Wednesday 14 December 2011

Merry Christmas from the City

In keeping with our new age of austerity except at the bailed out bankster banks, we present the 2011 update on an old childrens favourite. Merry Christmas from Wall Street and the City in London.

Christmas is coming and the geese are getting fat,

Please put a trillion in the banksters’ hat.

If you haven’t got a trillion a billion will do,

If you haven’t got a billion, God damn you!

Ebenezer Squid

Thursday 8 December 2011

LIR – 2 Days To Save The Euro.

Baltic Dry Index. 1856  -10

LIR Gold Target by 2019: $30,000.  Revised due to QE programs.

Christmas is coming and the geese are getting fat,
Please put a trillion in the banksters’ hat.
If you haven’t got a trillion a billion will do,
If you haven’t got a billion, God damn you!

Ebenezer Squid.

Stay long physical precious metals. The MF Global scandal is just the tip of the iceberg. For the full story scroll down to Crooks and Scoundrels Corner, but simply put, the great vampire squids  routinely re-hypothecate customer assets multiple times via their London based subsidiaries. The daisy chain of all daisy chains has broken. When the euro fails, as it almost certainly will next year, re-hypothecation goes into reverse, except the money isn’t there in the shadow banking system. Up to $15 trillion is missing. The system if effectively a bankrupt Ponzi Scheme. A giant Madoff exposed on the third anniversary of the Madoff implosion.  Whatever gets discussed over dinner tonight in Brussels, and dictated all day tomorrow by Germany to the vassal states and the non Eurozone outer barbarians is largely meaningless. At this point Europe’s ditherers and bunglers are largely irrelevant. There’s a black hole in London that’s unfixable.

MF Global is just the tip of the iceberg. As recession hits in Europe, Europe’s and specifically London’s lax hypothecation regulation crashes the system. The same customer assets have been pledged against loans over and over again. As this becomes more widely realised, clients will try to pull their money out of the Wall Street Squids, re-hypothecation goes into reverse.  Tonight and tomorrows meetings are merely about rearranging the deck chairs on the Titanic. After hitting an iceberg with Lehman, a tsunami of cash withdrawal is coming next year. As with Madoff, there isn’t much cash left its all smoke and mirrors. We have reached the end of the road.

"Liquidation sometimes is orderly, but more frequently degenerates into panic as the realization spreads that there is only so much money, not enough to enable everyone to sell out at the top”.

Charles P. Kindleberger.  Manias, panics and crashes.
DECEMBER 8, 2011

Banks Prep for Life After Euro

Countries Study Printing Their Own Notes in Case Monetary Union Unravels

Some central banks in Europe have started weighing contingency plans to prepare for the possibility that countries leave the euro zone or the currency union breaks apart entirely, according to people familiar with the matter.

The first signs are surfacing that central banks are thinking about how to resuscitate currencies based on bank notes that haven't been printed since the first euros went into circulation in January 2002.

At least one—the Central Bank of Ireland—is evaluating whether it needs to secure additional access to printing presses in case it has to churn out new bank notes to support a reborn national currency, according to people familiar with the matter.

Outside the 17-country euro zone, numerous European central banks are eyeing defensive measures to protect against the possible fallout if the euro zone were to unravel, other people said. Several, including Switzerland, are considering possible replacements for the euro as the external reference point, or peg, they use to try to keep their currencies' values stable.

The central banks' planning is preliminary, according to the people familiar with the matter. It doesn't represent an expectation that the euro zone is headed for dissolution.

But the fact central bankers are even studying the possibility, which until this fall was considered unthinkable, underscores how swiftly conditions have deteriorated. Policy makers, central bankers and investors around the world have pinned their hopes on this week's Brussels summit to forge a long-awaited solution to the Continent's two-year financial crisis, which was ignited by doubts over countries' abilities to pay their debts.

“When people look back on this period in five or ten years from now, they'll say that this was something approaching a turning point for the American economy."

Robert A. Rubin, Chairman National Economic Council, 1994.

To continue reading subscribe to the LIR at Currency Countdown.