This page has been archived and commenting is disabled.

Visualizing Europe's "Ponzi Patriotism"

Tyler Durden's picture


Zero Hedge has a habit of trying to simplify that which is otherwise unnecessarily complex, convoluted and opaque. Today, we wish to explain the primary reason why Europe has still not be engulfed in fire and brimstone and collapsed straight to the 9th circle of overlevereged Hell(as). The reason, as we henceforth dub it, is Ponzi PatriotismTM.

What is Ponzi PatriotismTM you may ask? Good question - instead of providing verbal explanation we will demonstrate it visually, courtesy of the two Reuters charts below. The bottom line is that since everyone else is rushing far and away from Europe's doomed countries, it is up to the countries themselves to double, then triple, then quadruple down on their own terminal insolvency, until, finally one day, it's all over. That day has not come yet, but it is fast approaching: that will be the day when the eligible ECB collateral (which in the last iteration included banana peels and condom wrappers, so even that is fast running out) is completely gone, and the ECB has no more pretext to fund various regional ponzies. Of course, by that time the youth unemployment will have hit 120% (based on BLS seasonal adjustments), and there will be other problems, but you get the idea.


- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Fri, 05/11/2012 - 11:56 | 2417594 Badabing
Badabing's picture

I'm a yankey doodle dandy

Do or Die!!!

Fri, 05/11/2012 - 12:06 | 2417638 Aziz
Aziz's picture

Buy our fucking dip!

Fri, 05/11/2012 - 12:08 | 2417642 redpill
redpill's picture

The wings have torn off and the tail's on fire, but for some reason the Germans still think they can land this plane.

Fri, 05/11/2012 - 12:09 | 2417647 knukles
knukles's picture

No more EuroVision Song Contests.

Fri, 05/11/2012 - 12:19 | 2417681 Chaffinch
Chaffinch's picture

They can always show repeats of the old Eurovision Song Contests - as long as we can't remember who won of course - cos that would really spoil it.

Fri, 05/11/2012 - 13:09 | 2417875 Manthong
Manthong's picture

How do you say Ponzi Patriotism in Japanese?

Fri, 05/11/2012 - 13:29 | 2417954 French Frog
French Frog's picture

"Zero Hedge has a habit of trying to simplify that which is otherwise unnecessarily complex, convoluted and opaque"

So true. And you've done it very well for many years now. A big bravo and thank you (I'm one amongst the many in here who have learnt so much over the years).

Fri, 05/11/2012 - 12:25 | 2417703 piliage
piliage's picture

Eurovision Song Contest. What all international culture would have been if the Nazi's won the war...

Fri, 05/11/2012 - 13:07 | 2417873 francis_sawyer
francis_sawyer's picture

Official "Europe" song contest winner (forevermore)...


Fri, 05/11/2012 - 18:24 | 2418874 Whiner
Whiner's picture

EU, my dahling. You effeminate, degenerate amalgamation of queers. May NATO (USA) continue it's benevolent protection of your precious welfare state. Whaayagonna do when Uncle Sam bankrupts? Call out the Boy Scouts? Germany and Russia will eat you for lunch.

Sat, 05/12/2012 - 12:01 | 2419780 Svendblaaskaeg
Svendblaaskaeg's picture

Not even one last EuroVision Swan-song Contests?

Fri, 05/11/2012 - 12:25 | 2417700 Chaffinch
Chaffinch's picture

Well Redpill you've got to admit the Germans make damn good cars - and they coped with the pain and cost of re-unification when everyone else was doubting them. That Weimar thing still haunts them though!

Fri, 05/11/2012 - 12:58 | 2417780 pkea
pkea's picture

at least they will get out of it sooner 


perfect illustration actually: dark blue line CHase trade, light blue-  the ecb support....the monumenetal question in this battle of titans is

who will get killed first?

Fri, 05/11/2012 - 12:59 | 2417850 Rynak
Rynak's picture

"Nun, wenn das Flugzeug mit folgendem Vektor und Geschwindigkeit, an jenem Hang dort aufprallen würde, so kämen wir wohl mit 20% Verlusten davon, tops... Errrrm, abhängig von den Brüchen unserer Zahlen natürlich!"

Fri, 05/11/2012 - 13:25 | 2417938 magpie
magpie's picture

Achtung, Spitfire !

Fri, 05/11/2012 - 12:53 | 2417773 pkea
pkea's picture

well, why is their ponzi worse than the one in the US? at least it is smaller. why can't they do what bernank did via other routes. they have their own patriotism and luckily it helped chase to eat their own medicine and get a taste of reality

Fri, 05/11/2012 - 11:54 | 2417598 Zola
Zola's picture

again it all comes down to Bernanke, without his BS swap lines etc , this thing would be over already. Notice the timing October/November 2011... Coincidence? NOT...

Fri, 05/11/2012 - 11:55 | 2417600 pods
pods's picture

This will make the fall all that much worse, as the effects of default will be doubly felt inside the country.

This also gives the government some protection, as the people will be slitting their own (pensions) throats if they clamor for default.


Fri, 05/11/2012 - 12:00 | 2417618 LawsofPhysics
LawsofPhysics's picture


For most a response to your post would be "What Pension?  Default motherfucker and let compensation find it's way back people who are actually worth a shit."

Fri, 05/11/2012 - 12:15 | 2417670 pods
pods's picture

Sure pensions were not sustainable from the get go.  But they were a contract.  

I guess we here in the states will see this when we pay our final payment for our mortgage payment and anticipate receiving our clear title.

Then the banker will say "What title?"

I think that seeing this shift of the debt holders was certainly engineered to keep the truly unproductive (banksters) in power.

I am with you on default, because if we do not ALL default, the ponzi will have to continue.

Notwithstanding all the fake talk of balanced budgets, etc.

In order for the pensions, etc to return their target rate there must be a continued expansion of credit money.  Well, I should say notional return.

All the while the banksters live high on the hog off the skim.


Fri, 05/11/2012 - 13:15 | 2417889 Rynak
Rynak's picture

Bingo.... it's one thing to create something unsustainable (which IMO is fraud from the getgo... pensions should be handled so that everyone at least gets back exactly what he paid in, with a bonus only being optional)... and until today failing to introduce an alternative and slowly fade out the old model.... yes, that's total incompetence, but it's own incompetence....

...transfering the pension funds to credit sharks who shit money, on the other hand, that is plain theft. Then again, everything they do is theft.

Just because they steal from something one dislikes, doesn't make it non-theft. You know, that old saying "First they came for the..."

Fri, 05/11/2012 - 15:42 | 2418366 Xkwisetly Paneful
Xkwisetly Paneful's picture

.....the Chrysler bond holders? Steal their money, pervert the capital hierarchy for a healthcare plan?


Anything and everything to prop up the hundreds of trillions of unfunded worldwide social obligations.

Blame the banksters, the military spending which is virtual nil where most of these obligations exist,

call it a perpetual revenue problem et al.

Anything and everything to prop up the largest fraud in the history of mankind.

Fri, 05/11/2012 - 16:07 | 2418497 LawsofPhysics
LawsofPhysics's picture

Military spending is virtually nil?  What fucking drugs are you on?  Yeah all those planes, boats, ships and military personnel are just "parked at home".  What a maroon.

Fri, 05/11/2012 - 19:45 | 2418984 Xkwisetly Paneful
Xkwisetly Paneful's picture

Uh yea, most of these obligations exist in countries that have already decimated their military in favor of propping up the scam or at the state and local level where there is no military.

hundreds of trillions in unfunded social obligations are at the bottom and it is not close,

and there is only hundreds of trillions of total wealth in the whole world.

$130trillion between Europe and the US which wouldn't cover it if every asset was sold tomorrow and used to pay for them.

I do thoroughly enjoy the pretend if they eliminated all military spending and just raised taxes alll would be well moronic notion though.   Hundreds of trillions in worldwide unfunded social obligations,

get it?  That is more than any banksters, military or anyone else could possibly steal in a 100 lifetimes. Yea maroon.

WTFU and assess blame where it is due and cease pretending to the contrary.

These obligations are the biggest scam in the history of mankind and yet they continued unabated for decades at an obviously unsustainable pace. It is obvious fraud unless dumb as a moonbat. 



Fri, 05/11/2012 - 12:05 | 2417628 SheepDog-One
SheepDog-One's picture

Actually guarantees complete and total collapse. That was Bens mission.

Fri, 05/11/2012 - 11:55 | 2417601 sunny
sunny's picture

Really?? Condom wrappers and banana peels will work for collateral?  Shoot, I can get a bunch of them, we live near a college town.  What can I buy with all the bucks I'll get.....


Fri, 05/11/2012 - 11:59 | 2417610 Badabing
Badabing's picture

bananas in rubber?

Fri, 05/11/2012 - 11:56 | 2417602 narnia
narnia's picture

The "capital" behind the vast majority of government debt in the world is 0% reserve deposit insurance.    

Fri, 05/11/2012 - 11:59 | 2417604 Xkwisetly Paneful
Xkwisetly Paneful's picture

It comes back to Bernanke.

Has nothing to do with the world flooded over in unfunded social obligations,

not a thing to do with the underlying purpose of a vast majority of the debt, contrary to zerobrains idiotic notions that the lionshare's is going to the banksters or for that matter anywhere else.

in the end it all comes back to Ben.

If there was no Ben or central banks, there would be no problem,

instead of printing money for these unfunded obligations,

they would wait for a unicorn to shit out some value laden skittles.

In the end it all comes back to Ben.



Fri, 05/11/2012 - 12:02 | 2417621 GeneMarchbanks
GeneMarchbanks's picture

Strangest haiku ever or you're just *thinking* out loud?

Fri, 05/11/2012 - 12:05 | 2417635 flacon
flacon's picture

Yep. And “In the long run, we are all dead" ~ John Maynard Keynes

Fri, 05/11/2012 - 12:38 | 2417763 crawldaddy
crawldaddy's picture

but are destined to return unless we reach a higher peace according the eastern thought.  So for most people, its back on the ride bitchez.

Fri, 05/11/2012 - 12:48 | 2417801 pkea
pkea's picture

for real clarity it should be called" the BEN company"

Fri, 05/11/2012 - 11:56 | 2417606 GMadScientist
GMadScientist's picture

Who the fuck are these Spaniards that can absorb 150B zooro in paper?

I guess it makes it that much less difficult to default on the payments (or exchange them for bonds denominated in pesetas...<wink>).

Fri, 05/11/2012 - 11:57 | 2417608 nasdaq99
nasdaq99's picture

This is the unwritten rule of "All Bonds Go Back Home" rule whispered by Germany.  Once, you pick a number, 80-90% of all bonds return home Germany will pull the plug and it will be all rats overboard.

Fri, 05/11/2012 - 11:58 | 2417609 piliage
piliage's picture

And the DAX today, which at 3:30pm was sitting at a .7% loss, suddenly, and with no reason, shot up to finish with a 1% gain. All members of the DAX moved at roughly the same time, and with the same percentage gain. Nothing to see here, move along.

Fri, 05/11/2012 - 12:08 | 2417639 flacon
flacon's picture

It's the "invisible hand" of Satan.

Fri, 05/11/2012 - 12:26 | 2417710 spastic_colon
spastic_colon's picture

gotta keep markets in line for FB IPO dontcha know

Fri, 05/11/2012 - 13:01 | 2417812 pkea
pkea's picture

DAX today, which at 3:30pm was sitting at a .7% loss, suddenly, and with no reason, shot up to finish with a 1% gain.


well, europeans unite against chase. so it's good depenning what side you are playing ha

Fri, 05/11/2012 - 11:59 | 2417611 distopiandreamboy
distopiandreamboy's picture

Lmao at the trademark on Ponzi Patriotism.

Fri, 05/11/2012 - 12:00 | 2417613 Dr. Engali
Dr. Engali's picture

Looks completely stable and sustainable to me... Now where did I leave that lat 1000  rounds of ammo I bought?

Fri, 05/11/2012 - 12:01 | 2417620 Whatta
Whatta's picture

Staggering, really.

How does that end with a whimper and not a bang though. A lot of people hurt will insist on BANG.

Fri, 05/11/2012 - 12:05 | 2417625 Non-overlapping...
Non-overlappingMagicCereal's picture

Honest question: in the ZH world view, is there anything in the universe that is not a Ponzi scheme?  As far as I can tell, the biggest threat to the US Ponzi is that the imminent collapse of the various European Ponzis threaten to undermine the efforts of the Federal Reserve Ponzi (led by Ponzimaster Bernanke).  Meanwhile, the S&P Ponzi bizarrely fails to reflect this threat, although most of that is due to the aberrant (and sure to be short lived) success of the Apple Ponzi.  Did I get all that right?

Some folks could stand to learn a new word every now and then.

Fri, 05/11/2012 - 12:11 | 2417658 flacon
flacon's picture

I went outside for a walk. I saw birds eating worms, squirrels scampering around looking for nuts. I even saw a chipmonk picking up little seeds and eating them.


Their life is not a ponzi. They don't beg, borrow, or steal. They are not in debt, and do not borrow from their future to fund today. 


The world needs to learn from nature. :)

Fri, 05/11/2012 - 12:16 | 2417668 Non-overlapping...
Non-overlappingMagicCereal's picture

Not sure the worm would agree.

Fri, 05/11/2012 - 12:29 | 2417721 Tinky
Tinky's picture

reminds me of this...


Fri, 05/11/2012 - 12:42 | 2417776 Non-overlapping...
Non-overlappingMagicCereal's picture

Yea, but see how he has to save half - no doubt for Uncle Sam.  Down with the worm ponzi, I say.

Fri, 05/11/2012 - 12:30 | 2417730 crawldaddy
crawldaddy's picture

the squirrels dont get to make up nuts, they either exist or they dont. Humans just make up shit all day and act as if its real.  One day we wake from the bullshit.

Fri, 05/11/2012 - 12:47 | 2417796 Non-overlapping...
Non-overlappingMagicCereal's picture

The romanticization of nature is adorable, but you guys do understand that nature is more violent and cruel than any hell you could imagine, right?  Being eaten alive and dieing from starvation aren't a heck of a lot of fun.  Animals do not die from old age.

Fri, 05/11/2012 - 13:15 | 2417900 ThirdWorldDude
ThirdWorldDude's picture

 Animals do not die from old age.


It depends on how high up the foodchain you are, and oddly enough it's reminiscent of the civilization.


However, you seem to miss the point, which is the manipulation that has been going on for quite a while now and most of the ZHers are sick and tired of it. I'd rather live in the cruel and violent nature with rules that are pretty much constant, than taking part in this giant decadent fraud called modern society.

Fri, 05/11/2012 - 13:28 | 2417948 Non-overlapping...
Non-overlappingMagicCereal's picture

Of course I don't miss the point, it was not subtle.  I share many of your concerns - but no, you would not prefer that.  The many ZHers who believe otherwise are simply whiny, self-pitying fools.

Fri, 05/11/2012 - 16:54 | 2418666 TBT or not TBT
TBT or not TBT's picture

Correction:   The many ZHers who believe otherwise are simply whiny, self-pitying fools.

One of the burdens of self-awareness, conciousness, whatever you like to call that.

Fri, 05/11/2012 - 16:40 | 2418599 TBT or not TBT
TBT or not TBT's picture

There are times when, given a hamburger today, one can borrow to consume it now, then pay back later.

This depends on hamburgers coming into existence in the present, and the confidence of the lender that she'll be paid back more than what she lent for the risk she undertook.

Fri, 05/11/2012 - 12:04 | 2417629 Whatta
Whatta's picture

Funnest investment philosophy of the day.

ABCD investing. Buy:

Anything Ben Can't Destroy!!!

Fri, 05/11/2012 - 12:06 | 2417634 Dick Darlington
Dick Darlington's picture

Makes the inevitable euro break up a bit "easier" when most of the govt bonds are held domestically.

Fri, 05/11/2012 - 12:05 | 2417636 The Swedish Chef
The Swedish Chef's picture


Looks like Japan and if that trend continues it means that the road is decades long and the can will get the shit kicked out of it.


My guess it´s all a result of the incestous relationship between the ECB and the bailout banks: buy gov´t bonds or else: No LTRO for you!

Fri, 05/11/2012 - 14:29 | 2418130 catacl1sm
catacl1sm's picture

Japan's domestic consumption of JGB's has largely been funded by savings, which is running out. They don't have much time left either.

Even if the ECB prints money for the banks to use to buy gov't bonds, the interest will, at some point, eat all of the capital. Even if the ECB increases the rate of printing (or amount) it will simply fuel inflation and eventually hyperinflation.

What we need are some inter-stellar investors from planet X or nuburi to save us.

Fri, 05/11/2012 - 12:10 | 2417645 Amish Hacker
Amish Hacker's picture

Whoah, insoluble problem, unsustainable trend. The only way to make this go away is to cook up something even worse to distract the muppets.

Rest assured, the Spanish and Italian governments are working on it.

Fri, 05/11/2012 - 12:11 | 2417651 Village Smithy
Village Smithy's picture

These are really great graphics. Thanks.

Fri, 05/11/2012 - 12:15 | 2417657 falak pema
falak pema's picture

AS I understand it the swap lines allow US banks to disengage from Club MEd bond risk and Italo-Spanish banks to step in their shoes, by selling "assets" on their books or providing USD to the selling parties in exchange of It/sp bonds. How is that a bad thing for FED? If it helps DIMINISH perceived risk of US banks to euro debt? 

Unless, the FED is also feeding the pump of US bank purchases of risky Euro debt elsewhere, not addressed here.

The whole game Merkozy/ECB played in these two countries was to oblige local banks to diminish French and German bank bond risks in It/SP. These charts don't tell us if the foreign reduction is Euro country or US.

Fri, 05/11/2012 - 12:14 | 2417666 El Viejo
El Viejo's picture

Graffitti on gas station condom machine:  "This gum tastes like rubber."

Fri, 05/11/2012 - 12:20 | 2417676 Eclipse89
Eclipse89's picture

Don't forget that LTROs forced italian/spanish banks to buy their own sovereign debt, so I'm not so surprised about this surge in domestic holders.

A more interesting story would be that to know how retailers (aka: common people) are behaving in this environment.

This would give some real advice about patriotism.

Fri, 05/11/2012 - 12:20 | 2417680 sunaJ
sunaJ's picture

The Great Money Chase as we know it is almost over.  It has such a psychological hold that, to an outside observer, it would appear to be nothing but madness, but people are unwilling or unable to disconnect. The Great Deleveraging has not taken place.  Soon, everyone will be in a mindset of wealth storage (gold, etc.) and survival until another trusted means of exchange can be established.  How long do you think it will take the masses to trust in another central currency - fiat or not?  I know for my home state of Utah, they have laid the groundwork for silver and gold competition - one step away from a silver/gold-backed regional currency to operate as the dollar breaks through the floor.

Fri, 05/11/2012 - 12:22 | 2417691 Village Smithy
Village Smithy's picture

All that money has been printed, then loaned, then spent and is just barely keeping bond prices stable. That is a lot of weight on a toothpick, sure it holds for now but change the angle just a little bit and....

Fri, 05/11/2012 - 12:26 | 2417711 Xue
Xue's picture

Ponzi patriotism, what's new? Japan has been doing this for decades.

Fri, 05/11/2012 - 12:28 | 2417714 crawldaddy
crawldaddy's picture

120% unemployment...dude Im so unemployed, Im actually like..employed...

Fri, 05/11/2012 - 12:29 | 2417726 CURWAR2012
CURWAR2012's picture

You are hard at work keeping gob-ment hard at work. I like it.

Fri, 05/11/2012 - 12:27 | 2417715 CURWAR2012
CURWAR2012's picture

Agonal breaths are sometimes confused with resting quietly. Our patient, the Euro, is clearly dying. Please bring out the Xanax and morphine drips

Fri, 05/11/2012 - 12:33 | 2417750 crawldaddy
crawldaddy's picture

time to work on my new app... the ipinkslip.  Allows employers to be hip in firing people.  Its tells them you are fired, and then sends fake texs from all sorts of people to the fired person, who is then starts responding to the text, does so in his normal zombie texting state and doesnt even notice he has been escorted from the building.

Fri, 05/11/2012 - 12:48 | 2417799 Village Smithy
Village Smithy's picture

Go one step further and have fake messages from fake head hunters expressing fake interest in the fake career of said ex-employee.

Fri, 05/11/2012 - 12:56 | 2417836 katchum
katchum's picture

The same can be said of U.S.A. The federal reserve holds 6 trillion of its national debt.

Fri, 05/11/2012 - 12:58 | 2417844 carbonmutant
carbonmutant's picture

Bilderberg demands sacrifices...

Fri, 05/11/2012 - 13:21 | 2417925 All is chosen
All is chosen's picture

From long immersion in two of them, the Latin-dialect speaking countries of Europe have a long established approach to problems situations (especially France); they don't have a Houston; thus they do not see a problem.

Fri, 05/11/2012 - 16:22 | 2418546 kevinearick
kevinearick's picture

nicely done; elegant.

Fri, 05/11/2012 - 17:00 | 2418685 thegreygrater
thegreygrater's picture

Ja! Someone please tell Fraudlein Merkel to be thankful that they got away with this Euro scam as long as they did. The Euro has been very very very good to Germany. But now it's time to fly. It is senseless to go down with this fraudulent ship. The banksters are rich enough. It's time (and long overdue) to think about the people you actually represent. 

Fri, 05/11/2012 - 17:28 | 2418747 MrSteve
MrSteve's picture

If you can't take it with you, then leave it "in gold". Whoever gets "it" will be extremely grateful for such analog, natural, portable, universal cash.

Do NOT follow this link or you will be banned from the site!