Euro-ECB-EU on the Road to Oblivion
Update – 23rd 2016: Brings Italy the end of the EU?
European financial system:
What is happening to the European financial system is truly history in the making, and it is believed this is going to be one of the biggest news stories of the second half of 2016. The Euro collapse may arrive much faster than many expect. While by stimulating borrowers with negative interest rates, the ECB has wiped-out savers, pension funds, and sent cash into hiding, which is contracting the economy. All this together puts the EU beyond repair, and that is why the Euro is in great trouble. The unravelling might be triggered by the serious troubles in Italy and Germany.
The biggest banks in the EU suffer from mounting problems. At one point Credit Suisse hit an all-time record low, and German banking giant Deutsche Bank closed last week at an all-time record low of 12.93. People are witnessing a full-blown financial meltdown.
Deutsche Bank continues to get absolutely hammered. If the biggest and most important bank in Germany is not completely imploding, then why does the stock price continue to crash time after time? Since the start of 2016, the value of Deutsche Bank has fallen by half, and many have pointed out that the trajectory that it is on is very, very similar to Lehman Brothers in 2008.
Bail out or in?
Germany will not be able to bail out Deutsche Bank, and other banks that may require a bailout is the Italian lender Banca Monte dei Paschi di Siena, which is the worlds’ oldest bank. The European Central Bank warned that the Italian bank is holding dangerously high levels of bad debt. The Italian government would like to provide funds to the banks without having investors share losses. But the EU now has bail-in legislation that mandate investors take part of the losses. All national actions are considerably complicated by the non cooperative stance of Brussels’ dictatorship.
The Italian banking crisis is real. It shows how numb people have become regarding large numbers. In a country of roughly 60 million people, there is reportedly 360 billion euros of bad debt. This is over 6,000 euros of bad debt for every Italian citizen. That is preposterous. – But what is even more laughable is the dispute between the EU and the Italian government. The EU wants the Italians to adhere to their rules and bail-in the debt-holders at all of the banks. The Italians want a government bailout because so much Italian bank debt is held by Italian citizens that a bail-in scenario would be catastrophic for the government. The Italian situation is far from over but it is just another obvious manifestation of the depth of the rot in the world financial system.
Anyhow Italy needs urgently a bailout for Monte Paschi, however, the Germans are opposing any such move. Wolfgang Schaeuble, the German Finance Minister, stated in a news conference, in Berlin that Italy intends to stick to the banking-union rules, as was conveyed to him by his Italian Counterpart, Pier Carlo Padoan. but Premier Renzi stated that;
“The difficulties facing Italian banks over their bad loans are miniscule by comparison with the problems some European banks face over their derivatives.”
He reminded the Germans that there were other European banks which had much bigger problems than Monte Paschi, in an indirect hint towards Deutsche Bank.
“If this non-performing loan problem is worth one, the question of ‘derivatives’ at other banks, is worth one hundred. “This is the ratio: one to one hundred,” Renzi stated, Reuters
Renzi is correct, when derivatives are included the bank’s exposure can be over 100 times the equity. Take Deutsche Bank for example; the total balance sheet exposure is 25 times equity. Adding their derivatives exposure of €68 trillion, their leverage is 100 times share capital and reserves. – This means that any depositor hoping to get his money back from the bank should be aware that any loss above 1% of Deutsche Bank’s assets would make them bankrupt. There is obviously no question that DB will lose only 1%. They are virtually guaranteed to lose more than 10% and probably at least 50% of total assets, which means that if you are a depositor you will not get your money back. Most European banks are in a similar position and so are many US banks including JP Morgan, Bank of America and Citigroup. And don’t believe that the Japanese, Chinese or Emerging Market banks are in a better shape. This is of course the reason why most major banks’ share prices have fallen 75-95% since 2006.
ECB’s Mario Draghi is already killing his banking system, starving the region’s pension systems and bankrupting insurance companies for no discernible benefit. Final question; At what point does a central banker say “We’ve gone too far”?
Update – 23rd 2016
Brings Italy the end of the EU?
If Italy presses forward with a bailout it would blow up EU banking rules. That would pave the way for other EU countries to do the same; undermining the EU’s entire banking authority.
But is the alternative even worse? If steps aren’t taken to shore up Italian banks right away and they fail, a malignant poison will spread. That’s because there’s a toxic link between EU-banks in countries such as Italy, Portugal and Spain and the huge amount of sovereign debt they hold.
Standard & Poor’s reports that EU bank home country’s debt is valued at 118% of total capital. In the U.S, domestic banks’ equivalent exposure to U.S. Treasuries is only 14% of total capital.
The bottom line: Italian banks are leveraged to the hilt with Italian government debt. If Italian banks implode, panicked investors will sell Italian government bonds en masse. That will cause an epic meltdown in the Italian financial system, economy and government. Basically, Italy would financially cease to exist.
But the damage won’t stop there: The is a crippling contagion, with a knock on effects to other European banks with exposure to Italian debt. For example: French banks own roughly €300 billion of Italian debt. German banks have €100 billion worth of this garbage. And Spanish banks have over €70 billion of worthless notes.
What happens to those banks once those losses hit? And what happens to the sovereign debt holdings of French, German and Spanish banks when they start to fail? There will be no stopping the contagion. And that’s what has the arrogant bureaucrats in Brussels melting down.
The ones that have gold and silver in their own possession will prosper no matter what happens next in the EU financial soap opera. Just know that what happens in Italy in the coming weeks will alter the course of the EU forever. The European Union will never be the same. It is impossible to predict what will happen next. But chaos is a good bet.
The reverberations of Brexit are continuing to shake the European financial system. The contagion from a serious banking crisis can easily spread around the world. The entire banking system is connected these days along with central banks.
Germany’s will to not allow Deutsche Bank to fail is fading. Post-Brexit, tensions are running high among the remaining members, as seen in the spat between Germany and Italy. Or maybe another secret trick will be applied?
Due to the earlier hard stance of the Germans, it is likely that any move to bail out Deutsche Bank will face considerable resistance from all other member nations. If allowed to fail, DB will cause a ‘crisis’ ten times worse than that which Lehman Brothers did.
The final meltdown begins!
Italian banks are on the cliff of a nationwide default. Deutsche Bank in Germany is hanging on by its fingertips. This bank is one of the prime candidates to go under, while at least three Italian banks are in collapse-mode too, risking bringing down the Italian government.
When that happens the Italians will begin a revolution. If the banks have to be bailed-out their only way-out is to print more Euro’s that will come in a super overdrive mode. No single member state can print their own currency, thus increasing the money supply which would mean unilaterally for all Euro-members. No single member can revalue the currency.
As other members involuntarily become overvalued, this is going to be an impossible situation. And that is the reason why the Euro cannot survive. Sovereign states with their own crises, require separate measures that are distinct from other members. So that’s going to break the euro system, and send capital into the US dollar, which soon will be toast too, but for other reasons. Only the very clever ones buy gold and silver. By the time this mess has become visible, only a major monetary reform can save the world economy. Chances are this is going to happen rather sooner than later.
Retirement funds confiscated:
Bankrupt governments, when they get desperate enough, are eyeballing to confiscate the multi-trillions of dollars in “un-taxed” retirement funds. As the world dances on the brink of a massive collapse, the government’s empty coffers will be further decimated as the economy contracts massively and tax receipts plummet. At that point in time, rather than reducing expenditures and doing massive layoffs and closures of departments, like any regular business would do, politicians will nationalize retirement funds for the “good of the nation”.
Laws have already been authorized, allowing governments to freeze and seize citizen’s bank accounts in the event of a banking crisis. Called “bail in.” This time around, when the inevitable crash comes, taxpayers’ money won’t be used to bail out banks. People’s retirement funds and deposits will be used. Like the case was in Cyprus where this law was used for the first time. Bank depositors discovered that up to 60% of their funds was removed.
The monetary system belongs not to the people as it should. It is the money system created by, for, and of the financial insiders. The money system is owned by the RKM cabal establishment!
Some people may object and ask: “Isn’t the money system set up by our elected representatives, and supposed to serve us all?” – No the world’s money system is largely under the control of one organisation called the Fed. And the Fed was set up at a secret meeting of plutocrats and bankers in the early 1900s. It is not owned by the people, nor by their government. It is owned by private banks. And it is controlled by a small group of unelected insiders – mostly bankers and their economists.
Central Banks have never been audited. And no member of Congress or Parliament really knows what they are up to. Almost the entire world – stocks, bonds, real estate, and collectibles, along with businesses, retailers, factories, investors, bonused-up executives, papered-up speculators, Ph.D. economists, and politicians – almost everybody with wealth or power depends on the insiders’ cheap money.
The recurring talk about helicopter money should tell observers all they have to know about how desperate the elites are becoming. Helicopter money is just QE on steroids as the central banks directly fund spiraling government deficits in an attempt to counteract worsening deflationary pressure. This virtually insures hyperinflation in the nearby future. Investors and savers cannot own enough physical gold and silver.
People in high places are preparing for the demise of the US dollar and the monetary system. The dollar and global economy are toast! Supplies purchased now are just in time. In case of a collapse count on empty shelves in the supermarkets. – Fiat Money Is Doing Exactly What It Was Designed to Do, Fail: explains Rob Kirby
Silver is Kryptonite to Central Bankers
Gold and silver expert Rob Kirby says the silver metal central banks are most fearful of is silver. Kirby says,
“Silver is Kryptonite to central bankers… Why? Because they don’t have any. They don’t have physical stores of silver to feed into the market to beat the price down. So, recently, to stem the rise of silver, they have really been attacking the price of gold. The whole notion there is if they beat the price of gold down, silver will decline in sympathy with the attack on gold.”
The solution is the Gold Standard:
The solution will effectively be the abolition of the existing monetary system, and the installation of the Gold Standard, often referred to as, Revaluation (RV), and the Global Currency Reset (GCR). The Eastern nations control most of the industrial capacity, and therefore will impose Gold Trade Notes for payment in trade shipments. They will refuse the US Dollar in payments.
The consequent effect will be for gold assets to be built up in the global banking system. The Gold Trade Notes will accumulate, and over time be converted to Gold bullion for their bank reserve usage. Eventually gold backed currencies will emerge, as well as a gold backed currency system.
Gold puts the Western Elite out of business:
Gold puts the Western Elite out of business. The Gold Standard will knock down the Western banking elite. And eliminate the free pass for easy money, for zero percent loans to the elites, for big bank welfare, for covering federal deficits, to enable debt coverings. In short it will turn the current power structure upside down, offering a true solution, but not without an enormous and staggering disruption.
The nations which sport a gigantic trade deficit will suffer shock waves as they will be forced to embark upon national initiatives to produce more for export, and thus to reduce their deficits. They will invite foreign capital investment and business formation. The effect of trade deficits will be the forfeiture of national assets on a grand scale, certainly forcing rapid change and adjustment.
The global economic system must be revamped with a colossal amount of construction projects, investments in infra-structure and business, and repair of imbalances. Doing so will put people back to work, but more importantly, in a positive constructive manner with a positive trickle down. In fact, Recapitalising the global financial system.
This initiative will surely involve gold and silver as a primary reserve asset. The event will coincide with a massive rise in the Gold and Silver prices. The entire global system will come alive once Gold and or Silver is installed. Fake money will be displaced by Gold and Silver, which have vital roles.
Silver Ruble coin:
Russia is working on the creation of a silver Ruble coin, which will be an important precedent, as this will be done outside the Central Bank system. Likewise, President Kennedy intended to do this in 1963 with the silver dollar which was the main motive to murder him in Dallas in November 1963.
The Silver Ruble coin will mark a necessary change, as the Silver Ruble coin is issued by the Treasury of the Russian Federation, which signifies that Russia affirms its sovereign right to create money – This right has been usurped by the RK Mafia which owns almost all Central Banks of the world – while the monetary value of Russian rubles would reside in the value of its silver content.
The rising price of silver would translate into a rising monetary quote for the Silver Ruble, making it ideal as an instrument for even the modest amounts of savings that the poorest of Russians would have; the rising monetary value of the Silver Ruble would protect savings from inflation, while being totally liquid at any given moment.
Referenda, Revolt, Revolution:
Most people are behaving as Mark Twain (1835 – 1910) so typically formulated:
“It is easier to fool people than to convince them that they have been fooled.”
The revolt against the elites isn’t confined to one country in particular. Elite opinion in the U.K., among most Labour and Tory party leaders, was strongly in favour of Britain remaining in the European Union. The voters said “To hell with that.”
The Netherlands, Germany, France, Switzerland, Denmark, and Sweden have seen the rise of nationalist, protectionist, anti-immigration sentiments, EU-sceptic political parties that horrify the elites. In France, Marine Le Pen’s National Front is now the largest political party. Parties similar to the National Front have been victorious in Poland and Hungary.
Elites call these parties the “right-wing fringe”, but all of these parties from both the right or the left, are straight forward in their criticism of the elites’ establishment, with their dictatorial laws, rules, and manipulations. The elite political fabric is unravelling. Also, in the U.S., the revolt against the elites isn’t coming from just one political direction.
In Austria’s May presidential election the “right-wing fringe” candidate Norbert Hofer, was narrowly defeated by another outsider, the “Green fringe” candidate Alexander Von der Bellen. This election was so close that the Constitutional Court of Austria has ordered a re-run.
Canada’s prime minister is the rich kid, former substitute teacher, part-time actor Justin Trudeau. He may have had an elite dad, Pierre Trudeau, but Justin has none of the other standard elite qualifications for high political office.
Even the usually staid politics of Australia has been through a shakeout. Australia has had five prime ministers in the past six years. The Aussies sure know how to throw the bastards out! Why are ordinary people around the world so mad at the elites?
Because the global elites have purposely been wrong about practically everything.
Central banks around the world – owned by the elite – have through their irresponsible policies created an inevitable disaster for the future of paper money and the well-being of humanity.
They will apply all the methods available to them before they give up. This will include not just money printing and more negative rates, but also debt forgiveness, devaluations, moratoria, stealing pension funds and bank deposits plus many other tricks that will impoverish most ordinary people. Neither governments, nor central banks will have any regrets about totally destroying the wealth of their people. Because it is the intention to do just that, in order to have humanity easier incorporated in their New World Order.
Everybody is forewarned, WAKE UP folks the hour of truth has arrived!!!
Unfortunately, these consequences will be horrendous for a very long time, the world is now very near the beginning of a disaster that will have a bigger impact on mankind than any war, disease or depression that ever is experienced.
Physical gold and silver will be the best money to own instead of worthless paper currency.
World Collapse Explained in 3 Minutes