As Greece Denies, Germany Begins Greek Default Preparations

Tyler Durden's picture

Literally seconds after the Greek finance ministry announce that any rumors of a Greek default over the weekend are absolute rubbish (we wonder who would admit such rumors?), we get the following from Bloomberg: "Chancellor Angela Merkel’s government is preparing plans to shore up German banks in the event that Greece fails to meet the terms of its aid package and defaults, three coalition officials said. The emergency plan involves measures to help banks and insurers that face a possible 50 percent loss on their Greek bonds if the next tranche of Greece’s bailout is withheld, said the people, who spoke on condition of anonymity because the deliberations are being held in private. The successor to the German government’s bank-rescue fund introduced in 2008 might be enrolled to help recapitalize the banks, one of the people said. The existence of a “Plan B” underscores German concerns that Greece’s failure to stick to budget-cutting targets threatens European efforts to tame the debt crisis rattling the euro. German lawmakers stepped up their criticism of Greece this week, threatening to withhold aid unless it meets the terms of its austerity package, after an international mission to Athens suspended its report on the country’s progress." Looks like at least one very "naive" government is not buying the latest batch of lies from Greece.


Greece is “on a knife’s edge,” German Finance Minister Wolfgang Schaeuble told lawmakers at a closed-door meeting in Berlin on Sept. 7, a report in parliament’s bulletin showed yesterday. If the government can’t meet the aid terms, “it’s up to Greece to figure out how to get financing without the euro zone’s help,” he later said in a speech to parliament."


The German government is awaiting the results of the Greek progress report and will decide what course of action then, a government spokesman said, speaking on customary condition of anonymity.


European bank credit risk surged to an all-time high today and stocks fell worldwide on concern that the debt crisis is escalating. German two-year yields declined to a record as investors sought a haven and Greek two-year note yields added as much as 86 basis points to 55.91 percent, a euro-era record.

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BaBaBouy's picture

"E" For ENGAGE The Bailout Seats ...

Chaffinch's picture

I can't help thinking they chose a bad day to mess with gold and silver prices - but it must be tough for them to pick a good day at the moment!

Thomas's picture

The market could surprise on a default.

Chaffinch's picture

I guess so - like that weird drop in gold price when the SNB said they would peg the CHF to the Euro - it made no sense - but I guess people often run the wrong way when they panic...

Smiddywesson's picture

Yes Thomas is right.  We know gold is manipulated.  We know they have margin hikes remaining.  Do you want to gamble they won't use them with equities failing, a crashing Swiss franc, the prospect of a Greek default over the weekend, and prices this close to $2k gold?  If not for this, for what are they keeping their powder dry? 

If I were them, I would hit gold with EVERYTHING I had, right here, right now (ala silver in May).  I covered.  If I miss the move above $2000, so be it. 

Times like these make me love my physical, so much less to worry about.

Chaffinch's picture

"If not for this, for what are they keeping their powder dry?"

I agree that from their point of view they should be hitting it harder now, but there are future events for which they may wish to keep dry powder. After $2000 will come $2500, which I believe is the inflation-adjusted high from 30 years ago (not that the situation 30 years ago was anything as like as calamitous as now...) and they will really want to make it look like a bursting bubble when we get there.
Of course a Greek default is bad, and there may be a falling domino effect, but the Greek economy is tiny, and they will paper over the problem again.
It may be enough (from their point of view) that their manipulation is causing huge volatility, which will be observed (and spun for all it's worth) by the MSM, which will scare off all those would-be investors who are now becoming aware of gold and who may be going into it for the first time.

RichyRoo's picture

maybe TBTF and PD's will double down on fiat by backstopping greek bonds despite failure to meet ECB terms?


The PD's have big deposits in the FED, they could deploy those to make the bid.

Zedge Hero's picture

Why doesn't Greece just say fuck off to the IMF and ECB, German banks, and the who ever else they are fucking ensalved to?  Here's a video about the whole European mess with a concentration on Italy's protest this week. Ithink it's starting to anger me. Sorry.

Chaffinch's picture

No need to apologize for getting angry - the Greeks should be a lot more angry - and as for the Irish - it is really sad to see them put into such a mess...

MS7's picture

I agree that Greeks should be more angry. The truth is they are angry, and they detest their government. Their government does whatever they are told by the IMF and others. They do not reflect the people in any way, but it is true that the more people should have joined the protest sooner.

A.W.E.S.O.M.-O 4000's picture

Beacause I think if the Greeks tell the Germans to "fuck off" preparations will then include constructing a series of camps equiped with showers and ovens, all conveniently located near rail lines.

Capitalist10's picture

Why doesn't Germany just say fuck off to lazy, lying, deadbeat tax cheats like the Greeks?

Oh wait, they are just about to...

MS7's picture

I agree. But I wonder if someone might know the answer to this-- What difference does it make if a country declares default or is declared by another to be in default? I'm asking because many people say it was in Greece's best interests to default. Now when Germany is going to do it for them, people seem to think Greece will be the loser in this. I don't understand.

e-recep's picture

simply because greeks are not icelanders. different mentality.

Mr Lennon Hendrix's picture

What is with the Illuminatti symbolism around 9/11?  Joachim and Boaz?  Solomon's Temple?  And now we have a comet switching up our gravity, and most important, electro-magnetism.  A former NASA scientist, and friend of Carl Sagan, says it is a time capsole.  Whatever it is, it is ominous, and so are the actions of the pagan Illuminatti.

Order out of Chaos, this is their goal.  They know what fear does to the status quo; it makes people complacent and this allows the Dinosaur Kings of old to further implement their control system.  They use one side of the sword to destroy the system, and the other side offers the solutions.  Yet both sides have the same effect.  Bank failure?  Print more debt.  Terrorism?  Kill millions of more brown people.  Yup, that will do the trick.

So now Greece fails, and people rush from Greek bonds into Euros. EUR/USD goes to $2.00, as Bernanke and Obama throw $4.47 trillion into the fire (perfect cover for US fiscal and monetary policy).  And al around the Egyptian New Year!  These Dinosaur Kings, they are Egyptian by the way.  You can call them Jews, what have you, but they are Pagans.  Yes they invented the "One True God", yes Moses was likely to be Akhenaten, but they are just as much Catholic as Jewish.  They do not worship what the status quo worships:  the status quo worships the daily bread.  The Dinosaur Kings worship POWER and CONTROL, because they want their Kingdoms back.  They are sick of the middle class.

So now into the fire it goes, and the slow burn of the last century torches the tree of life.  Soon the monopoly game will be over, and all fiat will be worthless in nominal terms.  Reality is at the doorstep, and boy is she ready to rock and roll.

Clorox Cowboy's picture

Hendrix, if you ever get a movie deal for this "Dinosaur Kings torching the tree of life" idea, count me in for one ticket.  With Michael Bay as director of course...

Mr Lennon Hendrix's picture

I'll see you at the premier then!

Smiddywesson's picture

Hendrix, you lost me in the second sentence.  Just tell me, is this good for gold or bad for gold?


RichyRoo's picture

im not scared, i have... umm gold umm God umm guns? Umm faith in my fellow man ... oh fuck i better fall in line!


Which is to say that nobody ever profited by falling in line, and i doubt there are jewish dinosaur kings.

Mr Lennon Hendrix's picture

Henry "Party Boy" Kissenger is the only Jew allowed at the Grove.  I think that says a lot about Jews running the world. 

David Rockefeller has a great quote from the 70's, "It does not matter which God people worship, as long as they worship one." 

I think that sums up the religous control system pretty well.

A.W.E.S.O.M.-O 4000's picture

Dude, first you tell me my paper money is worthless and now you tell me there is no God?


What a piece of shit Friday this is turning out to be.

ww2vet's picture

fuck you-ready to die??

Rasna's picture


This is a serious blog, right?

This is ZH, WTF??!!

Mr Lennon Hendrix's picture

Which part isn't serious?  The Illuminatti is real, they are pagans, their roots can be traced back to Egypt and the tribe of Aten, they were pissed that they were expelled from Egypt, they were pissed that they have not taken control of the entire world, there is a comet heading right at us from another solar system, it is affecting our earth's magnetic pulses, and Europe is about to implode on the same day this comet is passing us by, which is the same time of the Egyptian New Year.  So which comment do you think is not serious?

peekcrackers's picture

But one thing is there where 2 types of Jews that inter-mingled with the Egytians. Ashkenazi Jews where the ones that took control with inter-mingling sex.. Henss Zion

Mr Lennon Hendrix's picture

There was a priest class that took over Egypt and they begot the One God religion; they were exhiled.

tj3's picture

The euro going to two dollars...ummm and perhaps the boring, repetitive doom and gloom sign-off. It's almost like being inflicted with 24/7 OCD. zzzzzzzzzzzz

Is it always necessary to put style over substance in blog comments.

Mr Lennon Hendrix's picture

Substance?  I think I have enough of that to keep some style.

'Buy All the Euro You Can' If Greece Defaults: Jim Rogers:

ElvisDog's picture

I don't know why, but your psychodelic post about Dinosaur Kings made me think of that 1960's movie Barbarella. Jane Fonda was totally groovy in that flick.

Ethics Gradient's picture

Possibly not. Even Germany is prepared to print to cover this one.

The interesting thing will be what happens in the longer term. Greece will show the other PIIS what happens when you have a floating exchange rate.

Mr Lennon Hendrix's picture

Memories of Weimar might do the trick.  I doubt Germany wants to repeat history.

RichyRoo's picture

pfft according to modern theory the Weimar Germans mistake is that they didnt print enuff

Irish66's picture

debt holders not responding...running

oogs66's picture

but wien said all is good and zandi is ecstatic

papaswamp's picture

Popcorn bitchez!!!!


Wait shhhh the HFTs haven't noticed yet...

LawsofPhysics's picture

Sorry, the corn and energy required to make the popcorn is too expensive, you'll have to eat this paper instead.  yuck, yuck, yuck.

Bring the Gold's picture

Wait you can't eat fiat?


Next you will tell me some CRAZZZZYYY story that some farmers will actually accept precious metals in exchange for tangible food stuffs. 



unky's picture

quick pick up some cash for the weekend :- ) just in case

CrankItTo11's picture

Get your nets ready, the helicopter's coming!