Failed Dreams & Destroying Europe

The whole idea of a One World Government that began in Europe with the Treasty of Rome was based upon the idea inside Europe that a single government would end war. They never considered that there are two sides to that coin – international war and internal war we call revolution. As Thomas Jefferson said: “I hold it that a little rebellion now and then is a good thing, and as necessary in the political world as storms in the physical.

The ECB’s policy of negative interest rates was supposed to create rising inflation by forcing people to spend. They cannot understand that raising taxes is the offset. You cannot spend what you do not have and you will NOT spend as long as you lack confidence in the future outcome. Draghai’s policy is a fool’s dream and the collapse in bond markets demonstrates those who think they can manipulate society are just out of their minds. Continue reading

“All the Eurozone Is Capable of Is ‘Stealing’ Growth from Others”

There were other signs of traction. The Eurozone trade surplus with the rest of the world has been setting new records, powered by strong exports, particularly from Germany. This trend kicked off before the euro started tanking a year ago.So on Monday, ECB President Mario Draghi took the opportunity to slap himself and his colleagues on the back for their heroic and bold action, as these things are called, and offered an upbeat assessment of the Eurozone economy. He proclaimed “that growth is gaining momentum.” And he totally nailed it with three out of the four reasons he gave for that growth:

This is due to in particular the fall in oil prices, the gradual firming of external demand, easy financing conditions driven by our accommodative monetary policy, and the depreciation of the euro. Continue reading

ECB Prepares For Grexit, Anticipates 95% Loss On Greek Debt

 

Dear Greek readers: the writing is now on the wall, and it is in very clear 48-point, double bold, and underlined font: when the ECB “leaks” that it is modelling a Grexit, something Draghi lied about over and over in 2012 and directly in our face too, take it seriously, because it is time to start planning about what happens on “the day after.” And incidentally to all those curious what the fair value of peripheral European bonds is excluding ECB backstops, the ECB has a handy back of the envelope calculation: a 95% loss. Continue reading

The Full Explanation Of How The ECB Broke Europe’s Bond Market

It was almost three years ago to the day when Zero Hedge first explained the biggest problem facing Europe when it comes to unconventional monetary policy: the lack, not scarcity, but outright shortage of collateral.

Initially, our focus was on private-sector collateral, and if one had to summarize the key difference between the US and Europe in one chart, it would be this one, showing that while in the US the split between secured and unsecured funding was roughly even, in Europe, some 90% of corporate funding was on bank loan books, with only 10% in the form of (unsecured) corporate bonds (which also explains why in Europe NPLs, aka bad bank debt is by far the biggest problem facing the financial industry). Continue reading