From The Market Oracle, UK we get a comprehensive analysis of what has happened, and what is coming in the financial world. I am in fundamental agreement with their views, excepting a few quibbling details. Consider this a sanity check to the ‘good news’ the US Media is spraying all over like the fertilizer it actually is…
(Market Oracle UK) – Many are the events, signals, and telltale clues of a real live actual systemic failure in progress. Until the last several months, such banter was dismissed by the soldiers in the financial arena. But lately, they cannot dismiss the onslaught of evidence, a veritable plethora of ugly symptoms of conditions gone terribly wrong and solutions at best gone awry and at worst never intended in the first place.
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The wars serve two purposes, to enable significant fraud from overcharged services, and to hold open the gateways for sizeable money laundering flows into the Wall Street banks, those hollow structures that closely resemble a coke addict with dark teeth, wretched bones, wasted organs, lost attention, and a listless gait. The Greek showcase is coming to a neighborhood near you in Western Europe and Great Britain, soon to feature debuts across North America. No, the United States is not immune from the horrors of ruin since its marquee billboards read Zero Percent.
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Operation Twist cements ZIRP and closes the door on any Exit Strategy. Nothing exists in the twist of substance, a mere shift of the shell game movement. The most powerful effect of a maintained Zero Percent Interest Policy is that it ensures a systemic failure with capital destruction, rising costs, falling profit margins, and deterioration in the USEconomy. It guarantees growing federal deficits without any potential of resolution, and finally a US Govt debt default. Just one year ago, the travesty of political failure was in full view with the Super Committee charged with spending reduction.
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From December 2011 to April 2012, the Dollar Swap Facility released $3.2 trillion for European bank aid. It accomplished nothing, since their banks are a field of Greek-like ruins still. The money went into the LTRO funds, the ill-planned knucklehead Draghi plan. The banks bought overpriced government bonds, lifted in value by the Euro Central Bank itself. The same banks are worse off than before the application of LTRO funds. What irony! Draghi has no credibility left. Harken back to 2009 when a similar Dollar Swap Facility released over $1 trillion to the same European banks. It solved nothing either. The tragedy is accentuated by the realization that central bank clowns learn nothing, attempt the same vacant solutions, only to repeat their errors at a later date. The public seems incapable to recall the past failures, holding out hope. Now we hear of a possible $2 trillion plan to recapitalize the European banking system. In Weimar terms, this is pocket change. Counting the US fixes, the London fixes, and the previous DSFacility, the total is closer to $6 trillion already wasted in a massive debasement series of whiffs. So another $2 trillion is pissing in the wind of Weimar flatulence, the stench to be noted by next year.
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The story not told adequately is the extreme failure of the LongTerm Refinance Operation installed by Mario Draghi as his first act and deed at the Euro Central Bank. He has in the process lost all credibility before his first year of tenure is over. The Southern European sovereign bonds did not take well to the LTRO solution at all. It caused an immediate vomiting episode that continues to this day. The solution wrecked the banks further, applying a supposedly better quality elixir of fiat paper bonds to replace a dismissed toxic bond. The Draghi solution of LTRO funding was a stillborn baby. The Spanish Govt Bond yield is stuck at alert levels. The Italian Govt Bond is fast approaching the panic levels, while experts attempt to explain that Italy is in much better condition. The failure of bond auctions in Rome will put aside such silly notions. The bond yield in Spain will remain near 7% to keep the pressure on. The bond yield in Italy will push past 6% to apply renewed pressure. Nothing changed, nothing fixed, and worse, no real attempt to remedy or reform. As long as big bank liquidation is avoided, the supposed solutions are all empty cans of hope and heretic games.
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Bank runs have finally begun in Spain, Italy, and Greece in earnest. The savings accounts are being depleted within a broad vanishing act. Argentina is the lesson few learn. The latest is a report that NatWest within the RBS Group in the UK has suffered computer meltdown. Millions of customers had been unable to move or withdraw money from their accounts. A widening suspicion has come that the supposed technical glitch was instead a disguised kiting scheme designed to save the big bank conglomerate million$ in delays while clients were denied access to their money. It is theft by another name. The Ulster and Belfast bank interruptions blocked over 100 thousand account holders from access in Northern Ireland.
Whole Article – http://www.marketoracle.co.uk/Article35356.html
Regards,
LT
~Those who abuse Liberty, do so at their own peril!
