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A translation from German Economic News:-
Strictly shielded from the public, have the IMF and the World Bank held this weekend in Washington their Spring. It is surprising that hardly relevant details are penetrated to the public of the deliberations. Even the major financial media as the FT or the Wall Street Journal reported to have agreed the financial elites in Washington spoke only of Greece.
This is no accident. The really important document that meeting, the Global Financial Stability Report , is a sobering account of the failure of alchemists in the global financial system. The report of the recent efforts to prevent a crash, the worst possible witness.
The report states: The risks in the global financial system have increased, since October 2014 and have moved on parts of the financial system, where they are harder to detect and fight even harder. The developed economies are on the one hand even more dependent on the policy of the Central Bank and must at the same time get the unwanted side effects of a global low interest rate policy in the handle. The low oil prices set, together with the strong dollar, especially the emerging economies under pressure. You must, as is required by the IMF to make their financial systems more resilient by fighting their own vulnerabilities.
The almost manic obsession with the Greek crisis shows that the network on the global financial system has become so complex that a collapse in Greece, contrary to all official summons the global financial system at risk very well. The same applies to the Russian crisis. José Viñals, Chief Financial Officer of the IMF and lead author of the report, mentioned in his blog geopolitical tensions in Russia and Ukraine expressly, as well as those of the Middle East, parts of Africa and Greece.
Particularly threatening seems therefore the position of the euro zone to be. The IMF notes that the euro-zone banks to bad loans (non-performing loans NPL) sitting in the amount of 900 billion euros. In contrast, take the 250 billion euros that has awarded the international creditors to Greece and would be lost in the event of a Greek default, as a manageable size. The IMF calculations show that the majority of these bad loans in the Italian and Spanish banks, as well as in Ireland, Cyprus and Greece outsourced. While the ECB has achieved some success to equity through the acquisition of banking supervision in Europe and the new rules. But are these measures from in any way to tackle the problem of bad loans in the handle. The IMF therefore proposes that the banks would have to actively deal with these bad loans. At the same time, the IMF recommends to build more efficient legal and institutional frameworks to create these bad loans from the World.
How they should look, Viñals outlined in an interview with the Austrian newspaper of the standard. There, the IMF man supports the tough stance of the Austrian government against the creditors of the scandal bank Hypo Alpe Adria. Surprised this position when numerous international investors, especially many German public banks, however, are affected by the debt moratorium. You will have to realize billions in losses. The support of the IMF for this course shows that the international financial elites given the intractability of the debt problem in the "Striped Trip" - have issued mode. We are dealing with a kind of endgame in which everyone is now trying to blame the one hand to the other. Secondly, all parties will try to not have to pay for the irresponsible debt.
In this context, the remark made by US President Barack Obama to Greece are important: Obama has the Greeks recommended to clamp down when collecting taxes and calls on the IMF that to solve the debt crisis, higher taxes are probably the only proven means.. Only a few months ago, the IMF had a compulsory levy of about 10 percent on all assets required to advance debt reduction. Australia is already followed this proposal and will be the first country a tax on bank deposits introduce. Austria, which is coming under pressure with his bank failure, is preparing a law with which the deposit insurance rearranged to be. No longer should the state bank clients guarantee their deposits. The banks alone should stand up for the savings. France has decided , the use of cash drastically limit to prevent an escape from the penal interest on bank deposits.
The idea on taxation or a compulsory levy on savings and assets to solve the debt problem, seeps under the further into the financial system. A few weeks ago has McKinsey , traditionally an important advisor to the Minister of Finance in many countries, a compulsory levy on property described as the silver bullet to solve the debt crisis.
The IMF report notes in disarming frankness that the current global money printing seems to have remained on the financial markets without any effect. For this purpose, an interview is enlightening that the IMF has done to itself (video at the beginning of the article). This confirms Viñals that rule a liquidity problem in the international financial markets. This statement surprised even the questioner, who himself comes from the IMF. But to his question, whereas for all the trillions are gone, who pumped in recent years in the markets, central banks, Viñals can be no logical explanation. He speaks of a paradox, according to which a lot of liquidity in good times, in bad times, however, be good bad. In other words, when it really comes down to it, all the desperate actions of central banks were ineffective.
More importantly, the money printing has another, extremely dangerous side effect. The IMF notes that low interest rates pose a significant threat for the insurance industry in Europe. Life insurers hold in the EU a portfolio of 4.4 trillion euros, which is severely threatened by the low interest rates. The IMF stressed that under no circumstances only isolated this problem is in the insurance industry. The difficulties of life insurers could lead to the IMF because of the high cross-linking with the entire financial system to infection. The IMF sees this as evidence that the risks of the financial system have migrated from the banks to other institutions. Manageable they have not become there, quite the contrary.
Although the calculations and forecasts by the IMF, caution is always necessary. Eben first became known that the IMF has corrected its growth forecast for Greece after three days. However, this correction seems to be because of the poker, the current troika and Athens is played. One thing is clear that Greece can not be saved. At the same time it is clear that the euro zone Greece can not drop. German Finance Minister Schaeuble has presented a plan to a few days ago , after which Greece will go bankrupt while, but remains in the euro zone. This idea also attacks the voice of the City of London, the FT on, and believes that Greece should best explain his inability to pay to the IMF and the ECB. This in turn would mean that the losses are borne by European taxpayers.
The idea that European leaders actually occurred and admit that they have built with the political project of a single currency without the associated fiscal superstructure 250 billion euro loss before their voters, now seems unrealistic. The Euro-rescuers are trying to delay the game as long as possible.
The findings of the IMF remain sober from current maneuvers of European politics unaffected. The debts are out of control world, the system no longer works. The close and confusing network of all financial institutions makes a control, especially in a crisis virtually impossible. At the same time, any small political crisis - at about Russia - bring the whole system to collapse.
Against the backdrop of in Austria, Australia and France by way of example executed measures, one can assume that comprehensively in the coming months and years, the taxpayer, depositors and bank customers, although probably only to be gradually asked to pay. They are the only ones who can repay accumulated debts. That they do not, but their irresponsible governments have made this debt will help citizens as an excuse little.
States have, because of the violence and money monopoly the ability to enforce any kind of financial repression. In comparatively gentle words of the IMF report on global financial stability States recommends otherwise, as to do so quickly and decisively. For savers and investors, the time has come to think exactly what they do with their hard-earned money. You have to be very intelligent. Sooner or later they will be cut off any escape. The crash is inherent in the system. And as always, have in history there is: swim from the consequences of political failure never those who are responsible for disaster.
Comments
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For the averge person this is the problem as I see it:-
- governments are hunting for taxes
- governments will tax savings
- governments will put a special tax on houses
- there is no job security, yet you cannot save to protect yourself if you lose your job
- governments are cutting back on welfare payments if you lose your job
What a situation!
Strictly shielded from the public, have the IMF and the World Bank held this weekend in Washington their Spring. It is surprising that hardly relevant details are penetrated to the public of the deliberations. Even the major financial media as the FT or the Wall Street Journal reported to have agreed the financial elites in Washington spoke only of Greece.
This is no accident. The really important document that meeting, the Global Financial Stability Report , is a sobering account of the failure of alchemists in the global financial system. The report of the recent efforts to prevent a crash, the worst possible witness.
The report states: The risks in the global financial system have increased, since October 2014 and have moved on parts of the financial system, where they are harder to detect and fight even harder. The developed economies are on the one hand even more dependent on the policy of the Central Bank and must at the same time get the unwanted side effects of a global low interest rate policy in the handle. The low oil prices set, together with the strong dollar, especially the emerging economies under pressure. You must, as is required by the IMF to make their financial systems more resilient by fighting their own vulnerabilities.
The almost manic obsession with the Greek crisis shows that the network on the global financial system has become so complex that a collapse in Greece, contrary to all official summons the global financial system at risk very well. The same applies to the Russian crisis. José Viñals, Chief Financial Officer of the IMF and lead author of the report, mentioned in his blog geopolitical tensions in Russia and Ukraine expressly, as well as those of the Middle East, parts of Africa and Greece.
Particularly threatening seems therefore the position of the euro zone to be. The IMF notes that the euro-zone banks to bad loans (non-performing loans NPL) sitting in the amount of 900 billion euros. In contrast, take the 250 billion euros that has awarded the international creditors to Greece and would be lost in the event of a Greek default, as a manageable size. The IMF calculations show that the majority of these bad loans in the Italian and Spanish banks, as well as in Ireland, Cyprus and Greece outsourced. While the ECB has achieved some success to equity through the acquisition of banking supervision in Europe and the new rules. But are these measures from in any way to tackle the problem of bad loans in the handle. The IMF therefore proposes that the banks would have to actively deal with these bad loans. At the same time, the IMF recommends to build more efficient legal and institutional frameworks to create these bad loans from the World.
How they should look, Viñals outlined in an interview with the Austrian newspaper of the standard. There, the IMF man supports the tough stance of the Austrian government against the creditors of the scandal bank Hypo Alpe Adria. Surprised this position when numerous international investors, especially many German public banks, however, are affected by the debt moratorium. You will have to realize billions in losses. The support of the IMF for this course shows that the international financial elites given the intractability of the debt problem in the "Striped Trip" - have issued mode. We are dealing with a kind of endgame in which everyone is now trying to blame the one hand to the other. Secondly, all parties will try to not have to pay for the irresponsible debt.
In this context, the remark made by US President Barack Obama to Greece are important: Obama has the Greeks recommended to clamp down when collecting taxes and calls on the IMF that to solve the debt crisis, higher taxes are probably the only proven means.. Only a few months ago, the IMF had a compulsory levy of about 10 percent on all assets required to advance debt reduction. Australia is already followed this proposal and will be the first country a tax on bank deposits introduce. Austria, which is coming under pressure with his bank failure, is preparing a law with which the deposit insurance rearranged to be. No longer should the state bank clients guarantee their deposits. The banks alone should stand up for the savings. France has decided , the use of cash drastically limit to prevent an escape from the penal interest on bank deposits.
The idea on taxation or a compulsory levy on savings and assets to solve the debt problem, seeps under the further into the financial system. A few weeks ago has McKinsey , traditionally an important advisor to the Minister of Finance in many countries, a compulsory levy on property described as the silver bullet to solve the debt crisis.
The IMF report notes in disarming frankness that the current global money printing seems to have remained on the financial markets without any effect. For this purpose, an interview is enlightening that the IMF has done to itself (video at the beginning of the article). This confirms Viñals that rule a liquidity problem in the international financial markets. This statement surprised even the questioner, who himself comes from the IMF. But to his question, whereas for all the trillions are gone, who pumped in recent years in the markets, central banks, Viñals can be no logical explanation. He speaks of a paradox, according to which a lot of liquidity in good times, in bad times, however, be good bad. In other words, when it really comes down to it, all the desperate actions of central banks were ineffective.
More importantly, the money printing has another, extremely dangerous side effect. The IMF notes that low interest rates pose a significant threat for the insurance industry in Europe. Life insurers hold in the EU a portfolio of 4.4 trillion euros, which is severely threatened by the low interest rates. The IMF stressed that under no circumstances only isolated this problem is in the insurance industry. The difficulties of life insurers could lead to the IMF because of the high cross-linking with the entire financial system to infection. The IMF sees this as evidence that the risks of the financial system have migrated from the banks to other institutions. Manageable they have not become there, quite the contrary.
Although the calculations and forecasts by the IMF, caution is always necessary. Eben first became known that the IMF has corrected its growth forecast for Greece after three days. However, this correction seems to be because of the poker, the current troika and Athens is played. One thing is clear that Greece can not be saved. At the same time it is clear that the euro zone Greece can not drop. German Finance Minister Schaeuble has presented a plan to a few days ago , after which Greece will go bankrupt while, but remains in the euro zone. This idea also attacks the voice of the City of London, the FT on, and believes that Greece should best explain his inability to pay to the IMF and the ECB. This in turn would mean that the losses are borne by European taxpayers.
The idea that European leaders actually occurred and admit that they have built with the political project of a single currency without the associated fiscal superstructure 250 billion euro loss before their voters, now seems unrealistic. The Euro-rescuers are trying to delay the game as long as possible.
The findings of the IMF remain sober from current maneuvers of European politics unaffected. The debts are out of control world, the system no longer works. The close and confusing network of all financial institutions makes a control, especially in a crisis virtually impossible. At the same time, any small political crisis - at about Russia - bring the whole system to collapse.
Against the backdrop of in Austria, Australia and France by way of example executed measures, one can assume that comprehensively in the coming months and years, the taxpayer, depositors and bank customers, although probably only to be gradually asked to pay. They are the only ones who can repay accumulated debts. That they do not, but their irresponsible governments have made this debt will help citizens as an excuse little.
States have, because of the violence and money monopoly the ability to enforce any kind of financial repression. In comparatively gentle words of the IMF report on global financial stability States recommends otherwise, as to do so quickly and decisively. For savers and investors, the time has come to think exactly what they do with their hard-earned money. You have to be very intelligent. Sooner or later they will be cut off any escape. The crash is inherent in the system. And as always, have in history there is: swim from the consequences of political failure never those who are responsible for disaster.
Comments
---------------------------------------------------------------------------------------------------------------------
For the averge person this is the problem as I see it:-
- governments are hunting for taxes
- governments will tax savings
- governments will put a special tax on houses
- there is no job security, yet you cannot save to protect yourself if you lose your job
- governments are cutting back on welfare payments if you lose your job
What a situation!
Comment