Germany's Merkel Says Euro Is in Danger

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Germany's SPD could oppose eurozone looting bill:

Berlin- Legislation to rescue the eurozone system might pass the German parliament without the support of the opposition, sending a worrying mixed message about German support for the plan, politicians said Wednesday.

The bill is expected to pass into German law on Friday, as Chancellor Angela Merkel's ruling coalition continues to hold majorities in both houses of parliament.

But bringing the Social Democrats (SPD), the largest opposition party, on board would send a decisive signal to calm the markets.

The SPD's Frank-Walter Steinmeier said Merkel's appeal for broad legislative support was unconvincing, adding that too little was being done to regulate and tax financial market actors.

"Either we manage ... to reorganize the markets and fairly distribute the burdens, or we will indeed undermine the trust in Europe," Steinmeier said, calling for Merkel to follow up her words with deeds.

Legislators will determine Friday whether the 750-billion-euro (915-billion-dollar) eurozone bailout package is approved by Germany, which would be the largest single contributor, should it come into effect.

In her defence of the 750-billion-euro (915-billion-dollar) EU financial rescue system agreed in Brussels last week, Merkel said that the euro and the EU was facing an "existential test."

"It is about nothing less than the defence of the European idea," the chancellor added. However, she failed to specify details of how the rescue mechanism would be applied.

"This is about far more than the mere figures," Merkel said.

Two weeks ago, the SPD withheld its approval as parliament voted on a smaller rescue package aimed at bailing Greece out of the debt crisis which set the euro crisis in motion.

Since then, the SPD has been bolstered by a recent state election in which Merkel's Christian Democrat (CDU) and Free Democrat (FDP) allies failed to secure a majority.

Merkel's centre-right coalition fell to a 10-year low in an opinion survey released Wednesday. The governing alliance scored approval ratings of just 38 per cent according to the survey by pollsters Forsa, while the SPD rose to 27 per cent.

The chancellor's surprise decision to push internationally for a financial transaction tax could be seen as an overture to the SPD, who have called for just such a tax to be introduced and opposed the Greek bailout in the absence of such a tax.

In doing so, Merkel overruled opposition within her own coalition from the FDP, whose pro-business stance pitches them against the proposed tax.

Merkel said citizens were looking for the financial sector to pay its fair share towards the costs of the financial crisis, adding: "People are justified in asking for this."

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Germany bans naked short selling, halts eurozone meltdown, stuns banksters:

Germany has taken action to avert the economic meltdown of the euorzone by banning naked short selling of eurozone sovereign debt instruments.

The ban on naked short selling of Germany’s 10 leading financial firms, euro government bonds and on related transactions in credit default swaps (CDS) was imposed on Tuesday evening, stunning the markets.

Naked short selling of CDS helped push Greece to the edge of default.

In naked short selling, a trader sells a financial instrument without first borrowing the instrument as would in a conventional short sale.

In the wake of the ban, the cost of insuring European sovereign debt against default through CDS dropped on Wednesday morning, significantly reducing the pressure on the eurozone.

The five-year Greek CDS spread dropped to 530 basis points down from 619 basis points Tuesday; the Portuguese CDS spread narrowed by 50 basis points to 220; Ireland's CDS narrowed 35 basis points to 165, and Spain narrowed 25 basis points to 155 .

The CDS spreads dropped sharply in spite of the fact there was little liquidity in the market, underlining just how destablising the CDS are.

BaFin ban includes short selling in shares in Allianz, Deutsche Bank and Commerzbank.

This could be to preempt plans to push German banks which hold Greek debt into a Lehman Brother's-style default, so plunging Europe into a double dip recession.

The surprise ban spooked bankers and the controlled, mainstream media because it strongly suggests that the global bankers and Bilderbergs have lost control of key levers of power German government.

Bilderbergs Chancellor Angela Merkel and Finance Minister Wolfgang Schäuble have consistently failed to regulate CDS in spite of the danger they pose to the whole eurozone, and in spite of repeated pledges to do so.

The banks stand to make a fortune from destroying the euro using their various financial instruments. But they depend on the acquiescene of regulators and governments.

However, the ban applies only to Germany.

Speculators can continue to use London and New York to set up short positions as well as a whole range of financial instruments.

It is not clear how BaFin will deal with the many other instruments to short stock and bonds and drive up interest rates on souvereign debts artificially.

Moreover, Bilderberg French Finance Minister Christine Lagarde today lambasted Germany for the ban in spite of testifying to the French National Assembly yesterday on the dangers of speculation, indicating that her opposition is just entertainment and theatre for the gallery.

Lagarde said she had no intention of following the German ban.

Also, EU Commissioner Michel Barnier, who has been working for two years on the regulation of the CDS market without any result, criticised Germany's ban.

Barnier said he would present an proposal on how to deal with short-selling in autumn, also for sovereign credit default swaps.

BaFin defended its ban because of the extreme price moves that can be caused by naked short-selling, threatening "the stability of the entire financial system".

„BaFin justifies these steps given extraordinary volatility in debt securities issued by eurozone countries. Furthermore, credit default swaps on the credit default risk of several countries in the eurozone has increased significantly. Against this background, massive short sales of the affected debt securities and the conclusion of naked credit default risk on eurozone countries had led to excessive price shifts, which could have led to significant disadvantages for financial markets and have threatened the stability of the entire financial system,“ Bafin said in a statement.

The decision by elements in the German government and regulators to go it alone and ban a key instrument the bankers need to destroy the euro suggests that the banks have lost control of the power centre in Europe’s biggest economy, in what would be a major set backf for plans to take control of Europe.

Germany now needs to launch a parliamentary investigation and probes into the Greek and eurozone crisis and bring those responsible for creating the crushing mountain of debt that can never be paid off to account.

Only probes and criminal investigations can stop the banker's attacks in the long term.

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Why Europe and Germany face economic meltdown, hyperinflation and social upheaval:

My father had a doctorate in economics from Vienna University and explained to me many years ago how the current debt crisis would result in hyperinflation -- and how it was all planned.

I did not believe him at the time, but now I see he was right.

The banks and European governments are systematically, deliberately and wilfully engineering the destruction of the eurozone for their profit by means of artificially-created debts and artifically high interest payments.

The controlled mainstream media gives the general public a false and misleading impression of this crisi.

But unless the right action is taken, Europe will soon be in economic ruins, wracked by hyperinflation, social upheaval and prone to wars and totalitarian regimes. The nightmarish history of the 1930s, the Great Depression and the rise of Nazi Germany will repeat itself, but this time on an even larger continent-wide scale.

Today, the EU announced it has sent its first payment of 14.5 billion euros ($18 billion) to Greece allowing the government to make an immediate payment of 8.5 billion euros to banks that hold its souvereign debt, also to Goldman Sachs and Deutsche Bank.

But the 8.5 billion euro payment is just the beginning of the final phase in the eurozone's meltdown.

The governments of the United States and Europe alone will require at least $5 trillion dollars this year for interest payments on their „souvereign debts“ to banks such as Goldmann Sachs, JP Morgan and Deutsche Bank.

Because governments will not be able to find that kind of money from tax hikes and slashing national budgets, including pensions, education etc, the central banks, the European Central Bank and the Federal Reserve, have pledged to buy bonds and so, de facto, have ensured banks get billions via the souvereign debt bond scam.

The more bonds the central banks buy, the higher the risks of a massive increase in the money supply and of inflation, even hyperinflation, wiping out the last vestiges of wealth in the European and US population.

In 2009, the USA government spent almost $2 trillion dollars on interest payments to banks like Goldman Sachs for its „souvereign debt“ (largely due to the "need" for a bank bailout). The Federal Reserve bought 17% of all Treasury issuance last year, and in 2010, borrowing is likely to be more than $2 trillion dollars.

In Europe, the European Central Bank has torn up treaties, agreements, to start giving banks trillions in the form of purchases of bonds for Greek and other souvereign debt.

German Ifo head Hans Werner Sinn explained in the FAZ newspaper how Germany and the EU has turned into a milk cow for the banks:

"Under the cover of the crisis, the European debtor nations are forcing Germany into the transfer union. Because the capital markets are not giving the debtors any more money, other EU states are now doing it,“ he said.

Because the Greek government cannot pay the banks the gigantic interest payments on their paper debts by budget cuts alone, the money has to come from slashing budgets throughout the European Union, including the German budget as well as from the ECB bond buying interventions, and transferring that money to Greece and other nations with a souvereign debt crisis.

Sinn said the new politics of the EU are diametrically opposed to the interest of Germany because they push up souvereign debt interest rates for every country. After all, why should banks and their friends, the credit rating agencies, hold back interest payments rates when they know they can get whatever they want from corrupt governments and the ECB?

Sinn said the decision to give more than a 100 billion euros of German money to banks who hold Greek or other at risk souvereign debt bonds will prolong the phase of capital outflow from Germany, creating an artificial boom in the debtor nations and weakening Germany yet more.

Clemens Fuest told the FAZ that every rule of the eurozone has been broken.

Key articles in EU treaties as well as the German constitution have been trampled on to carry out this looting of European taxpayers under the cover of a 720 billion euro eurozone souvereign debt "bailout" for the banks.

In 2010, it has been estimated that €2.2 trillion or $3.1 trillion dollars will be owed in debt interest payments to banks in the UK and in Europe alone.

If the global economy suffers a double-dip recession in 2011 or 2012 because of the credit tightening activities of the banks and because such gigantic sums are being sucked out from the real economy, there could be full-scale debt crisis at the sovereign level.

In addition, the ECB and Federal Reserve plan to buy up so many bonds will result in the worst inflation since the 1970s, highly likely in hyperinflation, wiping out the last traces of any wealth in Europe.

Rating agencies downgrades on sovereign debt will force up interest payments artificially, and also compel pension funds to unload papers, so annihilating the money pools to fund the pensions of millions.

It is vital to remember that this souvereign debt crisis was created in the first place by the banks and the bank bailouts two years ago.

Governments have not run up these debts to spend more money on education, for example. They have run up these debts to give money to the banks and stimulate economies ruined by the bank's artificial subprime and credit crunch fraud.

At the end of 2007, Ireland’s General Government Debt, for example, stood at just 25 per cent of GDP, well below the European average according to Ireland’s National Treasury Management Agency (NTMA).

After borrowing billions to stimulate its economy and after adding bank „losses“ to the national souvereign debt in late 2008 and early 2009 and without any vote in Parliament, the Irish government increased this ratio to an estimated at 64.5 per cent at end of 2009.

Morgan Kelly, professor of economics at UCD (University College Dublin) says in a study, "Whatever happened to Ireland?" that adding Irish bank losses to its national debt will leave Ireland in 2012 with a debt-GDP ratio of 115%, and a debt-GNP ratio as high as 140%, above the ratio that is currently sinking Greece.

http://www.finfacts.ie/irishfinancenews/article_1019701.shtml

If Irish banks eventually lose one third of what they lent to property developers, and one tenth of business loans and mortgages, the net cost to the Irish taxpayer will amoutn to almost one third of GDP, Kelly says.

The Irish banks made these inflated loans and drove up their debt also on the back of a housing bubble they themselves helped create in the first place with cheap credit and the subprime loans.

The SEC is now probing Goldman Sachs and Deutsche Bank’s role in the subprime fraud.

The banks created the housing bubble by subprime loans, and then tightened credit and imploded the housing bubble under the pretext of the „subprime crisis“.

Next, these banks got gigantic infusions of money from the government in the form of bailouts, allowing them to go on a buying spree when everyone else is broke.

Governments borrowed the money to give to cover bank's subprime losses from other banks, so creating the souvereign debt crisis.

By helping to create the souvereign debt crisis, the banks have ensured they have a steady stream of money from the government while pushing economies over the brink, allowing banks to buy up assets for a pittance.

It has been estimated that Ireland will spend €5.2 billion – 16% of all tax collected – on servicing a record national debt of €116 billion in 2010, as the country pays interest rates of almost 6% to the banks for debts it made to pay these same banks a bailout for the subprime "losses".

Interest payments in Ireland to banks for this national debt will swallow up almost every euro collected in Corporation Tax this year and next, according to Goodbody Stockbrokers.

Just as in the case of Iceland, the tide of debt engulfing the EU has largely been created by banks lending to each other.

For example, Portuguese banks owe $86 billion to their counterparts in Spain, which in turn owe German banks $238 billion and French banks $220 billion.

In short, these banks use the fractional reserve banking system to lend each other huge sums that exist largely only paper and to create debts that no one in the real economy would want or service. They then load these debt onto the government and the governments forces taxpayers to find real money as interest payments for these paper debts.

To finance the interest payments, governments in the EU are raising taxes and cutting spending and so are halting the beginnings of a recovery in northern Europe and worsening the recession created by the banks by their „credit squeeze“ under the pretext of having lost so many billions on subprime loans.

Angela Merkel, Nicolas Sarkozy and Jose Zapatero et al are, at the same, time, ignoring every real solutions to the problem.

For example, Greece has a debt of 300 billion -- albeit engineered with the help of Goldman Sachs.

The IMF loan offered in conjunction with 15 eurozone nations is 110-billion-euros.

But the 110 billion euros money is not going to paying off the principal of the debt so reducing the overall interest payments of Greece even if it were desirable to pay off this paper debt. The 110 billion euros going to pay only interest payments, bit by bit, leaving Greece on its mountain of debt.

Josef Ackermann, the Deutsche Bank CEO, even helped push up the interest payments Greece will have to make also to banks such as his, personally, by talking up the Greek crisis in the media.

So, Greece will use the entire 120 billion euros sucked from taxpyers from the rest of Europe and the worldover the next three years just to pay the interest payments on this paper debt to Deutsche Bank, Goldman Sachs and co.

To raise more money for the banks, the Greek government plans to raise taxes and slash pensions, sending the economy into a depression that will make it harder to raise the revenue to pay the interest payments, forcing the government to make ever deeper „austerity measures“.

The argument in the EU is that reforms will increase the competitiveness of the Greek economy.

The opposite is true.

Slashing the national budget to give gigantic sums to the banks will destroy the economy and leave people with inadequate unemployment benefits at a time when unemployment soars.

The end result will be that the banks and IMF will end up owning half of Greece in a couple of years. This is because they will be the only one with the cash to buy up companies, assets, islands while everyone else goes bankrupt due to the credit tightening and interest payments those same banks imposed.

Banning the hedge funds would bring immediate halt to this crisis.

But Michel Barnier, the EU’s internal market commissioner, passed weak legislation last year in the wake of the 2008 financial crisis, and it only comes into force in December.

The new rules for the hedge funds that played a central role in the credit crunch and souvereign debt crisis are so weak – hedge funds have register should they wish to do business in the EU and disclose their investment – that they will be of little use.

Barnier’s promise to deal “very severely” with the sovereign credit default swap market is all theatre for the general public.

So are Merkel's and Sarkozy's and co public spats.

In addition, a probe into the activities of the credit rating agencies as is occuring in the USA is nowhere in sight in Europe just as there is no probe into the subprime fraud.

The three big agencies – Standard & Poor’s, Moody’s and Fitch – downgrade souvereign debt in Europe, as they please pushing up interest rate payments at will, so ensuring ever more gigantic profits for the banks.

The new rules for rating agencies operating in Europe are also ineffectual. Rating agencies will just have to register, meet certain corporate governance standards and disclose the methodology by which they arrive at their ratings.

Far too little, and far too late.

There are also no plans for a tax on financial transactions that could raise trillions from the banks.

Pledges to reform the financial market are just propaganda being presented to the increasingly angry European public to make it look like Trichet, Merkel, Osborne and co are on the side of the taxpayers when they are actively assisting in a looting on the biggest scale in European history.

http://www.spiegel.de/international/europe/0,1518,695386,00.html

It is not just Greece, Ireland and other countries like Spain that will suffer collapse.

Germany’s economy will eventually collapse as its export markets shrink.

Ownership of German export corporations is now overwhelming in the hands of international corporations – and it is they who profit from the exports not the German shareholders or employees.

Low wages in Germany have also depressed domestic demand.

Germany’s capital has flowed outwards to finance housing bubbles in the rest of europe leaving Germany with little capital to invest in its manufacturing base or in education.

Also, the German government and the federal states are burdened with trillions in debt made often through waste, such as the purchase of the swine flu jabs (cheaper than paying pensions after all).

While Merkel and Schäuble and Koch trample all over the EU treaties and German constitution when it comes to handing money to banks, the EU treaties are suddenly sacred when it comes to slashing the national budget to find the money for the banks.

Germany’s only hope of surviving this robbery by the banks and their political class is to ditch the euro and enter into a smaller currency union around a hard currency or reintroduce the D Mark at the right exchange rate to increase the purchasing power of Germans.

Speculators would have to be regulated to stop them driving up the D Mark’s exchange rate artificially to bankrupt exporters, and capital controls would have to be introduced.

Learning from the nightmarish hyperinflation of the 1930s which paved the way for the social catastrophe that allowed the Nazis to rise to power, Germany gave up the D Mark on the condition that the euro remains a „hard currency.“ This condition is anchored in the Contitution and in the EU treaties.

Now Merkel and Schäuble et al are breaking every law to print money for the profits of the banks, risking hyperinflation, social upheaval and war.

German Defence Minister Karl Theodor zu Guttenberg is already escalating the Afghanistan war - and at the same time ensuring sales of tanks to the German army from the same banker-owned military industrial complex.

Just as in the 1930s, war offers a way for the banksters to rob people, send them to some front to kill them while making yet more money and gaining more power.

Never again, Germany.

Stand up and say no to this robbery. Say no, to plans for hyperinflation, a totalitarian state and war.

Nie wieder. Nein.

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