Stop Fooling Yourself… NO Entity On Earth Can Stop This: Economic & Financial Collapse!
- Stop Fooling Yourself… NO Entity On Earth Can Stop This!
by Phoenix Capital Research, via www.zerohedge.com
The markets are going bananas over the same tired assumption that Central Bankers have some magic solution up their sleeve. Over the last five years, market participants have largely operated based on the “Bernanke Put” (the belief that no matter what happens Bernanke will somehow save us). I explained how this was a bluff in last issue of Private Wealth Advisory.
However, the ECB’s Mario Draghi may have surpassed the Bernanke Put as the biggest bluff in financial history with his claim that the ECB will take action and that the action will “be enough” to solve the EU Crisis. Let’s consider what the ECB has done so far and whether or not it has worked. To date, the ECB has:
1. Intervened in the sovereign bond markets throughout 2011.
2. Launched its LTRO 1 and LTRO 2 schemes which provided over €1 trillion in funds to EU banks.
3. Opened up various liquidity windows to EU banks.
4. Facilitated bailouts of Greece (2) Portugal (1) Spain (1) Ireland (1) and soon to be Cyprus and Slovenia. REAL w
5. Ballooned its balance sheet to over €3 trillion?Euros (roughly 30% bigger than the German?economy, which is the largest single economy in Europe).
Has the EU Crisis been solved by any of these measures? The obvious answer is no. The EU Crisis began in earnest in January 2010 with Greece. Today, August 2012, Greece is still an issue and is in fact about to default or leave the EU.
So, one has to ask one’s self… if the ECB (along with the IMF and Germany) has thus far failed to manage, let alone solve, Greece’s problems (a country which comprises only 2% of EU GDP and whose bond market was just €350 billion), how is it now going to solve those of Greece, Spain, Ireland, Portugal, Cyprus, and Slovenia all at once?
The answer is obvious: it cannot. Draghi is bluffing