News & Analysis
The Greek Default Was a Scam All Along?
Global banks see market rally on Greek exit ... Major global banks are advising clients to prepare for a stock market rally and a resurgence of the euro if Greece is forced out of monetary union, betting that world authorities will flood the international system with liquidity. Bank of America said EU authorities will pull out the stops to keep Greece in the system as they weigh the full dangers of contagion. Should that fail, it expects a series of dramatic moves ... Mr Bloom said the ECB is playing a game of chicken by waiting until it has secured maximum compliance from EMU's wayward states before coming to the rescue. "Once again it is holding everybody over the edge of the abyss until they scream for mercy," he said. – Ambrose Evans-Pritchard/UK Telegraph
Dominant Social Theme: Oh, no. Greece is leaving!
Free-Market Analysis: Ambrose Evans-Pritchard, with some of the best sources in the world, has buried his lead once again.
Just look at the excerpt from his latest article, above. The headline is that there will be a global rally. We figure this is a pretty good speculation.
He was told there would be, no doubt by fairly prominent people who want the word to get out.
But then he can't help report the rest, that the ECB is "playing a game of chicken by by waiting until it has secured maximum compliance from EMU's wayward states before coming to the rescue."
Say ... what? You mean all this breast-beating over Greece's expulsion from the EU was a kind of theatre?
That's a pretty big story, Ambrose! Why are you burying it ... ?
Of course, he CAN'T report it any other way. He can't write that the whole thing, from beginning to end, is a kind of directed history.
But he's a good reporter. And he can't help but write the story.
But ... jeez. Here's a bet. Our modest publication will be THE ONLY ONE pointing this out today. Evans-Pritchard writes a column read in aggregate by millions, but we're fairly certain that, in the short term anyway, we'll stand alone in pointing out what has been clearly reported now:
It's an entirely manufactured crisis.
To begin with, of course, it wasn't so clear. But it's been four years of dithering now. And gradually, we were able to see the noose tighten.
The goal all along has been to increase the power and authority of the EU. Various manmade facilities such as central banking and the governments of nation-states themselves were enlisted in creating first tremendous debt and now the response, which surely shall be greater centralization. The top men have actually said as much.
We figure that the global elite that apparently wants to rule the world has two scenarios in mind. The first one is to keep the EU together – with a good deal of pain and chaos. The second one is to collapse the EU – with a good deal of pain and chaos. Either scenario facilitates world government.
Evans-Pritchard writes the powers-that-be want to salvage the EU. This is a surface-y reading of what's going on. The real strategy is hidden further down. Here's some more from his article:
The ECB would cut interest rates, launch quantitative easing (QE), and back-stop Spain and Italy with mass bond purchases; the authorities would inject capital into the banks and create a pan-European system of deposit guarantees. The combined moves would be a major step towards EU fiscal union.
"We think the worst is over for the euro," said David Bloom, currency chief at HSBC. "The central banks will have to step in massively and that will be a soothing balm for the markets. The Fed is already leaving the door open for more QE. We could see quite a powerful rally."
A currency union without the encumbrance of Greece would be viewed as a stronger bloc by investors, but much would depend on events in Greece itself. If a return to the drachma proved to be a "ruinous experience" for the Greeks – as HSBC expects – if would mightily deter Portugal, Spain, and other from such temptation ...
Gary Jenkins from the bond advisers Swordfish said those betting on a market crash should be careful. "The global central banks are going to respond with the biggest flood of liquidity the world has ever seen. It will make the LTRO (the ECB's €1 trillion lending to banks) look like small change," he said.
"They have to act. We have reached the point where the peripheral bond markets are going to implode unless the ECB and EU politicians show they have deep pockets and start buying the debt on the secondary market. It is a quasi-fiscal union or bust at this stage," he said.
You see? The trap is sprung. The powers-that-be, after exposing us endlessly to "Merkozy," now reveal that they have plenty of firepower and are prepared to use it.
Gone is the nonsense about the new German empire and the special relationship between France and Germany. Gone is any pretense that England stands back, wishing to disengage from the EU.
The old men of the City of London are entirely in charge and always have been. They are hardly hiding their intentions now. They will do whatever it takes using the Federal Reserve and the European Central Bank. They will print as much as necessary.
We have written consistently that this "global crisis" would involve the disbursement of US$ 100 trillion before it was over. We believe we are at the US$ 50 trillion mark if you throw in the US$ 15 trillion or so in "short term" loans issued out by the Fed in 2008.
Let's see how much it costs these dynastic families (if that is what they are) to unearth the European Union, which already had one foot in the grave.
Of course, we hasten to point out, there is always what we call the Internet Reformation that may spoil even the best-laid elite plans. The controlled chaos that the elites wish to create can always turn worse, much worse. In the Internet era, the elites are by no means in control entirely as they seem to have been in the 20th century.
The collapse of the euro or EU ... a real collapse ... would show us once more as before that elite dominant social themes are collapsing more quickly than they can secure them. This is a good thing to observe.
But there is no doubt the firepower is being marshaled. They never give up. Their sense of entitlement is tremendous, as is their apparent contempt for those who are not privy to their planning and schemes.
Evans-Pritchard writes, further down, that "[A] benign outcome assumes that the European Central Bank steps in with massive support, backed by the US Federal Reserve, the Bank of Japan, and key central banks along the lines of concerted action in 2008-2009.
There is no legality to any of this. It is based on the dubious authority that those "in charge" of the world's spavined, central banking network simply will do as they choose.
Conclusion: In fact, it is nothing but directed history. And it is being "made" before your disbelieving eyes.