• Steve H. Hanke
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    Authored by Steve H. Hanke of The Johns Hopkins University. Follow him on Twitter @Steve_Hanke. A few weeks ago, the Monetary Authority of Singapore (MAS) sprang a surprise. It announced that a...

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

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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

http://www.spiegel.de/international/europe/0,1518,676634,00.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."

Fixed.

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

knukles,

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?

1)
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.

2)
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.

3)
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 ( http://en.wikipedia.org/wiki/The_Revolutions_of_1848_in_the_German_states ) But 1848 - a first step towards a democracy - failed and many were forced into exile (aka emigration to the United States).

4)
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
http://upload.wikimedia.org/wikipedia/commons/a/a7/Census-2000-Data-Top-...

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

http://en.wikipedia.org/wiki/Angles

5)
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).

6)
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.

7)
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!”

 

http://investmentwatchblog.com/dont-try-to-buy-at-the-bottom-and-sell-at...

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?

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