Saturday, 3 March 2012

Merkel's Finale!

Good Luck, Madame!

I had not blogged during January and February this year - too busy with everything related to PassivHaus, my PH Consultant Certification and clients that definitly know what they want and learn faster than the British industry and the stolid regulators can follow.

Not much was happening in the world that really would have been worth discussing; in relation to the EURO, which for me is now in a state that in human medicine you call brain-dead the choice of measurements is getting really weird; the term LTRO = Long Term Re-financing Operation is not really hiding the purpose.

In what one calls preemptive obedience we saw LTRO2, €530bn, outpoured over 800 banks - they tell us; RBS and Lloyds amidst them; 1% interest against no security is a very convincing argument whether you need to fill up equity capital accounts, suck up bonds and other goody-goody promises or want to secure investment banksters' bonuses. "No, not for that" they scream... alone, it is believing or not...

The Telegraph tells us it was a total of £22bn what UK banks borrowed from LTRO, which it calls "an emergency programme to prevent the region's financial system from collapsing". So UK banks are part of that system, that rergion? I thought so but did David Cameron not walk away offended from that same table?

LTRO was just the latest invention amongst the dubious instruments to keep the currency alive. It started with Bad Banks, something that most of us would like to have one of and if only to bank the bad decisions one makes through the years; ECB then eased up on all kinds of regulations and started accepting ever more rotten collateral in exchange for cheaper and cheaper loans; it bought any junk causing any kind of disruption and in parallel allowed e.g. TARGET2 balances to go berserk.

accounts receivable of Deutsche Bundesbank versus ECB
January 2012: €498.131bn

There is not much more one can do to safeguard a currency that left to the markets would have seized existence about seven years ago or rather would have never ever made it on stage.

That is why I admit there is not much more that could really stop that EURO for the time being. Mind you it is brain-dead, but its virtual brain, Madame Merkel, repeated her "without the Euro there will be no Europe" as if a nuclear bomb would erase that part of the Eurasian continent and also stressed that the crisis ain't over yet, but whatever she referred to, Greece leaving Euroland, to the banksters's existing or future problems or simply to the fact that the remaining PII(G)S + Be +F will undoubtedly need to be bailed out, soon, it ain't any problem: after LTRO2 LTRO3 or LTRO4... the Euro shall live!

As long as any insolvency is avoided by throwing real amounts of virtual money in the bottomless pot it will be "Let's carry on!".

Meanwhile we will loose the rests! Not only to China and its new generation of writers which we magnanimously but rather silly ignore to remark and take consequences from but we will give up our status and we will backstab our next generations; it is already happening as described.

This process will now go into "fast forward". Remember the G20 meeting the week before last? A €2trillion rescue package was called for by the G20 to secure the strength of the Euro. Meanwhile it is pretty academic whether the Feds of this world press "return" after typing in 2, 4 or 12 billions or trillions, fine, but why would the Euro want to be strong and hard when the vast majority of the remaining currencies seek their salvation in becoming soft and softer to be able to export any goods and import inflation: finally. 

With a hard EURO Germany's export bonanza will come to a rather abrupt hold; transferring Euros within Euroland will become an even more hollow game; does neo-liberal Europe under that wonderful umbrella of repetitively return-generated money see it coming?

I doubt it.

With all old and any new or revived currencies being pure numbers backed by trust into the currency's economic background, only, its relative and absolute degree of know-how and knowledge, education and training the currency per se, its name, paper, colour, design and history will never again be of any relevance. Even backed by gold it would only be the gold.

The most important currency might very likely be called Yuan.

Carpe diem!



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