By Bob Chapman
TheInternationalForecaster.com
We announced our belief a few weeks ago that the Fed loan to the ECB could with fractional banking be $10 trillion. This past week we found that Credit Suisse shares our ideas as well. We believe that what this move by the Fed and the ECB is telling us that this is probably it. We also ask again how can the banks in the LTRP repay the funds in a timely manner? No plan has been presented before or since, there is no plan. Again, just throw money at the problem. The only player really capable of saving Europe is Germany and they would destroy themselves in the process. Everyone should have seen this coming but no one did except a handful of insiders. The resultant use of funds since the ECB distribution is hardly even mentioned in the media. It is a big dark secret.
Will Germany want to rescue France or will France want to be rescued? We say it depends in part who the next president of France is in May. Based on current polls the socialists lead, but it is a very tight race. If Sarkozy loses in the primaries it will then depend on whether the conservatives throw their vote to Marine Le Pen and FN, something the conservatives have never done before. One thing is for sure if either the Socialist or the FN win the euro is history and perhaps the EU as well. We watched this years ago when the conservatives threw almost all their votes to the Socialists. This time it could be different.
As in Germany more than 50% of French voters want an end to the euro, but the major media does not bring this to anyone’s attention. The French are no longer anxious about their leadership position. They want France the way it once was; not jumbled up with a group of other countries. We saw this when we lived there 60 years ago. The French had a great drive on to make sure words like hotdog and weekend did not seep into the French language. We can vividly remember our daughter in Middle School in Lausanne, and Miss Galgosh storming the corridors yelling, parle français. You have to live in a culture to understand it.
If Le Pen eliminates Sarkozy, France will have set a new course no matter if it’s Hollande and Le Pen, part of which is the people versus the status quo. Germans and the French want change and that is rational considering their citizens no longer want the euro and all the responsibilities that go with it. This is the eternal game that is being played out within these countries. Even though the Federal Reserve came to the temporary rescue they have really lost their key front man in Sarkozy. The Fed, the US Treasury, the CIA and the Mossad are going to have to go to Plan B and we do not think they have an effective Plan B. The French are not dumb. They know exactly what has been going on. French banks and the French government have gone the limit in the attempts to save the euro and its constituent parts, the sovereign nations.
After French elections and later German elections we believe you will find that there will be cooperation on phasing out the euro among many things. The LTRO will allow for that transition phase. Greece has become a cat and mouse game and if the elitists and their appointed president think they are going to win they are mistaken. They lost 2-1/2 years ago. Once a new government is in place they’ll just reverse it all, default and go their own way, which they should have done 2-1/2 years ago, unfortunately Pasak sold them out. Greek creditors want a voluntary debt exchange, but they will take what they can get. In the end the creditors will sue and get nothing. Since when could you get blood from a stone: then there is the money owed via CDS, which is in the billions. Do you really believe credit default underwriters have any cash behind their promises to pay? It is all a scam. The backup funds do not exist. It should be noted no progress.
While Greece is headed to the dustbin the European one-worlders are fighting for an ESM, European Exchange Mechanism, which they plan to pass on January 30th in Mexico City. This would put the ESM online in July with a treasure chest of $650 billion, which may be increased. Where all the funds will come from remains to be seen and wait until the voters in each country discover they have been sold out again, and that their sovereignty is gone and with it their freedom and liberty. The banks do not have any transparency on the issue, so the public is essentially in the dark. That is the way the elitists like to work, secretly behind the scenes because you do not have a need to know.
Due to the LTRO at the ECB many investors are buying European bank debt again.
The downgrades of many sovereigns and banks recently cost the EFSF, its AAA rating. It fell from AAA to AA+. This is the pathway toward the implementation of the ESM, which has to be approved by all 27 EU members’ not just 17-euro zone members, as it was an amendment to the Lisbon Treaty. As of last week Germany refused to increase the size of the EFSF.
At the same time the ECB’s balance sheet has grown to $3.5 trillion dollars, which is larger than that of the Federal Reserve. This is a record and puts pressure on the euro, low interest rates and very high liquidity. The pledged collateral is in part financial garbage, and that means the euro will find it hard to stage a strong permanent rally.
Finland says the proposed new treaty is unnecessary and harmful. Their foreign minister says that Finland should not sign the treaty. The majority of the parliament has the same view.
During Sarkozy’s presidency almost $800 bullion was added to the national debt.
If we have a Greek default and more defaults to follow, will Germany leave the euro? It would give them the perfect opportunity to do so.
Bob Chapman on the Alex Jones show – 20 January 2012
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