The True French Debt To GDP: 146%

Tyler Durden's picture

From Mark Grant, author of Out of the Box, and onto Wall Street

Watch what They do; NOT what They Say

Over the weekend there was a Bloomberg article quoting the Bundesbank that was telling. The German Central Bank will no longer accept the sovereign debt of Ireland, Greece or Portugal as collateral. Now my operating assumption with central banks is that they know more than we do as they have more access to information and they get it first. If a central bank rejects collateral it must be for one primary reason and that is because they think the collateral has too much risk and that they could suffer from the consequences of holding it. Further, it was interesting to note that this was an announcement; a public statement. The Bundesbank could have handled it all quietly, said nothing and just refused to accept the collateral but no; a public declaration.  What they have done, in my opinion, and at the risk of surely offending Ireland, Greece and Portugal and also the ECB who will accept these sovereigns as collateral, is clearly signal that there are more problems to come with these three countries. The Bundesbank, in my view, has just stood up and waved a giant red flag in the breeze and I see it and I am paying attention. Something is amiss, some thing or some things are coming and we should all be standing back, way back, because whatever is about to show up on the landscape will not be pleasant; of that much you can be assured. This is not, to quote the Bard, “Much Ado About Nothing” but Much Ado About Some Thing and I give those in Berlin thanks for the warning.

"I have deceived even your very eyes: what your wisdoms could not discover, these shallow fools have brought to light…”

-William Shakespeare, Much Ado about Nothing

Shedding Light

In my continuing attempt to debunk what the European Union presents as facts; I turn my attention to France. I have already given you the correct debt to GDP ratios for Spain, Italy, Portugal and Germany which follows the exact principles of what any corporation in America or Europe would be mandated to report or suffer the slings and arrows of being held accountable for Fraud. I include contingent liabilities, derivatives, promises to pay, various guarantees and all of the normal accounting practices to be considered on any balance sheet except the sovereign nations of Europe. In the end, of course, it is your decision but at least we can begin any consideration based upon the facts and not based upon a fictitious account. Again, I divide up the liabilities into two categories, their national obligations and their European obligations; the European Union, the European Central Bank and finally for the other European institutions for which they bear some burden. Then I add it all up, divide by their GDP and we arrive at a factual accounting. Nothing complicated here except sleuthing about to get the data which is no easy task as it is hidden in various nooks and crannies.

How many Europeans does it take to screw in a light bulb?

One to hold the bulb and the rest to provide enough mis-information to make the economic world spin.

France

The Official French GDP                                      $2.774 trillion

FRANCE’S NATIONAL DEBT

Admitted Sovereign Debt                                   $2.261 trillion

Loans to the Nation                                           $214.9 billion

Admitted Bank Guaranteed Debt                        $479 billion

Dexia Guarantee                                                $55.48 billion

Total National Debt                                            $3.010 trillion

FRANCE’S EUROPEAN DEBT

France’s Liabilities at the ECB                            $569 billion

France’s cost for the EU Budget                        $23.2 billion

France’s Liabilities for the Stabilization Funds    $110 billion

France’s Liabilities for the Macro Fin Ass. Fund   $203 billion

France’s Guarantee of the EIB Debt                   $137.6 billion

France’s Total European Debt                            $1.043 trillion  

France’s National and European Debt             $4.053 trillion

France’s Official Debt to GDP Ratio                       86.1%

France’s ACTUAL Debt to GDP Ratio                  146%

“It is dangerous to be right in matters on which the established authorities are wrong.”

                                                                                       -Voltaire