Europe Is On The Verge Of Collapsing!
- At times it is almost impossible to explain how dire the situation is to the sheeple. They are just zombie like, living in their American Idol, Desperate Housewives, football …. world. They do not seem to be able to wake up from their dream world and take precautions. They are caught in a normalcy bias which says ‘Bad things can never happen to me. Things will work out fine!’ The reality is: the world is at a similar moment in history as the period 1929 – 1939. At the end of that period, World War 2 came about. Similarly, at the end of this period, WW3 will happen.
- - The situation now is far worse than at any time in modern history. It is easily 10x worse than the first Great Depression. As the saying goes: ‘If you are not afraid, you do not know what is going on!’ Fear is a great motivator for people to take precautions. However, knowing the sheeple, they will be caught like frozen rabbits in the headlights of an on coming car.
- - The next 6 months will likely see events progress as follows:
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- The PIIGS will collapse.
- The collapse of Italy & Spain will cause the entire Eurozone to collapse.
- Consequently, the Euro will collapse. The UKP will follow suit.
- Japan will not survive this (with their Debt to GDP above 200%).
The JPY will tank.
- Finally, this sovereign debt crisis will affect America and the USD will
collapse.
- Countries all over the world will be affected. Almost all countries hold USD.
Almost all countries hold US treasuries, Euro, JPY… keep in mind that
many banks hold sovereign debts of these countries and they will collapse.
- This is the way the global economic, financial and monetary crisis will
come about.
- - It is highly probable that the Illuminists will pull the plug in Q4 this year. We are talking about 100 days to financial Armageddon followed by the build up to World War 3. Got physical gold yet? Excerpts (emphasis mine):
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“Europe Is On The Verge Of Collapsing”
by Raul de Sagastizabal, http://www.globalresearch.ca/
Europe is on the verge of collapsing and the world is again in the quagmire, the reason being Europe, rather than just Greece, is the planet’s soft belly, and the impact of Europe’s eventual downfall would make itself felt throughout the world, even if Germany, or France, could somehow be spared.
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The scale of impact is unpredictable, but potentially worse than that of the recent toxic assets crisis. The European bloc is the second largest economy, the first trade partner of China, the largest importer of Russian energy and the first buyer of high quality raw materials …
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All over the world European debt holders and many states maintain their reserves in euros. China, for example, has one-fourth of its reserves in such currency and holds a large amount of Greek, Portuguese and Spanish debt bonds….
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Without debt restructuring involving important debt amount reductions and extended maturities, Greece will not be able to meet her commitments, just like the rest of Europe’s debt-overhung Europe’s periphery economies – Ireland, Portugal, Spain, and Italy, and the effects would certainly contaminate the rest of Europe including the region’s strongest economies. The illusion of dampening the fire by deferring debt maturities is just that – a chimera. Unless public and private bondholders’ debts are reduced and longer maturities granted, default and meltdown are around the corner.
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Debt restructuring means debt renegotiation of debts on behalf of those unable to honour them. In case of default it entails sovereign default. A country notifies its debtors that it is unable to pay and goes into default, outright failure, or proposes to renegotiate its debt and pay less or get extended deadlines. Amount reductions may involve paying a percentage of the original debt, or the original amount during a longer period, or even paying one’s whole debt over longer periods.
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Greece, Unable To Pay A Debt Exceeding 150% of GDP
The latter solution is not available to Greece: with negative real GDP growth, fiscal and trade balance deficits, among other negative indicators, the country is unable to pay a debt exceeding 150% of GDP, even in a far off future.
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In the April 2009 London G-20 summit, whose dubious merit was the rescue of private banks with public money, the developing world bought the idea that the worst was over – and emerging countries bought the idea that this time they would emerge unscathed from the crisis just by adopting local measures
to mitigate the domestic impacts.
…
We’re not saying that Germany, France or The Netherlands should unconditionally bail out such debtor countries – they should certainly have to improve their indicators and spend more carefully – but not in the context of nonviable programs such as those that have worsened their situation and swollen their debts.
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The Greek debt, for example, needed restructuring last year, when it was known to be impossible to meet, and the country and the entire euro area were in a better position to renegotiate with banks and investors.
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The Largest Bailout Package In Europe
Instead, Greece was coerced to implement a bailout package of 110,000 million euros, the largest in Europe. Since then, creditors, with IMF advice, have been evaluating and speculating on the consequences for their economies and banks of letting Greece go bankrupt or rescuing her. Now it is too late. It is not Greece.
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Greece’s bankruptcy would also prompt the failure of other countries in the Southern periphery, and if Greek debt restructuring occurs such other countries would also be called to accept debt-restructuring plans.
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Despite this reality, Germany, France and their Northern partners continue to consider the convenience of restructuring the Greek debt, under some other denomination, to avoid the spectre of contagion, seemingly believing such euphemism makes any difference whatsoever at this stage, …
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No Magic Wands
As for the rest of the indebted countries the Finance Ministers of the European area have just signed a treaty creating a permanent 700,000 million dollars bailout fund, kind of an European International Monetary Fund, which in fact requires the amendment of the Union Treaty and ratification by the member countries. Its purpose is to assist countries in financial difficulties from July 1, 2013. 2013? For the euro zone crisis, 2013 is kind of another century, if anything. Europeans keep playing for time, as somehow their problems might magically be solved.
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There are no magic wands. Time may heal wounds, but certainly does not extinguish fires. Without debt restructuring and financial regulation, the collapse of Europe is just around the corner and will quash the uneven and incipient global economy recovery. Europe is not playing with time, it is playing with fire.
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Raul de Sagastizabal is an international analyst and consultant, expert in international organizations. He writes mainly about global affairs. This article was initially edited in Spanish and English for http://www.politicapress.com. Also published by IDN-InDepthNews: http://www.indepthnews.info
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Will Germany Continue To Prop Up The Euro Zone?
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I do not believe the German people want to prop up the Eurozone. But the Illuminist ruling class want to do so. Germany will go bust if they continue to do so!
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Marc Morano & Alex Jones: Al Gore’s Green Nazi Movement Have Lost The Global Warming War!
- “In searching for a new enemy to unite us, we came up with the idea that pollution, the threat of global warming, water shortages, famine and the like would fit the bill. In their totality and in their interactions these phenomena do constitute a common threat with demands the solidarity of all peoples. But in designating them as the enemy, we fall into the trap about which we have already warned namely mistaking systems for causes. All these dangers are caused by human intervention and it is only through changed attitudes and behaviour that they can be overcome. The real enemy, then, is humanity itself.“
“The First Global Revolution”, A Report by the Council of the Club of Rome by Alexander King and Bertrand Schneider 1991.
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Ambrose Evans-Pritchard: Euro is ‘Unsaveable’!
Click on image for audio interview!
Is The World Going Bankrupt?
- The short and simple answer is YES! What the sheeple don’t understand is the US$600T (many say US$1.5 Quadrillion) derivatives market that is blowing up. Global economic, financial and monetary collapse is inevitable! This is the real plan of the Illuminist ruling power!
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Is The World Going Bankrupt?
by http://www.spiegel.de/
Europe and the US are hopelessly over-indebted. The crisis that started in the US real estate sector in 2007 has devastated state finances on both sides of the Atlantic and is threatening to wreck the euro and trigger a second global downturn. The world lacks the political leadership needed to end the turmoil.
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The fear is back, in the stock exchanges and in the capitals of the industrial nations. There are growing signs everywhere of a new financial crisis, and the political leaders of the West are looking helpless and out of their depth.
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The United States is struggling with an enormous budget deficit. And the euro zone’s central bankers and government leaders can’t find a strategy to end the permanent malaise of their single currency. The White House has achieved little more than to buy some time with a new debt compromise reached after theatrical political squabbling between Democrats and Republicans. Last Friday night, rating agency Standard & Poor’s lowered its rating for the US from AAA to AA+.
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Muddling through, postponing, playing down — the motto of the crisis managers on both sides of the Atlantic has sent alarm bells ringing in stock markets. Britain’s Economist magazine is warning of a double-dip recession in the US, a second downturn just three years after the last one. Many economists have been pointing out that last week’s panic resembled the fear that swept financial markets after the collapse of US investment bank Lehman Brothers in September 2008.
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Then as now, banks stopped lending each money. Then as now, banks’ cash deposits at the central bank doubled within days. The European Central Bank reacted by assuring banks of unlimited liquidity in the coming months. It was an emergency measure that led to short-term relief but sparked anxious questions among bankers and stock market players. How long can the central bank keep up its market-soothing liquidity operations before it finally loses its credibility, the most important asset of a central bank? Is the financial crisis about to escalate? And will the world then be bankrupt?
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It was less than three years ago that the global economy inched towards the abyss after the US real estate bubble burst. In order to save their over-indebted banks and insurance companies, Western governments borrowed huge sums of money themselves. They nationalized banks and implemented vast stimulus programs, while central banks flooded the economy with cheap money.
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As former German Finance Minister Peer Steinbrück put it, “fire was fought with fire.”
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That helped to prevent a global economic crisis of the kind that brought the world to a standstill in the 1930s. But it also set ablaze the headquarters of the world’s economic fire-fighters. Who will save the saviors? That question was already being asked back in 2008, and it has gained urgency now that government debt mountains are higher than ever.
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… for the full article click here!
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Eurogeddon Postponed Again as ECB Gains Three Weeks!
- Despite all the happy talk about the ECB buying Italian and Spanish bonds, the reality is more sobering. The ECB does not have the money to buy these bonds in sufficient quantity to solve the problem. After the announcement CDS for both France and Germany rose. The market is signalling that France and Germany may go bust trying to bail out Italy and Spain! This is perhaps the real intention of the Illuminists ie. bankruptcy of France and Germany the lynchpins of the Eurozone! Politically, I doubt German politicians can convince the Germans to bailout Italy and Spain (and the rest of the PIIGS) to the tune of possibly US$2T! Merkel will be voted out!
- - This respite in the collapse will only last a couple of weeks. I expect the Eurozone sovereign debt crisis fears will rear its head again in Sept/Oct. We may see the collapse of the Euro in Q4 this year!
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Eurogeddon postponed again as ECB gains three weeks
By Ambrose Evans-Pritchard, http://www.telegraph.co.uk/
Eurogeddon is postponed again. Jean-Claude Trichet has saved civilization. There will not be a spiralling bond crisis in Italy and Spain in early August after all. An imminent disintegration of Europe’s financial system has been averted.
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On balance, this is good, though not optimal. (Lancing the boil immediately by organising an orderly German exit from EMU would be better: it would halt the Fisherite debt-deflation spiral in Club Med and clear the way for recovery.)
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Spanish 10-year yields dropped 85 points to 5.2pc, Italian yields fell 76 points to 5.32pc in the first hour or so of trading after last night’s announcement.
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Now for the hard part. Unless the ECB is willing to back up its new role as lender-of-last-resort with massive purchases of Italian and Spanish debt, it will inevitably be tested by markets. Weak hands will take advantage of rallies to offload holdings onto the ECB, i.e. onto eurozone taxpayers. Frankfurt will find itself underwater very quickly without a legal mandate or EU treaty authority.
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RBS calculates that the ECB will have to buy roughly half the outstanding tradeable debt of the two countries to defend the line. RBS calculates €850bn. I would put it nearer €1 trillion. This is currently impossible. The ECB is acting as a temporary back-stop until the revamped EFSF bail-out fund is ratified by all parliaments over coming months. The EFSF will then take the baton.
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Yet as we all know, the EFSF has no money. The parliaments have not even ratified the earlier boost to €440bn. As of today, the fund has barely €80bn left after all the commitments to Greece, Ireland, and Portugal. It remains a fiction.
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As for boosting it further to €2 trillion or more – as suggested by Citigroup, RBS, and the European Parliament – we face a little local difficulty across the Rhine. Bavaria’s Social Christians said they will not back one bent Pfennig for extra bail-outs, and the FDP Free Democrats are almost of the same mood. Angela Merkel’s CDU base is more mutinous by the day. In any case, such an expansion of the EFSF would set off its own chain-reaction as France and then Germany lost their AAAs and slithered into the swamp.
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So, obviously markets will turn very nervous once ECB purchases approach the level that corresponds to the EFSF ceiling. They know that the ECB’s Teutons will die in a ditch rather than cross that line, taking the bond risk directly onto the ECB’s own balance sheet. That moment could come within three weeks.
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About
Societal and economics observer and commentator with an endtimes, future history perspective. Follow me at Twitter: socioecohistory
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