Euro Debt and Socialism - Christogenea Euro Forum Call 12-01-2011


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This article, from Seeking Alpha, helps to demonstrate the bankers' control of Germany. Here are the first two paragraphs:

Germany got a wake up call last week when an auction of 10 year government bonds failed to get bids for 35% of the bonds offered. While German bond auction failures are not as infrequent as one might imagine – six of the last eight auctions received fewer bids than the maximum amount of bonds offered – this one, coming in the midst of the European debt crisis, was perceived to be more ominous. If the strongest economy in Europe can’t sell all of its bonds, what chance does Italy or Greece have? Some have opined that this failure means the euro crisis has entered a new phase and that Germany itself – the one government in Europe thought capable of ending the crisis – is now at risk. It was more likely a power play by Europe’s bankers intended to send a message to Merkel and Schaeuble. And it appears the message was received.

Schaeuble has been at the forefront in Germany demanding that banks share losses in any sovereign bailouts that come via the European Stability Mechanism to be established next year (moved up from 2013). The failed German bund auction last week was the banks reply and Schaeuble almost immediately backed down. Friday, Schaeuble told reporters that “(i)f we now manage to move toward a stability union, we’ll see how one might possibly adjust the treaty”. Bankers 1, Schaeuble 0. It would appear the bankers are firmly in charge of Europe now and have no intention of playing the patsy. The banks were given an incentive to buy sovereign debt under the Basel committee rules that essentially made all European sovereign debt risk free. Banks could own European sovereign debt – no matter the country of issuance – without having to reserve for potential defaults. Europe’s governments, having fixed the rules to ensure a market for the bonds to fund their welfare states, now want to renege – and the bankers are having none of it.