- The ECB has activated the ‘nuclear option’ ie Quantitative Easing sooner than expected. They will now violate their own constitution and print massive amount of money out of thin air to buy their own bonds. The question is: How will this support the Euro? QE means the debasement of the currency. Its intention is to drive inflation upwards and inflate away debts. People who think that the Euro will now be supported and rally higher are delusional. The Euro will go to parity against the USD. It will facilitate the merger of Eurozone and America.
- Listening to the ECB speech, I paraphrase: ‘Any solution without political union will be problematic’! Without the means of controlling, enforcing rules upon politicians, monetary, fiscal rules/solutions will not be effective. This is simply a setup for a United States of Europe. The real agenda is the destruction of national sovereignty and build a supra-national unelected, unaccountable entity. The banksters are taking over the Eurozone. Their next move is a super merger with the coming North American Union (USA, Canada and Mexico). Note the IMF and ECB alliance in this bailout! Bloomberg reports:
The European Central Bank said it will buy government and private bonds as part of an historic bid to stave off a sovereign-debt crisis that threatens to destroy the euro. The ECB wants “to address severe tensions in certain market segments which are hampering the monetary policy transmission mechanism and thereby the effective conduct of monetary policy,” the central bank said in a statement at 3:15 a.m. in Frankfurt. The announcement came less than an hour after European finance ministers unveiled a loan package worth almost $1 trillion to staunch the market turmoil.
Resorting to what some economists have called the “nuclear option,” the ECB may open itself to the charge it’s undermining its independence by helping governments plug budget holes. Four days ago, ECB President Jean-Claude Trichet said bond purchases hadn’t been discussed when members of the bank’s 22-member Governing Council met to set interest rates in Lisbon. By deciding to “go in and buy sovereign and corporate debt, they crossed a line,” said David Kotok, chairman and chief investment officer at Cumberland Advisors Inc., which manages about $1.4 billion in Vineland, New Jersey. “The line between fiscal and monetary policy gets blurred.”
The euro jumped to $1.2982 at 8:30 a.m. in Frankfurt from $1.2755 at the end of last week.
The ECB said it will intervene in “those market segments which are dysfunctional,” suggesting it views the surge in some of the region’s bond yields as unjustified and that it’s acting to stabilize markets and protect the 16-nation economy.
Investors cited the ECB’s initial refusal to consider asset purchases as one reason for the May 7 rout in global markets, which included U.S. stocks falling the most in 14 months amid concern Greece’s woes were spreading.
After a week in which markets showed growing concern about access to funding, the Frankfurt-based ECB also reversed its withdrawal of emergency steps taken to tackle the global credit crisis, saying it will again offer banks as much cash as they want for terms of three and six months. It will also reactivate a swap line with the Federal Reserve and sell unlimited amounts of U.S. currency for seven and 84 days. The first operations will take place this week.
The central bank acted in concert with governments after markets targeted European economies with the weakest public finances. The extra yield that investors demand to hold Greek, Portuguese and Spanish debt instead of benchmark German bonds surged to the highest level since the euro’s 1999 introduction.
‘Using Every Means’
Bundesbank President Axel Weber said on May 5 that the threat of contagion from Greece’s fiscal crisis didn’t merit “using every means.” Without referring specifically to bond buying, he said “measures that damage the fundamental principles of the currency union and the trust of the people would be mistaken and more expensive for the economy in the longer term.”
The concern is that the purchasing of government debt opens the ECB to the accusation it’s coming to the rescue of fiscal authorities and may need a bailout of its own if the assets turn sour, raising questions about its independence. An unchecked increase in the amount of money in circulation could also fan inflation, the containment of which is the ECB’s main aim.
The ECB noted that some governments had vowed to accelerate their fiscal consolidation. Spain’s budget deficit reached 11.2 percent of gross domestic product last year and Portugal’s was 9.4 percent. Greece’s was 13.6 percent.
“Much will depend on whether or not euro-zone governments quickly follow through on their pledge,” said Marco Annunziata, chief economist at UniCredit Group in London. “If they do not, it will be hard for the ECB to fight off the charge of monetizing excessive fiscal deficits.”
There are signs banks have started to hoard money again. Overnight deposits with the ECB surged to a 10-month high of 290 billion euros on May 6, signaling banks are wary of lending to each other on concern about counterparties’ exposure to high-deficit countries. The rate banks say they pay for three-month loans in dollars rose the most in almost 16 months on May 7.
While European banks had claims on Greece totaling $193.1 billion at the end of 2009, that number is dwarfed by their $832.3 billion exposure to Spain and the $240.5 billion with Portugal, according to data from the Basel, Switzerland-based Bank for International Settlements.
Until today, Trichet had tried to convince investors that volatility in euro-region markets would subside once the Greek government drew on its 110 billion-euro aid package and implemented its agreed austerity plan. After the May 6 meeting of the ECB’s council, he urged other European governments to take “decisive” action on deficits and said Portugal and Spain were “not Greece.”
With the roots of the current crisis lying in fiscal policy, Trichet has had less of a say in fighting the turmoil. Politicians ignored his pleas for a fast aid package and his advice that the International Monetary Fund not be included in any rescue of Greece.
His role began to shift last week when the ECB broke a commitment not to assist individual countries, saying it would indefinitely accept Greek government debt as collateral regardless of its credit rating. Trichet is today set to talk to reporters after chairing a meeting of central bankers in Basel.
- It is obvious to all that this bailout will fail. It will lead to an even bigger collapse. This is the real intention. Do not be taken for a ride. The ECB is violating much of its constitution in implementing this bailout. The key rule being: No Bailout is Allowed ! Some Germans are going to the German courts to challenge Merkel’s and ECB support in this bailout. It is unconstitutional !
- Many Americans are slowly waking up to the reality that they are indeed bailing out Greece via the IMF. Where did this money come from? Either the American people or the FedRes printing money out of thin air: legalized counterfeiting, QE, Monetization of debts! The USD is toast !
- The world is heading towards a global financial, economic and monetary collapse. Many banks will go bust and all major fiat currencies are slated to be toilet paper. The lesser fiat currencies will also not survive the waves of attacks. This is intentional. It is a planned demolition of the current world order to usher in a Global Fascist Police State, New World Luciferian Order. My previous guestimation was within 1 year, this financial,economic and monetary tsunami will come. I won’t bet against the ginormous tsunami happening around October this year, though!
As Europe is bailed out to the tune of nearly $1 trillion dollars, Congressman Ron Paul warns that the constant monetization of debt, allied with taxpayer-funded bailouts, will inevitably lead to runaway inflation and the collapse of paper currencies.
Under the terms of the Federal Reserve’s credit swap deal with the EU – in addition to an additional IMF bailout of which U.S. taxpayers will be picking up 20 per cent ($57 billion dollars) of the tab, Paul pointed out that not just taxpayers but “anybody that buys anything” will be funding the European bailout because of the attendant inflationary consequences.
“The prices are going up already, producer prices are going up, the cost of living will go up so everyone in American will suffer and eventually the whole world will suffer because we cannot carry the whole world with our dollar,” Paul told Fox Business, adding that eventually people will lose confidence in the dollar.
The Congressman agreed with the host that the bailouts would lead to the crash of paper currencies, noting that last week’s stock market turmoil was accompanied by gold acting as a currency rather than just reacting to the value of the dollar.
“Gold has been money for 6,000 years and it will remain that way and it will rule the roost,” said Paul, adding that the dollar was weak in comparison with the strength of gold. “All paper currencies are under attack and this cannot be sustained,” said the Congressman.
Paul then explained how the ECB has completely reversed its promise that it wouldn’t monetize debt and how Bernanke had also gone back on his word that U.S. dollars would be use for this purpose. “When I talked to Bernanke last time in the Committee he said they had no intention of bailing out Greece but they are, through the IMF as well as opening up these swap lines to all the central banks, so it is on the shoulders on the burden of the American taxpayer and our dollar so all we’re doing is perpetuating a very very bad system and this is not a solution at all,” he said.
Paul agreed with the host that the bailout was merely a stunt to buy time while failing to address the underlying problem of European socialism and the entitlement culture, which is fast running out of money with which to keep itself ticking over.
- This is really about triggering the Satanic World War 3 Plan. It has nothing to do with religion or the mythical ‘Clash of Civilizations’ NeoCon Zionist espouse. Iran does not have nuclear weapons. Israel has between 150-400 nuclear weapons. Israel has the 4/5th largest army in the world. All these Zionist lies about being under existential threat are pure BS!
- The Illuminist cabal want to start this World War 3 to destroy the current order and usher in their Satanic New World Order, Luciferian State. This is a war against the sheeple. Jews and Christians must wake up and realize that there is no reason to support any war against the Muslim world. The most brutal and genocidal regimes are Zionist Israel and NATO-America. Massive amounts of Depleted Uranium and White Phosphorus rounds are used against civilians. Indiscriminate and deliberate murders are practiced.
- Why should sanctions be applied on Iran for the peaceful use of nuclear technology while Israel refuses to sign the NNPT? People who actively deny their guilt and responsibility in the face of overwhelming evidence are psychopaths. The Zionist State of Israel is a pathological liar and mentally sick! Note article below, Reuters like many MSM are Zionist owned. Much propaganda in this piece. The intent is clear: promote/sell the coming Iran war as a just war! The reality is: It will be the end of Zionist Israel !
Israel primed for war on Iran: Netanyahu deputy
(Reuters) – Israel is primed for a war on Iran, a deputy to Prime Minister Benjamin Netanyahu said Monday, in a rare break with his government’s reticence as world powers try to talk Tehran into curbing its nuclear plans.
By spearheading assaults on guerrillas in neighboring Lebanon and Palestinian territories, the Israeli air force had gained the techniques necessary for any future strikes on Iranian sites, Deputy Prime Minister Moshe Yaalon said.
“There is no doubt that the technological capabilities, which improved in recent years, have improved range and aerial refueling capabilities, and have brought about a massive improvement in the accuracy of ordnance and intelligence,” he told a conference of military officers and experts.
“This capability can be used for a war on terror in Gaza, for a war in the face of rockets from Lebanon, for war on the conventional Syrian army, and also for war on a peripheral state like Iran,” said Yaalon, a former armed forces chief. Israel, which is assumed to have the Middle East’s only atomic arsenal, bombed Iraq’s nuclear reactor in 1981 and launched a similar sortie in Syria in 2007.
But its veiled threats against foe Iran have been questioned by some independent analysts who see the potential targets as too distant, dispersed, numerous and well-defended for Israeli warplanes to take on alone. Israel’s leaders rarely use the term “war” while publicly discussing how to deal with Iran, in whose often secretive uranium enrichment, long-range missile projects and hostile rhetoric the Jewish state sees a mortal threat.
Officially endorsing efforts by U.N. Security Council powers to step up sanctions against Tehran, which denies having hostile designs, Netanyahu and other senior Israeli officials usually speak obliquely of a need to “keep all options on the table.” Two other senior Israeli officials said U.S.-led diplomatic pressure should be given a chance. But they voiced misgivings.
“I believe that, by the middle of June, there will be international sanctions that will be watered down, with very low chances of being effective,” Defense Minister Ehud Barak told a closed-door parliamentary committee, according to a spokesman.
“With that said, there is nevertheless importance to such sanctions, because the delay has only served Iran,” he said, adding: “It is very possible that there will be other, more effective sanctions by a specific set of European countries.”
Dan Meridor – another deputy prime minister who, like Yaalon and Barak, belongs to Netanyahu’s inner council — sought to play down Israel’s particular interest in having Iran reined in, calling it a global challenge. “If in the end of the day, Iran does get nuclear, in spite of what America says and wants, this will have grave implications for world order, the balance of power and the rules of the game,” Meridor told foreign journalists in Jerusalem.
In his address to the Fisher Institute for Air & Space Strategic Studies, Yaalon said Israel was in a proxy war with Iran due to its sponsorship of Lebanon’s Hezbollah guerrillas and the Palestinian Islamic movement Hamas. “There is no doubt, looking at the overall situation, that we are already in a military confrontation with Iran,” he said. “Iran is the main motivator of those attacking us.”