Goldman's Take On TARGET2 And How The Bundesbank Will Suffer Massive Losses If The Eurozone Fails

Tyler Durden's picture

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Cassandra Syndrome's picture

What's caused the sell off in the futures?

Chris Jusset's picture

As Lehman showed, it took the lock up of money markets to push the system over the edge, and require a multi-trillion bailout from the true lender of last resort. The same thing is happening now in Europe. And the Bundesbank increasingly appears to want none of it."


Fasten your seatbelts ... buckle up ... it's COMING ...

Careless Whisper's picture

Whatever Goldman says should be taken at face value. They always tell the truth. Former GoldmanSachs CEO Jon Corzine is an honest businessman.

WestVillageIdiot's picture

You may want to be on the lookout for lightning bolts heading towards your house. 

AssFire's picture

Right, Like Hamey would say: "If you can't trust the Government...who can you trust?"

AssFire's picture

Oh shit! that was a reminder that The Gingrich returns this week as well..ruined my night.

I look forward to catastrophic financial news , but not news of those who caused it..especially when they are running for office to be rewarded for creating it.

Go Ron Paul.

WestVillageIdiot's picture

It looks like his money bomb is currently just under $3,900,000.  

AssFire's picture

I know here is a photo of it:

If you don't want to do it online you can mail it:

If you would like to send a paper check, please send it to:
Ron Paul 2012 Presidential Committee
845 Plantation Drive
Clute, TX 77531

Either way don't put an accurate phone number, you will be pestered to death by others.


I know several people from Sargent TX Dr. Paul delivered for whatever could be afforded by the family rather than take Medicare. Now Dr. Paul asks the people to send what they can for the sickest patient.
WhiteNight123129's picture

Goldman Sachs is a fight with Germany. Germany is in a fight to finally recover its sovereingty. Fuck the bankster Germany!


old naughty's picture


I am confused. GS a bankster is in fight with G; and G is in fight to recover its sov...and G is now a bankster?

Are you coining a new oxmoron, soverign-bankster?

Thanks for sharing, nonetheless.

CPL's picture

Comfy chair...check


///curtains are almost about to open.




topcallingtroll's picture

I have been sitting here so long my popcorn is stale and my butt hurts.

Anybody else getting bailout fatigue?

CPL's picture

This is the Mexican stand off. just watch.  Who out of these countries haven't managed to do anything in 2 millennium except attempt to kill each other, this is the story arc.  It won't last very long, but the effects are going to be spectacular.


This, right here...this is where it starts.

Michael's picture

Karma is a bitch. Fasten your seat belts bitches, it's going to be a bumpy ride. I live the smell of complete and total worldwide economic collapse on Sunday evening.

Dr Paul Krugman's picture

Relax and have a drink.  And when you wake up in the morning, nothing will be different.

Michael's picture

That's what they said before the housing bubble bust, then the bust happened and you got your instant gratification of fulfilled prophecy with the carnage. The problem is so few people can actually analyze the natural progression of events and likely outcomes, you not being one of them who can. 

It works the same way in China. Their epic housing bubble is bursting right now and there's nothing they can do to stop it. We already know how that will turn out, just look at the western world for an example.

The Eurozone, part of the one world government program, is a complete and total failure just as their global carbon tax was. Get over it.




Dr Paul Krugman's picture

Culture is much more sophisticated than what you predict.  Europe has bonded as a continent politically.  Economically they are reliant on each other.  The main problem in Europe is the delusional technocrats that believe austerity is going to improve the bond market.

WestVillageIdiot's picture

From 2005 - 2008 I watched this mess, mainly focusing on the housing component, and could not believe the things I saw.  The stock market rose to its highs in 2007, as housing seemed headed for a major disaster.  The financial system seemed to be a boxer that could take any punch thrown at it.  Then came Sept. 14, 2008.  That punch didn't knock the boxer out, not right away.  But reality finally seemed to set in. 

The Fed then jumped in and bailed out every sociopathic criminal organization it could.  Now almost three years later I sit here wondering how it is still going.  The European mess just seems to get bigger.  The only thing holding up the U.S. economy is massive government deficit spending and The Fed operating in the shadows.  Just like 2008 it seems that something big has to happen soon.  In the meantime, plan and prepare.  I don't know what else to do. 

Absalon's picture

I want to see some perp walks and some long prison sentences.

The politicians on both sides of the ocean have had four years to get the banking system under control but have refused to do so because the banks paid them bribes campaign donations. 

The bankers and their paid lackies need to go to prison before we have any hope of saving the economies of the world.

AssFire's picture

The opening acts are pathetic..I don't think these people will want to be listed in the credits at the end of the show.

Atomizer's picture

Who cares, zero sum game is at play. By 2:15 PM tomorrow, another rumor will kick the can down the road.

ebworthen's picture

I would read this to mean that Germany has the biggest incentive to restore the Deutschmark and leave the Euro-zone (?).

Yes, their exports will be more expensive, but they won't have to bail out Southern Europe and can leave that chore to the apparently quiescent sheeple U.S. Taxpayers via the FED, Treasury, and IMF.

Spitzer's picture


They dont have to bailout anyone to save the Euro currency. Do you think the Euro is just going to dissapear ? The Thai baht, Russian Ruble, Icelandic Krone still exist.


old naughty's picture

Good valid point.

But then you don't need other currencies in a one-world gov.

Duffminster's picture

Like the Chinese they'll probably want a gold backed currency;  the question is how they could possibly achieve that when the Fed has most of their physical gold in theory, if it hasn't been rehypothecated?  In the case of the euro and the dollar, lets call it "ED",  the "ED" is “backed” primarily by government bonds, which are promises to pay EDs. So, the ED is a promise backed by a promise to pay an identical promise.  So what is the substance of this promise????   If the the germane government treasuries will not give you anything tangible for your ED, then the "EDA is a promise to pay nothing.

Despite all the hyperbole, in the end, the winner will be whoever holds the physical gold and silver in my opinion.  Thats the money I would want, rather than infitley debt laden fiat currencies backed only by ever increasing and increasingly not repayable debt.  The rush to take possession of the last real money (the only true store of wealth over time) will become quite evident as the remaining solvent nations rush to become the currency leaders, backing their currencies with the only univerally trusted money through out the ages of failed fiat currencies.


fnord88's picture


It seems to me the Euro could survive given their massive gold holdings. Unlike the US, Euro gold is marked to market, so they could convert savings accounts to being gold backed, print like crazy, stave off disaster, savers are protected by gold, so their new gold backed accounts should rise with inflation.

But it all comes down to who really ownes the Gold.

WestVillageIdiot's picture

Even with gold backing, wouldn't that scenario be hugely inflationary?  That doesn't seem like a great way to go. 

fnord88's picture

If savers money is backed by gold, who gives a shit? Wouldn't inflation become essentially meaningless? If it costs $1 or $100 for a loaf of bread, as long as your savings are backed by gold, what difference does it make if you use one imaginary number or a different one?

WestVillageIdiot's picture

Better hope the people that don't have savings don't have weapons. 

fnord88's picture

Why? The people that dont have savings probably have debt owed to banks. Under a massive inflationary period, all their debt essentially goes away. Pay 1c on the dollar or something. Savers win, debtors win, banks get totally fucked. Or am I missing something? Where is the downside?

WonderDawg's picture

If it were only that simple. We've crossed the event horizon. There is no way out that doesn't involve severe pain for all. There is no free lunch, and the bill is due.

Manthong's picture

" the winner will be whoever holds the physical gold and silver in my opinion"

Rickards seems to imply that the US might want to continue to hold Europes gold whether Europe wants us to or not.


Absalon's picture

It does seem that they could be more creative in their use of gold. 

Suppose Italy offered a Euro (or dollar) denominated 30 year bond which carried with it an option to exchange the principal of the bond  for gold at maturity, at say, 3000 Euros to the ounce secured by physical deposit of the gold in some country outside of Italy (Canada or Germany perhaps).   Such a bond with its inflation protection might attact a lower interest rate than Italy is able to get at the moment and Italy's problem revolves a lot around keeping interest rates down.

old naughty's picture

"Like the Chinese they'll probably want a gold backed currency..."

Didn't the Chinese gov "told" the citizens to buy gold? Why wouldn't they hoard more to strengthen their balance sheet (since it is so important these days)?

Sure they could confiscate the gold from the citizens someday; but perhaps their want is not that solid? Or, perhaps its an insurance policy, in case no-can-do back-to-gold-std?

q99x2's picture
Bundesbank is not in the business of doing God's work.
old naughty's picture

Leave God out of it, please.

Its our mess, our karma.

ISEEIT's picture



Nuff said.

BennyBoy's picture

One or more countires will leave the Euro (hello Iceland!)

KABOOM Buba! To the tune of $500B

Isn't fantasy finance fun?

DormRoom's picture

sort of supports Kyle Bass thesis that Germany will wait for the collpase, then recapitalize its bank.  I highly doubt US banks will get another bailout. If you hold BAC, or MS, you may be out of luck.


My thesis is Germany will exit. EZ collapses.  Germany will bailout its banks with new Deutsche Marks.  With a high Deutsche Mark, the new BundesBank will print, and her flushed, recapitalized banks will buy out prime European assets.  She gets Europe, and can maintain her export base.

economics1996's picture

What happens to PM, commodities when the bust happens?

economics1996's picture

In the past commodities always collapsed.  But the banks closed.  Do you risk a bank holiday to get cheap PMs?

chump666's picture

It will be interesting to watch.  But gold and oil may stay bid silver and other indust commodities sell off.  USD will be bid too on Asia outflows.  Stocks volatility to the major liquidation trade, then the print jobs...maybe 6mths into 2012.

DormRoom's picture

near term, if EZ collapses, commodity collateral trade will collapse, and commodity prices will collapse.  Medium run, if EZ collapses, US will enter another deep recession.  So it will be forced to stimulate.  But that will push debt:tax revenue over 120%.  So US will be headed for downgrades, and the USD as a reserve currency is doomed.


After the flight from USD is manifest, and its reserve status in jeopardy, US will either call for a debt jubilee, and risk war with China.  Or wage war with a big player (Iran/Pakistan) to increase GDP.


But when the USD falters as reserve currency, commodities will likely be a temporary store of value, and unit of exchange.  It's still unclear if USD will be dropped as the reserve currency, since the US will remain the primary military power for a long while.


Military planners have planned a US vs China conflict by 2020 (When China economy becomes bigger than the US)


The US could defeat China.  It would very likely win any war with middle powers to increase GDP.


But there will be a period where the USD reign will be questioned.  So I see a comeback in commodities, if it collapses after a EZ implosion.


NOne of the may come to pass, but it's fun to speculate.

fnord88's picture

Isn't using war to increase GDP a bit like the broken window fallacy? How does using precious resources to build armaments which are then destroyed boost GDP? I can see how people are employed, and thus have money to spend, but the wages the gov is paying is printed money anyways. I guess if they just gave everyone $100K, it would be spent in country and contribute to inflation, whereas blowing shit up in another country does not so much.

Still seems like madness to me. We could colanise mars, which would export inflation, kill less people, and be way cooler, for seeminly the smae economic boost.

chump666's picture

I am betting on China meltdown within the first 6mths of 2012.  So many signs pointing that way FX outflows, property implosion Wenzhou contagion (goggle it). When banking crisis in China hits the wires, stocks will be sold into oblivion.

Also, a cute Chinese girl that works at the local supermarket near me said this. "China really bad...too many properties..."

Say no more.

old naughty's picture


agreed with the "too many properties..." May be they are for Lunar reptiles migration?

And which comes first, Chinese meltdown or Asia outflows, in your 6-monthhorizon?

Thanks for sharing.