Debt Rattle June 17 2015

[Raúl Ilargi Meijer]

Theodor Horydczak Sheaffer fountain pen factory, Fort Madison, Iowa 1935 • The Euro: Portrait Of A Devastating Failure (MarketWatch) • IMF “Defense” O
[See the full post at: Debt Rattle June 17 2015]

[Dr. Diablo]

“Syriza Left Demands ‘Icelandic’ Default as Defiance Stiffens”
https://www.telegraph.co.uk/finance/11673989/Syriza-Left-demands-Icelandic-default-as-Greek-defiance-stiffens.html

Hey wait–wasn’t it a platform of their election to nationalize the banks? And wait — by negotiating clearly, openly, with unchanging demands up front, hasn’t Tsipras now dropped an additional 100B Euro on Germany (et al) in Tier 2 liability by giving his people and businesses time to prepare and stack cash? 100B in transition cash that European taxpayers who refused to voluntarily write off now have to write off involuntarily?

I see the problem: the world, and especially Europe, has never seen a government that told the truth. They simply assume that it’s lies, that it is promises, that’s it’s all “game theory”. It was: a game theory where they tell you what they’re going to do and do it, but you’re too incredulous to believe it, and too psychotic to recognize reality. The reality that all power has limits, and they are not invulnerable. If the EU banks couldn’t tolerate a Greek default back when it was 80B Euro, how are they going to weather a 280B Euro hit? Leveraged 30:1 (conservative and official, likely the real exposure is over 100:1) 280B is 8.4 Trillion. 8,400B Euros. As the movie goes: “Dodge this.”

DeutschBank is top contender for ceasing to exist 30 seconds later, taking the Eurozone with them. Money will flood to the US$, rightly or wrongly, likewise driving the US deeper into Depression and Deflation than they already are. After that, likely US will have to capitulate and re-value or even erase their currency, like Bretton Woods, the Washington Agreement, or the 1933 gold default.

Hey, it’s not like Syriza didn’t warn you. They’ve been totally honest: the one thing the present leaders cannot understand.

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