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Guest Macro Commentary: Is Germany Playing Chicken With Ben Bernanke?

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From Brian Rogers of Fator Securities

Macro Commentary: Is Germany Playing Chicken With Ben Bernanke?

"The few who understand the system, will either be so interested from its profits or so dependent on its favors, that there will be no opposition from that class." — Rothschild Brothers of London, 1863.

US markets are down at the open but there is a bit of optimism working its way through traders on a release out of Europe from EU Economic and Monetary Affairs Commissioner Olli Rehn that the European Commission may present draft legislation on euro bonds once they have completed a feasibility study on common debt sales.  Germany’s Merkel has continued to say that this solution is not something that  Germany supports.  And why would they?  To “save the system” might be the answer that some would give.  But this would mean that Germany would have to be willing to accept higher interest rates as it ties itself to the PIIGS and further put them on the hook fiscally should any of the PIIGS be unable to make their timely pro-rata share of the interest payment.  Given the political losses Merkel and her party has already suffered regionally, this solution to me seems like a non-starter.  Besides, if I was Germany I would simply play chicken with Ben Bernanke and wait for the Fed to eventually turn on the QE pumps to bail out the PIIGS.  Won’t happen you say?  I think it’s more likely than most think.  China has already stepped up to the plate for their own self-serving reasons and the Fed will likely reach the same conclusion eventually.  Probably will take another 15-20% in losses on the S&P but does anyone really think the Fed will simply stand by and watch as Europe implodes and takes our banking system down with it?  Especially when we can print to infinity and drop said printing from a helicopter.

Speaking of printing, how about the action in gold lately.  Let’s be clear, technically speaking gold is very over-bought here and if things temporarily calm down, it’s easy to imagine a decent pullback.  However, with all the concerns about European banks, double-dipping recessions and gold repatriating South American dictators, the technicals are meaningless.  Have we started the parabolic phase of the gold move a la December 1979?  We shall see soon.  The confusing news out of the Swiss National Bank has even believers in the CHF looking for a better flight-to-quality.

So how bad will this current round of hand-wringing be?  The problems in Europe have an endgame of essentially 2 things: monetary printing or default/restructuring.  Printing is not an option as the Bundesbank, I mean ECB, given their disastrous history with (hyper)inflation, will be loathe to go the helicopter money drop route.  Any defaults/haircuts will likely topple the big banks in Europe as their leverage levels are simply unsustainable.  US seems destined to double-dip which will pressure our own banks and real estate and muni spreads, etc, etc, etc…  And some people think QE3 will never happen, PUH-LEASE!  

Note to the future participants of Bretton Woods III – fiat currencies can only be floated with extremely tight and transparent banking laws, nothing like what we have today and this includes central banks.  And if you decide to go down the gold standard path, same thing applies, transparency and low leverage are keys to long-term stability.  Banks should operate like utilities with tremendous amounts of transparency, low levels of leverage and huge limitations on market size; read: granularity.  How we are stumbling around today with the same banks that almost crashed in 2008 with even greater market shares and low-visibility accounting is beyond my understanding.  Read the quote above to understand why the status quo is so eager to defeat anything that would reign in these black holes.  It was as true then as it is today.  -Brian

* Fator Securities LLC, Member FINRA/SIPC, is a U.S. entity and a member of the Fator group of companies in Brazil. The comments below are from Brian Rogers, who is employed by Fator Securities (Brian’s opinions are his own and do not constitute the opinions of Fator Securities or the Fator group of companies).

Fator Securities LLC is not affiliated with Zero Hedge or any third party mentioned in this communication; nor is Fator Securities LLC responsible for content on third party websites referred to in this communication.

This material was not prepared by Fator Securities LLC. U.S. Persons seeking further information must contact Fator Securities LLC in New York at (646) 205-1160. This material shall not constitute an offer to sell or the solicitation of any offer to buy (may only be made at the time qualified participants are in receipt of the requisite documentation, e.g., confidential private offering memorandum describing the offering, related subscription agreement, etc.). Securities shall not be offered or sold in any jurisdiction in which such offer, solicitation or sale would be unlawful or until all applicable regulatory or legal requirements of such jurisdictions have been satisfied. This material is not intended for general public use or distribution and is intended for distribution only to appropriate investors. The opinions contained herein are based on personal judgments and estimates and are, therefore, subject to revision. Past performances are not indicative of future results.

 

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Fri, 08/19/2011 - 11:06 | 1577334 Everybodys All ...
Everybodys All American's picture

Only problem is that the amount of QE3 necessary to create the solvency necessary to save EU banks is way beyond the debt ceiling.

Fri, 08/19/2011 - 11:13 | 1577367 lolmao500
lolmao500's picture

And? Has that ever stopped them? They will print till armageddon. If they have to print 20 trillion to bail out Europe, the US and the cleaning of Fukushima, they will do it.

Not to mention, ``assure an Obama victory`` in 2012. Since only 26% of Americans support Obama on the economy, they need to do some more QE till the election to make sure that 26% goes up...  they need to kick the can down the road.

Fri, 08/19/2011 - 11:19 | 1577412 SheepDog-One
SheepDog-One's picture

But QE is what caused his numbers to implode in the first place, so how does doing more help? No, there will be no Jackson Hole miracle gift from on high in the clouds. There will be no further can kicking, this is it...ZIRP for banksters and under the table QEeefing for banks here and there, till WW3 kicks off late fall.

Fri, 08/19/2011 - 11:33 | 1577497 Caviar Emptor
Caviar Emptor's picture

Are we agreeing on this??

Fri, 08/19/2011 - 11:42 | 1577558 SheepDog-One
SheepDog-One's picture

Probably.

Fri, 08/19/2011 - 14:35 | 1578329 eureka
eureka's picture

To QE+ or not to QE+ is NOT the question - US will cease to be, with it or without it - because no jobs will "be created" and no home prices will again "appreciate"; future Tea Party Republican austerity "rule" will kill the 150 Million 1/2 of the poor US population a little bit faster than continued Obama "rule".

"America" is a non-existent mythical construct - there is no "union" - there is only a crumbling conglomerate.

Rest in peace, oh myth of unipolar hegemony - as EU rises to your disbelief.

Sat, 08/20/2011 - 10:29 | 1580860 FlyPaper
FlyPaper's picture

.... and so you are arguing for the Status Quo in regard to US government spending, because 150 million poor people will be impacted?

It is fanciful thinking to believe that Europe is going to do any better than the US in this debacle.

 

Fri, 08/19/2011 - 14:53 | 1578399 malek
malek's picture

Ahem - if you closely enough, QE2 ending caused his numbers to implode. I don't like it, but I cannot deny it.

Fri, 08/19/2011 - 11:56 | 1577612 Spastica Rex
Spastica Rex's picture

"They" don't need Obama particularly; any bagman will do.

Fri, 08/19/2011 - 11:13 | 1577379 SheepDog-One
SheepDog-One's picture

It would take a $2.5 trillion QE to impress anyone at all, and if they did that the dollar would be totaly destroyed.

TARP/QE1 USD 90. Today, not so much.

Fri, 08/19/2011 - 11:06 | 1577335 SDRII
SDRII's picture

Germany = production. Russia = Materials. Natural glance east not west, but for continuing US occup. Germany opted against a Libya role. Syria will be another tell.

Fri, 08/19/2011 - 16:16 | 1578728 Ropingdown
Ropingdown's picture

Agree.  Sitting in southern europe on vacation, and surrounded by friends which include vacationing EU officials, I see a large reluctance to see Germany as fearful of peripheral debt, to see Germany inclined to turn eastward.  They would like to see Germany as a new Rome seeking to rule them.  I see Germany, Merkel, as afraid to associate with them.  I see your analysis as the natural one:  Ally with and buy into their most natural provider of oil, gas, industrial metals, and lumber.

Fri, 08/19/2011 - 11:07 | 1577338 Nothing To See Here
Nothing To See Here's picture

"Printing is not an option as the Bundesbank, I mean ECB, given their disastrous history with (hyper)inflation, will be loathe to go the helicopter money drop route."

Once desperate, they may go the route of printing nevertheless. Merkel will drop her current coalition and join with the Social Democrats, who will gladly approve.

And anyway, the Ben Bernank will print if the ECB doesnt.

But at some point, what awaits those helicopters at the bottom of the money pit is a rancor.

"Oh no! A rancor!" -C3P0

Fri, 08/19/2011 - 11:21 | 1577422 SheepDog-One
SheepDog-One's picture

Right, Germany cant do money printing because we all know how badly that ended...but WE in the US can do as much money printing as we want because no such bad ending would happen, surely.

Fri, 08/19/2011 - 11:43 | 1577559 Marcuz Aurelius
Marcuz Aurelius's picture

Hollywood Ending ! for sure.

Fri, 08/19/2011 - 11:10 | 1577343 Caviar Emptor
Caviar Emptor's picture

I disagree with a few of the "mainstream" "group-think" premises in this article.

First, Germany's position is not as 'robust' as many would like to believe. THeir debt/GDP is very similar to France. But their demographic is far more concerning. Ther export market has done well, but it's very narrowly focused on the ultra high-end. 

Next gold. It's not "very" overbought and technicals don't apply to fundamental tectonic shifts. As to endless comparisons to 1979-80, that's like the endless drivel about trying to compare our current recession with 1932...no 1982.....no 1873.....no 1907....

Finally, QE3. Everybody presumes it's a fix. And it's even been baked into the stock market. But Bernanke lately has given big indications that it won;t happen. For lots of reasons having to do with the reality that it worsened the recession and soured global economics. At a very high cost to US credit. I'm sticking my neck out for the 3rd time in saying that I think we'll get a big fiscal stimulus package soon, not monetary stimulus

Fri, 08/19/2011 - 11:29 | 1577475 CosmicBuddha
CosmicBuddha's picture

"I'm sticking my neck out for the 3rd time in saying that I think we'll get a big fiscal stimulus package soon, not monetary stimulus"

 

Am I being a bit thick here, but if the US government performs a big fiscal stimulus it will have to issue even more debt to pay for this? Now if it issues more paper on top of the massive amounts that it is already issuing, and there aren't enough buyers out there, won't the prices come down and the yields start rising? Now if that happens, the already mountenous pile of debt becomes impossible to service and the US government enters a debt death spiral a la Greece. Now if that starts to happen, won't the Bernank have to crank up his printing press with QE3, then QE4, QE5, etc until the dollar is no more and the gold chart peak arrives at the surface of the Moon?

 

So in a nutshell: how can you have a fiscal stimulus in todays environment without a corresponding monetary stimulus to facilitate it?

Fri, 08/19/2011 - 21:57 | 1579886 StychoKiller
StychoKiller's picture

One word:  GRIDLOCK!  Obamatron ain't gettin' any more "stimulus" thru a Congress controlled by the Republicons.  Wail and whine Decepticrats...

Fri, 08/19/2011 - 11:44 | 1577564 PaperBugsBurn
PaperBugsBurn's picture

I agree with you on all points. When you say it was at a high costs to global economics, I see it as a threat to bankster interests worldwide (money printing=inflation over there=destabilization of the regimes in bed with the banksters). What gives me pause is all these banks teetering on the edge in europe, some of which own the fed? But why would the fed save the euro, ie the competition?

Sat, 08/20/2011 - 10:35 | 1580869 FlyPaper
FlyPaper's picture

(a) The longer they can keep the "system" upright, the more interest the banks earn.  (b) Contagion will impact over-extended broke-except-on-paper US banks.  (c)  Fed is there to prop up POTUS.

Fri, 08/19/2011 - 11:11 | 1577368 buzzsaw99
buzzsaw99's picture

The bernanke will buy all markets foreign and domestic. HE controls the vertical, HE controls the horizontal. The bernank is the wellspring of all banking profits. All glory and honor to the mighty and benficent oz, er, bernank.

Fri, 08/19/2011 - 11:14 | 1577385 SheepDog-One
SheepDog-One's picture

'All your souls are belong to us, the world central bankster cartel'.

Fri, 08/19/2011 - 11:26 | 1577455 Paper CRUSHer
Paper CRUSHer's picture

LOL.....and do not attempt to adjust your t.v. set.

Fri, 08/19/2011 - 11:18 | 1577403 CosmicBuddha
CosmicBuddha's picture

"How we are stumbling around today with the same banks that almost crashed in 2008 with even greater market shares and low-visibility accounting is beyond my understanding."

 

Same here! The only possible explanation I can come up with is global systemic fraud at astronomically high levels. We need a complete systemic crash, quickly followed by the equivalent of the Nuremburg trials for all: senior bankers, central bankers, credit rating agency staff, politicians and any one else involved with this the greatest of heists in the 4.6 billion year history of the Earth.

Fri, 08/19/2011 - 13:35 | 1578067 HellFish
HellFish's picture

Nuremburg -type trials?  The answer to my dreams.  Plenty of streetlights in NYC and DC to hang them all.

Fri, 08/19/2011 - 13:50 | 1578122 CosmicBuddha
CosmicBuddha's picture

My thoughts exactly!

Fri, 08/19/2011 - 11:18 | 1577405 slaughterer
slaughterer's picture

"If I was Germany I would simply play chicken with Ben Bernanke and wait for the Fed to eventually turn on the QE pumps to bail out the PIIGS."

I think the situation in Germany is more complicated than that, although I agree with the necessary and imminent implementation of QE3. 

Fri, 08/19/2011 - 11:23 | 1577430 SheepDog-One
SheepDog-One's picture

We've been doing QE all along since QE2 end anyway...Jackson Hole will result in 'We're keeping things the way they are for an extended period, ZIRP and swaps, thats it'.

Fri, 08/19/2011 - 11:23 | 1577407 Paper CRUSHer
Paper CRUSHer's picture

Yeah,perfectly understandable since the German Blundersbank knows all to well what a hyper episode looks like when the wheelbarrrow becomes man's best companion whereas Dr.Ben greatest fears is deflation and therefor only understands one hyper, i.e. hyperdermic needle loaded with QE.

Fri, 08/19/2011 - 11:21 | 1577420 ColoradoNugget
ColoradoNugget's picture

This just in....

*MERKEL SAYS 'WE DON'T WANT' EUROBONDS

*MERKEL SAYS EURO AREA WOULD BE WORSE OFF WITH JOINT BONDS

Down we go again.  The bounce was nice while it lasted.

Fri, 08/19/2011 - 11:24 | 1577434 Dick Darlington
Dick Darlington's picture

I guess Angie saw the latest German polls. 76% of Germans oppose eurobonds, 59% of Germans oppose all bailouts and 44% of Germans want their country out of euro.

Fri, 08/19/2011 - 11:27 | 1577462 SheepDog-One
SheepDog-One's picture

While Obama ignored 80% of americans were against raising the debt ceiling. He said americans are not politicians, therefore dont know what theyre talking about, and further said to sit down and eat your peas.

Fri, 08/19/2011 - 11:24 | 1577435 SheepDog-One
SheepDog-One's picture

LOL...but the financial media INSISTS Merkel loves their Eurobond planted rumor!

Fri, 08/19/2011 - 11:45 | 1577566 slaughterer
slaughterer's picture

C'mon Angie, Euro-bonds "will help you out." 

Fri, 08/19/2011 - 11:21 | 1577424 boiltherich
boiltherich's picture

How we are stumbling around today with the same banks that almost crashed in 2008 with even greater market shares and low-visibility accounting is beyond my understanding.

Ironic that this story is posted directly below this:

Bank of America's Dead Drop To Rick Perry: "We Will Help You Out"
Fri, 08/19/2011 - 11:26 | 1577448 SheepDog-One
SheepDog-One's picture

Well, no one is considering that BofA bagman might not have been telling Perry he will help them out with money, but with a top level hit.

Fri, 08/19/2011 - 11:49 | 1577582 slaughterer
slaughterer's picture

Exactly, the BAC Bond operative is sleezing around with some blonde vixen in Jackson Hole right now, just waiting for M(oynihan) to call him with the instructions.  It is all in Ian Fleming's unpublished manuscript:  Dr. Treason.

Fri, 08/19/2011 - 14:28 | 1578303 Flakmeister
Flakmeister's picture

You must have missed it... there was a finacial coup d'etat. Codename TARP

Fri, 08/19/2011 - 11:23 | 1577432 Young Buckethead
Young Buckethead's picture

"Besides, it has to be admitted that Europe is no longer a motivating issue for the French" - Jacques Delors.

The EU Godfather has just declared every man for himself. The EMU is over.

Fri, 08/19/2011 - 15:05 | 1578447 eureka
eureka's picture

Incorrect. The EMU CORE - i.e. French-German EUR axis - is THE essential "motivating issue for the French".

U.S. "observers"commonly fail to understand the unspoken EU hierachy:

French-German CORE leads, Mediterra follows, U.S. controlled UK obstructs.

Hence: French-German unity is unquestionable and indominable - and will prevail.

Whereas: U.S. disintegrates within next nine months.

Fri, 08/19/2011 - 11:26 | 1577450 TruthInSunshine
TruthInSunshine's picture

I'm all for a nice rumor, but they have to be at least plausible - you know, like a Keynesian, faux extraterrestrial invasion of planet earth, in order to stimulate the economy, designed by Paul Krugman.

A roughly 90% cut in German standard of living for two generations along with a doubling of taxation and quadrupling of inflation (I'm being redundant as they factor into standard of living), to bail out PIIGS+France is not going to happen.

Even Germans have limits and will physically 'voice' their displeasure with treason on the part of their 'elected' leaders.

Fri, 08/19/2011 - 11:26 | 1577452 falak pema
falak pema's picture

Merkel wants her party to get reelected...This is short term clutch play for local crowd...No big deal on the real issues...Right now, they are under the water with the meltdown..like WS...

Fri, 08/19/2011 - 11:30 | 1577481 SheepDog-One
SheepDog-One's picture

At this point, theyre all damned if they do, damned if they dont...good luck 'trading' the collapse of the world.

Im going fishing.

Fri, 08/19/2011 - 11:32 | 1577493 Spitzer
Spitzer's picture

The ECB has the Fed hostage. The ECB is not keynesian.

Fri, 08/19/2011 - 11:57 | 1577618 lolmao500
lolmao500's picture

They are all keynesians. The ECB just can't be for now because of the rules it was founded on.. once they change those rules, they'll do like Bernanke.

Fri, 08/19/2011 - 11:35 | 1577511 gwar5
gwar5's picture

The central banks have been allowed to evolve into a secret cult that represents our greatest security threat, and it is astonishing.  We all know about the Federal Reserve Act of 1913.  But no one seriously thought, except for them and their agents, that they would become the unaccountable shadow government that they are.  All those conspiratorial rumors about the central banks are true, and then some.

 

Fri, 08/19/2011 - 12:00 | 1577628 Young Buckethead
Young Buckethead's picture

Central Bank secret cult? The Third Reich was the brainchild of the Thule Society, and the Order of Teutons before that. Skull and Bones is an American offshoot of the German university chapters of the Thule Society. Forget about all the philosophic/magic crap, it's all about lineage.

It was Wall Street money that financed the Third Reich, as Germany was somewhat caught up in a certain Weimar problem, that will be soon be playing in a theatre near you.

The artist they hired to be the front man got a little out of control. Now it's a physics professor. The Fourth Reich is here, only the US is the lead.

The Germans were represented by a Warburg at the creation of our Fed. Conspiracy? You betcha.

Fri, 08/19/2011 - 15:18 | 1578487 eureka
eureka's picture

You are incorrect. The U.S. Ivy Leagues are the spawning grounds for U.S. facist corporate execs - and based on the UK nobility and gentleman club system.

The Anglos orchestrated globalism/financialization. I know, because I am one.

The world should be so lucky as to be run by German principles of productivity and fiscal restraint

Alas, we Anglos would be lucky to fail our satanic rites of leverage, gambling and enslavement of the world through fiat enforcement and military bamboozlement.

Remember that teh Bernank works for U.S. empire - and no one else.

U.S. empire disintegrates within the next nine months - with or without QE+.

Fri, 08/19/2011 - 15:21 | 1578490 eureka
eureka's picture

You are incorrect. The U.S. Ivy Leagues are the spawning grounds for U.S. fascist corporate execs - and tehy are based on the UK nobleman/lord/gentleman club system.

The Anglos orchestrated globalism/financialization. I know, because I am one.

The world should be so lucky as to be run by German principles of productivity and fiscal restraint

Alas, we Anglos would be lucky to fail our satanic rites of leverage, gambling and enslavement of the world through fiat enforcement and military bamboozlement.

Remember: The Bernank works exclusively for U.S. empire - and no one else.

U.S. empire disintegrates within the next nine months - with or without QE+.

Fri, 08/19/2011 - 22:02 | 1579904 StychoKiller
StychoKiller's picture

Inquiring minds wanna know:  Is Obamatron, Tiberius, Nero, or...?

Fri, 08/19/2011 - 11:36 | 1577517 eurusdog
eurusdog's picture

If I want to know what what CNBC will be talking about tomorrow, I just read ZH today. Amazing. Now all of a sudden the $200M lent out in FX swap to SNB is news today!

Fri, 08/19/2011 - 12:31 | 1577802 Confused
Confused's picture

They seem to be doing alot of that lately.

Fri, 08/19/2011 - 11:40 | 1577541 Oh regional Indian
Oh regional Indian's picture

My goodness, when your legal fine print is longer than your article, perhaps you should wear the Chicken Little tag also?

And the US headed for a double dip? Hmmmmm..... another writer who cannot quite call a spade a spade.

All that and the well known but hardly acknowledged fact that Germany is the Daddy and the US is it's little girl, Germany does not need to play Chicken little except for dramatic/theatric effect.

All hail the Fourth Reich, long in the works... how they agreed to have a frumpy East Berlin Stasi Queen at it's head is the surprise.

Or not perhaps.

Vivek

http://aadivaahan.wordpress.com

Fri, 08/19/2011 - 11:47 | 1577577 SheepDog-One
SheepDog-One's picture

Yep ORI, everyone forgets or simply not aware the Germany won WW2. People will surely explode in calls of 'thats insane' but Project Paperclip and other facts clearly show the real results of WW2, the Reich turned 4th and moved into the US.

Fri, 08/19/2011 - 12:15 | 1577700 Oh regional Indian
Oh regional Indian's picture

Exactly SD1, I get those looks of horror every time I say stuff like that. 

And here we are, now th ebig Q, what will be the modern day equivalent of the Reichstag Fire?

Vivek (ORI)

Fri, 08/19/2011 - 15:36 | 1578545 eureka
eureka's picture

"And here we are, now th ebig Q, what will be the modern day equivalent of the Reichstag Fire?"

I have a better idea for you: in stead of a QE Reichstag Fire - imagine a Wall Street Kristallnacht.

Imagine 1,000 top banksters assassinated in one night - followed up by an ultimatum to dismantle all big U.S. banks within 24 hours or experience second, third, fourth and so forth Crystal Nights until the entire unholy U.S. Empire is crushed and the republic can rise from its ashes.

Fri, 08/19/2011 - 22:04 | 1579908 StychoKiller
StychoKiller's picture

Bloody optimist!  How could we possibly get so lucky??

Sat, 08/20/2011 - 10:43 | 1580899 FlyPaper
FlyPaper's picture

They already have this covered.  Just watch how the "patriot act" is utilized to pulverize the rights of US citizenry.  They won't allow an uprising other than for TV and only if it supports socialist / union (light marxist) agenda.

Fri, 08/19/2011 - 12:34 | 1577828 Confused
Confused's picture

SD1. I would agree with everything you have here except using the word German. That would imply the people of Germany. And as we all know, they have never been the winners of anything, simply the pawns of higher powers (as are the American people). As someone mentioned earlier (you perhaps?) its all about lineage.

Fri, 08/19/2011 - 15:28 | 1578518 eureka
eureka's picture

Germany does not have the income gap U.S. has - i.e. The German People are in far better shape that the U.S. People. The U.S. People are the losers, because they submit to their beloved and admired celebrity oligarchs.

Do not feel sorry for Germans. Clean up your own scum infested country. Kill your oligarchs - be free & brave.

Fri, 08/19/2011 - 11:45 | 1577546 adr
adr's picture

Why is oil trading up? At least the yen is dropping a bit. The yen trade is really srewing me over becuase I work for an American division of a Japanese company and we need to buy all of our product from Japan. We lost 35% profit just in the currency conversion over four years. Below 70 yen we can't stay in business. 86 yen was hard enough.

 

well I'm turing of the TV to do some work again. I'll turn it back on in an hour or so. I expect Dow 200+ when I turn it on then to be Dow -75 the next half hour.

Too funny the CNBC market alerts can't even keep up. It just flashed major indexes back to day lows, oops Nasdaq positive again. Dow only down 25 after being down 75 in the last minute.

Fri, 08/19/2011 - 11:49 | 1577580 SheepDog-One
SheepDog-One's picture

Basket case manic depressive markets...one minute sobbing in the corner, the next minute running around the room in glee throwing confetti.

Fri, 08/19/2011 - 11:42 | 1577557 MrBoompi
MrBoompi's picture

I like to read the opinions and get another glimpse into the insight of others, but when they say "gold is over-bought" I can't help buy think they really don't know what the fuck they're talking about.

 

 

 

Fri, 08/19/2011 - 12:01 | 1577593 slewie the pi-rat
slewie the pi-rat's picture

"chicken"?

like this?

Jan and Dean - Dead Man's Curve - YouTube

pretty deadly game, but in a sense, the author is correct. 

i liked the part about the eurobondage.   Rehn: "...the European Commission may present draft legislation on euro bonds once they have completed a feasibility study on common debt sales."

they are really working "together"

but what they're up to is a "secret"

besides, who cares?  carry the absurd forward and just like real life, it won't change until you change.  we are now speaking of bankrupt nations and zombie banks (including the FED).  what tf is so hard to grasp?  the "powers" are bankrupt.  yes, that is an accounting conclusion, a "beancounter's term" but so what if it is accurate and valid?

wellllll!  if we look at it this way, we can still re-fi, doncha see?  yep. 

listen.  it doesn't matter how many computers you have or how sexy your car or hairdo is or how much that fabulous dress cost.  when you are bankrupt, you have only 2 basic choices:  1)  get some financing and buy some time and improve the situ, or   2)  liquidate.  this is what kicking the can down the road means, sports fans.  we already did 1, and we can either do it, again, or do 2. 

it didn't work last time, so now, we are gonna "study" why (or why not) it is feasible, here.  kukla, fran, and fuking ollie will know soon.   KuklaFran&Ollie posing for slewie

stay tooned, BiCheZ!

 

Fri, 08/19/2011 - 11:54 | 1577603 Mountainview
Mountainview's picture

The Greek way (with the Finns) is the good way! To every new debt paper to be sold some precis collateral should be attached ( an island, a historic site, a bus line .....). Mutual guarantees are politically unfeasible...

Fri, 08/19/2011 - 11:57 | 1577617 TK7936
TK7936's picture

Well the FED can print all it wants but what it cant do is print in other currencys than the dollar. Ultimatly this means if the dollar is further weakend there is a opoint where printing has no more effect and Weimar 2.0 becomes a reality. This can all be prevented if Ron Paul wins the election. I think he is the last chance, not just for America but for the world.

Fri, 08/19/2011 - 12:01 | 1577630 Gromit
Gromit's picture

Germany better be careful playing chicken.

I know there was a reason for the US Poodle downgrade which was carefully delivered during a "flight to quality" when US bonds could stand it.

If Germany does not cooperate thet may not be so lucky.

Fri, 08/19/2011 - 12:16 | 1577707 RiverRoad
RiverRoad's picture

After the crash of '29 banks were remade into utilities, but thanks to Sandy Weill et al. and the end of Glass-Steigal we have been doomed to repeat history.

Fri, 08/19/2011 - 12:24 | 1577749 lesterbegood
lesterbegood's picture

"Note to the future participants of Bretton Woods III – fiat currencies can only be floated with extremely tight and transparent banking laws, nothing like what we have today and this includes central banks."

Fiat Currency is fraud, plain and simple. Fiat currency = slavery. You cannot pay your debts with IOUs (fiat currency). No individual(s) lawfully have the authority to grant another group of individuals the authority to create 'money' out of thin air and determine the value of said 'money'. (ultra vires)

Highly suggest Frederic Bastiat's "The Law" as reading material.

http://gsfsystem.ch

Fri, 08/19/2011 - 12:32 | 1577815 RiverRoad
RiverRoad's picture

Right you are:  Fiat "currency" is counterfeit "money" anyway you look at it.

Fri, 08/19/2011 - 12:30 | 1577787 AlmostEven
AlmostEven's picture

Regarding gold being "overbought"... Looking at charts of various commodities shows that oil, copper and silver are up 250% or more from their 2008/09 lows. Gold is up about 100%. Seems like gold might still be "underbought".

Fri, 08/19/2011 - 12:32 | 1577812 AlmostEven
AlmostEven's picture

Correction: gold is up about 140%...but the argument still holds.

Fri, 08/19/2011 - 12:53 | 1577916 mikmid
mikmid's picture

Bernake will print, gold will go up and jobs will disapear. This will continue until a intelligent, brave person holds political power, which I do not foresee in the next 6 years. Some writers here say to move to South America or else where but for most of us that will not happen and we must build community, strenth and self reliance at home as this shit will get tough. Meet your neibors, arm yourself, store food and be prepared. It's going to be a long decade.

Fri, 08/19/2011 - 13:24 | 1578016 lesterbegood
lesterbegood's picture

I disagree with your timeline. Intelligent, brave, moral Americans have already stepped up. Meet those who love life, liberty, and the pursuit of happiness.

http://republicfortheunitedstates.org

Fri, 08/19/2011 - 15:17 | 1578480 Newsboy
Newsboy's picture

Bretton woods-3 was held this Spring. shortly after that, the host, George Soros, was out of mutual funds, and into "cash" (I doubt FRNs).

Maybe we don't get QE-3 OR not-QE-3.

Maybe we get the new-new-deal soon. What is Biden chatting about in china?

Fri, 08/19/2011 - 22:10 | 1579920 StychoKiller
StychoKiller's picture

Biden:  "Good news, homeless US Citizens!  Our Chinese brethren have agreed to provide housing for you...in China!  In exchange, all they want is..."

Fri, 08/19/2011 - 22:15 | 1579933 HomelessCEO
HomelessCEO's picture

Only the first line shows up in the new comments box in the right column. What a tease. Maybe they can bulldoze a Palestinian settlement and make us a tent city over there.

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