Germany decares WAR !

[Mega]

http://www.telegraph.co.uk/finance/f...scue-fund.html

Germany (Backed by Russia/China) tells US (Anglo-Saxons) to stick it!
Mike

[GRG55]

Re: Germany decares WAR !

http://www.telegraph.co.uk/finance/f...scue-fund.html

Germany (Backed by Russia/China) tells US (Anglo-Saxons) to stick it!
Mike

And the USA can smoke Germany yet again. The last time they used these:


This time they don't even have to leave home. It's all done with the Federal Reserve's computers.
Some nations [or at least their Finance Ministers] never learn...


From the article you posted:

"...The danger for Germany is that America will lose patience, with unpredictable consequences. The US Federal Reserve is currently propping up the European banking system in a variety of ways, including dollar swaps..."

[Mega]

Re: Germany decares WAR !

The $ is past, the RED RMB is the Future
Mike

[Shakespear]

Re: Germany decares WAR !

told the White House to sort out its own mess before giving gratuitous advice to others.

You don't need to be a wizard to know that this is a FACT.

[Starving Steve]

Re: Germany decares WAR !

"... [T]he people are making painful sacrifices, ....[T]he Greek people feel that they have little left to give." ( remarks above by the Greek Premier, Popendreau )

Yes, the Greek people retire at age 50 or 55 and with full benefits from government civil service work, or just terrific benefits from the Greek government for just living in Greece, breathing air in Greece, regardless of work career (if any). All of this so-called "sacrifice", not to mention the Greeks live on estates with beautiful homes over-looking the deep blue sea..... Thus it is said about the deadbeat nations of PIGS, "Club Med".

And Greece wants bail-out #4, or is it now bail-out #5 ?

Italy is waiting off-stage for its bail-out. Portugal is improving its wine industry by improving the corks in its wine bottles. And Spain is..... Who knows?

[unlucky]

Re: Germany decares WAR !

"... [T]he people are making painful sacrifices, ....[T]he Greek people feel that they have little left to give." ( remarks above by the Greek Premier, Popendreau )

Yes, the Greek people retire at age 50 or 55 and with full benefits from government civil service work, or just terrific benefits from the Greek government for just living in Greece, breathing air in Greece, regardless of work career (if any). All of this so-called "sacrifice", not to mention the Greeks live on estates with beautiful homes over-looking the deep blue sea..... Thus it is said about the deadbeat nations of PIGS, "Club Med".

And Greece wants bail-out #4, or is it now bail-out #5 ?

Italy is waiting off-stage for its bail-out. Portugal is improving its wine industry by improving the corks in its wine bottles. And Spain is..... Who knows?

Berlusconi has four simultaneous trials to deal with, with charges ranging from corruption to sexual exploitation of underage girls. Thank God he is such an energetic and virile man, otherwise he would have no chance of saving Italy while also keeping himself out of jail.

[GRG55]

Re: Germany decares WAR !

http://www.telegraph.co.uk/finance/f...scue-fund.html

Germany (Backed by Russia/China) tells US (Anglo-Saxons) to stick it!
Mike

LOL. So much for the German's exercising restraint. Sounds like more of "When in doubt, vote to bailout".

Yesterday Finland caved. Today Germany.

Man up Mega...when it comes to bailing out their banking system the Germans aren't any different than the Americans. Or the Chinese, as we are about to find out

German Market Up As Parliament Approves EFSF Expansion

9/29/2011 6:57 AM ET

(RTTNews) - The German market is marginally higher in afternoon trading Thursday, as Parliament voted in favor of expanding the Eurozone bailout fund, indicating a solution to the region's debt crisis. Most Asian markets advanced, while the U.S. index futures are higher.
In a vote in the Bundestag, the lower house of parliament, 85 percent of votes were cast approving the enlarging of the European Financial Stability Facility (EFSF) fund to help distressed countries in the Eurozone. There were 523 votes in favor of the proposal and 85 against, while three lawmakers abstained.

The Bundestag approval paves way for raising Germany's contribution to the EFSF from 123 billion euros to 211 billion euros. Germany became the 10th euro area nation to approve the reforms to the euro rescue fund. Yesterday, Finland gave its backing...

[DRumsfeld2000]

Re: Germany decares WAR !

The only war the Germans have declared is on their own people. Wait for the elections to happen, the current bunch of politicians will be slaughtered (at least they deserve to be!)

[coolhand]

Re: Germany decares WAR !

LOL. So much for the German's exercising restraint. Sounds like more of "When in doubt, vote to bailout".

Yesterday Finland caved. Today Germany.

Man up Mega...when it comes to bailing out their banking system the Germans aren't any different than the Americans. Or the Chinese, as we are about to find out

German Market Up As Parliament Approves EFSF Expansion

9/29/2011 6:57 AM ET

(RTTNews) - The German market is marginally higher in afternoon trading Thursday, as Parliament voted in favor of expanding the Eurozone bailout fund, indicating a solution to the region's debt crisis. Most Asian markets advanced, while the U.S. index futures are higher.
In a vote in the Bundestag, the lower house of parliament, 85 percent of votes were cast approving the enlarging of the European Financial Stability Facility (EFSF) fund to help distressed countries in the Eurozone. There were 523 votes in favor of the proposal and 85 against, while three lawmakers abstained.

The Bundestag approval paves way for raising Germany's contribution to the EFSF from 123 billion euros to 211 billion euros. Germany became the 10th euro area nation to approve the reforms to the euro rescue fund. Yesterday, Finland gave its backing...

Yet another mile post in the road leading us to global fiat currency collapse. There is debt. It cannot be paid. We can either accept that reality & let it go, or we can paper over it more debt, & reality will visit us differently, through the currency markets. Buy more hard assets now. Beat the rush later.

[Starving Steve]

Re: Germany decares WAR !

Yet another mile post in the road leading us to global fiat currency collapse. There is debt. It cannot be paid. We can either accept that reality & let it go, or we can paper over it more debt, & reality will visit us differently, through the currency markets. Buy more hard assets now. Beat the rush later.

At $1600 to $1900 per ounce, gold is not a hard asset, nor is silver a hard asset at $25 to $45 per ounce. They are dreamland assets and about as real as paper money now. In other words, you value these assets as you wish. And real estate to-day is in dreamland too. Everything is soft and drifting in price, searching for an anchor.... This state of affairs has arisen because there is no international money system anchored to anything, so everything is confused and drifting relative to everything else. This makes planning, saving, investing, producing, borrowing, even administrating impossible because no-one knows the long-term value of anything.

Yes, utility itself has a value, but for how long, relative to what, at what price, and to whom? Can the buyer pay, and in what currency, with what financing, lent by whom, and for how long?

And then we get into the small problems that have arisen from this insane post-Breton Woods international monetary system: Greece, the E.U, the Euro, the $, the debt, the bail-outs, "Club Med", the PIIGS, extend-'n-pretend, bubbles, entitlements, unemployment, national debts, discontent, uprisings, military adventures, and a growing mess. And the deeper we sink into this Great Recession, the more it has become apparent that our economic leaders are lost--- because there is no international monetary system.

[coolhand]

Re: Germany decares WAR !

At $1600 to $1900 per ounce, gold is not a hard asset, nor is silver a hard asset at $25 to $45 per ounce. They are dreamland assets and about as real as paper money now. In other words, you value these assets as you wish. And real estate to-day is in dreamland too. Everything is soft and drifting in price, searching for an anchor.

6,000 years of history, & more relevantly, the last 2 major US financial crises would suggest otherwise. In the 1930's, the value of US Treasury-owned gold as a % of the US monetary base hit 120%. In the 1970's, it hit 131%. It currently sits just slightly below 20%.

So you are free to your opinion, but history tells me that $1600-1900/oz means that a) most people have forgotten the 6,000 year tie b/c gold & money in just the span of 30 years, & b) people are nowhere near as suspecting of the value of fiat currency as they will eventually become.

By deduction, your logic implies that the value of the US dollar relative to gold & all other hard assets will move higher from here on out. As EJ notes, that is ultimately a political decision, so you could prove correct...but that seems like a very bad bet to me, b/c once again both total civilized history & modern relevant history suggest that there is very little chance of the US gov't saving the fiat paper dollar.

This is especially true once you understand the actual structure of the US dollar - it is a debt-backed, fiat currency. That's why it says "Federal Reserve Note" it. It is simply a bond of zero duration. So by saying you think gold is overvalued at $1600-1900/oz, you are saying you expect the US gov't to make a conscious political decision to allow deflation, which will cause debt deflation in the US.

HOWEVER - here's the ironic part - if we have the unbridled debt deflation your comments re: gold imply, you will eventually destroy the debt backing of the US dollar...which will eventually cause the same hyperinflation of the dollar v. gold that would occur through overprinting!!!

So vis a vis gold, all roads lead to Rome, so to speak...there are only 3 choices (unless a lot of cheap new energy comes available to the US): Controlled devaluation of the dollar v. gold; hyperinflation of the dollar v. gold via inflation; or hyperinflation of the dollar v. gold via deflation.

I am indifferent to all 3 from an investment standpoint, although I think the 1st would probably be the least politically destabilizing, so personally would prefer it. And so far, that's exactly what they are doing.

[Prazak]

Re: Germany decares WAR !

You don't need to be a wizard to know that this is a FACT.

As long as the Fed is backstopping Europe's major financial houses with USD liquidity I think the USG has perfect standing to give advice. You don't want the advice? Don't take the money.

[coolhand]

Re: Germany decares WAR !

As long as the Fed is backstopping Europe's major financial houses with USD liquidity I think the USG has perfect standing to give advice. You don't want the advice? Don't take the money.

The Fed's not dealing from a position of strength on this one, despite what it may seem. The ECB has 10,000 tons of gold. They could just as easily not take the US Fed's money, and instead offer Gold-backed Euro-bonds that would value the ECB's gold at say 50,000 euros/oz. They could then take those bonds & buy up every last piece of bad debt from the sovereigns & the banks.

By virtue of doing this, the USD would overnight effectively cease being the world's reserve currency, & prices of imported goods for the US would skyrocket, driving up inflation significantly, & likely collapsing the US economy.

So you see, the ECB in this case is likely saying "If you don't give us the money, US Fed, we will simply revalue our gold significantly higher as needed to cure our ills, which will in the process end the USD's 'exorbitant privilege' & crush your way of life."

Google "Europe eyes gold backed bonds" from a few weeks ago. Then notice how quickly that story disappeared from further consideration, & how quick the Fed was to write checks (which I believe was not too long after in terms of timing.)

[Prazak]

Re: Germany decares WAR !

The Fed's not dealing from a position of strength on this one, despite what it may seem. The ECB has 10,000 tons of gold. They could just as easily not take the US Fed's money, and instead offer Gold-backed Euro-bonds that would value the ECB's gold at say 50,000 euros/oz. They could then take those bonds & buy up every last piece of bad debt from the sovereigns & the banks.

By virtue of doing this, the USD would overnight effectively cease being the world's reserve currency, & prices of imported goods for the US would skyrocket, driving up inflation significantly, & likely collapsing the US economy.

So you see, the ECB in this case is likely saying "If you don't give us the money, US Fed, we will simply revalue our gold significantly higher as needed to cure our ills, which will in the process end the USD's 'exorbitant privilege' & crush your way of life."

Google "Europe eyes gold backed bonds" from a few weeks ago. Then notice how quickly that story disappeared from further consideration, & how quick the Fed was to write checks (which I believe was not too long after in terms of timing.)

But weren't those gold-backed bonds to consist merely of the gold of Greece and Italy as backing for bonds to sort out their own debts, rather than a generalized gold backing to Eurobonds? There was also talk of putting up a few Mediterranean islands.

And wasn't the short-term liquidity crisis that the Fed back-stopped a USD liquidity crisis resulting from U.S. money market funds pulling their USDs out of Europe's debt markets? European banks couldn't get Dollars fast enough and the Fed stepped in, no?

[coolhand]

Re: Germany decares WAR !

And wasn't the short-term liquidity crisis that the Fed back-stopped a USD liquidity crisis resulting from U.S. money market funds pulling their USDs out of Europe's debt markets? European banks couldn't get Dollars fast enough and the Fed stepped in, no?

Sure - but that supports what i'm saying in a way. The American MMF pulled USD's out of Euro debt markets. At that point, the European financial was faced with collapse. Do you think the ECB bankers & politicians would just allow this occur? Never, it would be politically unacceptable.

So then if you believe that premise, there are two (maybe more) but definitely two choices to which they are relatively indifferent:

1. Either the US Fed prints every last dollar needed to keep the Euro system solvent; or

2. The ECB revalues their gold high enough to bail out the system.

IF the US Fed refuses to do #1, forcing the ECB to choose #2, it will effectively end the USD's reign as the reserve currency of the world, both from the standpoint of the Euro being more valuable, & from the standpoint of the Fed admitting it would no longer provide dollar liquidity as needed...

At that point, the estimated $6-7T in USD sitting overseas would come rushing back into the US, creating the Ka-poom inflation. Why would you hold things in dollars if you knew the Fed wouldn't help you in a pinch?

Or alternatively, foreign countries would revalue their products higher in USD knowing they could not afford to get stuck with them, since the Fed would no longer be providing them...

Either way, much higher import inflation in the US, most notably for oil, & bye-bye US economy...which will require the Fed to print a bunch of money.

Seems to me t's just easier for the Fed to give the Europeans what they want...but it's definitely from a position of weakness, IMO