DE GROTE EURO ZONE CRISIS : The Endgame

[Sjaax]

Oorspronkelijk geplaatst door Piero

En dat gaan we dan allemaal democratisch regelen?

Niet dan? Een alternatief is het om ondemocratisch te regelen. Ben ik geen voorstander van. Napoleon en Hitler hebben we al gehad en nog een soortgenoot? Liever niet

Oorspronkelijk geplaatst door Piero

En hoe stelt u zich dit beleid voor? We hebben al een merkwaardig landbouwbeleid en quotering voor de visserij. En nu nog toebedelen van bepaalde industrieën aan enkele landen? Het beheer over bodemschatten of het verdelen van de rijkdom aan bodemschatten, compenseren voor gemis van ligging aan zee, bossen of landbouw grond? Het verdelen van luchthavens en vliegverkeer voor doorvoer en de autofabrieken, het investeren in technologische ontwikkeling? Extra belasten van inkomsten die iemand verdient in aan buurland? Het gelijktrekken van salarissen van medici in alle landen om vlucht van goedopgeleide artsen naar hoge loon landen te voorkomen?

Ja, er zijn tal van complexe problemen. Maar het feit dat ze complex zijn, is geen reden ze niet aan te pakken. Met niks aanpakken krijgen we voortdurend crises zoals de huidige eurocrisis.

[zonbron]

De huidige situatie...

(@Sjaax, @Piero... inderdaad, geen democratische oplossingen en tevens 'geen effectieve oplossingen')

European Debt Crisis Becoming A Greater Problem
An excerpt from Bob Chapman's weekly publication.

December 18 2011



After watching Europe’s performance last week the only thing they really were after was an ESM, European Stabilization Mechanism, to tie down all EU nations to a tighter regional set up. As it turns out England and others did not agree. Britain obviously does not want to become part of a new treaty that deprives them of their sovereignty. This regional government concept appeared in the early 1960s and is now going to be pushed in Europe with the US to follow. Our question, is England just trying to protect the advantages of the “City of London,” or is the disagreement deeper than that? A new treaty will take two years for ratification, but in the meantime an agreement will hold forth on what can be called a handshake. Evidence is still out on whether this is an attempt by Germany to break up the euro zone and the EU or a genuine effort to set up a platform for world government. We know that since WWII that the internationalists have been setting up Europe as the foundation for world government. On the other hand we know that 65% to 70% of the German people want no part of it from any standpoint.

The main players in the end treated the debt crisis as a secondary problem, probably because the Federal Reserve had it covered for them. The only main player that displayed real nervousness was France’s Sarkozy. France had to have its banks bailed out and had to avoid one or two rating downgrades. Not only would those downgrades entail higher costs, but also they would impair France’s ability to help bailout the six unsound economies. The Fed is bailing out French banks short-term. Once the situation is more stable American short-term bond buyers will return and the Fed can concentrate aiding in other areas. That, of course, is if stability returns. Bailouts can only emanate from central banks and governments and any such operations in and of themselves are inflationary and if persistent will lead to hyperinflation.

This means all of the banks in the solvent countries will have to be nationalized, all or in part. At the same time these same banks and countries have to bail out the dreaded six countries. That will be a tall order, as some are not even cooperating. That could mean three or more of these countries could default leaving sound countries and their banks with big holes in their balance sheets. Overall none of this has been solved, because France and Germany were more interested in changing treaty rules than addressing the debt problem. These massive bailouts are on the way for the sound and the unsound, accompanied by higher inflation. Needless to say, all of this solves nothing on the short to intermediate term. It is another temporary respite. All we see is avoidance. Von Mises has told us only purging the system works. The bankers, politicians and bureaucrats do not want to see that happen, because the key to their power lies in the banking system and once purged their power is lost and countries are free to survive on their own. That is why the world has wars to keep the elitist bankers as our overseers. Under such circumstances nations are forced to amalgamate to bring order and to provide for the common defense. None of us are on the inside, so we do not know which avenue will be taken. Both choices mean lots more trouble ahead. The EU and the euro zone structures do not need to be changed, but the debt problem certainly needs to be addressed.

The quest for more power via the ESM is obvious to those in favor of world government. There will be nothing democratic about the ESM and most players will be appointees. Someone should tell these elitists bigger is not better and that more than half of Europe knows what they are up too. Whether it is called the EU, or Soviet Union, National Socialist Bund or the North American Union, they are all the same. They are totalitarian governments within one form of socialism at its core. This is government by appointment and regulation, which has no intention of letting the public participate. Every move or change will require no input from the people, only edicts from above.

That brings us to the position that England has taken. PM David Cameron is an elitist and one directly chosen at the Queen’s request. His position at last week’s meeting was surprising as he wanted guarantees of protection for the “City of London,” which supplies 40% of London’s jobs and 10% of jobs in England. This is the gang that was deeply involved in Bear Stearns, Lehman Bros., AIG and the Madoff scandals.

Among other things, Britain has objected and threatened to veto any kind of tax, even 1%, which on a compound basis would be far higher. Cameron believes this would cause financial sector business to move to Frankfurt. This rebellion within the EU ranks has far reaching implications. Cameron is no conservative and is part of the elitist operatives; obviously few of these characters trust each other. This is why England never committed to the euro. Cameron’s action has finally set Britain apart from the EU, never to join the euro, and cuts England off in part from the attempted consolidation on the Continent. That means it will have difficulty in fronting for American interests, and such interests will become more transparent.

Such a new treaty could take years and in the meantime Germany expects an agreement to do the very same thing. You have to wonder if there really are any rules here. This is why Britain said no to the treaty. At the last minute Hungary, the Czech Republic and Sweden agreed to the arrangement. National parliaments have to approve such a treaty in Denmark, Latvia, Poland, Lithuania, Romania and Bulgaria. Remember, this is not what this was to be about. It was about providing funds for the six unsound economies, all of which was shunted into the background, as a sort of afterthought. There is no question this was the plan from the beginning. Change the treaties, moving European power to Germany and deal with the debt as they go. The US and UK are not going to like that. The US could withdraw support from the financial perspective. Germany is saying we want more centralized power if we are going to pay all these debts. It would demand balanced budgets. If not feasible then raise taxes. The agreement would give the EU power over each legislative action, which means sovereign nations would lose their sovereignty.

These central planners believe they will lose a number of euro zone members along the way and that does not concern them. They’ll just absorb the debt for their government and their banks, nationalizing them in the process. From the very beginning, years ago, we saw this coming, and it is here. The formation of a hardcore socialist bloc controlled by bureaucratic technocrats (bankers) with the public having little to say about proceedings.

That takes us to the other side of the equation - the six problem countries, led by Greece. Greece is a banker looting operation and when their man Papandreou couldn’t get the job done they had their man Lucas Papademos appointed to do the job. He is a Trilateralist and Bilderberg. In spite of Papademos’ position he is accomplishing very little. The Troika seems to be running in circles. It won’t be long before Mr. Samoras is in charge, perhaps 2-1/2 to 3 months. Polls show him with half the votes in a three party race. The people are enraged and rightly so. On September 20th almost $11 billion is coming into Greece and all but $1 billion will go to pay bankers’ interest, which means this coming year taxes will rise to pay the bankers even more interest. The financial treadmill Greece is on is running ever faster. At the same time the Troika wants government to fire even more people. This group is making no effort to create jobs, only to save banks and large corporations. The Troika wants to destroy Greece and pick up the pieces for 10 cents on the dollar. The result domestically is that crime is running rampant. People on the edge, who normally would never commit crime, have been forced to become criminals just to live. The police have even become criminals, because they cannot support their families on much lower salaries.

Mr. Samaras has put Mr. Papadimos on notice that real elections have to come quickly. If elections do not come soon it certainly will lead to serious trouble.
Those in office and those who have been in office are at great risk of being charged civilly and criminally. The politicians, bureaucrats and bankers have almost totally destroyed the country. Many could go to jail including Papandreou and Papadimos and then again Mr. Samaras could end up dead. These people are playing for the highest stakes and they should remember there is real trouble headed their way.

Next we expect there is a chance that Greece will enter the nether world of selective default; you might say they’ll follow the path of 1999 to 2002 Argentina. It seems Greece will get the $157 billion to cover their in house debt which means they will be lossers all around. There then will be not only default in Greece, but among the other failing countries as well. Is debt repayment going to be extended in whole or in part? The answer is probably. The interest rates will probably be 3 to 4 percent. It looks like help is on the way and the EU is going to bail out those in trouble no matter what the cost. That is $6 trillion or more, which will be created for the most part out of thin air, which will be very inflationary. Owners of debt may have it phased out over three years and may end up getting 80%. That is if the Greeks agree. We do not expect them to agree.

We find it amusing that the Bundesbank finds financing the Greek government unacceptable, while they have no trouble funding Greek banks. Germany is trying to reinterpret the Maastricht and Lisbon Treaties and fit in the EFSF and next the ESM, whatever it takes to change things to their satisfaction, just as Germany did in the Rhineland and Saarland starting in 1936 in violation of the Treaty of Versailles.

This push by Germany to dominate other euro zone and EU members could lead to serious political problems in France. The economy in France is weakening. Strauss-Kahn looks to be out of the race. Germany’s power is visualized in France as to turning France into a German satrapy and that has the French very upset. France was a very big buyer of toxic bonds and faces a rating reduction and perhaps even a double reduction. That will cost the French; it’s Bank of France, its banks and citizens more to do business with higher interest rates. These events have set the stage for the National Front’s, Marine Le Pen to improve her poll percentage currently at about 21%, up to 26%, which would put her into round two.

French voters have stepped further from the center since the late 1980s when Jean-Marie Le Pen garnered 21% of the final vote and lost the election, as head of the National Front. Traditional parties continue to lose ground in France whereas in other countries major parties hold their ground and third parties continue to find the going difficult. People in Europe see more clearly that with the exception of Germany, the Netherlands and Finland that their countries are being mismanaged. In France can a change come via Marine Le Pen? We think so, she has much common sense and the first thing she would do is leave the euro. She has stated this and many French agree. Like the average German many of the French want out. We have lived in both countries for an extended period of time, speak both languages, and deeply understand their cultures, which are like night and day. We see it amazing that the euro has held together as long as it has. Le Pen is acutely aware of these differences. She reflects national feeling far better than any French leader. She should be able to siphon off enough votes from Sarkozy to enter the finals, which she could win setting a whole new course for France. We must state here that we are friends of the Le Pen family and have known Marine since her teens, so we express favoritism in this case.

As we have stated for more than 15 years, the euro zone and the EU are unnatural associations that can never hope to work.

Britain’s approach is a perfect example of the dichotomous situation. The main mission of PM Cameron was to make sure there were no treaty changes that were detrimental to England. He accomplished that at a great price. The Monarchy and all its defenders, such as the “City of London” were proud he stood his ground. Germany and others were unwilling to accept such impertinence from a country they believe shouldn’t be in the EU in the first place. England is not against more spending to delay the inevitable – it had to protect the greatest wealth center in the world, the City of London. They also know just as the other members do, that they’ll be no meaningful reforms and more debt has to be created to service current debt, until the system collapses. Via this system the UK and US control the world and intend to continue to do so. This is a UK-US holding action until another series of wars, or a major war can be put in place to take the blame for the current financial failures. Just look at history. That is how it works and has worked for centuries. For the UK and US, Germany is the problem and France just tags along. That is something Marine Le Pen is well aware of and she wants to change that. French bankers hate her, because she knows exactly what they have been up too.

Treaty changes require unanimous consent, so there are not going to be any changes until the City of London is exempt from additional taxation. There are still several countries that have to approve by Parliamentary consent in their countries, so Mr. Cameron may have some company in bolstering his position. In fact whether they have their meetings or not, Britain has cast the die and now Germany must respond. It is either let’s make a deal or the EU and the euro zone breaks up. Who knows, perhaps that is what Germany is after?

VOOR MEER EN LINKS(BRONNEN) HIER

[UnionJack]

Hahahaha!!!

http://www.hln.be/hln/nl/3424/&#8203...e-helpen.dhtml

Heeeelp ons, heeeelp ons, uit de nood,
Of de rating bureaus raten ons dood!

Stort maar in mijn bankje klein,
Kzal je dankbaar zijn!

[D'ARTOIS]

OK en toen?

[UnionJack]

Oorspronkelijk geplaatst door D'ARTOIS

OK en toen?

En toen, was er de Big Bang

[zonbron]

ESM is vergelijkbaar met een super-TARP

Video Explanation Of How The ESM Is Europe's Uber-TARP On Steroids

...

the ESM "is an organization that can sue us, but is immune from any forms of prosecution and whose managers enjoy the same immunity; there are no independent reviewers and no existing laws apply; governments can not take action against it? Europe's national budgets in the hands of one single unelected intergovernmental organization? Is that the future of Europe? Is that the new EU? A Europe devoid of sovereign democracies?" Ironically even America's feeble and corrupt Congress stopped a version of TARP that demanded far less from the taxpaying citizens. Yet somehow, Europe has completely let this one slip by. Is it simply to continue the illusion of the insolvent Walfare State for a continent habituated by zombifying socialism, or is Europe by now just too afraid and too tired to say anything against its eurocrat class? One thing is certain: when the people voluntarily give up on democracy, out of sheer laziness or any other reason, the historical outcomes are always all too tragic

...

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Europe Is Now Officially Bazooko's Circus - Italy To Provide €23.5 Billion In IMF Cash To Bailout Italy

...

The EU was already embarrassed into releasing a press release that it could procure €150 billion in Eurozone contributions to the IMF rescue, now that the UK is out of the picture and the December 9 Eurosummit agreed upon total of €200 billion including non-Eurozone contributors (mostly the UK with €30.9 billion) has been "adjusted." Now we find that the rabbit hole goes even deeper into Bazooko's Circus because according to a just released update, of the remaining meager €150 billion in funding, Germany will be responsible for €41.5 bn, France at €31.4 billion, and Italy will need to provide €23.5 billion and Spain another €15 billion. To, you know, bailout Italy and Spain.

...

Lees ook volgend EUstatement via SCRIBD : IMF resources (de nodige bijdragen per land lid van de EURO ZONE)

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Een aanrader: Het 'Thunder Road report'

"2012: Dear Portfolio Manager, you are leaving the capitalist sector and heading into a full-spectrum crisis."

...

The turbocharged, debt-driven over-consumption of past decades must be undone. The strong medicine could and should have been taken years ago. As the primary architect, Greenspan shoulders much blame, but shrugs it off. The financial system is already past the point of no return (“In my mind and in my car, we can’t rewind we’ve gone too far”) – and we are on the brink of a TSUNAMI of new money/credit creation to delay its failure. This will be the final run to the summit of the Ponzi scheme. All Ponzi schemes end and there will have to be a system reboot. This is a “Crisis of the Ages”;

...

The majority of people probably won’t agree (yet) with much of this paragraph, but we are in a chain of events where the direction of travel is: INFLATIONISM - INTERVENTIONISM - SOCIALISM - REDUCED LIVING STANDARDS - TOTALITARIANISM. Elements of all of them are already present to a greater or lesser extent, as I’ll discuss. Of course, the earlier ones, inflationism and interventionism (which Ludwig Von Mises described as “socialism by installments”), are the most obvious. What we are experiencing was prophesied in fictional form by Ayn Rand in her masterpiece “Atlas Shrugged” when it was published in 1957. I’m reading it and it’s amazing.

...

Without a framework with which you can see beyond the short term, it’s getting more and more like being a spectator at a tennis match. Look at the equity market recently, or gold and silver, where the prices have fallen as the banking system disintegrates. Markets are all over the place, as more and more holes in the dyke burst open.

The main lessons I learnt from this report are about SOCIALISM and its impact on financial markets. For example:

How far we’ve departed from the ideal of free-market capitalism and how far the Socialist takeover has advanced;
How the style of the Socialist takeover has elements of both the extreme left and the extreme right (“national”) on the political spectrum – not only making it harder to categorise, but also harder to see; and
What I think that this means for asset allocation.

Let’s take the last point and consider some of the key themes:

Socialism from the Left: government taking a greater share of GDP, lower living standards and debasement of currencies;

Combined with:

Socialism from the Right: government largesse and corruption with certain large corporate interests which serve the purposes of the state, military adventurism and a much more controlled society.

...



Thunder Road Report

[Sjaax]

Oorspronkelijk geplaatst door zonbron

[zonbron]

Oorspronkelijk geplaatst door Sjaax

Waar heb ik dat gepost ? Kan het niet terugvinden.

In elk geval, de 'core' van de EUSSR zou wel eens het ESM kunnen zijn.

*** Heb het reeds gevonden. Dat is een C/P uit een link die ik geplaatst heb naar de international forecaster van Bob Chapman

European Debt Crisis Becoming A Greater Problem

The quest for more power via the ESM is obvious to those in favor of world government. There will be nothing democratic about the ESM and most players will be appointees. Someone should tell these elitists bigger is not better and that more than half of Europe knows what they are up too. Whether it is called the EU, or Soviet Union, National Socialist Bund or the North American Union, they are all the same. They are totalitarian governments within one form of socialism at its core. This is government by appointment and regulation, which has no intention of letting the public participate. Every move or change will require no input from the people, only edicts from above.

That brings us to the position that England has taken. PM David Cameron is an elitist and one directly chosen at the Queen’s request. His position at last week’s meeting was surprising as he wanted guarantees of protection for the “City of London,” which supplies 40% of London’s jobs and 10% of jobs in England. This is the gang that was deeply involved in Bear Stearns, Lehman Bros., AIG and the Madoff scandals.

Dat stukje over het ESM weggelaten ? Veelzeggend

Het doet me toch een plezier dat je de vernoemde sites bezoekt, dus toch een

[zonbron]

De EU speelt poker

ZERO HEDGE - You Want The Truth? You CAN Handle The Truth!

I’m not sure exactly when it happened, but Europe has finally starting dealing in the truth.

Draghi can’t point out the limits of sovereign debt purchases often enough.

The EU, usually happy to let completely false rumor after false rumor to drive the markets, took the time to quash the idea of EFSF and ESM being increased in size. Not just, once, but twice, as Merkel has said it on the 13th, and it came out after yesterday’s conference call.

They even took the time to point out that they hadn’t been able to agree on 85% agreement. That could easily have been buried or ignored, but yet they chose to highlight it after their call yesterday.

Finally, they even went ahead detailing the relatively puny IMF/Central Banks bailout fund. The fund was disappointingly small at €150 billion, rather than the €200 billion that had been expected. The UK is out, but so are Portugal, Ireland, and Greece. Those 3 not being in makes sense, but this is the first time that I can remember that the EU gave us the numbers straight. Usually they would have announced the big number with caveats about various “stepping out countries” and “yet to be ratified” countries. Estonia, which has no debt, is not going to participate. Again, makes sense, but is a step away from the EU making everything sound bigger and grander than in the past.

I’m not really sure what any of this “truthfulness” means. While the EU, IMF, and ECB have done a horrible job dealing with the crisis, they are not stupid nor are they quitters. So why suddenly stop the spin and deliver the more harsh reality? Has Merkozy finally decided to stop being the bull in a bullfight? Every time the market waved a red cloth in front of them (telling them what they needed to do), they failed to deliver or the market failed to respond. Have they decided to take a step back and work on a plan that they may have the resources to implement?

I remain completely convinced that we are far from the endgame in Europe and the ultimate solution will involve restructuring, debt forgiveness, and massive dilution at the banks. But there is something about this focus on the truth and the willingness of the EU/ECB to embrace negative news that seems like a set-up. Is this all part of a plan to allow the ECB to print? Is it setting up for a renewed effort with the EFSF? Does the IMF have something up its sleeve?

It feels like they are trying to create bearish sentiment, that they are purposely lowering expectations. Longer term, I believe those lower expectations are warranted, but in the short term, are they planning on catching the market short to get more bang for the euro on some new announcement? The strongest seasonality effect we see would be from the closing on Wednesday until the market opens after Christmas. That strong seasonality, coupled with reduced expectations, and an extraordinarily thin market, could be an ideal time to launch a new program or refurbished existing one. China may be finally concerned enough about their own economy that they relent and lend their name (and money) to some plan.

...

[zonbron]

Oeps...

Spain names ex-Lehman executive as economy minister

[zonbron]

Jesuit troika - 4 alumni
Added Wednesday 7 December 2011 :: Category: General :: »

Readers will have noticed one sign of hope on the European scene, a blessed unity of purpose among three of Europe’s leaders: Herman van Rompuy, President of the European Council; Mario Draghi, President of the European Central Bank; and Mario Monti, the new Prime Minister of Italy. In a recent speech van Rompuy reminded listeners that all three were educated by the Jesuits: “My two technocrat colleagues share with me an idea of a humane market economy, an area where I have always dwelled.” They share the global economic vision of Pope Benedict’s encyclical: Caritas in Veritate. The fact that the Spaniards have just elected another Jesuit alumnus, Mariano Rajoy, as their leader, is stirring the lunatic fringe to talk of a Jesuit take-over of Europe – whatever that means.

[zonbron]

Analyse US/Europa

GEAB – Global Economic Crisis: The U.S. An Insolvent and Ungovernable Country

Dec 18, 2011 – 05:57 AM
By: LEAP


As announced in previous GEABs, in this issue our team presents its anticipations on the changes in the United States for the period 2012-2016. This country, the epicentre of the global systemic crisis and pillar of the international system since 1945, will go through a particularly tragic in its history during these five years.

Already insolvent it will become ungovernable bringing about, for Americans and those who depend on the United States violent and destructive economic, financial, monetary, geopolitical and social shocks. If the United States today is already very different from the “super-power” of 2006, the year the first GEAB was published, announcing the global systemic crisis and the end of the all-powerful US, the changes we anticipate for the 2012-2016 period are even more important, and will radically transform the country’s institutional system, its social fabric and its economic and financial weight.

At the same time, every December, we evaluate our anticipations for the year just ended. This exercise, too rarely practiced by the think tanks, experts and media (1) is a tool enabling our subscribers (2) as well as our researchers to verify that our work retains a high added-value and and is in direct contact with reality. This year our score improved slightly and LEAP/E2020 attained an 82% success rate in its anticipations for 2011.

In addition we also detail our recommendations on foreign currencies, gold, stock exchanges and the consequences of the United Kingdom’s marginalization within the EU (3) on the Pound, Gilts and UK debt and we set out some advice on developments of the American institutional system (4).

In this public communiqué we have chosen to present an excerpt from our anticipation on the changes in the United States for the 2012-2016 period.

But before addressing the American case, we wish to review the situation in Europe (5).

From the non-dislocation of Euroland to the dislocation of the United Kingdom
As anticipated by our team, the EU summit in Brussels on 7 and 8 December last has led to two key events:

. the further integration of Euroland with an acceleration and strengthening of budgetary and financial integration and the initiation of a fiscal integration (6). The Eurozone governments, led by Germany, have confirmed their willingness to go right through to the end of this process, unlike all the Anglo-Saxon and Eurosceptic discussions which, for the last two years, predicted that Germany would abandon the Euro. At the same time, they have refused to follow the path of the Fed and the Bank of England by refraining from running the printing press (Quantitative Easing) as long as budgetary discipline is not achieved within Euroland (7). The clear failure of QE in the US as in the UK (8) confirms the relevance of this choice which will allow the issue of Eurobonds at the end of 2012 (9).

US, UK, Japanese and European central bank balance sheets (2007-2011, based 100 in June 2008) – Source: Société Générale, 11/2011
In contrast, the “assurance” that the Greek case (of a “voluntary tax” of a 50% “haircut” for the country’s private creditors) will remain an exception is a promise that binds only those who believe it. Incidentally it has been pushed by the French President, Nicolas Sarkozy, whose citizens are well aware, after five years of seeing him in action, that his commitments have no lasting value and are always tactical in nature (10).

. the lasting marginalization (at least 5 years) of the UK within the European Union vividly confirms that it really is now Euroland that henceforth leads European affairs. David Cameron’s inability to gather even only two or three of the United Kingdom’s “traditional allies” (11) illustrates the structural weakening of British diplomacy and the general lack of confidence in Europe on UK’s ability to overcome the crisis (12). It’s also a reliable indicator of the loss of US influence on the continent since the sending of Treasury Secretary Tim Geithner and Vice President Joe Biden to maraude on the mainland a few days before the summit served no purpose and didn’t prevent the British failure (13).

Comparison between interest rates on current debt and the market rate for 10 year borrowing – Source: Figaro, 11/2011
In fact this summit will have been historic, but not yet because it will have settled the European financial and budgetary problems. As we anticipated in December 2010, and as Angela Merkel has just said in the Bundestag, the Euroland path is a long journey, complex and chaotic, like the road traveled since the 1950s for European integration (14). But it’s a way that strengthens our continent and will place Euroland at the heart of the world after the crisis (15). If markets are not happy with this reality, it’s their problem. They will continue to see their ghost-assets go up in smoke, their banks and hedge funds go bankrupt, trying in vain to push up interest rates on European debt (16) resulting in the ratings of the Anglo-Saxon credit rating agencies losing all credibility (17).

Large hedge funds’ donations to the British Conservative Party (2001-2011) – Source: Financial Times, 12/2011
This summit is historic because it confirms and boosts the return of the EU founding countries in charge of the European project and because it shows that far from witnessing a collapse of the Euro zone, the shock treatment attempted by David Cameron on the orders of City financiers (18), is resulting in an acceleration of the United Kingdom’s dislocation (19). In addition to the confrontation between Liberal Democrats and Conservatives which Cameron’s posture initiated, undermining even further a coalition already in really bad shape, this British marginalization raises fierce opposition in Scotland and Wales whose leaders proclaim their attachment to the EU and its volition, as regards Scotland (20), to join the Euro once the independence process starts around 2014 (21).

And, the icing on the cake, the collusion between the City and the British government is now a topic that extends beyond the UK’s borders and reinforces the continent’s determination to finally bring this “outlaw” under control. As we have described since December 2009 and the beginning of the attacks against Greece and Euroland, the City, alarmed by the consequences of the crisis as regards European regulations, launched itself in an attack against an evolving Euroland, putting the Conservative Party and Anglo-Saxon financial media in its service (22). The episode of the recent Brussels summit marks a major defeat for the City in this increasingly public war, exposing by the way the resentment of a majority of British who are not so much against Euroland than against the City (23) accused of exploiting the country (24).

With £1.8 trillion of public money invested in banks to prevent their collapse in 2008, the British taxpayers are in fact those who have paid the most for the rescue of financial institutions. And the British government may well continue to exclude this amount from its public debt calculations by claiming it’s an “investment”, de facto, fewer and fewer people consider that the banks in the City will recover from the crisis, especially since its worsening in the second half of 2011: the shares purchased by the Government in fact are already worthless. The “UK hedge fund” is on the brink of collapse (25) … and thanks to David Cameron and the City, it’s isolated with no one to come to its aid, neither in Europe nor the United States.

With the Chinese bubble (26) about to join the European recession and the US depression, the 2012 storm will determine whether David Cameron and his finance minister George Osborne are worthy descendants of the great British sailors.

Maritime freight costs China/Europe (in blue) and China/USA (in red) (September-November 2011) – Source: Phantonomics, 12/2011
But back now to the extract from our anticipation on the future of the United States for the 2012-2016 period.

The future of the USA – 2012-2016: An insolvent and ungovernable United States
In this issue, our team therefore gives its anticipations regarding the future of the United States for the 2012-2016 period. We recall that since 2006 and the first GEAB issues, LEAP/E2020 described the global systemic crisis as a phenomenon characterizing the end of the world as we know it since 1945, marking the collapse of the American pillar on which this world order has rested for nearly seven decades. Since 2006, we had identified the period 2011-2013 as that during which the “Dollar Wall” on which the power of the United States sits would fall apart. Summer 2011, with the cut in the United States’ credit rating by S & P, marked an historic turning point and confirmed that the “impossible” (27) was indeed in the process of coming true. Therefore today, it seems essential to provide our subscribers with a clear anticipatory vision of what awaits the “pillar” of the world before the crisis at the point when the crisis moved into “top gear” in summer 2011 (28).

Thus, according to LEAP/E2020, the 2012 election year, which opens against the backdrop of economic and social depression, complete paralysis of the federal system (29), strong rejection of the traditional two-party system and a growing questioning of the relevance of the Constitution, inaugurates a crucial period in the history of the United States. Over the next four years, the country will be subjected to political, economic, financial and social upheaval such as it has not known since the end of the Civil War which, by an accident of history, started exactly 150 years ago in 1861. During this period, the US will be simultaneously insolvent and ungovernable, turning that which was the “flagship” of the world in recent decades into a “drunken boat”.

To make the complexity of the current process understandable, our team has chosen to organize its anticipations around three key areas:

US institutional deadlock and the break-up of the traditional two-party system
The unstoppable spiral of recession/depression/inflation
The breakdown of the US socio-political fabric

The unstoppable US economic spiral : recession/depression/inflation (extract)
In fact, the United States ends 2011 in a state of weakness unmatched since the Civil War. They practice no significant leadership at international level. The confrontation between geopolitical blocs is sharpening and they find themselves confronted by almost all the world’s major players: China, Russia, Brazil (and in general almost all of South America) and now Euroland (30). Meanwhile, they cannot control unemployment where the true rate stagnates at around 20% against the backdrop of an unabated and unprecedented reduction in the labour force (which has now fallen to its 2001 level (31)).

Real estate, the foundation of US household wealth along with the stock market, continues to see prices drop year after year despite desperate attempts by the Fed (32) to facilitate lending to the economy through its zero interest rate policy. The stock market has resumed its downward path artificially interrupted by two Quantitative Easings in 2009 and 2010. US banks, whose balance sheets are much more heavily loaded with financial derivative products than their European counterparts (33), are dangerously approaching a new series of bankruptcies of which MF Global is a but a precursor, indicating the absence of procedural controls or alarms three years after the collapse of Wall Street in 2008 (34).

Poverty is gradually increasing in the country every day, where one in six Americans now depend on food stamps (35) and one in five children has experienced periods of living on the streets (36). Public services (education, social, police, highways…) have been significantly reduced across the country to avoid city, county, or state bankruptcies. The success with which the revolt of the middle class and the young (TP and OWS) has met is explained by these objective developments. And the coming years will see these trends get worse.

The weakness of the 2011 US economy and society is, paradoxically, the result of the “rescue” attempts carried out in 2009/2010 (stimulus plans, QE …) and the worsening of a pre-2008 “normal” situation. 2012 will mark the first year of deterioration from an already badly impaired situation (37).

SMEs, households, local authorities (38), public services,… have no more “padding” to soften the blow of the recession into which the country has fallen again (39). We anticipated that 2012 would see a 30% drop in the Dollar against major world currencies. In this economy, which imports the bulk of its consumer goods, this will result in a corresponding decrease in US household purchasing power against a backdrop of double-digit inflation.

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Na ZH en Ron Paul, beschuldigt ook ex-Vice President van de FED(Dallas), GERALD P. O'DRISCOLL, Bernanke ervan EU-bailouts te realiseren via onbegrijpbare/ingewikkelde SWAP-operaties.

First it was Zero Hedge. Then Ron Paul joined in. Now it is the turn of a former Dallas Fed Vice President, Gerald ODriscoll, to outright accuse the Fed of bailing out Europe courtesy of "incomprehensible" currency swaps, and implicitly accusing Bernanke of lying that he would not bail out Europe even as he has done precisely that. And not only that: by cutting the USD swap spread from OIS+100 to OIS+50, the Fed has made sure it gets paid less than ever for extended Europe the courtesy of bailing it out all over again. Incidentally, O'Driscoll says, "America's central bank, the Federal Reserve, is engaged in a bailout of European banks. Surprisingly, its operation is largely unnoticed here."
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The Federal Reserve's Covert Bailout of Europe
When is a loan between central banks not a loan? When it is a dollars-for-euros currency swap

America's central bank, the Federal Reserve, is engaged in a bailout of European banks. Surprisingly, its operation is largely unnoticed here.

The Fed is using what is termed a "temporary U.S. dollar liquidity swap arrangement" with the European Central Bank (ECB). There are similar arrangements with the central banks of Canada, England, Switzerland and Japan. Simply put, the Fed trades or "swaps" dollars for euros. The Fed is compensated by payment of an interest rate (currently 50 basis points, or one-half of 1%) above the overnight index swap rate.

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De Euro Zone loopt nog steeds gevaar en is een bedreiging voor de wereldeconomie.

A Strategic Alpha Preview Of 2012: Hope And Expectations
Submitted by Tyler Durden on 12/28/2011 -

The EU is still a massive risk to the global economy but so is political inaction, over- regulated or manipulated markets, high unemployment and geo-political shifts. QE is a concern as central banks abandon inflation targeting and indeed growth to maintain ratings. The EU is still throwing liquidity at a solvency crisis at both sovereign and banking level. EU banks not only have a cash problem, more specifically, as ECB President Mario Draghi says : "hoarding at the ECB signals that the problem afflicting the Euro-zone is not so much about the amount of liquidity but that this liquidity is not circulating around the region's banks". I am not surprised as they all know that each has a similar or worse problem sitting in the vaults....

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EUR Plunges In Thin Market, Below 1.3000


While it is unclear what just spooked the EURUSD, sending it lower by 70 pips in minutes, perhaps a better question is why the EURUSD is not thousands of pips lower to begin with. As a reminder every single large bank is pushing for a lower EURUSD on hopes that a EUR collapse will kill the market and send the ECB scurrying into printing money. The problem there is that the ECB just announced its balance sheet expanded to EUR 2.73 trillion, an expected increase of over EUR 200 billion in one week (since the LTRO), and a whopping EUR 800 billion in 6 months (that's $1.1 trillion... in six months)!

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De onrust groeit gestaag bij de banken

Art Cashin Exposes The Behind The Scenes Panic In Europe


Submitted by Tyler Durden on 12/28/2011 - 09:26 Art Cashin Bank Run ETC European Central Bank Greece headlines Italy SWIFT Yen

Think "all is fine" in Europe after today's largely irrelevant Italian bill auction (the auction was for 6 month debt - even Greece can raise that kind of money)? Think again. Here is the Fermentation Committee Chairman explaining why Europe is so hard pressed to create a fake sense of calm, allowing those who know the real story to take advantage of the situation while they still can, and sharing the behind the scenes truth you won't get anywhere else.

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From UBS:

Europe Rumbles Continue Beneath More Upbeat Headlines - Ever since last week’s liquidity operation, most headlines out of Europe have leaned toward the reassuring side. Beneath those headlines, however, there are signs the strains remain and may, in fact, be growing.



European banks are making great use of the ECB’s overnight deposit facility. Last night they parked $590 billion at the ECB breaking the record they had set the night before. They are clearly unwilling to lend to other European banks, highlighting the distrust and fear in the interbank marketplace. While the ECB’s lending initiative calmed the markets somewhat, it apparently has done nothing to free up the logjam blocking interbank lending.



The distrust on the streets is said to be growing also. Barroom gossip says that safe-deposit boxes are in a demand that borders on frenzy. They allow you to take your Euros and covert them into something of value (gold, Swiss Francs, etc.) and sock it away in a safe place.



Others are said to be buying property in London and elsewhere lest you awake one day and discover that your Euros have reverted to drachmas or lira.



Savvy bankers are said to be setting up personal and communal trusts domiciled in places like the Bahamas, the Caymans or the Isle of Jersey. Some banks are offering depository accounts denominated (and repayable) in alternate currencies like the dollar or the yen.



We think a Lehman-like event would most likely be triggered by a run on a bank or a series of banks. The scramble for currency (value) protection among the public could turn into that bank run in the same way that a crowd can instantly turn into a mob. Watch the money flows out of Greece and Italy very carefully. The pot continues to bubble

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Promo/Spotje: Het is feest & fun, de Euro Zone zal overleven, Happy 2012 & denk positief

Rosenberg, Ryding, Zandi, Arbess, Zuckermann And Rickards All Chime In On The Future Of The Eurozone
Submitted by Tyler Durden on 12/27/2011 - 15:49 Eurozone keynesianism Rosenberg

When six out of five economists (thanks to the magic of Keynesianism... and self promotion from general counsel to general expert) all agree on the same topic, and the very definition of groupthink is that the Eurozone will survive, the glaringly obvious call is precisely the opposite. If there was ever an argument to say that 2012 is the year the Eurozone finally dies, the below video is it.
Video Bloomberg

Dec. 27 (Bloomberg) -- Howard Davies, former deputy governor of the Bank of England and a professor at the French School of Political Science, David Rosenberg, chief economist at Gluskin Sheff & Associates Inc., Mark Zandi, chief economist at Moody's Analytics Inc., and John Ryding, chief economist at RDQ Economics, talk with Bloomberg Television about the outlook for the European Union and the euro in 2012. Jim Rickards of Tangent Capital, Daniel Arbess of Perella Weinberg Partners LP, Mortimer Zuckerman of Boston Properties Inc., and David Winters of Wintergreen Advisors LLC also speak. (Source: Bloomberg)

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Voorlopig zit er geen schot in.

Zelfs met crisis leeft de EU onverdroten voort .....