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September: Crunchtime For Europe And Germany

Tyler Durden's picture





 

"September will undoubtedly be the crunch time," one senior euro zone policymaker said. "In nearly 20 years of dealing with EU issues, I've never known a state of affairs like we are in now," one euro zone diplomat said this week. "It really is a very, very difficult fix and it's far from certain that we'll be able to find the right way out of it."

As Europe's fight with the twin demons of logic and math continues, time is running out. And as eurocrats take their mandatory vacations for a job well done and spend the next two weeks lounging on some Mediterranean island or listening to opera, Europe will enter hibernation mode, courtesy of a slow down in sovereign bond issuance, all of which however will change very quickly once September rolls in which as Reuters describes, "is shaping up as a "make-or-break" month as policymakers run desperately short of options to save the common currency." It is then that we will find if all that money spent on newsletter promoting active prayer to push the hands of central planners in that direction or the other, was well spent, or just thrown in the same cash black hole which is the final restring place for hundreds of billions in "bailout money" which has achieved nothing but perpetuating the same destructive behavior that it was meant to change.

Reuters explains why September will also be known as the popcorn month:

In that month a German court makes a ruling that could neuter the new euro zone rescue fund, the anti-bailout Dutch vote in elections just as Greece tries to renegotiate its financial lifeline, and decisions need to be made on whether taxpayers suffer huge losses on state loans to Athens.

 

On top of that, the euro zone has to figure out how to help its next wobbling dominoes, Spain and Italy - or what do if one or both were to topple.

 

Since the crisis erupted in January 2010, the euro zone has had to rescue relative minnows in Greece, Ireland and Portugal as they lost the ability to fund their budget deficits and debt obligations by borrowing commercially at affordable rates.

 

Now two much larger economies are in the firing line and policymakers must consider ever more radical solutions.

Following a year of real-time failed rumor, innuendo, speculation, prepackaged 'bankruptcy that is not a bankruptcy' negotiations, and much more, Europe has figured out what was patently obvious to everyone. This:

In Reuters' own words, the life raft is about to go pop:

The euro zone does not seem to have enough cash in the current setup to deal with a scenario of Spain and Italy needing a rescue, and a sense of doom is growing among some policymakers. Fighting the crisis, said the euro zone diplomat, is like trying to keep a life raft above water.

 

"For two years we've been pumping up the life raft, taking decisions that fill it with just enough air to keep it afloat even though it has a leak," the diplomat said. "But now the leak has got so big that we can't pump air into the raft quickly enough to keep it afloat."

Two bailouts in, and one bankruptcy, and Greece is fixed. Not

Compounding the problems, Greece is far behind with reforms to improve its finances and economy so it may need more time, more money and a debt reduction from euro zone governments.

 

If Greek debt cannot be made sustainable, the country may have to leave the euro zone, sending a shockwave across financial markets and the European economy.

 

Athens wants two more years than originally planned to cut its budget deficit to below 3 percent of GDP, so as not to impose yet more spending cuts on a country which is already in a depression.

 

This would mean Greece's 130 billion euro second bailout package may need to be increased by 20-50 billion euros, according to estimates by some euro zone officials and economists, and there is no appetite in the euro zone to give Greece yet more extra money.

 

More importantly Greece needs to bring its debt, which is equal to 160 percent of its annual economic output, under control. This means euro zone governments, which own roughly two thirds of it, may need to write part of it off.

 

Private creditors have already suffered a huge writedown in the value of their Greek debt holdings but so far euro zone taxpayers have not lost a cent on any of the bailouts.

So if Greece "agrees" to more austerity, how long until the rioting paralyzes the economy again, and a new government is elected, one in which Syriza has absolute majority, and the entire June fiasco with Greece potentially leaving the Eurozone out of its own volition is replayed? Not too long it seems. Especially since Schauble, who this weekend has perfected the art of throwing water in people's faces, just said there will be no more concessions.

But Greece is, once again, just the beginning.

Sept. 12 is a crucial date in the European diary. On that day the German Constitutional Court is scheduled to rule on whether a treaty establishing the euro zone's permanent bailout fund, the 500 billion euro European Stability Mechanism (ESM), is compatible with the German constitution.

 

A positive ruling is vital, because Germany is the biggest funder of the ESM, and the euro zone would be powerless to protect Spain or Italy without the ESM.

 

On the same day, parliamentary elections are held in the Netherlands where popular opposition to spending any more money on bailing out spendthrift euro zone governments is strong. The Dutch vote may complicate talks on a revised second bailout for Greece, which also has to be agreed in September.

Is a ECB impairment next in the cards? And if indeed Draghi takes a haircut on his Greek holdings, how long until he has to do the same with Portugal, Ireland, Spain and Italy? And how long until the EUR is currency only by decree, when even the blindest of the blind realize that the ECB's balance sheet has a massive capital shortfall, that can only be held together by more printing, something which Germany will hardly be delighted by:

Policymakers are working on "last chance" options to bring Greece's debts down and keep it in the euro zone, with the ECB and national central banks looking at also taking significant losses on the value of their bond holdings, officials said.

 

If governments swallowed the bitter pill by also accepting a cut in the value of their contributions to loans already made to Greece, this would break a taboo and could provoke demands for similar treatment from Ireland or Portugal.

 

Peter Vanden Houte, chief economist at ING bank, said euro governments might be forced to accept a halving of the value of their Greek debt - known in the business as haircut.

 

"If Greece is to be saved, we must see some debt forgiveness from euro zone governments in the coming years because otherwise Greece is never going to come out of the situation it is in now," he said. "We are talking about potentially a 50 percent haircut, which would still mean the Greek debt would be (proportionately) around the euro zone average."

 

The euro zone would want concessions from Athens. "Most probably in exchange, euro zone partners will be more strict on Greek compliance with structural reforms and may ask Greece to give up some sovereignty," said Vanden Houte.

In the grand scheme of things, we wonder what is more realistic: Greece handing over the keys to the kingdom to a Belgian, or the ECB getting senior bondholder concessions out of insolvent banks. Frankly, neither. At least not until iTraxx Crossover is over 1000 bps: aka - peak despair.

And then there is Spain and Italy, and the fact that the ESM is insufficient (not to mention still inactive), and the ECB will need to step in. Hope that it would do so, is what sent the market soaring last week. Yesterday, however, Germany made it all too clear that Draghi had made a deal without the devil, and that attempts to bluff Germany into a "certain" outcome just won't fly.

ECB President Mario Draghi signalled last Thursday the bank was ready to act, indicating it may revive its programme of buying bonds of troubled governments on the secondary market.

 

"Within our mandate, the ECB is ready to do whatever it takes to preserve the euro. And believe me, it will be enough," Draghi said. "To the extent that the size of the sovereign premia (borrowing costs) hamper the functioning of the monetary policy transmission channels, they come within our mandate."

 

However, Germany has always been hostile to the idea and the Bundesbank said on Friday that it continued to view it "in a critical fashion".

 

German Finance Minister Wolfgang Schaeuble dismissed suggestions Spain will ask the bailout fund to try to lower its borrowing costs by purchasing its bonds.

 

Spain faces high borrowing costs because investors fear they will not get their money back. The Spanish economy is shrinking, many of its autonomous regions need bailouts from Madrid and banks need the recapitalisation of up to 100 billion euros.

Which, in turn, leaves out those who just bought Spanish bonds, because hope and prayer are a strategy (and remember: Lehman will never fail), out in the cold:

Madrid still has to raise about 50 billion euros on the market by the end of the year. This may be impossible if its funding costs stay well above 7 percent for 10-year bonds.

 

Draghi's remarks knocked yields down by more than 40 basis points to below 7 percent on Thursday, but they could quickly climb back if the market does not see firm ECB buying soon.

All this, and much more, is finally coming to a head, as the time for can kicking with hollow promises and words without action is coming to an end: just more than one month from now is when Europe will have to put up or shut up. And we will truly find out how much of a misnomer the "European Union" truly is.

Finally, for those who enjoy a granular walk through for what is in store for Europe, here it is courtesy of Deutsche Bank.

July

  • 30 July: Italy auction. Bonds.

August:

  • 1 August: Monti meets Finnish PM. Italian PM Monti is due to meet his Finnish counterpart in Helsinki.
  • 2 August: Spain auction. Bonds
  • 2 August: ECB Governing Council meeting. Our expectation is that 2 August is likely to be an occasion for non-standard (“quantity”) monetary policies. Standard (“price”) monetary policy, or the level of policy rates, we suspect will take a backseat this month. A monetary policy “price” response would in any case be more effective after a “quantity” response given the current impairments of the monetary transmission mechanism. We expect a further 25bp refi rate cut at the September meeting. We suspect the deposit rate will remain at zero for now. See “Eurostress” in this issue of Focus Europe.
  • 7 August: Italian Q2 GDP flash estimate. A weak figure would reignite the ‘austerity versus growth’ debate (DB forecast –1.0% qoq).
  • 13 August: Italy auction. Bills
  • 14 August: Italy auction. Bonds
  • 14 August: Euro area Q2 GDP flash estimate, from Eurostat.
  • Mid-August: French Constitutional Court/Fiscal Compact. In Mid-August the French Constitutional Court is due to rule whether  the Fiscal Compact, which euro area countries are due to endorse by the start of 2013, needs to be ratified into the French Constitution. If so, a joint vote by the French Assembly would be required. Signals are that this would happen in September if required. See accompanying article on France in this issue of Focus Europe.
  • 16 August: Spain auction. Bonds
  • 20 August: Greek bond redemption. Greece is due to repay EUR3.1bn of GGBs. Following the PSI, these would be GGBs owned  by the ECB and EIB. While agreement on how to reconfigure the second loan programme is unlikely before September, it is unlikely the EU will hold-out from paying funds to Greece to repay the ECB/EIB. In a consolidated sense, the official sector’s exposure to Greece remains the same, but the creditor changes (to the EFSF). Alternatively, Greece could issue T-bills and the  Greek banks could absorb them with the assistance of ELA from the Greek central bank.
  • 21 August: Spain auction. Bills
  • 28 August: Spain auction. Bills
  • 28 August: Italy auction. Bonds
  • 29 August: Italy auction. Bills
  • 30 August: Italy auction. Bonds
  • End-August: DBRS rating on Spain/Ireland. By the end of August, the DBRS ratings agency is due to have concluded its review  of Spanish and Irish sovereign ratings.

September:

  • September: Moody’s due to conclude review of Spanish sovereign rating. Logically Moody's should wait until there is clarity on  direct recap before making a decision on Spain’s rating. Since governments have not made progress fleshing out a direct recapitalisation facility — indeed, have created some ambiguity as to whether it will be non-recourse — there is a distinct risk that Moody's, in another move to be “ahead of the curve”, decides to downgrade Spain within the next 3 months. Moody’s currently rates Spain Baa3, the lowest investment grade rating.
  • September: Detailed bottom-up Spanish bank stress tests due for publication.
  • 6 September: Spain auction. Bonds
  • 6 September: ECB Governing Council meeting. If we are right about the outcome of the 2 August ECB meeting (dominated by “quantity” measures), we suspect that revisions to staff forecasts for growth and inflation are likely to be a basis for a 25bp rate  cut.
  • 11 September: Greece auction. Bills
  • 12 September: German Constitutional Court ESM ruling. The German Constitutional Court is to rule on the complaints lodged  against the ESM and fiscal compact. The chances of the ESM being vetoed are low. However, the Court might again strengthen the German Parliament’s prerogatives as regards future European integration (see Focus Germany, 20 July). Germany is the last approval needed for the ESM to come into effect. Then the first instalment of the capital has to be paid by the ESM members  within 15 days of the ESM treaty entering into force. There are three other countries where Constitutional Court queries are outstanding — France, Austria and Ireland. France’s Constitutional Court will be deciding by mid-August. Neither Austria (which  may take another 3-6 months) nor Ireland are large enough to hold back the ESM — the ESM will come into force when countries representing 90% of the subscribed capital have approved it. Both Germany and France have an effective veto power in that case.
  • 12 September: Dutch Election. In April, the VVD/CDA minority government failed when Geert Wilders' PVV party withdrew its  support amid negotiations for the 2013 austerity budget. A crisis was averted when three smaller parties came forward to give support to a budget, but an early election was unavoidable. Domestic austerity and European crisis issues will likely play  important roles in the election. Compared to the configuration of parliament at the October 2010 election, the latest opinion polls (Maurice de Hond) show PM Rutte's VVD liberal party vying with the Socialist Party for the dominant party position. Both would  gain 31 seats in the 150 seat parliament on the latest polls. This is an unchanged position for VVD, but a doubling of SP seats. SP are gaining at the expense of all other parties except VVD and neo-liberal D66. This may reflect a backlash against the  austerity for 2013 which has broad party political support. SP have also taken a stance against euro rescue initiatives, voting against the ESM alongside the PVV and extracting a pledge from Dutch FinMin De Jager that parliament will vote on any future  direct bank recapitalisation disbursements. Given the typical distribution of the vote among several parties, the questions are  what coalition emerges from this election, how long it takes to form a government and what policies will it support? Markets in particular will be watching the ramifications for domestic fiscal policy (the 2013 Budget is a week after the election) and euro  rescue initiatives.
  • 12 September: Italy auction. Bills
  • 13-14 September: G20 Finance Ministers and Central Bankers meeting. In Mexico.
  • 13 September: Italy auction. Bonds
  • 14 September: ECOFIN meeting. This is very likely the finance ministers meeting when adjustments to Greece's second loan programme will be considered. The remaining EUR23bn recapitalisation of the Greek banks is due to complete by the end of September, assuming a positive review of the loan programme. This is also when finance ministers should have their first discussion on the proposals for a common bank supervisory regime under the ECB. Any delays, with knock-on delays for a direct bank recapitalisation mechanism, will disappoint the market. Options for a reconsideration of Ireland’s legacy bank bailout policies may also be discussed (decision not due until October ECOFIN meeting).
  • 15 September: Eurogroup meeting. Coinciding
  • 18 September: Greece auction. Bills
  • 18 September: Spain auction. Bills
  • 20 September: Spain auction. Bonds
  • 25 September: Spain auction. Bills
  • 25 September: Italy auction. Bonds
  • 26 September: Italy auction. Bills
  • 27 September: Italy auction. Bonds
 


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Sun, 07/29/2012 - 10:52 | Link to Comment williambanzai7
williambanzai7's picture

CLOUD NEIN!

Sun, 07/29/2012 - 11:07 | Link to Comment engineertheeconomy
engineertheeconomy's picture

Give in to your inner temptation to steal from others and live decadently

no, scratch that...

Give in to your temptation to shoot the cocksuckers that are stealing from others and living decadently!

Sun, 07/29/2012 - 12:20 | Link to Comment Manthong
Manthong's picture

When you can create money from nothing and impose taxes to your hearts content, every season is springtime.

Sun, 07/29/2012 - 13:57 | Link to Comment GeezerGeek
GeezerGeek's picture

Refresh my memory, please. Are we talking about Europe or Washington, DC?

Sun, 07/29/2012 - 14:04 | Link to Comment Manthong
Manthong's picture

“it's far from certain that we'll be able to find the right way out of it.”

..which means close to certain that they will find the wrong way out of it.

Sun, 07/29/2012 - 15:00 | Link to Comment Ancona
Ancona's picture

......99 macht luft balloon

Sun, 07/29/2012 - 17:11 | Link to Comment MillionDollarBoner_
MillionDollarBoner_'s picture

Anyone got a picture of that German chick - Nena, wasn't it? She wuz Hot!

Sun, 07/29/2012 - 21:02 | Link to Comment caconhma
caconhma's picture

Regardless of what ZH or anybody else said, the EU future is very simple: the entire EU as well as the Euro-zone will be ruined together with Germany. Presently the German political leadership is totally controlled by the World Zionist Banking Mafia (WZBM) who does not give a shit about Germany or its people. The same is true also for the old USA.

Just remember that the German Supreme Court is not any different from its American counterpart. The political expediency presently rules the Western World.

Today, the only somewhat independent from WZBM country is China but they have too many internal problems: the present Chinese political & economic structure needs an urgent transformation to move forward. The present one comes from the post-Mao times. It is still a communist model with its enormous corruption, fraud, and inflexibility.  The Chinese international economic model just cannot continue in its present form since the West cannot and does not want to pay for Chinese good & services at all. Plus, from now on going forward, Chinese will have to defend their national interests using its military might and friendly allies. The post-WW2 “peaceful” world is over.

 

Sun, 07/29/2012 - 22:02 | Link to Comment Lord Blankcheck
Lord Blankcheck's picture

Peacefull world?

Mon, 07/30/2012 - 05:27 | Link to Comment Dugald
Dugald's picture

A few weeks back it was August to be the make or break month.....did you thimk we would not notice a year was not given.

Mon, 07/30/2012 - 06:54 | Link to Comment Bogdog
Bogdog's picture

"Presently the German political leadership is totally controlled by the World Zionist Banking Mafia (WZBM)"

 

oh boo hoo, payback is a motherfucker.

Mon, 07/30/2012 - 04:39 | Link to Comment Rogue Trooper
Rogue Trooper's picture

Here you are MDB the whole vid........ she was hot in an 80's kinda way ;)

http://www.youtube.com/watch?v=Lur-SGl3uw8

Sun, 07/29/2012 - 20:41 | Link to Comment FreedomGuy
FreedomGuy's picture

Well said, lol! Actually, they all know the "right way". It is to properly let countries default, settle accounts and suffer the consequences of their actions. However, that is the responsible, adult, non-collectivist way out. So they will not do it.

The entire premise of statism-collectivism is that the state with its central planning geniuses can remove all evil and negative consequences from life, especially when we are talking economic management. All this is an attempt to hide the lie that they are fools and actually create these disasters.

Sun, 07/29/2012 - 14:16 | Link to Comment TheGardener
TheGardener's picture

What is wrong with living decadently in times like those?
Enjoy the party while it lasts. Open up a bottle of
bubbly each time real money makes up another hundred old
fiat dollars per ounce . Decadence is another issue, it is the entitlement infected so called middle classes with rotten apple gadgets and attitudes that make them unemployable outside this socialist system that have the most to loose or aged personae claiming a right to overseas
vacation that should be reduced to their proper role .
Which is just supporting their next akin, if any...

Sun, 07/29/2012 - 11:59 | Link to Comment Arius
Arius's picture

looking back in retroperspective ... it was so easy, if we just did not let the first domino to fall ... Greece that is ... everything would have been different ... now the markets have taken a life on their own and none trust anything anymore ... what is to come ... it was so easy to just stop it at the very beginning ....

Sun, 07/29/2012 - 15:29 | Link to Comment MsCreant
MsCreant's picture

Tell us how you would have stopped it? Hmmm?

Sun, 07/29/2012 - 21:51 | Link to Comment Matt
Matt's picture

I would have stopped it by not knowingly allowing bankrupt countries to join the Eurozone.

Sun, 07/29/2012 - 11:59 | Link to Comment The Monkey
The Monkey's picture

But, but, but... FOMC!

Sun, 07/29/2012 - 13:27 | Link to Comment disabledvet
disabledvet's picture

maybe the live version will get me an up arrow: http://www.youtube.com/watch?v=knzIpxNWkYs

ain't the temptations that's fer sure. the keyboardist is Ivan Neville who is apparently related to the Neville Bros of Neville Bros fame.http://en.wikipedia.org/wiki/Ivan_Neville
what was the article about again?

Mon, 07/30/2012 - 01:26 | Link to Comment palmereldritch
palmereldritch's picture

The ESM says 999 but the BIS says 666.

Sun, 07/29/2012 - 10:56 | Link to Comment cherry picker
cherry picker's picture

At this stage of the game, who cares whether the one currency or one government fails?  Do you think those in Greece or Spain or Portugal or France or England who spent thousands getting an education and discover there is nothing for them to do in the way of making an income and too financially stressed to be able to start a business of their own cares?  How about those raising a family and have little if nothing to feed the young with?

Isn't the Euro and it's government the kind of stuff that pushed Europeans to the West, where opportunities used to prevail and a man could be considered free of this nonsense.  Note I used the words "used to be".

Sun, 07/29/2012 - 12:02 | Link to Comment knukles
knukles's picture

Mais Non!

Not now.  This is still July.  We're packing for vacation.  September will take care of itself in September. 

Phhhhht!

Sun, 07/29/2012 - 14:01 | Link to Comment AssFire
AssFire's picture

Celente:

The entire financial system is under collapse. It’s not about the Greeks; it’s not about the Spanish; it’s not about the Italians; it’s not about the English; it’s not about the Americans; it’s not about the Chinese; it’s about everybody.
http://www.economicnoise.com (http://s.tt/1j8NL)
Sun, 07/29/2012 - 17:15 | Link to Comment MillionDollarBoner_
MillionDollarBoner_'s picture

Almost perfect French...only you forgot to shrug when you said "Phhhhht!"

Sun, 07/29/2012 - 12:08 | Link to Comment Broomer
Broomer's picture

Just a bit more to the West and the Europeans will drown in the Atlantic, like lemmings.

Sun, 07/29/2012 - 13:19 | Link to Comment pendragon
pendragon's picture

you prove you have zero clue by lumping england (sic) with greece, spain and portugal.

Sun, 07/29/2012 - 13:35 | Link to Comment cherry picker
cherry picker's picture

No Clue, really?

If so then blame the media as it tells me that within a few miles of the Olympics the English are living in squalor.  The media tells me the English are in a recession.  It tells me that the Polish are taking all the manufacturing jobs in England.  That is what the news media tells me.

If they are wrong, please enlighten me as I have no other source of information.

If they are wrong, who is right?  You?

Sun, 07/29/2012 - 14:03 | Link to Comment pendragon
pendragon's picture

first it's the uk you muppet. second look at the bond yields and then work out who to lump with who. third don't believe the media..see for yourself. fourth there are no manufacturing jobs in the uk. fifth i'm right

Sun, 07/29/2012 - 17:16 | Link to Comment MillionDollarBoner_
MillionDollarBoner_'s picture

Sixth - its just a matter of time ;o)

Sun, 07/29/2012 - 10:58 | Link to Comment I am Jobe
I am Jobe's picture

Vaseline Bitchezz.

Sun, 07/29/2012 - 13:03 | Link to Comment fockewulf190
fockewulf190's picture

Looks like Phyzz is going to be the Preperation H of the economic world that ends up bringing any semblance of relief. Stock up.

Sun, 07/29/2012 - 11:00 | Link to Comment JeremyWS
JeremyWS's picture

I've got a good birthday to look forward to in September. Should be fun!!!!

Sun, 07/29/2012 - 11:10 | Link to Comment StrawberryBlonde
StrawberryBlonde's picture

So, I guess Italy will have to sell some of its gold (or hand it over to Germany)...as the world's 3rd largest  holder of gold, that shouldn't put too much of a dent in its vault...and no doubt Spain will have to fork over some hard assets...depends how badly they want to stay in the Euro.

Sun, 07/29/2012 - 11:12 | Link to Comment TrainWreck1
TrainWreck1's picture

The gold that is so safe in the basement of the NY Fed that it rarely needs audited

Sun, 07/29/2012 - 12:10 | Link to Comment The Big Ching-aso
The Big Ching-aso's picture

 

 

It appears Europe is simultaneously hosting a Financial Special Olympics.   Let's see who takes the most gold.

Sun, 07/29/2012 - 12:05 | Link to Comment Broomer
Broomer's picture

Hey. It's your gold, I mean, I'm just holding it for you, like a bank.
Except, huh, you know,  better than a bank because, you know, banks always get knocked off.
You know, no one knocks off old Fed.

Sun, 07/29/2012 - 12:28 | Link to Comment knukles
knukles's picture

Hey, come on! 
Trust me.
It's in it's own very lonesome allocated segregated unaudited account held in custody just for you :)
Don't listen to those rumors about it being sent to the City for rehypothication, used as collateral for gold swaps or set aside for any other purpose.
Why, it's safe with us.
Wouldn't you rather a wire transfer good from the NYFRB?
By the way, f you go to our website, we've got a nice little downloadable brochure you can have.

http://www.newyorkfed.org/education/addpub/goldvault.pdf

And try out our research for dummies, too

https://www.newyorkfed.org/publications/result.cfm?comics=1

We gotcha covered!

Sun, 07/29/2012 - 14:29 | Link to Comment tongue.stan
tongue.stan's picture

http://www.zerohedge.com/news/tungsten-filled-1-kilo-gold-bar-found-uk .(... and china)

Older article: http://www.americanfreepress.net/html/gold_bar_scam_215.html

The crunchtime I look forward to is when all the rehypothecated tier one assets of tungsten filled bars are finally accounted for.

Oh wait, thats not gonna happen.

 

Wheres that idiot with the katy perry videos when you need her?

Sun, 07/29/2012 - 14:54 | Link to Comment MisterMousePotato
MisterMousePotato's picture

Paraphrase of a line at the end of The Professional, right?

Great movie, btw, for anyone who hasn't seen it.

Sun, 07/29/2012 - 12:28 | Link to Comment jimmyjames
jimmyjames's picture

So, I guess Italy will have to sell some of its gold

***********

They wont be able to sell it because the EU will have claims on it and that goes for all PIIGS gold-

I'm surprised by how little press this got even on the blogsphere

*************

http://bit.ly/KqrbNZ

Sun, 07/29/2012 - 14:25 | Link to Comment Ghordius
Ghordius's picture

Careful, it's only a plan. And a bad one, anyway.

Sun, 07/29/2012 - 15:23 | Link to Comment Western
Western's picture

A bad plan for whom, the debtor nations or the creditors?

Mon, 07/30/2012 - 02:58 | Link to Comment Ghordius
Ghordius's picture

+1 good point. I was thinking about the debtor nations. But you could make the case that it's a bad plan for both depending from the timeframe and price. Here on ZH we all like to discuss what is going to happen soon. Chances are that this is all the beginning of a long, long fight. Currency wars are often longer than a decade.

Sun, 07/29/2012 - 17:19 | Link to Comment MillionDollarBoner_
MillionDollarBoner_'s picture

Have you never seen "The Italian Job"?

Michael Caine nicked it all in a mini :O)

Sun, 07/29/2012 - 11:12 | Link to Comment Beam Me Up Scotty
Beam Me Up Scotty's picture

"And if indeed Draghi takes a haircut on his Greek holdings, how long until he has to do the same with Portugal, Ireland, Spain and Italy? And how long until the EUR is currency only by decree, when even the blindest of the blind realize that the ECB's balance sheet has a massive capital shortfall, that can only be held together by more printing, something which Germany will hardly be delighted by:"

How long until Bernanke takes a haircut on his Euro holdings?  How many Euros does the Fed hold thru currency swap?  The broke US taxpayer on the hook again???

Sun, 07/29/2012 - 12:39 | Link to Comment ElvisDog
ElvisDog's picture

The Fed and ECB will never, ever take a haircut until all other (i.e. taxpayer) options are exhausted. The central bankers are getting a free pass now because the taxpayers haven't really felt the sting of all the obligations (student loans, FHA mortgages, etc.) that have been allocated to them. This is because the U.S. can still run and fund $1T deficits every year. The flaw in the plan of dumping everything on the taxpayer, of course, is that the middle class taxpayers are already being bled dry. Those taxpayer guarentees don't mean anything if the taxpayers don't have any money to pay them.

Sun, 07/29/2012 - 13:10 | Link to Comment Totentänzerlied
Totentänzerlied's picture

Living taxpayers. You forgot to mention the real mark in this heist: the young and the unborn. Remember, claims on future productivity. Kick that can, yes we can.

Sun, 07/29/2012 - 11:13 | Link to Comment Haole
Haole's picture

The Human Centipede, European Parliament stylie.

 

Sun, 07/29/2012 - 11:14 | Link to Comment Eireann go Brach
Eireann go Brach's picture

Obama and his mini me sidekick Geitner will go over there and give a speech, and the Teleprompter will save the day!

Sun, 07/29/2012 - 11:15 | Link to Comment dick cheneys ghost
dick cheneys ghost's picture

Can we make Money Printing an Olympic Sport?

Sun, 07/29/2012 - 11:22 | Link to Comment Haole
Haole's picture

It already is, pay attention, that's what the Olympics are all about.  Well, that and now occultist rituals full of predictive programming like the opening ceremony...

Sun, 07/29/2012 - 11:15 | Link to Comment same old story
same old story's picture

September is crunch time.  Oh where have we heard that before?  cans will be kicked, rumors will be bought, and the world will keep churning as the rich get richer, and more people descend into poverty.  The psychos in charge will rub their hands in glee and blame the people for their lack of resources as they fly off to another tax payer funded summit where they discuss over lobster and champaign how to fleece even more wealth and gain greater power.  This will not stop until they are removed, and so far they have no fear of that.  

Sun, 07/29/2012 - 11:26 | Link to Comment Roger Knights
Roger Knights's picture

Sooner or later something's gotta give. It could be September.

Sun, 07/29/2012 - 14:58 | Link to Comment MisterMousePotato
MisterMousePotato's picture

Ilike this song:

http://www.dailymotion.com/video/x1sqwq_drowning-pool-the-bodies-hit-the...

"Bodies"

Let the bodies hit the floor
Let the bodies hit the floor
Let the bodies hit the floor
Let the bodies hit the floooooor
Beaten why for (why for)
Can't take much more
Here we go!
Here we go!
Here we go!
One - Nothing wrong with me
Two - Nothing wrong with me
Three - Nothing wrong with me
Four - Nothing wrong with me

One - Something's got to give
Two - Something's got to give
Three - Something's got to give
Now
Let the bodies hit the floor
Let the bodies hit the floor
Let the bodies hit the flooooor
Let the bodies hit the floor
Let the bodies hit the floor
Let the bodies hit the flooooor
Now!
Push me again
This is the end
Here we go!
Here we go!
Here we go!
One - Nothing wrong with me
Two - Nothing wrong with me
Three - Nothing wrong with me
Four - Nothing wrong with me
One - Something's got to give
Two - Something's got to give
Three - Something's got to give
Now
Let the bodies hit the floor
Let the bodies hit the floor
Let the bodies hit the flooooor
Let the bodies hit the floor
Let the bodies hit the floor
Let the bodies hit the floor
Skin against skin blood and bone
You're all by yourself but you're not alone
You wanted in now you're here
Driven by hate
consumed by fear
Let the bodies hit the floor
Let the bodies hit the floor
Let the bodies hit the floor
Let the bodies hit the floooooooor
One - Nothing wrong with me
Two - Nothing wrong with me
Three - Nothing wrong with me
Four - Nothing wrong with me
One - Something's got to give
Two - Something's got to give
Three - Something's got to give
Now
Let the bodies hit the floor
Let the bodies hit the floor
Let the bodies hit the flooooor
Let the bodies hit the floor
Let the bodies hit the floor
Let the bodies hit the floor

Sun, 07/29/2012 - 11:43 | Link to Comment RiverRoad
RiverRoad's picture

So true "same old".  We rid the world of kings and this is what we got for it?  A ruling cabal of central banksters that ravages the world far worse than kings ever did; at least they rarely cooperated with each other as this unholy bunch does.

Sun, 07/29/2012 - 14:27 | Link to Comment Ghordius
Ghordius's picture

The point is that August is sleepy vacation time for europe. The Asian and American markets are home alone.

Sun, 07/29/2012 - 11:18 | Link to Comment RobotTrader
RobotTrader's picture

Nothing on that calendar that cannot be stick-saved by "Jawboning"

And for whatever reason that doesn't work, then Bernanke and Draghi may actually do something.

Remember, Jackson Hole is coming up.

Bernanke will be in a much better mood after playing cards, drinking some booze, and fornicating with some exotic escorts with his peers out there.

Sun, 07/29/2012 - 11:29 | Link to Comment SeverinSlade
SeverinSlade's picture

Bernanke and Geithner are butt buddies.

Sun, 07/29/2012 - 11:34 | Link to Comment Bay of Pigs
Bay of Pigs's picture

+1 for The Bernank comment.

Maybe there is hope for you yet Robo.

Sun, 07/29/2012 - 11:44 | Link to Comment Offthebeach
Offthebeach's picture

I bet Shlomo does it with the escorts Spritzer style. ( With his white soxs on ).

Sun, 07/29/2012 - 12:31 | Link to Comment knukles
knukles's picture

Well the Greeks do it with their boston red soxs on.

Sun, 07/29/2012 - 12:23 | Link to Comment Satan
Satan's picture

I gave you a down arrow. Sorry it's just a reflex...

Sun, 07/29/2012 - 12:52 | Link to Comment francis_sawyer
francis_sawyer's picture

@Tyler

+1 for removing the rickroller...

Edit: The rickroller begs to differ ~ lol

Sun, 07/29/2012 - 11:25 | Link to Comment sudzee
sudzee's picture

Note to self for this week:

1/ Withdraw the remainder of "in god we trust".

2/ Purchase more "in gold we trust".

3/ complete detailed plan for extended vacation till Dec.

Sun, 07/29/2012 - 11:27 | Link to Comment JackT
JackT's picture

IMF, ESM, and EFSF should take their available funds and establish a unicorn farm. They might have enough time if they act now.

Sun, 07/29/2012 - 13:14 | Link to Comment Peter K
Peter K's picture

NO, they need to set up the money tree orchard. The creditor banks just might wait. :)

Sun, 07/29/2012 - 11:36 | Link to Comment RiverRoad
RiverRoad's picture

So Draghi et al say they will do "whatever it takes to save the Euro."  Perhaps that's their oblique way of saying that, if necessary, Greece is kaput....fini. 

Sun, 07/29/2012 - 11:38 | Link to Comment Freegolder
Freegolder's picture

Nice that the Euro central banking system has hundreds of billions of physical gold though. Soon that will be correctly priced, physical only, worth trillions it will be. Then we shall see which currency is strongest!

Maseratis are great cars by the way ;)

Sun, 07/29/2012 - 11:42 | Link to Comment Joe A
Joe A's picture

Is that physical gold or paper gold? Where is that gold physically kept? As long as you don't have physically in your control than it is out of reach.

Sun, 07/29/2012 - 12:23 | Link to Comment Broomer
Broomer's picture

My redacted version of this article on German gold reserves:

Germany has gold reserves of just under 3,400 tons, the second-largest reserves in the world after the United States. Much of that is in the safekeeping of central banks outside Germany, [and] the German central bank relies on the assurances of its foreign counterparts that the gold is where it should be. Germany moved some of its gold reserves abroad during the Cold War to protect them from a possible Soviet attack. Some of the gold was moved back to Frankfurt after the collapse of communism. But the Bundesbank argues that it still makes sense to store some gold in major financial centers so that it can be sold quickly if necessary. Although the Bundesbank does not provide exact details about the distribution, it has revealed that the largest share of Germany's gold is held in New York, followed by Frankfurt, London and Paris. (...) German central bank relies on the assurances of its foreign counterparts that the gold is where it should be. The three foreign central banks give the Bundesbank annual statements confirming the size of the reserves, but the Germans do not usually carry out physical inspections of the bars. (...)

Some Germans even want to bring the gold reserves back to Germany. The initiative alleges that there is an "acute" danger that the German gold could be expropriated as a result of the financial and debt crisis. (...) But the Bundesbank wants to leave the gold where it is. Observers point out that apart from the high cost of transporting the gold back to Frankfurt, the symbolic effect of Germany repatriating its gold reserves might unsettle the nervous financial markets, who could see it as a sign of an impending collapse of the euro.

Sun, 07/29/2012 - 15:07 | Link to Comment Joe A
Joe A's picture

Hmmmm."Assurances of its foreign counterparts": "Sure, I will keep your gold. It is safe with me, I promise".

http://www.youtube.com/watch?v=iaysTVcounI

Sun, 07/29/2012 - 11:41 | Link to Comment steve brassey
steve brassey's picture

gggg

 

 

1

Sun, 07/29/2012 - 11:43 | Link to Comment BliptoP3
BliptoP3's picture

And I'll state the obvious - even if they manage to fund through Sept.; no structual issues will be fixed - these are not bridge loans; they're bridge to nowhere loans.

Sun, 07/29/2012 - 11:45 | Link to Comment bankruptcylawyer
bankruptcylawyer's picture

how about they kick spain out of the euro , and keep greece and italy---germany gives up, but on the condition spain is booted.

i think that works out for everyone , especially france. 

 

you cannot afford to lose greece because they will be important in the coming war. spain, not so much. , the british already own gibraltar, and spain is otherwise militarily useless. 

 

Sun, 07/29/2012 - 11:46 | Link to Comment Renewable Life
Renewable Life's picture

For a longtime I have thought, in this sick globalization game of chicken or the egg, that America would be pushed off the cliff by a European collapse, NOT the other way around!!!! But the closer we get to the debt ceiling (again) and the tax cuts expiring, the economy tanking, coupled with the election and Ben being terrified of "appearing political" down the homestretch, it might be us, that goes first!!!!

Not to mention, August, September and October before an American Presidential election, are Black Swan mating months!!! It will be interesting to watch who the Chinese and Russians decide, will be in their own self interest, is elected the next President!! There will be many post Olympic clues everywhere, very soon!!!

Sun, 07/29/2012 - 11:56 | Link to Comment BliptoP3
BliptoP3's picture

  My money is still on Europe; they've never failed to fail. This would be an interesting poll and discussion though?

Sun, 07/29/2012 - 12:14 | Link to Comment mark7
mark7's picture

How is USA supposedly better off? 50 million people on foodstamps and still that number is rising every single month. Spain debt to GDP is about 75 percent and Americans here in ZH are talking like it is the end of world. Meanwhile, USA is already at 100 percent and rising fast.

Congress is only asking how high, not how to even stop it. Then you demand things from Europe you yourselves are unable to even start! It is like a fat man complaining about his neighbour's diet, that he should try harder!

Sun, 07/29/2012 - 12:44 | Link to Comment Fail2Deliver
Fail2Deliver's picture

Mark 7; We are better because we have our very own printing press which is obviuosly bullish.

Sun, 07/29/2012 - 15:05 | Link to Comment Matt
Matt's picture

You can never go broke as long as you have 3 things:

1) the power to create your own money

2) the printing press to print the money

3) the supplies for the press

Zimbabwe failed because they didn't produce their own paper for printing the money on. America produces quite a bit of flax and cotton, so they can keep the game going for quite some time.

Sun, 07/29/2012 - 20:39 | Link to Comment RiverRoad
RiverRoad's picture

And 4)  a military to force people to accept your fiat at the point of a bayonnette.

Sun, 07/29/2012 - 15:05 | Link to Comment Renewable Life
Renewable Life's picture

Or you could see it as, printing could bring the collapse on suddenly, Lehman style, because the federal reserve is printing on a whole bunch of assumptions and projections, that just aren't based in reality and leave no margin for error or sudden change in circumstances!!

For example, war in the middle east, drought and international food shortages, natural disasters (Tokyo, Haiti, LA?????). There's probably ten more examples none of us could even think of, but my point is.....these idiot leaders of ours, are walking a tightrope of reality, that has zero margin for error and must have EVERY global dynamic go perfect for the next 10 years for this miracle strategy work!!!!

It's just pure fantasy!!! But until the outside factor occurs, that they haven't "planned for" occurs.......it's a self reinforcing fantasy, I'll give them that!

Sun, 07/29/2012 - 12:57 | Link to Comment BliptoP3
BliptoP3's picture

   In the US, all essential government services, roads, police, fire, etc. are provided by states and localities - The feds just transfer money around. - If/when the federal government disappears/banrupts itself, thing just get better for the majority of us - so good riddance. 

   I took my kids for a hike, about 15 miles away, on the way there I drove by two survivalist training centers.  One of my liberal friends asked me last week to teach him how to shoot, and what kind of things he should buy, in case "thing go bad".

   In short, thing will be better in (parts of) the US becuase instead of rioting and protesting they are preparing.  The more of your neighbors who are prepared, they better everyone in your neighborhood is.  When all is said and done it comes down to you and your neihbors - congress can go f*** itself.

 

Sun, 07/29/2012 - 12:01 | Link to Comment fonzannoon
fonzannoon's picture

September will finally be the month where rabble rabble rabble. Europe will finally have to choose between blah blah blah and flarf flarf flarf. Then soon after that the fiscal cliff will finally force the US to confront narf narf narf because if they don't they will be faced with barf barf barf.

Sun, 07/29/2012 - 12:09 | Link to Comment knukles
knukles's picture

To wit: One of the Europeans just the other day said (and this is for real) that their financial problem was the fault of the US fiscal cliff.  Blah, blah, snarf, blurt, thplkmmmft.  Phhht.  Mlufft.  Twhtht.

Just dawned upon me.
If these people were truly serious about all of this, they'd coordinate just who the fuck speaks for the whatrevergroup of folksitissupposed to be doingwhatevertit is they'resupposed to be doing.

This is just plain mass confusion.

Now what's that tell ya'll about the integrity of the EU, etc.?
It's a fucking clown car.

AP-  Knulkes downgrades EU, ECB, IMF, et al. to triple clown minus with a God Help Us All Tiny Tim Look Out Below outlook

Sun, 07/29/2012 - 15:07 | Link to Comment Matt
Matt's picture

that's an insult ... to clown cars. That act takes rehearsal like you wouldn't believe. Euro-leaders are more like "Whose Line Is It Anyways?", except without any talent.

Sun, 07/29/2012 - 15:14 | Link to Comment Joe A
Joe A's picture

Well, for now this mass confusion is working because the Euro has not collapsed yet. The FED is just printing dollars which does not solve much.

Sun, 07/29/2012 - 12:02 | Link to Comment Gimleteye
Gimleteye's picture

September 11

Sun, 07/29/2012 - 12:12 | Link to Comment Tirpitz
Tirpitz's picture

"It really is a very, very difficult fix and it's far from certain that we'll be able to find the right way out of it."

Who said them fellows would want to fix it for good? Kicking the can further down the road is the modus operandi, since years. Draghi will open the flood gates of liquidity and the Bundesbank will issue another angry statement. And till the German court legally approves the looting of the taxpayers in six weeks, the sun will just keep shining on those over-extended bank balance sheets.

Sun, 07/29/2012 - 12:13 | Link to Comment DarAdder
DarAdder's picture

"And as eurocrats take their mandatory vacations for a job well done and spend the next two weeks lounging on some Mediterranean island or listening to opera..."

Two weeks? You don't know much about Europe, do you.

 

Sun, 07/29/2012 - 13:36 | Link to Comment Neethgie
Neethgie's picture

i cant wait for obama to come to europe and relieve us of all responsibilities.. This european debt crisis, you didnt make that! it was someone else!

Sun, 07/29/2012 - 15:21 | Link to Comment Joe A
Joe A's picture

I was embarrased to be a European when Obama came to Europe first time and hundreds of thousand of delusional people went to see and cheer him. What a bunch of idiots, these people.

Sun, 07/29/2012 - 12:31 | Link to Comment Atlantis Consigliore
Atlantis Consigliore's picture

Turn turn kick turn turn turn kick turn,

Make it Gay Make it Gay, and blame the USA,

Make it Gay Make it Gay, the jews caused it all Oy Vey,

Blame the specs blame the vix, its all caused by Chik-fil-e

.....its all bawd, blame the fraud, its the banks with their Libor-leee.

if you baught gm, or facebook its bawd,

if you in the markets, you conned its all Fraud,

Make it Gay Make it Gay, 

run for the gold NBC the prey...

bend over, its over Your Chik -fel -eee

and Rahm crises cant be wasted will kiss you....in your  assssss....

keep it gay....http://youtu.be/EC9Fq6EoBeo

 

 

Sun, 07/29/2012 - 15:10 | Link to Comment Matt
Matt's picture

downvotes from those unfamiliar with the source material for this article's title, The Producers.

Sun, 07/29/2012 - 12:32 | Link to Comment i-dog
i-dog's picture

"September will undoubtedly be the crunch time,"

Never underestimate the ability of the GLOBALIST place-kickers to boot the Euro can another 70 yards down the field (into September, or October). And never underestimate the ability of a complex system to suddenly "phase shift" without warning...that's what always thwarts Central Planners!

Long gold...Short paper. I smell a change in the air.

Sun, 07/29/2012 - 12:34 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

July was the Eurozone's largest debt roll of the year.  Part of me is surprised they made it through.  The other part understands that they can fractionally reserve their fiat and leverage up to buy bonds, kicking the can down the road.  They can also decrease leverage to strengthen the euro, and they can cordinate these moves with the Fed and other Central Banks to get exactly what the want in the short term.

Long term though the fiat ponzi will crumble.  Fiat is nothing but a debt instrument of the IOU bonds, which will never be paid in full.  Not Greek bonds, not USTs.  Nothing will be paid in full, making fiat a bad investment.

All that and fiat, and bonds, have no intrinsic value, meaning in reality they are totally worthless.

Sun, 07/29/2012 - 12:38 | Link to Comment Fail2Deliver
Fail2Deliver's picture

September is now crunchtime? Wasn't it just July and before that May and before that March, etc....? Yawn.....Its all bullish folks...Obviuosly bullish.

Sun, 07/29/2012 - 13:02 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

The status quo will be maintained at all costs while letting asset prices (think oil) slowly appreciate.  Don't spook the herd, but suck in as much wealth as possible, and the slower the better.

Sun, 07/29/2012 - 12:44 | Link to Comment WallowaMountainMan
WallowaMountainMan's picture

the only mathematical solution is clear. a euro fed that can print at will and keep its own 'balance' sheet. a 'bad' bank that can not be held back by accounting rules.

the us of a does it, the chinese do it, the japanese do it...everybody does it.

except euro zone.

it's their achilles heel in a game of global push for profits via cheapest, least regulated labor and highest bid for 'natural' resources. export to nirvana.

sure that game is going to destroy the planet and any hope for not only a bettor life for humanity as a whole, but hope for humanity itself.

short sighted, short term rewards in fact doom the species we call human. humans inevitably will follow in the path of those it drove to extinction.

this folly will become apparent to its future generations. and they will hate and despise the generations who went before them (a group i like to call us).

and they will hate the artificial life form that we have let loose upon the planet. a life form whose exact purpose is diametrically opposed to the welfare of humans. a life form whose dna compels it to literally devour, not conserve, the things that keep humans alive. to create the illusion that consuming is the holly grail for humans. so that it can stay alive. forever.

blessed be the eternal corporation; limited life span humans be damned.

stupid humans. for sure. but it is now out of the hands of the many and into the high priests of corporate structure.

i am 63 and in decent health. the quality of my existence it is likely to be maintained.  i will long enough to see that all know with certainty that the planet and humans will have become incompatible. that the magic of an infinite number of random occurrences in the past that led to the incredible place called earth upon which we have evolved, will have been undone by choice.

and unlike the future, one cannot hedge against the past. it is simply a matter of fact.

read the zh more will i, for it is a story of compelling fascination. but be sure, there is nothing more for me to contribute here.

off for my hike into the wilderness. remember. exercise, eat less, sleep well and have some fun. And be good to others, especially the children. we owe them that.

 

Sun, 07/29/2012 - 13:44 | Link to Comment i-dog
i-dog's picture

 

"global push for profits via cheapest, least regulated labor and highest bid for 'natural' resources. export to nirvana.

sure that game is going to destroy the planet and any hope for not only a bettor life for humanity as a whole, but hope for humanity itself."

With all due respect, that is a load of defeatist bullshit!!

Firstly, the "game" is not "global profits", but "global kontrol". The globalists have a published Agenda ('Agenda 21', first formulated in 1987, and currently reasonably well on track) which outlines how they wish to control every man, beast and inanimate object on the planet in order to recreate their perfect Garden of Eden [for themselves]. Their current push for profits is merely to concentrate as much as possible into as few hands as possible in order to simplify the changeover to their new paradigm for the 21st century.

They have no intention of destroying the planet (only your enjoyment of it). Rather, they plan to save it [for themselves] by eliminating all opposition to their plan. After all, they are "the smartest guys in the room" and they KNOW what's best for you!! Unfortunately, they consider 7 billion people just a tad too many to kontrol, so they're planning on reducing that number by...er...about 90% - through managed starvation and disease.

If you plan to give up, then I sure hope you've booked your spot in the "lucky" 10% who will be obediently following all orders in their new "paradise"!!

Secondly, the transfer of industrial output and wealth generation from one empire to the next has been going on for thousands of years. There is nothing new in that ... China is just the latest and there is no reason why it couldn't continue to progress from China to other less developed parts of the world in decades to come, bringing more societies successively into the "developing", then "developed", world. The only thing stopping that progression is the Zionist "smart asses" who are currently trying to transfer all that wealth generation only to themselves.

Unless we derail their plan - quick smart, by rapid decentralisation of government - things are going to get very sticky ... very soon.....

Sun, 07/29/2012 - 12:40 | Link to Comment Rat Patrol
Rat Patrol's picture

Those nations have lots of land to trade. If Germany doesn't get at least an island from each, they are fools.

Sun, 07/29/2012 - 12:54 | Link to Comment francis_sawyer
francis_sawyer's picture

Even Lex Luthor got 'Austrailia' from General Zod...

Sun, 07/29/2012 - 13:03 | Link to Comment Haager
Haager's picture

I just thought about Mallorca beeing in German hands already.

Sun, 07/29/2012 - 14:09 | Link to Comment Winston of Oceania
Winston of Oceania's picture

Sell Greece off to the Turks, that should kick the can down the road until at least next summer...  /sarc

Sun, 07/29/2012 - 13:35 | Link to Comment Freegold
Freegold's picture

"the blindest of the blind realize that the ECB's balance sheet has a massive capital shortfall, that can only be held together by more printing, something which Germany will hardly be delighted by"

 

And when they can´t expand the FIAT realm their gold will fill the void with ease. When modern money-making stops, everybody will know the true value of gold lost in the minds of men in only one generation. During this period oil brought forward great wealth and it´s in this context you will find golds new much much higher price. It was not gold that lost value (in comparison to wealth), it was paper money that was overpriced.

 

Gold, go get you some "Aristotle"

Sun, 07/29/2012 - 13:12 | Link to Comment Tom Green Swedish
Tom Green Swedish's picture

Is all this crap about Europe and the Fed just to distract us from the real problem?  Population Growth is the ultimate bubble.

 

Ok here's what is entirely messed up with the global economy.  We are forecast to run out of oil in around 10 years - in the USA.  Now this has huge global proportions but nobody really talks about it.  See the problem here is its a commodity and it is not infinite, yet if they raise the price too high the whole world economy will suffer.  We have seen this in 2007 and just recently.  Therefore we are all totally screwed on a mass scale, the price cannot rise (or else our economy would get demolished) and the price should not be so low to encourage mass consumption, yet it is (but will slowly keep rising).  A tax to the oil will do no good, other than to collect money for public transportation, but I do think we will have to go the Europe route and in 5 years look at a gradual tax to the oil each year.  It might not save us but it is probably our only shot.  Not only this oil is a raw material for just about everything.  Couple with the water shortages in the world we are in for some major problems. What are the alternatives to cheap oil?  I think there are none. And we all know no growth is acheieved without cheap oil. 

 

Here's an interesting fact in 2008 the average price per barrel of oil was 97.33 yet the price at the pump was 3.29.  In 2012 the average (so far) is 93.77 but the price at the pump is 3.68.  A twelve per cent increase. Strange? No not really. There really is no correlation between the price of a barrell of oil and gallon of gas other than they both rise in tandem.  I believe we are gradually being conditioned to accept higher oil prices and we will see prices north of 8 dollars per gallon by 2020.  There is simply nothing we can do.  Oil is too prevelent, we cannot replace it with anything and we cannot replace our current system by being short of it.

 

I do not see any politician addressing these problems.  They are addressing stupid political things like jobs and the economy.  Maybe Bush and Cheney were right, and weren't so stupid, maybe all of us have it backwards.  Barack has added just as much to the deficit as bush did in 8 years in 4 and we still have the same unemployment.  And where is this clean energy society he has been talking about?  Solyndra?  This is pathetic.  His track record as president is worse than Romney's at Bain.  But seriously. What good does a job do  you if you can't even get to it without paying all  your money in gas?

 

I do not see things getting better in the next decade. Every system has thought of resouces as infinite; capitalism, socialism, communism.  These are old theories of thought.  200-300 years old.  We need a new system now. And it ain't gonna be going back to using precious metals as money a system even older than fiat.  The haves and have nots. Trying to create Utopia.  Emerging markets.  Things are going to get ugly very fast, and its already begun in the Middle East.

Sun, 07/29/2012 - 13:22 | Link to Comment Totentänzerlied
Totentänzerlied's picture

Not capitalism, Keynesianism and MMT - corporatism and consumerism, in short. I don't care enough to defend Marxism or any variant thereof, but yes, it is entirely productivist as well.

Sun, 07/29/2012 - 13:24 | Link to Comment Tom Green Swedish
Tom Green Swedish's picture

Well if you are saying corportatism and consumerism are the newest economic theories you are right they are both screwed, but it has to be this way otherwise the consumer would dominate and destroy everything.  We have to be rationed.  This is what is clearly happening and yet nobody seems to realize it.

Sun, 07/29/2012 - 14:46 | Link to Comment Haager
Haager's picture

Population growth is no bubble, it is not ballooning because some are blewing thin air into it.

It is of course a problem and the civilisation as we know it can't handle that. Projects like Masdar and - maybe in the far future - the Venus Project are some workarounds.

 

Sun, 07/29/2012 - 13:12 | Link to Comment Duke of Con Dao
Duke of Con Dao's picture

3rd in the series 'You Didn't Build That' this one featuring Alec Guinness:

YouTube - 'Obi-Wan Kenobi... You Didn't Build!' sez President Obama

Sun, 07/29/2012 - 14:12 | Link to Comment NuYawkFrankie
NuYawkFrankie's picture

Re SEPTEMBER : Crunch Time For Europe....

 

As supposedly was April, May, June and July. Guess they're skipping August- too many people off on vacation (gettin some of that La Dolce Vita on those famously topless beaches) and TPTB are worried that  they might just be a little too distracted to pay any attention to their incessant blathering...

ZZzzz......zzz...zzz...zz..z.....

 

Sun, 07/29/2012 - 14:15 | Link to Comment Atomizer
Atomizer's picture

 

 

You must be one of those assholes that live in a gated community prison. Can only imagine that you dress yourself up in a cat suit and sniff the asses of your neighbor’s dogs. Once you’ve gathered information on all the Co2 fallout polluting your property, you dash off to the HOA to file a complaint. The comedy, when people leave in droves the cost of your HOA fee rises to support the crew who takes care of your prison environment. LOL

 

The point of my story, the parallel alignment to loot more monies from the likes of your type’s is in full execution under the Bank of International Settlements program..

http://www.bis.org/fsi/fsiop2012.htm

 

Meow.. sniff, sniff

Sun, 07/29/2012 - 14:26 | Link to Comment NuYawkFrankie
NuYawkFrankie's picture

Are you related to - or are you in fact - Sandy Weill ?

Sun, 07/29/2012 - 14:33 | Link to Comment Atomizer
Atomizer's picture

Neither. Just someone who is smart enough to see thru bullshit.

Sun, 07/29/2012 - 14:47 | Link to Comment NuYawkFrankie
NuYawkFrankie's picture

Yes - judging by your fertile imagination, much too smart for me to be trading bards with!

Anyway, must be off to the club-house for the annual Toga Party (Cynthia's hosting this year - makes a terrific G n T!)

We should be done about midnight - so if you could hold of on your pool-cleaning duties til then it would be most appreciated  ;)

Catch you later old chum!

Sun, 07/29/2012 - 14:49 | Link to Comment Atomizer
Atomizer's picture

Enjoy your afternoon. 

Sun, 07/29/2012 - 15:02 | Link to Comment NuYawkFrankie
NuYawkFrankie's picture

Grazie - but it's aXtually sera here on The Amalfi Coast ;)

 

Sun, 07/29/2012 - 13:58 | Link to Comment AssFire
AssFire's picture

I had to start laughing @

20 August: Greek bond redemption. Greece is due to repay EUR3.1bn of GGBs.

Maybe that is where the article should have ended.

Sun, 07/29/2012 - 13:59 | Link to Comment slewie the pi-rat
slewie the pi-rat's picture

so now we can have a month off from chicken little?

remember how scared tyler had ori earlier in the year? 

constant predictions that there was NO WAY the US would make it thru july without riots and martial law and blood blood blood

elections?  nothing will be left standing by august/september

slewienomics, on the other hand,  has been predicting that TPTB will do anything and everything simply to keep the ckecks in the mail

and little else matters to them at this point b/c they are in church sharing a 'communal' memory-hope or @ the pagan sacrifice getting that emotional cone up:  praying/preying  for the "money" to keep the checks in the mail

or they (TPTB) are pretty fuked, huh?  [even zeroHeads can understand this;  trust me]

now there are competing political views about how to proceed, but this is the economic imperative of the NWO

the US is proceeding under its relatively new banking laws such as dodd/frank, which celebrated its second birthday last month

in this election cycle we have a LOT of stuff coming up about this dodd/frank law

apparently, the political party which blew up the US and world economies would like to re-gain power in the US and thinks it has the propaganda machine & the candidate to do so

talk about hopium!

as slewienomics predicted a year ago, prez0 will seek re-election as the national hi-priest of our civil religion as one nation, under god (1954):  on a strong dollar, a stable economy/social system [youse and mine's checks in the mail]  and a military ready, willing, and able to deliver us from evil.  amen.   <cue parade music and "she'saGrandOldFlag">

Sun, 07/29/2012 - 14:27 | Link to Comment terryfuckwit
terryfuckwit's picture

A holistic analysis appears to have escaped the author..

 

"Private creditors have already suffered a huge writedown in the value of their Greek debt holdings but so far euro zone taxpayers have not lost a cent on any of the bailouts"

 

like my arse!!

Sun, 07/29/2012 - 14:45 | Link to Comment steelrules
steelrules's picture

I wish the damned Euro would die already and along with it the European parliament, the IMF the ECB, JPM and Goldman to list just a few.

Jubilee for everyone!

Sun, 07/29/2012 - 14:45 | Link to Comment dcb
dcb's picture

this isn't rocket science. they haven't found a way out because they aren't willing to impose losses on those who should take them, and potect those they should

Sun, 07/29/2012 - 14:46 | Link to Comment gwar5
gwar5's picture

Seems like crunch time is always 2 months from now.  Are we getting younger?

 

Sun, 07/29/2012 - 15:09 | Link to Comment elwu
elwu's picture
"Crunchtime For Europe And Germany"

Hm. You know that the FinMin of the mighty US of A Mr. Geithner is visiting Mr. Schäuble, FinMin of tiny Germany, on Sylt? Sylt? Google it.

And ask yourself: what's going on that the big guy subserviantly follows the small guy to Sylt, of all places, and begs for help?

There is something fishy going on, and it's epicentre is not Europe. It is the US.

Sun, 07/29/2012 - 15:21 | Link to Comment miker
miker's picture

The US threat is that Europe has to print or the US will beat them to it and really slam export trade.  I think both FED and ECB will ease jointly in a coordinated manner.  Japan, Russia and China may all get in the game too.

Tomorrow, Geithner is going over to tell Germany it's a done deal.  They aren't going to wait for the German Supreme Court or whatever in September.  There isn't time.  As Draghi implied, they have the mandate if they think the system is going down.  Same basis Bernanke used in 08/09...essentially they can do what they have to. 

It's easier to get forgiveness than permission.

Sun, 07/29/2012 - 15:22 | Link to Comment miker
miker's picture

Look for easing announcement (camoflaged in ECB case to not sound so much like printing) THIS FIRST WEEK IN AUGUST.

Sun, 07/29/2012 - 15:26 | Link to Comment Joe A
Joe A's picture

They keep on postponing crunch time until December so the Maya prophecy can come true ;-)

Sun, 07/29/2012 - 15:32 | Link to Comment Segestan
Segestan's picture

"September will undoubtedly be the crunch time," ........   I bet nothing happens in September... they use that non-event as proof they have the issues under control.

"In nearly 20 years of dealing with EU issues, I've never known a state of affairs like we are in now,"........ Well no shit sherlock . "It really is a very, very difficult fix and it's far from certain that we'll be able to find the right way out of it."......... difficult fix???  No details just talking more trash talk.

There will be no fix. What comes next in the global ponzi is purely based on self preservation of nation, state and individuals. I just want to see who takes control of Free Gold???

Sun, 07/29/2012 - 15:44 | Link to Comment Essential Nexus
Essential Nexus's picture

If Finland were smart, it would drop the Euro right now.  Just while everyone is on vacation...

Sun, 07/29/2012 - 16:02 | Link to Comment Renewable Life
Renewable Life's picture

That would be a baby black swan.............the real mother of all black swan events would be a surprise attack on our air craft carriers with some of those Russian and Chinese "carrier killer missiles" they have!!!! If the US gets militarily involved in Syria and overthrows Al Assad, the Russians could give the green light!!

They would get a double boost, exploding oil prices and a check on US military arrogance, as they view it!!!

If you initial gut reaction to this scenario is, "it could never happen"!! It's probably more likely then you'll ever understand!!!

Sun, 07/29/2012 - 15:50 | Link to Comment IMA5U
IMA5U's picture

Despite all this euro fear money keeps on pouring into junk bonds

 

Can't have a complete debacle without the credit market becoming unhinged

 

Strangest market I've ever seen

Sun, 07/29/2012 - 18:38 | Link to Comment China
China's picture

China has said many times, September will be very interesting for bagging pants, Christian value hating Amerika. And into October. It will go before the election. We shipping gold over by the thousands and thousands of tons now. Amerikans buy sugar soft drinks, Chineese (thank you) Trinkets. China appreciate the delusion Amerika is under. Please remain in Religious Entertainment Complexes and not worship at home. True relationship with Christ could bring truth. Very dangerous. Remember to attack Christian Values. Also, China recommend selling country side escape and buy nice apartment in middle of metro city in area with high minority rate. Also, sell guns as well and only keep 1 day supply of food in refrigerator. Yes, stay tuned into the MSMs. We support them all. And vote for one of our candidates please.

 

Thank you

Mon, 07/30/2012 - 06:10 | Link to Comment trilliontroll
trilliontroll's picture

Genesis , get em out by friday ( October 1972, foxtrott album)

" ... (a passage of time)
18/9/2012 t.v. flash on all dial-a-program services

This is an announcement from genetic control:
It is my sad duty to inform you of a four foot restriction on
Humanoid height.

Extract from conversation of joe ordinary in local puborama
I hear the directors of genetic control have been buying all the
Properties that have recently been sold, taking risks oh so bold.
Its said now that people will be shorter in height,
They can fit twice as many in the same building site. ..."

Mon, 07/30/2012 - 08:11 | Link to Comment toomanyfakecons...
toomanyfakeconservatives's picture

Speaking of crunchtime and countdowns, the Federal Reserve Note, the NWO (meaning the OWO), and the illegitimate U.S. federal government are all on the chopping block. Every day the FRN is bypassed more and more as countries trade amongst themselves in commodities and alternative currencies. Every day the NWO is defunded, defanged, and isolated by powerful forces intent on flushing it down the toilet. Every day the MASS ARRESTS approach... http://tinyurl.com/cd5cyjo/

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