Germany guarantees all savings deposit

[krakknisse]

http://news.bbc.co.uk/2/hi/business/7653317.stm

Germany will guarantee all private savings accounts, says Chancellor Angela Merkel, as a major bank struggles to stay in business.

The government is under intense pressure to save the bank before markets reopen on Monday.

Seems to me that bank runs are imminent.
F* this. This is a game of chicken. I'm a chicken.

[rj1]

Re: Germany guarantees all savings deposit

http://news.bbc.co.uk/2/hi/business/7653317.stm


Seems to me that bank runs are imminent.
F* this. This is a game of chicken. I'm a chicken.

*Gordon Brown throws his chair through a window.*

[Supercilious]

Re: Germany guarantees all savings deposit

http://news.bbc.co.uk/2/hi/business/7653317.stm


Seems to me that bank runs are imminent.
F* this. This is a game of chicken. I'm a chicken.

krakknisse, if you live in a eurozone country you may be right: runs on the banks could be imminent.

[idianov]

Re: Germany guarantees all savings deposit

I think Euro governments full deposit guarantees provides proxy for Euro-dollar transfer channel from US Federal Reserve to Euro commercial banks via Euro central banks. The Fed will buy US Treasuries directly from ECB in exchange for freshly printed dollars to satisfy demand for Euro dollar deposits.

Other European countries should start following the lead of Ireland, Greece and Germany. The US Fed will effectively monetize all mortgage debts held outside of US.

Igor

[phirang]

Re: Germany guarantees all savings deposit

krakknisse, if you live in a eurozone country you may be right: runs on the banks could be imminent.

some great comments by, "kafka" in brad's blog:

http://blogs.cfr.org/setser/2008/10/...oes/#more-3837

[jk]

Re: Germany guarantees all savings deposit

my favorite passage from the bbc article:

Chancellor Angela Merkel has announced that Germany will guarantee all private savings accounts, as a major bank struggles to stay in business.
Ms Merkel was speaking after an emergency meeting with the central bank and financial regulator.
Hypo Real Estate, Germany's second biggest commercial property lender, is in trouble after a 35bn euro ($48bn; £27.2bn) rescue plan collapsed.
Hypo has said it will study alternative measures to fund its business.
Ms Merkel had previously been strongly critical of the Irish and Greek governments' decisions to take independent action to protect all savings deposits.

[second emphasis added]
it doesn't take so long for politicians to eat their words these days.

[Guest]

Re: Germany guarantees all savings deposit

Unbelievable. And then we should witness as much as a couple of full years of synthetic USD strength?

The US Fed will effectively monetize all mortgage debts held outside of US. Igor

[idianov]

Re: Germany guarantees all savings deposit

Unbelievable. And then we should witness as much as a couple of full years of synthetic USD strength?

Luke, the story of the Great Debt Deflation has already been written by the Fed in 2003. EJ just covered this in Still no deflation: Disinflation then lots of inflation:

I remind readers that our comments and forecasts on central bank policy should not be construed as approval. We cannot help our readers prepare for the future if we try to impose our own theories on how the economy, financial system, and monetary systems should work. We are interested in what the Fed and other central banks are thinking, not how they should be thinking. We'll have time for that later. So far careful observation of that has yielded, unfortunately, accurate forecasts.

So, why worry about short term fluctuations? Relax and enjoy the story as it unfolds.

Igor