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Instead Of Relenting To Demands To Let ECB Print, Germany Is Preparing To Kick Countries Out Of Eurozone
It's official - Germany has become just like China (or, rather, has always been like it): the more it is pushed to do something (let ECB print), the more it will do the opposite. Half a year ago we discussed that the weakest point of the European bailout language was its reliance on Collective Action Clauses which imply that any resolution which does not have 100% backing of all bondholders would potentially push a country into default. In essence, this took control out of the hands of the Eurozone head, Germany, and put it to the bondholders. Well, according to a preliminary draft released by the Telegraph and FT, as part of the new bailout 'indenture' contained in the ESM, "under a section headed “The establishment of a procedure for an orderly default as part of the ESM”, Berlin makes clear that countries which are deemed to be insolvent – rather than just suffering a temporary loss of access to the financial markets – would be allowed, in effect, to declare bankruptcy and default on their bonds: If [a debt sustainability review] is negative, the affected member state would instead receive loans for a limited time only, during which the procedure for an orderly default would be prepared. In order to make sovereign defaults possible where they are unavoidable, the threat of instability in the financial system resulting from such a default must be able to be credibly excluded. A plan to maintain the stability of the financial system in the event of an orderly default needs to be developed in close co-operation with European banking regulators. This would determine which banks would be restructured and/or recapitalised, which will necessitate the drawing up of Europe-wide rules on bank restructuring." And as we discussed previously, the voluntary language will likely be taken out from the final draft, effectively giving Germany the unilateral ability to kick countries out. Which explains why the market is about to plunge: according to just released information from DPA, "the German Foreign Ministry on Friday confirmed that Germany was considering the possibility of more eurozone "orderly defaults" beyond that of Greece, as suggested by a paper leaked by the British press." In essence, what this means is that instead of relenting on the ECB issue, which as every investment bank has said would be the end of the world unless massive printing is permitted, Germany would rather kick countries out of the Eurozone instead of entering a hyperinflationary collapse. Perhaps it is now time for the banks to start toning down their language on the imminent destruction that would ensue if the ECB does not print, as this is apparently not happening...
Our friends and rivals over at The Daily Telegraph have gotten their hands on an interesting document from the German government detailing its proposals for EU treaty change, and have helpfully posted it online (with an English translation by the Open Europe think thank).
Although the Telegraph focuses on its implications for Britain, there is a significant amount of detail on how Berlin would like to change eurozone economic governance, including yet another stab at enshrining bondholder “haircuts” in the EU treaties.
For those who haven’t followed the debate closely, there is now a closed-door fight going on about whether Greece really will be the only country that sees its bondholders pushed into losses – as the eurozone’s leaders have repeatedly insisted in their summit conclusions – or whether the bloc’s new €500bn rescue fund, which could come into place as early as next year, should allow for organised defaults.
Why is this a market moving event?
When broader default powers were mooted for the ESM at this time last year in a much-discussed agreement between France’s Nicolas Sarkozy and Germany’s Angela Merkel in the French seaside town of Deauville, bond markets swooned, sending Ireland and then Portugal into bail-outs. Days later, during a G20 meeting in Seoul, Merkel was forced to back down. But the issue clearly hasn’t died.
In other words, while everyone believes Germany has been boxed into a corner and has no choice but to relent on global demands to let the ECB do whatever France demands, Germany was making other plans all along. Such as having the opion to kick France out of the Eurozone if and when it so chooses.
Because after all, money talks. And in Europe, only Germany has the money.
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Kick out, segregate, hide....all the same thing in this situation.
Problem doesn't go away if you stick your head in the sand. Fucking useless civil servants. At least there's a universal constant...the complete and total incompetence of the civil service.
Let us hail those too stupid to make a job, too spineless to operate on their own and to brittle to actually do work.
Unreal.
No - you are wrong Che Guevara breathe (I must say though, I always admired his courage and clarity of ideas and ideals).
It is good for the world for D-land to take this stand. The EU and eurzone started with a starry eyed dream that didn't take into account the vast cultural and economic differences among the countries. Reality ahs bitten and there has to some adjustment for the project to continue on a smaller scale.
I think one of the most inspiring speeches about the Eurozone crisis came from President Herman Von Rumpoy who delivered a fantastic rebuttal of the ignorant right-wing nationalists. Von Rumpoy points out that
"The euro zone has to move toward real economic union commensurate with monetary union"
Once again President Von Rumpoy pinpoints the solution with remarkable clarity. What Europe needs now is MORE integration and MORE centralization in the hands of experts so that the global economy can be managed by the smartest economic advisors. These are challenging economic times and the sooner we delegate power to the sharpest economic minds, the sooner we can restore prosperity and freedom to Europe and to the rest of the world.
Yes, but it has to be built with a samller group of countries that can sustain it. The other countries can be reintegrated when they are ready.
I respectfully disagree. If you've read Dr Paul Krugman's work you will know that increased welfare spending and fiscal stimulus programs boost aggregate demand and increase retail sales, which leads to service sector job growth. A larger EU is capable of funding significantly larger social programs to boost prosperity for all Europeans in just this way.
Please don't blame Paul Krugman for your own distortions and illusions.
MDB, good one today, much more inspired trolling. You've been pretty unimaginative lately.
Definately improving his game here today. Most sites really hate trolls. ZH is unique in that it is better because of them... that is, if they can rise to the occasion.
It's the fucking comedy hour here at 0H.
Imagine how fun it would be if someone pushed the US to do something... anything...
nah that's impossible... no one pushed the US... right?
but if they did, would US do the opposite....
like China and Germany....?
What I love is this magic pixie dust statement:
"In order to make sovereign defaults possible where they are unavoidable, the threat of instability in the financial system resulting from such a default must be able to be credibly excluded."
Folks, this is Geopolitics 101. Breathe out, over-reach, breathe in, see how much you really hold, then breathe out again.
EU (the entity) does not give a shit about anyone. Not about greeks, nor about Germans.
There is a plan. They are clearly sticking to it. They have one on the periphery (Greece) and one in the Heart (Italy).
Anyone notice how Spain has finally started showing up and for all the wrong reasons?
ORI
ode to my Pattern Maker
Yes, its a 'negotiation'.
oh, you can do that, well I can do this, ... hmm, so you can do that too huh? Ok, but I got you here, cop this, I'm going to take Austria and Poland, then France and Russia. Problem was, they couldn't consolidate it longer term, and nor could Japan.
So what will they try to take and hold, and consolidate, this time?
And you know who'll be doing the fighting and the dieing ... right?
Consequently, we're going to need a bigger myth, because "for king and country", or for Uncle Sam, ain't going to cut it this time.
This time they'll need to make us believe in something somewhat more credible, and it's going to take false flags to get there and a lot of marginalisation of the committed dissenter and objector ... before the 'negociations' begin in earnest.
I respectfully disagree. Everyone knows that the private sector needs to be allowed to operate without restrictions or regulations and everything will be fixed. If only Jamie Dimon and Lloyd Blankfein had more power and fewer regulatoins, everything would be fine. Alan Greenspan was right and it's the damned socialists who have screwed up his brilliant vision of concentrating more debt on the backs of the middle class, and using that debt to centralize more and more real wealth at the top, for the benefit of us all.
That's pretty funny stuff.
That is factually incorrect. Liberals have been warning for decades about the lack of welfare spending and nobody has listened. Since the introduction of the Welfare State and the great society programs, the gap between rich and poor has contracted significantly. The size of government has been shrinking for years, and liberals have been warning about this. Resources shouldn't be allocated based on supply and demand because this is a subjective means of resource allocation. The only objective means is according to the preferences of elected experts and professionals. History shows that politicians are accountable to the people and therefore we can trust them to use the power for good only. OBAMA/BERNANKE 2012!!!
Dontcha just luv this guy ^^^
MDB, no no no... you got it wrong, it should read:
"Resources shouldn't be allocated based on supply and demand because this is a subjective means of resource allocation. The only objective means is according to the magnitude of need by an individual or organization."
You're like the antithesis of Ayn mayne.
And where have you been? We've been missing your incredible socialistic spin on things.
Agreed, reading that gave me fits of giggles interrupted by dry heaves.
I am dying to see the chart to support this.....
Yep, we do love this guy. I would also like to suggest one minor revision, as follows:
"Resources shouldn't be allocated based on supply and demand because this is a subjective means of resource allocation. The only objective means is according to the preferences of appointed experts and professionals." In order to remove the uncertainty associated with any election process.
@MDB
Oh boy, whatever you smoke I want exactly the same stuff!
Must feel great to fly around in tha lala land without knowing shit.
You have amazing stamina - I want to know what meds you're taking.
I think MDB is a conservative with his tongue in his cheek creating a little humor out of misdirection...because no one could really be that stupid!
Gee, ya think?
MDB, I'm suprised you have not moved right to the ultimate solution. Stop all this work crap and just pass out money so everybody can spend. Pass out $10,000,000 Euro's to everyone on the continent and we'll have solved these economic problems once and for all. sac
Im certain MillionDollorBonus is an economics major or ex economics major
thats the only place where you get material of this quality
Rand besmircher.
AAAAAARGHHHHHHHHH!
To MDB who do you work for and when the" turning" comes which it will do, do you not worry about being tried for treason.
No worries, on "turning"'s Eve, his master will leave him tied up outside as bait
Dude, at least have the decency to pursue your reasoning untill it ends: "increased welfare spending and fiscal stimulus programs boost aggregate demand and increase retail sales".
If it's sooooo simple, why limiting the debt ceiling, and why even bother getting a balanced budget? Let's just borrow and print untill infinity and beyond (because yeah, when nobody has the money to lend, someone has to print for the borrower to borrow...): problem solved!
I tried it and it does not work dick head!
Sincerely,
Weimar, Germany
Obama will provide. Amen.
Good God man. That's completely delusional by my standards.
By the way, did you ever make that additional over and above that which was required to be paid to the federal government, your extra special on top of that necessary contribution, so that we'd really know that you're no a hypocrite?
You'd said that it was important and noble for each person to pay more in taxes, so just looking for you to lead by example.
Knuckles, I feel that I am doing my part by making the ethical and moral case for government coercion. I consider myself a rational empiricist, and by winning minds with my objective analysis, I am enabling politicians to take more of what they need in order to provide us with happiness freedom. I point out that politicians protect us from the criminal corporations who are trying to sell us expensive goods and offer us low wage jobs. My individual tax contribution pales in comparison to the effects of my objective moral analysis.
Delusional pabulum
"provide us with happiness freedom"
You silly silly devalued fiat bonus. You don't need politicians for that. Drugs are much more potent and several orders of magnitude cheaper.
Borders exist not because somebody just drew a line on the map, but because they separate nations with fundamentaly different mentalities, attitudes and world views. And more to the point, yes there are nations whose attitudes and work ethics that are better suited for a soft currency and nations whose attitudes are better suited for a hard currency. Now pretending that you can do away with these differences on a whim, because a bunch of politicos had a "vision" and other crap along these lines, is just a very dangerous experiment. No, you will not force the Greeks to work like the Germans, or the Italians to act like the Fins, and so on. The more they persist with this crap, the more the anger, and in the end it will all end in revolution. And go tell Krugman to knock off the crap. The West has been living above it means, on borrowed money for far too long. No further integration will ever change that. Take a look at the Demographics, at the social security entitlements in the US and in European countries, look at the industrial production figures and tell me that the West is living within its means. It is not. Further integration of anything is just the latest extend and pretend game. And this time it is not just about money, it is about gambling entire countries and nations in the name of fiscal experiments, put together by academics who never had a real job. And this is criminal.
Van Rumpoy is a shit stain on the underwear of humanity.
Van Rump-Boy... when God comes to give this place an anema, I know exactly where he's going to stick the hose.
MBD is the chunk.
The man is powerless over delusion, brain addled, or else a paid troll.
Either way....
Dawg, you do shit a gross injustice.
Do you really believe this shit you write?
Trollin' down a river....
Satire is the best form of criticism... At this point it is irrelevant to consider if MDB believes these ideas - they are part of the character.
The best part is when he starts a seemingly serious discussion with another troll - see above.
Red arrows are the measure of MDB's success - and I give him one nearly every time.
Let them eat rand eats it up, ha.. Cannot distinguish between criminal behaviour and capitalism.. I agree, I like this hamy wanger much better than the rest, never out of character, no hints deadpan delivery very enjoyable..
Interesting observation about my inability to distinguish criiminal behavior from capitalism. Very true.
If myself and five partners use picks and shovels to dig iron ore out of the ground build a furnace and smelt and form it into shovels to employ folks to help us we are now criminals..
You and your ilk are dangerous and you and I should probably never meet, matter/antimatter and all.. I fear your ignorant delusions and self pity may be spreading and guys like me may soon need to school children like you.
If it's satire, it misses. Like minded individuals recognize satire aimed at their opponents and seek it out. Fountains of Keynesianisms are just tedious. The same that we're confronted with everywhere else we turn.
I give him a green every time!
@MDB
So these "sharp minds" will be able to manage a future in which the southern states are steadily subsidized by northern states? Institutionalized transfer payments to keep the dead beats buying german production? Sounds like China's relationship with us...and sure to fail in the end.
I cannot believe how many idiots on ZH take MDB serious. He must be sitting at his keyboard laughing his ass off at all the morons.
Though I assume he's just doing a little "shit stirring", we could all come up with plenty of "experts" who feel that they are more competent than we are in running our lives.
I think one of the most inspiring speeches about the Galactic crisis came from Supreme Chancellor Palpatine who delivered a fantastic rebuttal of the ignorant right-wing seperatists. Palpatine points out that
"The Galactic Repulic has to move toward real economic union commensurate with monetary union"
Once again Supreme Chancellor Palpatine pinpoints the solution with remarkable clarity. What the Galactic Republic needs now is MORE integration and MORE centralization in the hands of experts so that the Galactic economy can be managed by the smartest economic advisors. These are challenging economic times and the sooner we delegate power to the sharpest economic minds, the sooner we can restore prosperity and freedom to the Republic and to the rest of the world.
According to today's Wall Street Journal, we should all be very afraid:
"[T]he ECB has assumed a new role: Europe's most potent institution."
"So far, the [ECB] has resisted [printing], arguing this wouldn't be legal under European law. Yet few believe the ECB would let the common currency collapse to defend that principle."
So if I'm reading this correctly we've got (i) an unelected group usurping democratically elected governments to become the most powerful body in the EU, and (ii) a group that is not expected to follow laws or let legalities stand in the way of its actions.
Amazing that the WSJ is now printing it for everyone to read. So like much of the recent past, when the obvious is shoved in our faces we'll hear cries that "we never saw it coming."
Source: Wall Street Journal
> Amazing that the WSJ is now printing it for everyone to read
No it isn't. They print it because it's Europe's scam. They don't talk about American scams.
The ECB and other central banks do not 'print', the concept is incorrect. Central banks expand their balance sheets, creating assets and taking liabilities in the form of national or sovereign bonds.
The problem with the ECB is that there is no agency to create the liability the bank would take onto its balance sheet. It cannot fix the liability onto the country needing the asset because their bonds aren't worth anything. ECB rules (reasonably) prevent the bank from accepting liability other than from solvent entities. This means the only debt acceptable is German debt: this liability the Germans refuse to accept. They do so because they believe that euro defaults won't touch them if they refuse euro debt liabilities from non-Germans, preferring deposits from the same euro entities instead (?)
What the ECB must do is recycle the funds it takes on as deposits from other banks. The Bundesbank needs to do the same thing: the capital flight into these two banks is a large component to the panic/liquidity squeeze.
There you go with that "law" stuff. Even the Magna Carta is dead. Get with it.
Anyone worth their salt will not allow themselves to be pillaged. You can't centrally plan other people's production.
"Once again President Von Rumpoy pinpoints the solution with remarkable clarity. What Europe needs now is MORE integration and MORE centralization in the hands of experts so that the global economy can be managed by the smartest economic advisors. These are challenging economic times and the sooner we delegate power to the sharpest economic minds, the sooner we can restore prosperity and freedom to Europe and to the rest of the world."
LOL. I think a lot of folks on the thread missed the humor.
I agree with Von Rumpoy, Germany and the rest have no choice there is no practical ALTERNATIVE to the euro ... only parallel currencies and monetary sovereignty with the euro as a reserve currency.
The entire Germany current account is denominated in euros (its F/X reserves include other currencies). What has been taking place -- behind the scrim of asset dumps, bank recapitalization and euro redemptions -- is flight out of euros in to CHF, bucks ... gold ... anything else.
A euro repudiation lets the air out of Germany's so-called 'wealth'. This makes Greece too big to fail! Why do ya think the Eurocrats are so desperate to keep the EU and the euro together? Shits and giggles?
If the euro dies, so does Germany, France, all the rest. Too much has been invested in the euro.
What Germany needs to do is put some bankers in jail rather than bail them out: to restore some confidence in the system.
A bridge too far, apparently. They want confidence, they just don't want it that much. Market confidence is a fake, so they continue to fake us out via other means, than putting fine upstanding bankers in prison.
We need bankers where they are, for they are masters of the universe, and the sun would refuse to shine, or the crops grow, without them holding the reins of our future stranglement.
I assue this is sarcasm .....
I LOOOVE this guy
He really gives out the chuckles
So, where does it end, MDB?
Should the US join the eurozone? if fiscal consolidatin is good, then global consolidation should be great...
Is Herman Von Rumpoy ready to lead North AmericEurope? You must see where I'm going with this...
And when the super cool "euro-world" comes together, should it be Democratic, or Dictatorship? Should people be allowed to elect their world leaders?
And if so, then please tell me WHY pray tell, is Democracy no longer any good for Greece or Italy, where NONE of the incoming governments are comprised of elected people...?
Come on Million Dollar, that's a put on, right?
Deadpan. Or brain dead.
And how is that going to go for D-land when all their customers are fucking broke. The infinite growth model with everyone being a "producer" is hardly sustainable on a planet with finite resources. The entire system needs an overall so that compensation can find its way back to people and labor that are actually worth a shit or in economic terms, of real value.
About as well as it will if we see unlimited printing. Only difference will be the timing.
It's che picking his nose.
To be honest his life was fairly disgusting, from his ability to rape and murder to his politics being slightly short of batshit crazy. However it was the cold war, everyone was crazy.
I photoshoped this because I walked through a mall and counted probably five suburban kids sporting his visage on their shirts and could only question why other than good marketing that side stepped his sociopath lifestyle of rape and murder.
And by Eurozone do you mean Europe. Because the term Eurozone is meaningless. It's an empty moniker with the same symbolism as a can of coke. Since it was called Europe before hand, the term Eurozone goes over as well as that other rebranded failure 'New coke'.
Words have power.
Europe is ancient, known, historical in terms of countries, culture and language that is fascinating and offers stories and useful parables to draw from. Both successes and failures.
The term "eurozone", claims someone owns it and there is no past and bars reality from entering the conversation.
Well we now know that you have an affinity for nose picking and not much more.
Digging for gold is still better than a thumb in the ass.
Thank you, he was a murdering bastard..
Here is a very credible account of the side of Che that few in the world have ever heard:
http://townhall.com/columnists/humbertofontova/2010/10/09/che_guevara;_g...
Hgh Jordan,
Yeah, and here's the other.
http://www.freerepublic.com/focus/f-news/1849658/posts
at ratso and his readers: imagine Jon Voight stomping NYC - on a grey day, with his new best buddy:
"Yeah ratso - i know what you're saying... about Europe - it's a starry eyed dream, all right - it didn't take into account the vast cultural and economic differences among the countries... - you're smart ratso, you know that? and I'm gonna take care of you... because where I come from, we're all cowboys, everyone's the same... and we stick together, you know what I mean? We have a common cause - we have a dream - and it's not like it seems... it's not like here, in New York City, with all the fancy lights and things... all the tall buildings... it's like they're going to eat you... alive... like they're gonna consume the whole world, as fast as possible... but Europe is different... maybe we'll go there one day and see what it's really like... I hear it's very different - in some ways even better than Florida - would you like that?"
And then... Jon blows him..
Spot on, spot on. Germany is being very smart and clever, if this thing is about to implode cut the culprits out of the club and backstop your own banks. It's much cheaper and less of a burden to the country as a whole.
Jim Willie has been claiming for years that the current euro will be replaced by a "nordic" euro. Fucking guy's gonna be right.
I'm still trying to figure out what the Deutsche Mark to Dollar exchange rate's gonna be. Here's hoping I can get my order in early for the lowest serial numbers while the little sucker's are still hot off the Merkel printing press. I also wonder whose face they're gonna put on the bills.
What a collectible those are gonna be.
You are getting excited about getting new FIAT debt , some people will never get it
Hell yeah I get it.
Fiat sucks, Chevy rules!
TF, Jim Willie is going to be proven right but but you have been right for years as well!! Keep up the good work my man!!
Jim Willie Rocks.....
Like a breath of fresh air ,reading his work.
And YES,he will be right.
Here, here. It is all about the value of one's labor. Far too much compensation has been going to paper-pushing fucknuts in BOTH the private (wall street in particular) and public sector. This simply is another form of capital mis-allocation.
Crash the fucking system already and let's find out precisely what the value of everyone's labor really is. Fucking bring it.
Well said.
amen
somebody needs to start swinging a big hammer and clean up this mess, bring an 8lb sledge to the next meeting
Jawohl, Hauptmann !
Well said lawsofphysics.
We've truly forgotten value at the alter of price.
That too in current-sea.
Value Vs. Price
ORI
....and exactly HOW are 'zee Germans' going to "kick countries out of the Eurozone" might I ask...?
By refusing to pick up their bar tabs. The rest is up to gravity and other natural forces.
Plus it's not that easy. Germany blows up its national bank potentially. We now know about Proton. Unicredit is 1000 times "the same thing." you do the math.
Greece isn't leaving or being dropped. If that happens France takes a hit. That ain't gonna happen. The US taxpayer is giving money to the IMF which in turn is giving money to the ECB.
France is the big story. Not Greece. Not Italy. Not Spain.
"The US taxpayer is giving money to the IMF which in turn is giving money to the ECB."
This is the bottom line. The euro isn't going under. The US will fund it all. Germany's gold in NYC?
Vielen Dank, Meine Herren!!!!
Gott in Himmel !
Gotta admire their tenacity and perseverance. Theyve been going for hegemony in europe since 1871, and despite some minor setbacks, have seemingly come up with a foolproof plan that wont result in millions of soviets pouring over their border. "National" european language and tax of the untermenschen anyone?
http://www.youtube.com/watch?v=ww7WlSPi9gc !
Something something uber alles?
Nehmen Sie mein American Express kardieren?
if you have any credit left I'lll take it!
gettin' there... pain in spain, something rain I dunno. Too many fronts once again.
Humm along with me. ready?
"Deutschland, Deutshcland ueber alles, ....ueber alles in der welt....."
You can slice off some warts like Greece, but do they have the pelotas to cut off the boot?
Not until they get the gold. Hence WWIII.
The force is strong with Merkel
nope.jpg
Just another empty civil servant suit counting the days until retirement. Want to know the most popular screen saver across all government sectors across the western world. It's the retirement countdown.
http://www.ultimatesavers.com/index.asp?ID=520
Don't bother installing it though, it usually comes with a secondary payload.
Oh my, I hope the nonmarket continues to ignore this headline for a couple more hours.
You don't buy me out, I buy you out. [/Moe Green]
make him an offer he can't refuse...
...the orderly default plan, BiCheZ!
They are not going to print, except for the printing they do everyday. That's a good one.
Merkel will sell out.
libertarian86.blogspot.com
Of course she will.
She'll swallow whatever cock is shoved in her face via the central banks (EFSF, IMF, whatever is acting in that role now...it sure isn't the ECB). After gladdly choking back that cock, she'll take the money from the night stand and call it a day.
German women give lousy blowjobs.
You're claiming to be better at it?
So - Germany kicks out France, Italy, Greece, Spain, Ireland and Portugal. Can we just call this the end of the Euro state and be done with it?
After it's all said and done Germany will be the only EU member.
Lol!
They should keep Belgium. Good to have more beer variety and then there's always chocolate too.
Yes, all praise the home of Freedom Fries and Ketchup.
Didn't Lehman effectively get 'kicked out' of the banking industry?
And we know how well that planned 'kick out' went.
Again, the use of words such as "well" in situations such as the Lehman Brothers collapse need a little bit of clarity shone upon them.
If by "well" you mean the financial industry received TARP, endless government bailouts, QE after QE by various central banks, TALF and all of the other alphabet soups as reward for its utter destruction of the global economy, I'd say the Lehman event went quite "well", wouldn't you?
Perspective.
Regarding the Lehman Bros. collapse, hypothetically speaking: The PRC discovers that the TBTF banks, et.al., have been photocopying mortgage contracts x 10-20, bundling them in $30 million tranches and selling them to Europe and Asia (MBS). PRC, et.al. refuses to purchase any more MBS. Futhermore, they refused to accept USD created after 2008. Liquidity dries up, TBTF panics, need liquidity ASAP. Lehman Bros, sacrificed to provide liquidity quickly. Hypothetically speaking, of course.
Let's hope that they don't corner Germany hard enough. Because we are way too close from the spawning of another charismatic "leader".
Who ever gets kicked out needs to back their old currency with PM's and really undercut/payback the EuroZombies
My money's on the Germans - why waste money propping up Club Med when you just know they'll be back at the trough in no time? Use the same funds to create a "soft landing" as you kick their arses out the door. Germany's banks seems to have the least exsposure to the PIGGS debt - hence Sarkorzy better get on his knees hard and fast.
Desert Irish .
My money's on the Germans
Mine too.(Merkel has no choice, her head would be on a picket had she allowed the EU to do what's been done to us.)
They would have done this anyway, but they already SAW the MOVIE, and know the plot.(and the Plight), OURS.
Greek market making new crisis lows on the news.
There is no such thing as an orderly default.
We all know that in 12 months time there will either be an 8 country eurozone or there will be no eurozone because Germany leaves.
My feeling is that Germany leaves "temporarily" within the next 3-6 months.
A "strong Deutschmark" has benefits (cheaper energy/raw materials imports) as well as disadvantages. And German exports do not compete exclusively on price anyway.
Then they re-enter the Eurozone after the Euro has been de-valued to practically zero.
Here's the money quote-save the banks (the people don't matter):
"In order to make sovereign defaults possible where they are unavoidable, the threat of instability in the financial system resulting from such a default must be able to be credibly excluded."
Also, who came up with the laughable notion of an "orderly" sovereign default for EU countires?
Either Germany leaves or they kick the deadbeats out. Germany did fine by itself.
So Germany has spoken..maybe...now we wait for an emergency meeting?...the IMF to speak...the ESFS to speak....what...I am nervous.....this is so exciting....where is Mr P now...can´t he be a sideline commentator now...maybe a TV show with the Bunga Bunga man....Kind of like the "Man Show"..girls on trampolines and all...
They have to kick Greece out, that much is clear. Greece should never have been allowed to join in the first place. I find it hard to justify any nation beyond that. Portugal behaved itself reasonably well, just got unlucky. Ireland is not beyond repair. Now that Italy is in the hands of the eurocrats, it will fall in line. Just leaves Spain but with 10 yr yields pushing the magic 7% threshold, anticipate a political overthrow in 10, 9, 8....
What Germany really needs to do is shut the fuck up. German corporations benefited handsomely from the eurofringe being able to borrow cheaply to buy German goods and services. German banks are whining now because the money they lent to PIIGS went to German automakers (etc) and now they can't get it back. Boo, hoo, the money is still in Germany isn't it? It just shifted hands via some PIIGS. Are we supposed to feel sorry for German banks? Nobody forced banks to lend at stupidly low rates to PIIGS. They decided all on their own to ignore history and treat all european citizens as identical economic entities when, clearly, cultural differences ensure this is not the case. They fucked up and screwed themselves while German manufacturers made out like kings.
When (not if) Europe eases, the fringe will not experience rampant internal inflation as so many fear due to the counterbalancing effect of servicing enormous debts and a continued push towards greater fiscal discipline. Inflation will instead be felt in Germany, but Germans being Germans, as I know them, that inflation will dampen as it overflows into foreign investment (Germans love their holiday homes in Spain). In other words, the ECB printing gives Germany an excuse to buy up everything that isn't nailed down in PIIGS territory. A land grab.
All the German resistance is just for show. It's bullshit. Once the penny drops they'll be all for it. Ironically, it's the PIIGS that should be resisting ECB easing if they have any desire to remain sovereign.
word!
Crash and print baby,it's all theatre to bring on devaluing like there was no choice
I don't believe any of this shit because the agenda all along to form the NWO is to first have a United States of Europe, whether by referendum (unpermissable under fascism) or by financial takeover and debt enslavement. The PIIGS will wind up as wholly owned subsidiaries of some financial entity (think BIS).
4th Reich by financial blitzkrieg? Let's send Chamberlain to discuss...
All I've got to say is- 'WHAT A SHOW!!'
Soon enough we will be part of the show.. It will not look so good on the wrong side of the cage.
I am confused, didn't everyone cheer when the old Soviet Union broke up? Gorbachev brought Glasnost!
van Rompuy seems to want none of that and I guess he looks at Gorbachev as an utter failure for not ruling with an iron fist.
All this BS just to protect over leveraged banks. Must be nice to be able to fuck up with impunity..
Really liking my 3.0 on 1.358 right now. LOL
21 months too late
That doesn't mean much. She's only saying that in order to keep her government running. German people don't want to pay for Greece, and they certainly don't want to pay for the Italian as they consider them lazy (always has been, always will be).
But Merkel is not a doer, she's a blender. She never wants to take a stance and/or formulate a precise position. Never has, never will. It's not her style, she prefers politics with "a calm hand".
Don't be happy yet, German industry wants EU in order to keep exporting. There's massive lobbying going on in Frankfurt today to start printing money for real. After all, companies don't care about debt, they care about profits.
Profits rely on other EU countries for export, EU countries rely on ECB for money, ECB relies on Germany funding, funding comes from taxing future generations (i.e. debt)
easy game, no game over for EU, never. not as long as merkel is in charge.
The currency adjustments that would occur if German economic power were reflected accurately would be jarring to their industry initially. But I would bet that they could still produce and compete and be profitable globally with a true value on their currency. Perhaps not as ridiculously profitable, but profitable still.
Smaller Eurozone not necessarily better for finances. Under the radar for now are serious problems, yes, even with Germany.
"Perhaps it is now time for the banks to start toning down their language on the imminent destruction that would ensue if the ECB does not print, as this is apparently not happening..."
aaaahahahaahhahahaha
Meanwhile, the HFTs are lining up their FX and ETF squeeze play for the afternoon. Two words: bear trap.
Since we already have the likely scenarios sussed out on one side of the equation it would be nice to see someone take a stab at quantifying the disruptions and expenses involved if Germany exits the Euro.
Well, let's see export figures from 2010 (from destatis.de)
Portugal: €7.8 bln (0.8% of total exports)
Ireland: €4.2 bln (0.4%)
Italy: €58.6 bln (6.2%)
Greece: €5.8 bln (0.6%)
Spain: €34.2 bln (3.6%)
Total PIIGS: €110.6 bln (11.6%)
and then comes France: €89.6 bln (9.4%)
Now just imagine 11.6% of your exports suddenly turning nearly worthless due to a strong new D-Mark. Or even 21.0% (when France bites the dust)
German companies do not like D-Mark.
German will eventually agree to print.
If 11.6% or 21% of your customers can no longer obtain credit to purchase your goods, you're already fucked.
Where else are they going to buy from? It's not like the drachma is going to be worth a lot of yuan or yen or dollars either. Neither do they have the capability to manufacture cars, etc themselves. Volume will go down but not to zero.
You don't think Merkel's going to make ALL these guys pay for
saying she eats too much cheese and is an unf***able lard ass?
You don't know Germans:-) She is NEVER going to print:-)
Bravo Germany. Apparently they realize that wiping out the middle class, the inevitable result of money printing on a large scale, would be the end for Europe.