their business model.  Fuck Goldman.

Sun, 09/11/2011 - 12:51 | 1656451 Miles Kendig
Miles Kendig's picture

Better use vinyl, at least two layers, latex will get shredded on that diseased ho

Sun, 09/11/2011 - 16:36 | 1657165 DoChenRollingBearing
DoChenRollingBearing's picture

Chuckle of the day, at least so far...

Sun, 09/11/2011 - 12:36 | 1656396 WestVillageIdiot
WestVillageIdiot's picture

Tyler, I apologize that I could not read that whole thing.  I think I got the gist from the part I did read.  The hubris of these crooks is just overwhelming.  It is not surprising but it is overwhelming. 

Sun, 09/11/2011 - 12:39 | 1656409 bbq on whitehou...
bbq on whitehouse lawn's picture

Maybe what we need is a Pol Pot to kill everyone and burn the world or at l;east the US-EU to ash. That way the pesants and poor can try and rewbuild.  Only to be enlsaved by the educated and rich once more.

If only the pesantry had the education of the rich and powerful. All students recieved the same trainning and education.

Theft would stop, cons would be unmade and the rich would have to do more the wake up and check on their holdings.


Sun, 09/11/2011 - 15:58 | 1657053 gmj
gmj's picture

The only difference between the poor and the rich is money.

Sun, 09/11/2011 - 16:04 | 1657066 disabledvet
disabledvet's picture

The rich are far better liars too. Never underestimate this quality in "making it."

Sun, 09/11/2011 - 12:44 | 1656430 Miles Kendig
Miles Kendig's picture

Balance sheet considerations should not seriously constrain central bank operations - Ben Bernanke

Sun, 09/11/2011 - 14:07 | 1656712 knukles
knukles's picture

Taking a close look (doesn't even need to be more than cursory, without calculator for reality to be clearly experienced) at the ECB balance sheet above.

There's not enough fucking capital to absorb one case of Herpes form a Lithuanian Hooker at a Central Banker's Convention.

Goldman, the EU, ECB, Fed, MSM, Politicians...
Everybody's Completely Bat Shit Insane!

How this ends can be demonstrated with a Venn Diagram where There Is No Solution Set (intersection) between "End" and "Happy". 

The Null Fucking Set

Sun, 09/11/2011 - 16:08 | 1657078 gmj
Sun, 09/11/2011 - 18:27 | 1657589 snowball777
snowball777's picture

Kobayahi Maru Hoe-down!

Sun, 09/11/2011 - 18:50 | 1657668 Miles Kendig
Miles Kendig's picture

With economic, political and legal leadership determined to find failure, and will cheat the program at every opportunity to try and achieve it   :-)

Go Bears!!

Sun, 09/11/2011 - 18:49 | 1657690 Miles Kendig
Miles Kendig's picture

I suppose the intersection may be found at the point immediately preceding the chart reflecting a post insanity construct.  Getting these bat shit insane POS's out of a position to harm themselves and others will be that point of intersection.

cheers knukles

Sun, 09/11/2011 - 12:47 | 1656447 Little John
Little John's picture

Good Friend Ben

 (Sung to the tune of the theme song from the Beverly Hillbillies)


Come and listen to my story ‘bout a man named Ben;

Chairman of the Fed, Wall Street’s long-time friend.

He likes to print up money – remember QE2?

And if he has a QE3 I’ll tell you what to do!

Buy gold, friends; buy plenty!


Well, the first thing you know, Obama needs some cash,

to stimulate the markets and prevent another crash.

But everyone is pretty sure that Congress will say “NO!”

So he’s hoping that his good friend Ben will print him up some dough.


The bankers and the traders trust Ben to watch their backs,

While they gamble with our future and take money home in sacks.

Let’s all pray that our country lasts until 2014,

When Ron Paul can chase that Keynesian from our economic scene!

:)This is for the ZH song book, my wife wrote it.


Sun, 09/11/2011 - 14:42 | 1656835 WonderDawg
WonderDawg's picture

I guess 2012 would be hard to rhyme with.

Sun, 09/11/2011 - 14:48 | 1656858 Little John
Little John's picture

The Bernank's term isn't up 'till 14.  

Sun, 09/11/2011 - 15:32 | 1656986 WonderDawg
WonderDawg's picture

Ah, true enough. I was thinking more like RP would somehow sack him once elected, but he couldn't do it until 2013 anyway, so what do I know. Either way, great little diddy, and even better now that the rhyme makes sense to me.

You have to forgive me, I'm a little slow today.


Sun, 09/11/2011 - 12:50 | 1656457 cossack55
cossack55's picture

Oh you are such a seeeemple blog, oui? What is theeeese zeeerohedge soufle anyways? Sacre Bleu.

Sun, 09/11/2011 - 12:59 | 1656486 tictawk
tictawk's picture

The Fed's answer to EVERY problem has been the same, ie. provide MORE credit and Print more.  The only problem they are facing is that you CANNOT PRINT WEALTH.  Benny and the inkjets can print paper but the wealth of a nation cannot come from more pieces of paper.  The markets have figured that out and are in the process of repricing assets.  Fed INFLATES, markets DEFLATE.

Sun, 09/11/2011 - 13:06 | 1656507 Pretorian
Pretorian's picture

No matter how much I hate EU aristocrats and euro, aside from PIIGS happening, I must admit that EURO is a sound currency backed by real industrial production. Or put it in this way. How many American cars you can see driving in Europe.Answer is almost None , think vice verse for China and everywhere else. US must have engineering this EU crise or reserve currency $ was in trouble and US easy leaving. Thats the same story they have done it in 80-90 with Japan.





Sun, 09/11/2011 - 15:16 | 1656936 Léonard
Léonard's picture

China believes in the Euro.

Russia believes in the Euro.

Saddam wanted to trade oil with Euro.

kadhafi wanted to trade oil with Euro.

There's nothing else to say. The USA are at war with the Euro and Europe.

Sun, 09/11/2011 - 16:08 | 1657077 disabledvet
disabledvet's picture

What's a "pre-torian" exactly? Is that like a "pre-snoreian?"

Sun, 09/11/2011 - 13:04 | 1656511 beanieville
beanieville's picture

I don't hate gold. I actually have 10% of my money in gold....just in case the crazy tea party succeeds with their agenda.

Fiat is better and more practical. That's why our cultures have had over 3000 fiat currencies through the ages vs sticking with gold as a currency.

I think we are in a severe negativity bubble now is why all the talk about gold. But things will get better and there will be less talk about gold. Gold is a total waste of time and focus. Other than for a certain insurance policy , gold is otherwise ponzi and tulipmanic talk.

Sun, 09/11/2011 - 14:19 | 1656762 Deadpool
Deadpool's picture

...I'll be right over. Hope your security system is cheap.

Sun, 09/11/2011 - 15:20 | 1656948 chubbar
chubbar's picture

Oh, THAT's why there has been over 3000 currencies! Because they are better and more practical! Here I thought it was because they all failed for the same reason the current crop are failing. Yeah, gold is the ponzi, got it!

Sun, 09/11/2011 - 13:06 | 1656517 Atomizer
Atomizer's picture

Operation torque, 50 yr bond is the next closed door curtain trick. Globalization is getting harder for the multinationals to sell to sheep. DHS must continue the course of fear. Spend or get reported thru


Sun, 09/11/2011 - 13:11 | 1656520 sasebo
sasebo's picture

What these assholes are calling bank capital in not capital, it's paper money. Capital is steel, wood, machines, factories, vehicles, tables & chairs, concrete, etc. If you had 1,000,000,000 trillion dollars of paper money & no stuff you would have no capital. 

Increasing the central banks balance sheets is just increasing debt.

Quantative easing is just exchanging paper bonds for paper money.

I'm tired of all this gobbledygook. 

Sun, 09/11/2011 - 14:19 | 1656760 Deadpool
Deadpool's picture

Halleluiah! praise all deities. you get it!!

Sun, 09/11/2011 - 13:09 | 1656529 Joebloinvestor
Joebloinvestor's picture

There is no mention of Ben stepping in and giving them trillions to cut through all the paperwork.

Including authorization from congress.

What a fucking corrupt system.

Sun, 09/11/2011 - 13:11 | 1656535 Deadpool
Deadpool's picture

first the credit crisis, then the sovereign debt crisis, then the currency crisis, then the trade war, then the shooting war. You heard it here second.

Sun, 09/11/2011 - 13:41 | 1656619 falak pema
falak pema's picture

...then the shooting war.... As you are writing this scenario; one question : where will the gunfight at OK corral be staged...?

Never mind when, just where?

Sun, 09/11/2011 - 14:16 | 1656752 Deadpool
Deadpool's picture

somewhere in Asia when the Euro bloc and the North American bloc team up against Asia for the resources in the South China sea and Indonisia. Burma/Cambodia/Vietnam/Korea it's the last frontier. Could also happen in Mongolia/Afpak as the silk road is always up for grabs. Note both involve Russia so whomever corrals the bear has the upper hand. Again, follow the money and it's going heavy to Asia these days which the dude cannot abide.

Sun, 09/11/2011 - 14:35 | 1656812 WonderDawg
WonderDawg's picture

You seriously have to ask? It will be staged where the oil is found or needs to be transported, where else would it be?

Sun, 09/11/2011 - 15:20 | 1656949 falak pema
falak pema's picture

sorry Wdawg, you didn't write the script.

Sun, 09/11/2011 - 15:36 | 1656998 WonderDawg
WonderDawg's picture

Sorry, thought it was an open question, didn't realize you were asking Deadpool specifically. Didn't know he wrote the script. My bad.

 And although I didn't write the script, I can easily read it.


Sun, 09/11/2011 - 18:57 | 1657720 Deadpool
Deadpool's picture

I'm flattered but history writes the scrpt. We are but bit players. WD is right, oil and gold are the end games wherever they may be and for those with the most might. Not money, that's phony, but billeted are real.

Sun, 09/11/2011 - 13:12 | 1656542 vast-dom
vast-dom's picture

Do they not realize that they are postponing the inevitable and every time they do so they are magnifying the magnitude of crash?

Sun, 09/11/2011 - 13:22 | 1656570 Deadpool
Deadpool's picture

of course they do. a crash to them means you're broke. they swoop in and buy everything on the cheap. Look at the balance sheet of MetLife; all post depression era farm land. richest company in the world and they get richer every second when we pay our dental, auto, home, boat, etc. insurance. think they save that money in cash at BofA? no....hard assets is the name of the game, people. diversify wisely.

Sun, 09/11/2011 - 14:01 | 1656695 vast-dom
vast-dom's picture

should have had my /sarc// on.



Sun, 09/11/2011 - 13:20 | 1656562 props2009
props2009's picture

Some DB charts and the full report from DB on state of affairs in EU Land

Sun, 09/11/2011 - 13:20 | 1656563 Atomizer
Atomizer's picture

Sounds like GS exended its role in loaning monies. We must sweep this fraud under the rug and seek the taxpayer to fund our mistakes.

Sun, 09/11/2011 - 13:27 | 1656577 falak pema
falak pema's picture

How can a fiat currency that represents 25% of world reserves and its counter part that represents 75% of world reserves burn in impunity? Both represent economies hocked into debt beyond their family jewels. So GS is saying a very simple thing : we don't want the world economy to implode. We'll do anything to keep the flame burning. We like our bonuses more than anything else in the world...

"I can't believe what you saaaying mmm... Cause I see what you do!"... Tina Turner is nearer the truth than GS. But GS is spot on the button as hyped politically correct spiel. 

Ten years after the twins we are three years through the burn out of capitalism and deeper in trouble; like a hangman's rope it is dope to the swingers of politically correct hopium.

Sun, 09/11/2011 - 13:36 | 1656605 FederalReserveB...
FederalReserveBankofTerror's picture

The ECB has two choices:

1. Eat Peas Voluntarily Now: Markets Crash.

2. Forced To Eat Peas Later: Markets Crash Harder.


Either way the ECB is eatin peas and the markets are crashing. My strategy, WTBO! Wait The Bastards Out! Time is on my side and I have plenty of it and plenty of popcorn as CNBS airs live swan dives from Wall Street brought to you by The Original Terrorist: The Federal Reserve Bank and its primary dealer bankster theives.

Sun, 09/11/2011 - 13:41 | 1656620 Corn1945
Corn1945's picture

Hard assets (gold, silver, oil, etc) will rocketshot if we get more money printing. Gold will easily pass $2000 and I wouldn't be surprised to see $3000.

QE3 should be a mental wakeup call to everyone that they will never voluntarily stop the money printing.

Sun, 09/11/2011 - 13:44 | 1656633 TradingJoe
TradingJoe's picture

GS, another big dawg in dire need of cash, I guess they scream this much because they know what's coming, NADA is coming! They wish for a big rally to get rid of whats left of their portfolios and then short everything and their clients! Pathetic bunch of scumbags! In my opinion they need a huge DRILL UP THEIR ASSES! Am sure they will get it soon!
Lots of noise already form them bonuses, means to me they sure as he'll need them! Too bad for them it's almost game over, campaign year followed by election year, etc., ain't easy to get them cash bags anymore!

Sun, 09/11/2011 - 17:15 | 1656661 Apeman
Apeman's picture

The end is nigh! Reprint, sinners!

Sun, 09/11/2011 - 13:55 | 1656673 flyr1710
flyr1710's picture

That Euro 1.50 target they had looking great now; glad I joined them in fading that call

Sun, 09/11/2011 - 14:26 | 1656783 JW n FL
JW n FL's picture

Night video: Flares & flash bombs fly in fresh Greece clashes

Sun, 09/11/2011 - 14:27 | 1656786 JW n FL
JW n FL's picture

Harvest of Hypocrisy? UK opium poppy farming kept hush-hush

Sun, 09/11/2011 - 14:35 | 1656810 JW n FL
JW n FL's picture

how about some fun for a change? instead of facts and figures?

Race day two at the America's Cup World Series in Plymouth saw some blustery conditions, leading to three boats in the afternoon fleet race capsizing... spectacularly!

If you are interested.

Sun, 09/11/2011 - 16:49 | 1657210 DoChenRollingBearing
DoChenRollingBearing's picture

Excellent JW!  The only question I would have is whether or not the pahrmaceutical makers would pay enogh to Afghan farmers for their crops vs. the drugrunners.  I betcha the drugrunners and Taliban win that one.

Still, it's not worth a war over.  Nor a War on Drugs either.

+ $1860 and green

Sun, 09/11/2011 - 14:27 | 1656789 duckhook
duckhook's picture

This ultimate self serving comment shows Mr schumacher' s complete ignorace of history .Gs has no credibility left and within a few years  no business either 

Sun, 09/11/2011 - 14:40 | 1656831 urrterrible
urrterrible's picture

I am buying more Maple Leafs. I wasnt sure when i tossed in 20k at 1350, Im not sure now, but MZM is growing in double digits and money is just being created. Why not buy another 10 coins?

Sun, 09/11/2011 - 14:56 | 1656879 Sequitur
Sequitur's picture

I love Maple Leafs. Gonna buy some myself.

Sun, 09/11/2011 - 16:52 | 1657219 DoChenRollingBearing
DoChenRollingBearing's picture

Buying more gold in almost any form is good.  Maple Leafs are pretty, one of my friends likes the Austrial Philharmonics.  And the US Buffalo is nice as well.

But, the bulk of mine or the Gold Eagles.  Beauty is not the thing for me.  Just the Au, in a form that is easily recognized here in the USA and can take a little abuse.

Sun, 09/11/2011 - 17:20 | 1657330 Apeman
Apeman's picture

FML, I can only afford silver.

Sun, 09/11/2011 - 14:57 | 1656883 DormRoom
DormRoom's picture

QE goes against one of the article in the Maastricht Treaty. Germany will be more pissed.

Sun, 09/11/2011 - 15:05 | 1656907 Mrs Kensington
Mrs Kensington's picture

This desperate pumping for QE3 from banks and goldbugs everywhere, and this albeit wonderful site not innocent in this, is not being met by any explicit confirmation from the Central Banks. Given this is bullet number 6 of the roulette barrel, they will save it for the full court Euro implosion - scheduled for Q4/11 or Qi/12.


Sun, 09/11/2011 - 15:06 | 1656909 Racer
Racer's picture

'We Have to Go Spend Money to Keep From Going Bankrupt'

Sun, 09/11/2011 - 15:07 | 1656911 Atomizer
Atomizer's picture

Some other points to ponder.

Once available, a preliminary prospect relating to these securities may be obtained from Goldman, Sachs & Co., via telephone: (866) 471-2526; facsimile: (212) 902-9316; email:; or standard mail at Goldman, Sachs & Co., Prospectus Department, 85 Broad Street, New York, NY 10004, and from Morgan Stanley & Co. Incorporated, via telephone: (866) 718-1649; email:; or standard mail at Morgan Stanley & Co. Incorporated, 180 Varick Street, New York, NY 10014, Attn: Prospectus Department.

About Solyndra Headquartered in Fremont, CA, Solyndra designs and manufactures photovoltaic systems, comprised of panels and mounts, for the commercial rooftop market. Using proprietary cylindrical modules and thin film technology, Solyndra systems are designed to provide the lowest cost of electricity and the highest kilowatt hour production per rooftop for typical installations. Fremont, CA – December 18, 2009 – Solyndra, Inc., a manufacturer of innovative cylindrical photovoltaic systems for commercial rooftops, announced today that it has filed a registration statement with the Securities and Exchange Commission relating to the proposed initial public offering of its common stock. The joint book-running managers of the proposed offering will be Goldman, Sachs & Co. and Morgan Stanley & Co. Incorporated. A registration statement relating to these securities has been filed with the Securities and Exchange Commission but has not yet become effective. These securities may not be sold, nor may offers to buy be accepted prior to the time the registration statement becomes effective. This press release shall not constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

Then the IPO came into play. Do you know how much a IPO cost? When a IPO doesn't materialize, certain people walk away with a shit load of cash. This process is not capitalism. Winks.

Solyndra, Inc. Form S-1

The Keynesian in chief forgot to erase the evidence. A side from all the flash drives and Cisco records. It will be hard for this crime to disappear. Solar, guns and guitars are the mounting criminal proceedings for the Keynesian teleprompter reader.

Sun, 09/11/2011 - 16:54 | 1657234 DoChenRollingBearing
DoChenRollingBearing's picture

Unless the Obama - Holder controlled "Justice" system and the State Run Media decide not to pursue this.  Would either?  Naah.  Fast and Furious?  Nothing to see here, keep moving...

What could the House of Reps do?  Not much.  Impeach him?

Sun, 09/11/2011 - 15:09 | 1656917 Zola
Zola's picture

Goldman is the new standard oil out there... execpt they dont really produce much. If they are so good, let them compete with other hedge funds without the insider connections and fed credit lines...

This market will see GS to 0 or broken up i think.

Sun, 09/11/2011 - 15:22 | 1656957 Deadpool
Deadpool's picture

Everyone is hung up on Goldman Sucks as if they are Al Capone...GS is a branch of the Federal Reserve Bank. They do as they are told as does JP Morgan and Citi and BofA as does Bundesbank, UBS, Barclays, HSBC and Mitsubishi. They all have vested interest in fiat currency and will do EVERYTHING and ANYTHING to preserve it like issue Eurobonds enslaving the whole of western Europe -- and the dummies in central Europe eager to sign up -- by looting their tax paying middle class and consumers (VAT) as does America already with Treasuries. until we trade sea shells for oil the banks hold all the cards. live with it or rise against it at your futile detriment and starve. If sea shells were the medium of exchange the FED would cartel those too. We work for them.

Sun, 09/11/2011 - 16:45 | 1657198 gwar5
gwar5's picture

Or, maybe Goldman sack is member/owner of the all important FRBNY, calling the shots to the FED figurehead, and academic, Bernanke. 


Sun, 09/11/2011 - 15:22 | 1656951 Grand Supercycle
Grand Supercycle's picture

Updated SP500 monthly chart at blog.

My long term indicators continue to warn of significant USD strength and AUD / NZD / EUR etc weakness and these signals have increased since 2009.

Unfortunately the March 2009 equity lows eventually will be breached.

Do NOT follow this link or you will be banned from the site!