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Is that Desperation Hanging Over Europe’s Banking System?
Turns out, Italy’s banking crisis is not fixed.
Many of Europe’s and America’s biggest banks have begun begging, cap in hand, for a new, innovative way of raising vast sums of dirt-cheap debt on Europe’s financial markets.
The Association for Financial Markets in Europe (AFMA), an organization that prides itself on serving as “the voice of Europe’s wholesale financial markets,” just sent a strongly worded letter to the European Central Bank, urging for the prompt creation of EU-wide regulation allowing banks to sell a newfangled class of bail-in-able debt called “senior non-preferred bonds.”
“A swift agreement is essential to enable banks to continue increasing their loss-absorbing cushions and improve their resolution capacity,” says the letter (translated from Spanish).
In its own words, the AFMA represents “leading global and European banks and other significant capital market players.” Its board includes representatives of the biggest banks, from US megabanks like Citi, Goldman, JP Morgan Chase, Morgan Stanley, Bank of America Merrill Lynch and BNY Mellon to European behemoths like Deutsche Bank, HSBC, Lloyds TSB, Barclays, Unicredit, ING, BNP Paribas, Credit Agrcole, Crédit Agircole, and Credit Suisse.
Many of these banks and a few others not directly represented on AFMA’s board (such as Spain’s Santander) are facing heightened regulatory pressure, both at the regional and global level, to issue increasingly more bail-in-able debt so as to ensure that the next time a banking disaster strikes, part or all of the debt can be used to “bail in” those investors before taxpayers are called upon to cough up the rest.
It’s the way it should have been from the very inception of this global banking crisis. Instead, governments and central banks have injected trillions of dollars, euros, pounds, yen, and yuan of public funds into banks to keep the banks upright and make most bondholders whole, including those holding subordinated, or junior, debt, which is theoretically designed to bear losses in times of stress.
The “senior non-preferred bond” is the financial system’s latest effort to finally change all of that. Also known as senior junior, senior subordinated or Tier 3, this newfangled class of bank debt is a hybrid creation that combines the biggest drawback (for investors) of senior debt (i.e. low yields) with the biggest drawback (once again, for investors) of subordinate debt (i.e. virtually no protection in the event of a banking collapse).
It’s what makes senior non-preferred bonds so attractive to capital-starved TBTF banks: the bonds pretend to be simultaneously one thing (senior), in order to keep the yield (and the cost for the bank) down, and another (junior) in order to qualify as bail-in-able. It’s a way for big banks to bamboozle bondholders – usually institutional investors like pension funds – into buying something with other people’s money that doesn’t yield nearly enough to compensate them for the risks they’re taking. But that hasn’t stopped yield-starved institutional investors from gobbling them up.
The European Commission has already endorsed the financial instrument, rating agencies have also lent their approval, and the ECB can’t wait to come up with “a common framework at Union level.” However, the legislation permitting its issuance, both at the regional and national level, is taking a long time to complete. And one thing many of the banks appear to be rather short of is time.
The only jurisdiction where big banks can issue, 100% legally, senior non-preferred debt is France, where the debt instrument was initially created as a means of helping the country’s big four banks (BNP Paribas, Crédit Agricole, Groupe BPCE, and Société Générale) spruce up their balance sheets at minimal cost.
Elsewhere in Europe there is no legal framework for issuance of the new debt instrument but that hasn’t stopped some banks, including Holland’s ING and Spain’s Santander, from issuing senior non-preferred bonds. Spain’s second biggest bank, BBVA, which is not even officially too big to fail, is also expected to dip its toes in the non-quite-legal market in the coming months.
Santander, BBVA and Spain’s third biggest bank, La Caixa, have been on a spectacular debt binge since this fledgling year began, issuing more combined debt in the first six weeks of 2017 than at any other time since 2007, the year that Spain’s spectacular real estate bubble reached its climactic peak.
Even more ominous, Italy’s fragile megabank, Unicredit, has also expressed an interest in issuing non-preferred bonds, though it will probably have to wait for Italy’s banking crisis, in which it is has a major role, to blow over (assuming it actually can) before joining the party. That could be a long time coming: there continues to be widespread disagreement between the ECB and the European Commission over whether to allow Italy to go ahead with its more or less illegal bailout of the banking sector.
In the meantime, Italy’s Target2 imbalance continues to grow. The Banca d’Italia now owes a record ¤364 billion to the ECB – the equivalent of 22% of GDP, its highest point since the creation of the euro, and the figure keeps rising. It’s testament to an ongoing — and accelerating — capital flight out of Italy’s banking system, as investors lose faith not only in the possibility of a workable solution being found to Europe’s most serious and arguably most complex financial threat but in the long-term viability of the single currency itself.
If Italian and European authorities don’t soon find a workable solution to Italy’s intractable banking problem — and preferably one that is more or less palatable for the German electorate, which is already up in arms at the latest Target2 imbalances — there is a very real risk that Italy will suffer sudden bank runs and disorderly failures, at which point the chances of Unicredit raising ¤13 billion of new capital by its June deadline will fade to zero. And at that point, as even the FT has admitted (behind paywall), it will probably be game over
====================================
De kans op een EU breakup is nu geschat op 25 % (Binnen 1 jaar : Gemeten over 5000 investeerders)
Zolang er meer-en-meer geld uit Italië weggestroomd dan dat er binnen gaat is er gewoon niks opgelost. En de ECB volkomen clueless van wat ze hieraan nog kunnen doen. Ook hun bazooka is leeg.
Turns out, Italy’s banking crisis is not fixed.
Many of Europe’s and America’s biggest banks have begun begging, cap in hand, for a new, innovative way of raising vast sums of dirt-cheap debt on Europe’s financial markets.
The Association for Financial Markets in Europe (AFMA), an organization that prides itself on serving as “the voice of Europe’s wholesale financial markets,” just sent a strongly worded letter to the European Central Bank, urging for the prompt creation of EU-wide regulation allowing banks to sell a newfangled class of bail-in-able debt called “senior non-preferred bonds.”
“A swift agreement is essential to enable banks to continue increasing their loss-absorbing cushions and improve their resolution capacity,” says the letter (translated from Spanish).
In its own words, the AFMA represents “leading global and European banks and other significant capital market players.” Its board includes representatives of the biggest banks, from US megabanks like Citi, Goldman, JP Morgan Chase, Morgan Stanley, Bank of America Merrill Lynch and BNY Mellon to European behemoths like Deutsche Bank, HSBC, Lloyds TSB, Barclays, Unicredit, ING, BNP Paribas, Credit Agrcole, Crédit Agircole, and Credit Suisse.
Many of these banks and a few others not directly represented on AFMA’s board (such as Spain’s Santander) are facing heightened regulatory pressure, both at the regional and global level, to issue increasingly more bail-in-able debt so as to ensure that the next time a banking disaster strikes, part or all of the debt can be used to “bail in” those investors before taxpayers are called upon to cough up the rest.
It’s the way it should have been from the very inception of this global banking crisis. Instead, governments and central banks have injected trillions of dollars, euros, pounds, yen, and yuan of public funds into banks to keep the banks upright and make most bondholders whole, including those holding subordinated, or junior, debt, which is theoretically designed to bear losses in times of stress.
The “senior non-preferred bond” is the financial system’s latest effort to finally change all of that. Also known as senior junior, senior subordinated or Tier 3, this newfangled class of bank debt is a hybrid creation that combines the biggest drawback (for investors) of senior debt (i.e. low yields) with the biggest drawback (once again, for investors) of subordinate debt (i.e. virtually no protection in the event of a banking collapse).
It’s what makes senior non-preferred bonds so attractive to capital-starved TBTF banks: the bonds pretend to be simultaneously one thing (senior), in order to keep the yield (and the cost for the bank) down, and another (junior) in order to qualify as bail-in-able. It’s a way for big banks to bamboozle bondholders – usually institutional investors like pension funds – into buying something with other people’s money that doesn’t yield nearly enough to compensate them for the risks they’re taking. But that hasn’t stopped yield-starved institutional investors from gobbling them up.
The European Commission has already endorsed the financial instrument, rating agencies have also lent their approval, and the ECB can’t wait to come up with “a common framework at Union level.” However, the legislation permitting its issuance, both at the regional and national level, is taking a long time to complete. And one thing many of the banks appear to be rather short of is time.
The only jurisdiction where big banks can issue, 100% legally, senior non-preferred debt is France, where the debt instrument was initially created as a means of helping the country’s big four banks (BNP Paribas, Crédit Agricole, Groupe BPCE, and Société Générale) spruce up their balance sheets at minimal cost.
Elsewhere in Europe there is no legal framework for issuance of the new debt instrument but that hasn’t stopped some banks, including Holland’s ING and Spain’s Santander, from issuing senior non-preferred bonds. Spain’s second biggest bank, BBVA, which is not even officially too big to fail, is also expected to dip its toes in the non-quite-legal market in the coming months.
Santander, BBVA and Spain’s third biggest bank, La Caixa, have been on a spectacular debt binge since this fledgling year began, issuing more combined debt in the first six weeks of 2017 than at any other time since 2007, the year that Spain’s spectacular real estate bubble reached its climactic peak.
Even more ominous, Italy’s fragile megabank, Unicredit, has also expressed an interest in issuing non-preferred bonds, though it will probably have to wait for Italy’s banking crisis, in which it is has a major role, to blow over (assuming it actually can) before joining the party. That could be a long time coming: there continues to be widespread disagreement between the ECB and the European Commission over whether to allow Italy to go ahead with its more or less illegal bailout of the banking sector.
In the meantime, Italy’s Target2 imbalance continues to grow. The Banca d’Italia now owes a record ¤364 billion to the ECB – the equivalent of 22% of GDP, its highest point since the creation of the euro, and the figure keeps rising. It’s testament to an ongoing — and accelerating — capital flight out of Italy’s banking system, as investors lose faith not only in the possibility of a workable solution being found to Europe’s most serious and arguably most complex financial threat but in the long-term viability of the single currency itself.
If Italian and European authorities don’t soon find a workable solution to Italy’s intractable banking problem — and preferably one that is more or less palatable for the German electorate, which is already up in arms at the latest Target2 imbalances — there is a very real risk that Italy will suffer sudden bank runs and disorderly failures, at which point the chances of Unicredit raising ¤13 billion of new capital by its June deadline will fade to zero. And at that point, as even the FT has admitted (behind paywall), it will probably be game over
====================================
De kans op een EU breakup is nu geschat op 25 % (Binnen 1 jaar : Gemeten over 5000 investeerders)
Zolang er meer-en-meer geld uit Italië weggestroomd dan dat er binnen gaat is er gewoon niks opgelost. En de ECB volkomen clueless van wat ze hieraan nog kunnen doen. Ook hun bazooka is leeg.
Het volgende artikel van bis is zelfs voor mij te complex
In the latest BIS Quarterly Review, the BIS points a finger at the ECB for rising Target2 imbalances.
That sounds highly accusatory, but the BIS also claims this is a “benign by-product of the decentralized implementation of the asset purchase program (APP) rather than as a sign of renewed capital flight.”
I strongly disagree that any of this is “benign” unless and until someone can tell me precisely how Italy, Spain, Greece, etc., are supposed to pay back the claims.
From the BIS (this is complicated) …(hell ya)
In 2012, the BIS had a different Target2 Conclusion.
The debate over the appropriate interpretation of the TARGET2 balances has involved the analytic question of whether such balances are best associated with ongoing current account balances or whether they reflect a capital account reversal that is motivated by credit concerns. We recognize both but our analysis of the first half of 2012 data emphasises the importance of positioning against redenomination risk. The European Economic Advisory Group (2012, p 62) states, “In the past interest rates diverged due to the fear of depreciation; now they do so because of the fear of default.” Our identification of capital flows as motivated by redenomination risk implies that interest rates diverged into 2012 on fears of depreciation, or hopes of appreciation. Flows of funds suggest that 2012’s last leg up in TARGET2 balances reflected something more akin to a currency attack than current account financing or credit reversal.
Fear of Default
Nothing has changed, except the transfer mechanism. The ECB is now aiding and abetting capital flight.
Here is a simple test question: What would happen to Italian bond yields if Draghi halted QE asset purchases?
If bonds yields would rise, then the ECB is acting to prevent either interest rate risk or default risk. But what is interest rate risk if ultimately not default risk?
German debt has a lower yield than Greek debt and Italian debt for one reason only: default risk.
Italy is on ECB life support. Should Draghi halt QE asset purchases, demand for Italian bonds will plunge.
For discussion, please see Draghi’s Dilemma: Eurozone Inflation Hits 2% with Italy on Bond Life Support.
Stealth Bailout
Zerohedge reported BIS Admits TARGET2 Is A Stealth Bailout Of Europe’s Periphery. == Fucking True, daar begon ik dit topic al mee
That headline isn’t accurate but the idea is sound. The ECB is bailing out peripheral countries via indirect means.
But whether or not capital flight is direct or indirect, the ECB’s mask does not change reality.
In the latest BIS Quarterly Review, the BIS points a finger at the ECB for rising Target2 imbalances.
That sounds highly accusatory, but the BIS also claims this is a “benign by-product of the decentralized implementation of the asset purchase program (APP) rather than as a sign of renewed capital flight.”
I strongly disagree that any of this is “benign” unless and until someone can tell me precisely how Italy, Spain, Greece, etc., are supposed to pay back the claims.
From the BIS (this is complicated) …(hell ya)
2012 Conclusionquote:TARGET2 (T2) balances are again on the rise. Since early 2015, the T2 balances of euro area national central banks (NCBs) have risen steadily, in some cases exceeding the levels seen during the sovereign debt crisis (Graph A, left-hand panel). However, unlike then, record T2 balances should be viewed as a benign by-product of the decentralized implementation of the asset purchase program (APP) [ECB’s QE] rather than as a sign of renewed capital flight.
Because liquidity operations in the Eurosystem are decentralised, claims or liabilities of NCBs vis-à-vis the ECB can arise. Market operations are to a large extent implemented by the Eurosystem’s NCBs rather than by the ECB. When an NCB disburses liquidity directly to commercial banks, it keeps the claims on those commercial banks on its own balance sheet. But the funds may end up in another commercial bank’s account with a different NCB. As a consequence, the liquidity-providing NCB has a liability vis-à-vis the ECB, while the NCB receiving the reserves holds a claim on the ECB.
The net of such claims and liabilities is referred to as a “TARGET2 balance” because it is recorded as such in the main payment settlement system of the euro area, the second edition of the Trans-European Automated Real-time Gross Settlement Express Transfer System.
In the period leading up to mid-2012, T2 balances grew strongly (Graph A, left-hand panel) due to intra-euro area capital flight. At the time, sovereign market strains spiked and redenomination risk came to the fore in parts of the euro area. Private capital fled from Ireland, Italy, Greece, Portugal and Spain into markets perceived to be safer, such as Germany, Luxembourg and the Netherlands.
Indeed, during that period, the rise in T2 balances seemed related to concerns about sovereign risk. The blue dots in the centre panel of Graph A show the close relationship between the sovereign credit default swap (CDS) spreads of Italy, Portugal and Spain and the evolution of their combined T2 balance from January 2008 to September 2014. Whenever the CDS spreads of those economies rose, the associated private capital outflows increased their T2 deficit. When the CDS spreads decreased after confidence in the euro area was restored in mid-2012, the capital outflows partly reversed, and T2 deficits dwindled.
In contrast, the current rise seems unrelated to concerns about the sustainability of public debt in the euro area. The red dots in the centre panel of Graph A show that, between October 2014 and December 2016, there was no relationship between the sovereign CDS spreads of Italy, Portugal and Spain and the evolution of their combined T2 balance.
The current rise in T2 imbalances seems to have a different cause: the Eurosystem’s APP, which mechanically affects the evolution of these balances. Many APP purchases are conducted by NCBs via banks located in other countries. One example is where the Bank of Italy, as part of its implementation of the APP, buys securities from a London-based bank that connects to the T2 system via a correspondent bank located in Germany. The purchase amount is credited to the account of the German correspondent bank at the Deutsche Bundesbank, thus increasing the T2 surplus of the Bundesbank. Similarly, the Bank of Italy’s T2 deficit widens.
Thus, T2 imbalances will increase whenever any T2-debtor NCB conducts an asset purchase with a counterparty that has a correspondent bank located in a T2-creditor NCB. This is very frequently the case. For example, whereas the Bundesbank itself purchases less than a quarter of the total APP purchases, 60% of all Eurosystem purchases under the APP are conducted via banks that connect to the T2 system via the Bundesbank.icon
As the European interbank market is still fragmented, the liquidity does not circulate in the euro area and T2 imbalances grow as the total holdings under the APP accumulate. Indeed, the overall increase in T2 imbalances can be linked closely to the total purchases under the APP (Graph A, right-hand panel). A recent study, which takes into account the precise geography of the correspondent banks of each and every APP security purchase, shows that APP transactions can almost fully account for the re-emergence of T2 imbalances.icon
This mechanical impact of the APP on T2 imbalances is also confirmed by the evolution of T2 balances vis-à-vis Greece. The country’s sovereign bonds are not eligible for the APP, and consequently the Greek T2 deficit has actually been more or less stable during recent months (Graph A, left-hand panel).
In 2012, the BIS had a different Target2 Conclusion.
The debate over the appropriate interpretation of the TARGET2 balances has involved the analytic question of whether such balances are best associated with ongoing current account balances or whether they reflect a capital account reversal that is motivated by credit concerns. We recognize both but our analysis of the first half of 2012 data emphasises the importance of positioning against redenomination risk. The European Economic Advisory Group (2012, p 62) states, “In the past interest rates diverged due to the fear of depreciation; now they do so because of the fear of default.” Our identification of capital flows as motivated by redenomination risk implies that interest rates diverged into 2012 on fears of depreciation, or hopes of appreciation. Flows of funds suggest that 2012’s last leg up in TARGET2 balances reflected something more akin to a currency attack than current account financing or credit reversal.
Fear of Default
Nothing has changed, except the transfer mechanism. The ECB is now aiding and abetting capital flight.
Here is a simple test question: What would happen to Italian bond yields if Draghi halted QE asset purchases?
If bonds yields would rise, then the ECB is acting to prevent either interest rate risk or default risk. But what is interest rate risk if ultimately not default risk?
German debt has a lower yield than Greek debt and Italian debt for one reason only: default risk.
Italy is on ECB life support. Should Draghi halt QE asset purchases, demand for Italian bonds will plunge.
For discussion, please see Draghi’s Dilemma: Eurozone Inflation Hits 2% with Italy on Bond Life Support.
Stealth Bailout
Zerohedge reported BIS Admits TARGET2 Is A Stealth Bailout Of Europe’s Periphery. == Fucking True, daar begon ik dit topic al mee
That headline isn’t accurate but the idea is sound. The ECB is bailing out peripheral countries via indirect means.
But whether or not capital flight is direct or indirect, the ECB’s mask does not change reality.
De EU gaat meer en meer een financiële gevangenis worden. Wil de eerste inhoudelijke (NL) politicus hierover nog horen.
As we speak 50 % van de target 2 scheefgroei is veroorzaakt door landen buiten de EU. Die wel een lijn open hebben bij de (DE)Bundesbank. En daarop voldoende speculeren(op een break-up).
------------------------------------------------
No doubt the reason you proffer is true, but for years I’ve felt that the ultra low rates in Germany due in part to bet on euro break up. Bettors, er, investors bought German debt knowing that if break up occurred German debt would be repriced in deutsche marks. Currency play.
[ Bericht 35% gewijzigd door Drugshond op 08-03-2017 04:38:01 ]
As we speak 50 % van de target 2 scheefgroei is veroorzaakt door landen buiten de EU. Die wel een lijn open hebben bij de (DE)Bundesbank. En daarop voldoende speculeren(op een break-up).
------------------------------------------------
No doubt the reason you proffer is true, but for years I’ve felt that the ultra low rates in Germany due in part to bet on euro break up. Bettors, er, investors bought German debt knowing that if break up occurred German debt would be repriced in deutsche marks. Currency play.
[ Bericht 35% gewijzigd door Drugshond op 08-03-2017 04:38:01 ]
En waar koop jij dan een brood van als de hel losbreken doet?quote:Op zaterdag 25 februari 2017 22:08 schreef 111210 het volgende:
Oftewel al ons spaargeld in zwitserland veiligstellen?
Health In Harmony is een non-profitorganisatie die regenwoudgemeenschappen helpt met gezondheidszorg en duurzame inkomens in ruil voor bosbescherming, en zo tegelijk klimaatverandering en armoede aanpakt. - https://www.healthinharmony.org/
ECB money piles up in Germany as investors wary of risk: Bundesbank
The European Central Bank (ECB) headquarters is pictured in Frankfurt, Germany, December 8, 2016. REUTERS/Ralph Orlowski
Money created by the European Central Bank to shore up euro zone growth and inflation is piling up in Germany as investors are reluctant to venture outside the bloc's strongest economy, Bundesbank data showed on Monday.
A large amount of the money printed by the ECB to buy bonds is landing in German bank accounts, often held by foreign investors, and staying there.
This is pushing up the Bundesbank's net credit with the ECB's Target 2 system for settling cross-border payments in the euro zone, which rose to a record high of 814 billion euros ($875.13 billion) in February.
In the same month, Italy's Target 2 liabilities hit an all-time high of 386.1 billion euros, which the Bank of Italy blamed on factors including Italians investing their savings abroad and the ECB's bond purchases.
In its monthly report, the Bundesbank said this money does not then flow to other parts of the euro zone, even though bond yields tend to be there higher than in Germany.
That showed investors' reluctance to put their cash to work in weaker economies and raised questions about the effectiveness of the ECB's stimulus program.
"It is remarkable ... that these second-round effects of the APP ... are not taking place in some countries, including Germany," the Bundesbank said in its monthly report.
The ECB declined to comment. Last year, the central bank said growing Target 2 imbalances simply reflected purchases of bonds by central banks from sellers located in different euro zone countries.
Before the euro zone debt crisis that peaked in 2012, money flowed out of Germany to seek higher returns in countries such as Greece, Spain or Italy.
=========================================
Systeem een beetje stuk, mijnheer Draghi.
The European Central Bank (ECB) headquarters is pictured in Frankfurt, Germany, December 8, 2016. REUTERS/Ralph Orlowski
Money created by the European Central Bank to shore up euro zone growth and inflation is piling up in Germany as investors are reluctant to venture outside the bloc's strongest economy, Bundesbank data showed on Monday.
A large amount of the money printed by the ECB to buy bonds is landing in German bank accounts, often held by foreign investors, and staying there.
This is pushing up the Bundesbank's net credit with the ECB's Target 2 system for settling cross-border payments in the euro zone, which rose to a record high of 814 billion euros ($875.13 billion) in February.
In the same month, Italy's Target 2 liabilities hit an all-time high of 386.1 billion euros, which the Bank of Italy blamed on factors including Italians investing their savings abroad and the ECB's bond purchases.
In its monthly report, the Bundesbank said this money does not then flow to other parts of the euro zone, even though bond yields tend to be there higher than in Germany.
That showed investors' reluctance to put their cash to work in weaker economies and raised questions about the effectiveness of the ECB's stimulus program.
"It is remarkable ... that these second-round effects of the APP ... are not taking place in some countries, including Germany," the Bundesbank said in its monthly report.
The ECB declined to comment. Last year, the central bank said growing Target 2 imbalances simply reflected purchases of bonds by central banks from sellers located in different euro zone countries.
Before the euro zone debt crisis that peaked in 2012, money flowed out of Germany to seek higher returns in countries such as Greece, Spain or Italy.
=========================================
Systeem een beetje stuk, mijnheer Draghi.
En dan te bedenken dat dit nog maar 1 van de vele problemen is waar ook Nederland mee te maken heeft 
Naast deze mallotige constructie hangt natuurlijk ook het ESM zwaard boven ons hoofd. Het ESM is mogelijk nog ondemocratischer dan de EU. Voor diegenen die nog depressiever willen worden, moeten het maar zelf opzoeken. Waar het op neer komt is dat naast toegezegde miljarden van de Noordelijke landen ook een onbegrensd beroep gedaan kan worden op deze landen als de pleuris uitbreekt. Hoe heeft de Nederlandse regering hier ooit mee in kunnen stemmen
Naast deze mallotige constructie hangt natuurlijk ook het ESM zwaard boven ons hoofd. Het ESM is mogelijk nog ondemocratischer dan de EU. Voor diegenen die nog depressiever willen worden, moeten het maar zelf opzoeken. Waar het op neer komt is dat naast toegezegde miljarden van de Noordelijke landen ook een onbegrensd beroep gedaan kan worden op deze landen als de pleuris uitbreekt. Hoe heeft de Nederlandse regering hier ooit mee in kunnen stemmen
Exaudi orationem meam
Requiem aeternam dona eis, Domine.
Et lux perpetua luceat eis.
Requiem aeternam dona eis, Domine.
Et lux perpetua luceat eis.
En dan leven we in een "staat" die zijn eigen uitgeschreven staatsleningen inkoopt en de marktrente manipuleert ten gunste van zijn eigen uitgeschreven staatsleningen. What possibly could go wrong.quote:
En dan te bedenken dat dit nog maar 1 van de vele problemen is waar ook Nederland mee te maken heeft
Naast deze mallotige constructie hangt natuurlijk ook het ESM zwaard boven ons hoofd. Het ESM is mogelijk nog ondemocratischer dan de EU. Voor diegenen die nog depressiever willen worden, moeten het maar zelf opzoeken. Waar het op neer komt is dat naast toegezegde miljarden van de Noordelijke landen ook een onbegrensd beroep gedaan kan worden op deze landen als de pleuris uitbreekt. Hoe heeft de Nederlandse regering hier ooit mee in kunnen stemmen
Conclusie? We staan aan de vooravond van een nieuwe crisis of hoe moet ik dit zien?
Ben timmerman, geen econoom.
Ben timmerman, geen econoom.
Neem het leven niet te serieus, je overleeft het toch niet.
Conclusie is volgens mij dat je straks klussen aanneemt voor WC papier, scheermesjes en tomaten in plaats van euro'squote:
Conclusie? We staan aan de vooravond van een nieuwe crisis of hoe moet ik dit zien?
Ben timmerman, geen econoom.
. (Als ik deze topics moet geloven dan, wat ik liever niet doe maar stiekem wel)
Iedereen is de hoofdrolspeler van zijn eigen komedie.
Vrijheid
Vrijheid
Echt. En vervolgens ook nog even olie op 't vuur gooien dat Zuid-Europese landen alleen geïnteresseerd zijn in alcohol& vrouwenquote:
[..]
En dan leven we in een "staat" die zijn eigen uitgeschreven staatsleningen inkoopt en de marktrente manipuleert ten gunste van zijn eigen uitgeschreven staatsleningen. What possibly could go wrong.
Wat maakt het trouwens uit, reden te meer om het hier ook te doen, ze komen noord toch niet tegenmoed kan noord niet beter hun tegenmoed komen dan?quote:Op donderdag 23 maart 2017 10:40 schreef MidnightB00m het volgende:
[..]
Echt. En vervolgens ook nog even olie op 't vuur gooien dat Zuid-Europese landen alleen geïnteresseerd zijn in alcohol& vrouwen
Geef mij eens een gedegen drijfveer om nog te dweilen met de kraan open!
Samen zingen wij blij wij leven lang wij leven lang.
[ Bericht 3% gewijzigd door #ANONIEM op 23-03-2017 10:45:00 ]
Je zou toch denken dat economen ook een oplossing weten te bedenken.
Helaas is het zo dat niet iedereen onderlegd is in deze materie. Daar val ik dus ook onder. Maar een en ander word wel steeds duidelijker door dit soort topics.
Het gevaar blijft bestaan dat economen je alles wijs kunnen maken. Er is niets aan de hand en de economie draait weer op volle toeren aldus ons huidige kabinet. De crisis is opgelost.
Helaas is het zo dat niet iedereen onderlegd is in deze materie. Daar val ik dus ook onder. Maar een en ander word wel steeds duidelijker door dit soort topics.
Het gevaar blijft bestaan dat economen je alles wijs kunnen maken. Er is niets aan de hand en de economie draait weer op volle toeren aldus ons huidige kabinet. De crisis is opgelost.
krik, krak, sjiemela, sjiemela, sjiemela
krik, krak, sjiemela, sjiemela
krik, krak, sjiemela, sjiemela
Hmm, maar wat zou jij graag willen zien dan?quote:
[..]
Wat maakt het trouwens uit, reden te meer om het hier ook te doen, ze komen noord toch niet tegenmoed kan noord niet beter hun tegenmoed komen dan?
Geef mij eens een gedegen drijfveer om nog te dweilen met de kraan open!
Samen zingen wij blij wij leven lang wij leven lang.
Soms ben ik bang dat we nog meer macht uit handen gaan geven aan Brussel om de zeepbel intact te houden.
Ik graag zien, ik weet het niet, zo geleerd ben ik niet hoor.quote:
[..]
Hmm, maar wat zou jij graag willen zien dan?
Soms ben ik bang dat we nog meer macht uit handen gaan geven aan Brussel om de zeepbel intact te houden.
Heb maar een IQ van 25, Brussel zeepbel?
Ja daar ben ik het wel mee eens, al van het begin af aan, zelfs al zou ik op een flatgebouw gaan staan en zeggen doe het niet.
Denk jij dat het iets zou uitmaken?
Op
The ECB must reform Target2 to make it sustainable
Target2 has emerged as the eurozone’s financing entity for ballooning structural balance-of-payments gaps. The present system is unsustainable and needs reform, says Philip Turner
Euro banknotes in a chest
When and how will the European Central Bank (ECB) reform Target2, its unsustainable international payment system? The Deutsche Bundesbank credit balance recently set a new record of around ¤843.4 billion ($948.9 billion), with the combined debits of the Bank of Italy and the Bank of Spain almost the same figure. Eventual reforms to reassure creditors could well upset bank funding and government bond markets in peripheral eurozone countries. But the root cause of problems lies elsewhere. The fundamental issue is Germany’s huge international financing gap – a massive current account surplus and strong private capital inflows into the country that exceed the foreign investments that Germans would find attractive and safe.
The international financing gap in 2011/12, when Target2 was last in the news, was the opposite. It was the massive current account deficit of Greece combined with the flight of private capital that caused imbalances to swell. Loans from eurozone central banks to the Bank of Greece under Target2 rose to exceed ¤100 billion – dwarfing International Monetary Fund, European Union and other official financing sources.
Germany’s international financing gap arises because private investors cannot find enough safe and attractive external assets to recycle the inflows from the country’s quasi-permanent current account surplus and from foreign investments in Germany. Currency appreciation – the classic adjustment mechanism in such circumstances – cannot take place because of the common currency. And the interest rate and balance sheet policies of the ECB (rightly expansionary, given weak demand and low inflation in the eurozone as a whole) have led to a sizeable real depreciation of the euro.
This financing predicament creates an excess of funds flowing into German banks. This is not new. Before the global financial crisis, the combination of rising household savings and weak demand for domestic loans (as domestic investment demand remained very low by historical standards) meant that German banks had more funds than they could place at home. So they lent their surplus funds through the interbank market (uncollateralised) to banks in peripheral eurozone countries, notably in Spain and Ireland. Others invested in highly rated securitised products backed by US subprime and other assets. Because the current account surplus was offset by private-sector capital outflows, the outstanding Target2 balances remained small.
Neither strategy gave the German banks the safe international assets they had sought. Subsequent losses during the global and eurozone financial crises instilled much greater caution in the banks and their regulators about their international investments. It became evident to both banks and their regulator that it would be much safer for German banks to deposit their surplus funds with the Bundesbank.
The international financing gap was then closed by uncollateralised lending by the Bundesbank, through the Target2 payment system, to other eurozone central banks. What is ostensibly a payment system has become a mechanism for the official financing of structural balance-of-payments gaps of ever greater size. The net balances emerging from huge two-way flows, not settled by debtors transferring assets to creditors (as under a normal payment system), simply led to the automatic creation of a claim of the creditor central bank on the debtor central bank. Yet no explicit government decision has approved lending on such a scale. Moreover, under the full allotment policy, the Eurosystem imposes no direct limits on how much a national central bank can borrow. Nor does the ECB take collateral on the Target2 debts of national central banks.
Unlike the case of Greece, both Italy and Spain have current account surpluses... These large balances ... reflect how easily Italian and Spanish banks have been able to fund themselves by posting a form of collateral that they have in abundance – their own governments’ bonds
The underlying positions of the debit countries are quite different than in 2011/12. Unlike the case of Greece, both Italy and Spain have current account surpluses. Nor is the link to the cross-country pattern of sovereign risk as strong as it was in the earlier crisis. These large balances instead reflect how easily Italian and Spanish banks have been able to fund themselves by posting a form of collateral that they have in abundance – their own governments’ bonds.
One reason for such large credit and debit positions is that international financial firms continue to protect themselves from a breakdown of the euro. Since the euro’s existential crisis of 2011/12, the routine response of those in international banks and global companies seeking to protect themselves in the event of a breakdown of the euro has been to place their euro cash with banks based in Germany (and in Luxembourg and a few others) and ensure their short-term euro liabilities are in the periphery. For example, banks of all nationalities that sell eurozone government bonds to the national central banks under quantitative easing will tend to deposit the cash proceeds with banks based in Germany. One estimate is that 60% of all such purchases are conducted through banks that connect to Target2 via the Bundesbank.
There are two reasons why banks in Italy and Spain borrow heavily from their central banks. One is that their credit standing is comparatively low, given the high level of non-performing loans and the uncertain value of their property collateral. This makes it more expensive to fund themselves using cross-border interbank or bond markets. A second reason is that such banks may not be able to use the surplus liquidity generated by their own affiliates in other European countries. Host-country regulators often require such affiliates to keep enough cash to meet local withdrawals. Interbank markets in the eurozone are fragmented because the credit quality of banks in different countries is variable and uncertain, and regulators in ‘strong’ countries insist that foreign banks from ‘weaker’ countries keep sufficient liquid assets in their host jurisdictions.
Risk creation
Large outstanding balances that have become quasi-permanent create risks. If a country with a large Target2 debt leaves the euro, its central bank is unlikely to be able to repay this debt immediately. But there is also a less extreme risk: the failure of an Italian or Spanish bank with large short-term debts to its central bank. The hope is that the repurchase agreements in place will ensure the central bank suffers no loss when a commercial bank fails. But other creditors might seek alternative outcomes. For political and legal reasons, settling issues related to the collateral posted by the failed bank would take time. What would happen to Target2 balances in the meantime? Would other central banks use the crisis to suddenly tighten financing arrangements under Target2? The danger with all unsustainable financing arrangements is that they get corrected in a crisis, and not necessarily with due care.
At some point, the Bundesbank, as the main creditor central bank, might seek reforms of Target2. In most international financial crises, creditor countries use their political power to minimise any loss in the value of their external assets.
Placing some collateral with the ECB, rather than with the national central bank, could alter outcomes in the event of a bank restructuring. A more draconian step would be to define as eligible collateral only government bonds issued by creditor countries or by European supranational bodies
Many options could be considered. The current full allotment policy of the Eurosystem – where a bank with eligible collateral can borrow as much as it likes – could be reviewed. Another would be to impose interest rate penalties on central banks with debit balances beyond a certain threshold. Collateral policies might also be changed. Placing some collateral with the ECB, rather than with the national central bank, could alter outcomes in the event of a bank restructuring. A more draconian step would be to define as eligible collateral only government bonds issued by creditor countries or by European supranational bodies. Target2 would then resemble something similar to a gold standard, compelling debtors to buy bonds counted as eligible collateral and sell the bonds of their own government. Creditors might feel more assured that their assets are truly safe.
This assurance, however, would prove illusory. Toughening financing for debtors would not work unless supported by other policies to deal with the root cause of the explosion in Target2 balances. This is a result of the size of Germany’ current account surplus, which is so large that it cannot be fully offset by counterpart private capital outflows into foreign investments that German investors (or banks) would find safe and attractive. The 2011/12 eurozone crisis was at its root a balance-of-payments crisis. The deflationary policies that followed this put all the adjustment burden on debtors. Reform of Target2 should not make the same mistake.
Target2 has emerged as the eurozone’s financing entity for ballooning structural balance-of-payments gaps. The present system is unsustainable and needs reform, says Philip Turner
Euro banknotes in a chest
When and how will the European Central Bank (ECB) reform Target2, its unsustainable international payment system? The Deutsche Bundesbank credit balance recently set a new record of around ¤843.4 billion ($948.9 billion), with the combined debits of the Bank of Italy and the Bank of Spain almost the same figure. Eventual reforms to reassure creditors could well upset bank funding and government bond markets in peripheral eurozone countries. But the root cause of problems lies elsewhere. The fundamental issue is Germany’s huge international financing gap – a massive current account surplus and strong private capital inflows into the country that exceed the foreign investments that Germans would find attractive and safe.
The international financing gap in 2011/12, when Target2 was last in the news, was the opposite. It was the massive current account deficit of Greece combined with the flight of private capital that caused imbalances to swell. Loans from eurozone central banks to the Bank of Greece under Target2 rose to exceed ¤100 billion – dwarfing International Monetary Fund, European Union and other official financing sources.
Germany’s international financing gap arises because private investors cannot find enough safe and attractive external assets to recycle the inflows from the country’s quasi-permanent current account surplus and from foreign investments in Germany. Currency appreciation – the classic adjustment mechanism in such circumstances – cannot take place because of the common currency. And the interest rate and balance sheet policies of the ECB (rightly expansionary, given weak demand and low inflation in the eurozone as a whole) have led to a sizeable real depreciation of the euro.
This financing predicament creates an excess of funds flowing into German banks. This is not new. Before the global financial crisis, the combination of rising household savings and weak demand for domestic loans (as domestic investment demand remained very low by historical standards) meant that German banks had more funds than they could place at home. So they lent their surplus funds through the interbank market (uncollateralised) to banks in peripheral eurozone countries, notably in Spain and Ireland. Others invested in highly rated securitised products backed by US subprime and other assets. Because the current account surplus was offset by private-sector capital outflows, the outstanding Target2 balances remained small.
Neither strategy gave the German banks the safe international assets they had sought. Subsequent losses during the global and eurozone financial crises instilled much greater caution in the banks and their regulators about their international investments. It became evident to both banks and their regulator that it would be much safer for German banks to deposit their surplus funds with the Bundesbank.
The international financing gap was then closed by uncollateralised lending by the Bundesbank, through the Target2 payment system, to other eurozone central banks. What is ostensibly a payment system has become a mechanism for the official financing of structural balance-of-payments gaps of ever greater size. The net balances emerging from huge two-way flows, not settled by debtors transferring assets to creditors (as under a normal payment system), simply led to the automatic creation of a claim of the creditor central bank on the debtor central bank. Yet no explicit government decision has approved lending on such a scale. Moreover, under the full allotment policy, the Eurosystem imposes no direct limits on how much a national central bank can borrow. Nor does the ECB take collateral on the Target2 debts of national central banks.
Unlike the case of Greece, both Italy and Spain have current account surpluses... These large balances ... reflect how easily Italian and Spanish banks have been able to fund themselves by posting a form of collateral that they have in abundance – their own governments’ bonds
The underlying positions of the debit countries are quite different than in 2011/12. Unlike the case of Greece, both Italy and Spain have current account surpluses. Nor is the link to the cross-country pattern of sovereign risk as strong as it was in the earlier crisis. These large balances instead reflect how easily Italian and Spanish banks have been able to fund themselves by posting a form of collateral that they have in abundance – their own governments’ bonds.
One reason for such large credit and debit positions is that international financial firms continue to protect themselves from a breakdown of the euro. Since the euro’s existential crisis of 2011/12, the routine response of those in international banks and global companies seeking to protect themselves in the event of a breakdown of the euro has been to place their euro cash with banks based in Germany (and in Luxembourg and a few others) and ensure their short-term euro liabilities are in the periphery. For example, banks of all nationalities that sell eurozone government bonds to the national central banks under quantitative easing will tend to deposit the cash proceeds with banks based in Germany. One estimate is that 60% of all such purchases are conducted through banks that connect to Target2 via the Bundesbank.
There are two reasons why banks in Italy and Spain borrow heavily from their central banks. One is that their credit standing is comparatively low, given the high level of non-performing loans and the uncertain value of their property collateral. This makes it more expensive to fund themselves using cross-border interbank or bond markets. A second reason is that such banks may not be able to use the surplus liquidity generated by their own affiliates in other European countries. Host-country regulators often require such affiliates to keep enough cash to meet local withdrawals. Interbank markets in the eurozone are fragmented because the credit quality of banks in different countries is variable and uncertain, and regulators in ‘strong’ countries insist that foreign banks from ‘weaker’ countries keep sufficient liquid assets in their host jurisdictions.
Risk creation
Large outstanding balances that have become quasi-permanent create risks. If a country with a large Target2 debt leaves the euro, its central bank is unlikely to be able to repay this debt immediately. But there is also a less extreme risk: the failure of an Italian or Spanish bank with large short-term debts to its central bank. The hope is that the repurchase agreements in place will ensure the central bank suffers no loss when a commercial bank fails. But other creditors might seek alternative outcomes. For political and legal reasons, settling issues related to the collateral posted by the failed bank would take time. What would happen to Target2 balances in the meantime? Would other central banks use the crisis to suddenly tighten financing arrangements under Target2? The danger with all unsustainable financing arrangements is that they get corrected in a crisis, and not necessarily with due care.
At some point, the Bundesbank, as the main creditor central bank, might seek reforms of Target2. In most international financial crises, creditor countries use their political power to minimise any loss in the value of their external assets.
Placing some collateral with the ECB, rather than with the national central bank, could alter outcomes in the event of a bank restructuring. A more draconian step would be to define as eligible collateral only government bonds issued by creditor countries or by European supranational bodies
Many options could be considered. The current full allotment policy of the Eurosystem – where a bank with eligible collateral can borrow as much as it likes – could be reviewed. Another would be to impose interest rate penalties on central banks with debit balances beyond a certain threshold. Collateral policies might also be changed. Placing some collateral with the ECB, rather than with the national central bank, could alter outcomes in the event of a bank restructuring. A more draconian step would be to define as eligible collateral only government bonds issued by creditor countries or by European supranational bodies. Target2 would then resemble something similar to a gold standard, compelling debtors to buy bonds counted as eligible collateral and sell the bonds of their own government. Creditors might feel more assured that their assets are truly safe.
This assurance, however, would prove illusory. Toughening financing for debtors would not work unless supported by other policies to deal with the root cause of the explosion in Target2 balances. This is a result of the size of Germany’ current account surplus, which is so large that it cannot be fully offset by counterpart private capital outflows into foreign investments that German investors (or banks) would find safe and attractive. The 2011/12 eurozone crisis was at its root a balance-of-payments crisis. The deflationary policies that followed this put all the adjustment burden on debtors. Reform of Target2 should not make the same mistake.
Were fuckedquote:
The ECB must reform Target2 to make it sustainable
Target2 has emerged as the eurozone’s financing entity for ballooning structural balance-of-payments gaps. The present system is unsustainable and needs reform, says Philip Turner
Euro banknotes in a chest
When and how will the European Central Bank (ECB) reform Target2, its unsustainable international payment system? The Deutsche Bundesbank credit balance recently set a new record of around ¤843.4 billion ($948.9 billion), with the combined debits of the Bank of Italy and the Bank of Spain almost the same figure. Eventual reforms to reassure creditors could well upset bank funding and government bond markets in peripheral eurozone countries. But the root cause of problems lies elsewhere. The fundamental issue is Germany’s huge international financing gap – a massive current account surplus and strong private capital inflows into the country that exceed the foreign investments that Germans would find attractive and safe.
The international financing gap in 2011/12, when Target2 was last in the news, was the opposite. It was the massive current account deficit of Greece combined with the flight of private capital that caused imbalances to swell. Loans from eurozone central banks to the Bank of Greece under Target2 rose to exceed ¤100 billion – dwarfing International Monetary Fund, European Union and other official financing sources.
Germany’s international financing gap arises because private investors cannot find enough safe and attractive external assets to recycle the inflows from the country’s quasi-permanent current account surplus and from foreign investments in Germany. Currency appreciation – the classic adjustment mechanism in such circumstances – cannot take place because of the common currency. And the interest rate and balance sheet policies of the ECB (rightly expansionary, given weak demand and low inflation in the eurozone as a whole) have led to a sizeable real depreciation of the euro.
This financing predicament creates an excess of funds flowing into German banks. This is not new. Before the global financial crisis, the combination of rising household savings and weak demand for domestic loans (as domestic investment demand remained very low by historical standards) meant that German banks had more funds than they could place at home. So they lent their surplus funds through the interbank market (uncollateralised) to banks in peripheral eurozone countries, notably in Spain and Ireland. Others invested in highly rated securitised products backed by US subprime and other assets. Because the current account surplus was offset by private-sector capital outflows, the outstanding Target2 balances remained small.
Neither strategy gave the German banks the safe international assets they had sought. Subsequent losses during the global and eurozone financial crises instilled much greater caution in the banks and their regulators about their international investments. It became evident to both banks and their regulator that it would be much safer for German banks to deposit their surplus funds with the Bundesbank.
The international financing gap was then closed by uncollateralised lending by the Bundesbank, through the Target2 payment system, to other eurozone central banks. What is ostensibly a payment system has become a mechanism for the official financing of structural balance-of-payments gaps of ever greater size. The net balances emerging from huge two-way flows, not settled by debtors transferring assets to creditors (as under a normal payment system), simply led to the automatic creation of a claim of the creditor central bank on the debtor central bank. Yet no explicit government decision has approved lending on such a scale. Moreover, under the full allotment policy, the Eurosystem imposes no direct limits on how much a national central bank can borrow. Nor does the ECB take collateral on the Target2 debts of national central banks.
Unlike the case of Greece, both Italy and Spain have current account surpluses... These large balances ... reflect how easily Italian and Spanish banks have been able to fund themselves by posting a form of collateral that they have in abundance – their own governments’ bonds
The underlying positions of the debit countries are quite different than in 2011/12. Unlike the case of Greece, both Italy and Spain have current account surpluses. Nor is the link to the cross-country pattern of sovereign risk as strong as it was in the earlier crisis. These large balances instead reflect how easily Italian and Spanish banks have been able to fund themselves by posting a form of collateral that they have in abundance – their own governments’ bonds.
One reason for such large credit and debit positions is that international financial firms continue to protect themselves from a breakdown of the euro. Since the euro’s existential crisis of 2011/12, the routine response of those in international banks and global companies seeking to protect themselves in the event of a breakdown of the euro has been to place their euro cash with banks based in Germany (and in Luxembourg and a few others) and ensure their short-term euro liabilities are in the periphery. For example, banks of all nationalities that sell eurozone government bonds to the national central banks under quantitative easing will tend to deposit the cash proceeds with banks based in Germany. One estimate is that 60% of all such purchases are conducted through banks that connect to Target2 via the Bundesbank.
There are two reasons why banks in Italy and Spain borrow heavily from their central banks. One is that their credit standing is comparatively low, given the high level of non-performing loans and the uncertain value of their property collateral. This makes it more expensive to fund themselves using cross-border interbank or bond markets. A second reason is that such banks may not be able to use the surplus liquidity generated by their own affiliates in other European countries. Host-country regulators often require such affiliates to keep enough cash to meet local withdrawals. Interbank markets in the eurozone are fragmented because the credit quality of banks in different countries is variable and uncertain, and regulators in ‘strong’ countries insist that foreign banks from ‘weaker’ countries keep sufficient liquid assets in their host jurisdictions.
Risk creation
Large outstanding balances that have become quasi-permanent create risks. If a country with a large Target2 debt leaves the euro, its central bank is unlikely to be able to repay this debt immediately. But there is also a less extreme risk: the failure of an Italian or Spanish bank with large short-term debts to its central bank. The hope is that the repurchase agreements in place will ensure the central bank suffers no loss when a commercial bank fails. But other creditors might seek alternative outcomes. For political and legal reasons, settling issues related to the collateral posted by the failed bank would take time. What would happen to Target2 balances in the meantime? Would other central banks use the crisis to suddenly tighten financing arrangements under Target2? The danger with all unsustainable financing arrangements is that they get corrected in a crisis, and not necessarily with due care.
At some point, the Bundesbank, as the main creditor central bank, might seek reforms of Target2. In most international financial crises, creditor countries use their political power to minimise any loss in the value of their external assets.
Placing some collateral with the ECB, rather than with the national central bank, could alter outcomes in the event of a bank restructuring. A more draconian step would be to define as eligible collateral only government bonds issued by creditor countries or by European supranational bodies
Many options could be considered. The current full allotment policy of the Eurosystem – where a bank with eligible collateral can borrow as much as it likes – could be reviewed. Another would be to impose interest rate penalties on central banks with debit balances beyond a certain threshold. Collateral policies might also be changed. Placing some collateral with the ECB, rather than with the national central bank, could alter outcomes in the event of a bank restructuring. A more draconian step would be to define as eligible collateral only government bonds issued by creditor countries or by European supranational bodies. Target2 would then resemble something similar to a gold standard, compelling debtors to buy bonds counted as eligible collateral and sell the bonds of their own government. Creditors might feel more assured that their assets are truly safe.
This assurance, however, would prove illusory. Toughening financing for debtors would not work unless supported by other policies to deal with the root cause of the explosion in Target2 balances. This is a result of the size of Germany’ current account surplus, which is so large that it cannot be fully offset by counterpart private capital outflows into foreign investments that German investors (or banks) would find safe and attractive. The 2011/12 eurozone crisis was at its root a balance-of-payments crisis. The deflationary policies that followed this put all the adjustment burden on debtors. Reform of Target2 should not make the same mistake.
Yes, we are fucked.
Good intentions and tender feelings may do credit to those who possess them, but they often lead to ineffective — or positively destructive — policies ... Kevin D. Williamson
De ECB kan dit proces niet zo maar stoppen, en zullen euros blijven printen. Dat zal leiden tot oplopende inflatie, een roep om hogere lonen, arbeidsonrust.
Het is maar goed dat de Jappen en Yanks hun geldpersen ook op stand turbo hebben staan, want anders zou die Euro heel snel heel veel minder waard kunnen worden.
Het is maar goed dat de Jappen en Yanks hun geldpersen ook op stand turbo hebben staan, want anders zou die Euro heel snel heel veel minder waard kunnen worden.
Good intentions and tender feelings may do credit to those who possess them, but they often lead to ineffective — or positively destructive — policies ... Kevin D. Williamson
11.7 miljard qua euro waarde ja..quote:
[..]
307 ton goud is slechts 11.7 miljard euro. Verder een interessant topic.
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