France may not be able to cope on its own, but there aren’t many countries able or willing to help it. Moody’s just cut Spain’s debt rating and Standard and Poor’s did the same to 24 Italian banks. France has a very simple plan that will solve all its problems: Germany must pour money into a European fund that will bail France out while accepting more French influence over future German financial decisions.

It is simple and elegant, but for some reason the Germans aren’t as enthusiastic about the French.

Viewed from Paris, the European Union has always been an effective way for France to increase its global influence by marginalizing Britain and domesticating Germany. Previously, Germany swallowed the bitter pills that France handed to it. Trading the mighty D-Mark for reunification was only one of them. But this time the Germans are balking:
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When it comes to economics, the Germans are confident that they know better than the Latins and the Greeks [how can you argue with that? - B], and they are much harder to budge on economic policy issues than they used to be. Germans are in any case allergic to President Sarkozy’s hyperactive negotiating style. The faster he tries to bounce them into some grand scheme, the more their go-slow instincts kick in.

Sarkozy wants to turn global investor nervousness into a negotiating tool. “The markets will melt down worldwide if you don’t give me what I want by Sunday,” appears to be his latest approach. This may not be as powerful a weapon as he hopes. At this point the Germans have seen markets collapse and recover many times during what is slowly turning from a crisis into a historical period. A solution cobbled together to meet a self-imposed deadline may buy a few days peace on the financial markets, but unless the plan is sound and sensible, investors will quickly pick it apart and we will soon be back to yet another hysterical crisis and yet another set of French demands, Germans reason.

Take your time, get it right — and don’t get sucked into any long term commitments until you are absolutely sure you are not being entangled in some devious French ploy.

Screaming at the Germans is usually not the best way to reach an agreement. Germany is usually willing to defer to France on questions of prestige and decor. But it is increasingly less willing to give ground on substance — especially when it is convinced that France’s inflationary, politicizing instincts are the kind of Latin economic ideas that caused the European crisis in the first place. - Walter Russell Mead

So let's sum it up: if the undercapitalized banks want to be shored up by corrupt politicians giving away taxpayer money, then they become wards of the state. If they take the deal and refuse to play along, then they really become wards of the state. That way the banks are recapitalized to fund the paying down of the debt of Euro governments in order to shore up the banks so the banks fund the paying down of the debt of Euro governments to shore up the banks.

The reason for my decision to pull the plug was excruciatingly simple: I could no longer tell my clients that their monies and positions were safe in the futures and options markets – because they are not. And this goes not just for my clients, but for every futures and options account in the United States. The entire system has been utterly destroyed by the MF Global collapse. Given this sad reality, I could not in good conscience take one more step as a commodity broker, soliciting trades that I knew were unsafe or holding funds that I knew to be in jeopardy.

The futures markets are very highly-leveraged and thus require an exceptionally firm base upon which to function. That base was the sacrosanct segregation of customer funds from clearing firm capital, with additional emergency financial backing provided by the exchanges themselves. Up until a few weeks ago, that base existed, and had worked flawlessly. Firms came and went, with some imploding in spectacular fashion. Whenever a firm failure happened, the customer funds were intact and the exchanges would step in to backstop everything and keep customers 100% liquid – even as their clearing firm collapsed and was quickly replaced by another firm within the system.

Everything changed just a few short weeks ago. A firm, led by a crony of the Obama regime, stole all of the non-margined cash held by customers of his firm. Let’s not sugar-coat this or make this crime seem “complex” and “abstract” by drowning ourselves in six-dollar words and uber-technical jargon. Jon Corzine STOLE the customer cash at MF Global. Knowing Jon Corzine, and knowing the abject lawlessness and contempt for humanity of the Marxist Obama regime and its cronies, this is not really a surprise. What was a surprise was the reaction of the exchanges and regulators. Their reaction has been to take a bad situation and make it orders of magnitude worse. Specifically, they froze customers out of their accounts WHILE THE MARKETS CONTINUED TO TRADE, refusing to even allow them to liquidate. This is unfathomable. The risk exposure precedent that has been set is completely intolerable and has destroyed the entire industry paradigm. No informed person can continue to engage these markets, and no moral person can continue to broker or facilitate customer engagement in what is now a massive game of Russian Roulette.

I have learned over the last week that MF Global is almost certainly the mere tip of the iceberg. There is massive industry-wide exposure to European sovereign junk debt. While other firms may not be as heavily leveraged as Corzine had MFG leveraged, and it is now thought that MFG’s leverage may have been in excess of 100:1, they are still suicidally leveraged and will likely stand massive, unmeetable collateral calls in the coming days and weeks as Europe inevitably collapses. I now suspect that the reason the Chicago Mercantile Exchange did not immediately step in to backstop the MFG implosion was because they knew and know that if they backstopped MFG, they would then be expected to backstop all of the other firms in the system when the failures began to cascade – and there simply isn’t that much money in the entire system. In short, the problem is a SYSTEMIC problem, not merely isolated to one firm.

… And so, to the very unpleasant crux of the matter. The futures and options markets are no longer viable. It is my recommendation that ALL customers withdraw from all of the markets as soon as possible so that they have the best chance of protecting themselves and their equity. The system is no longer functioning with integrity and is suicidally risk-laden. The rule of law is non-existent, instead replaced with godless, criminal political cronyism.

… Finally, I will not, under any circumstance, consider reforming and re-opening Barnhardt Capital Management, or any other iteration of a brokerage business, until Barack Obama has been removed from office AND the government of the United States has been sufficiently reformed and repopulated so as to engender my total and complete confidence in the government, its adherence to and enforcement of the rule of law, and in its competent and just regulatory oversight of any commodities markets that may reform. So long as the government remains criminal, it would serve no purpose whatsoever to attempt to rebuild the futures industry or my firm, because in a lawless environment, the same thievery and fraud would simply happen again, and the criminals would go unpunished, sheltered by the criminal oligarchy.

...my clients, who literally TO THE MAN agreed with my assessment of the situation...

"There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose." - Keynes

"Print more money." - Krugman's solution for everything.

He describes loosely a federation, where Goldman Sachs sits in the thrones of Europe, in a quasi debt failure receivership role. [power elite rapidly extracting the wealth of the nations - B] Unfortunately, the pressure on the Euro Central Bank to purchase Italian, Spanish, and Greek Govt Bonds has put its balance sheet in total ruins. It is the buyer of last resort for fast falling toxic bonds. The only central bank more ruined is the US Federal Reserve.
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expects a depression to hit Southern Europe, and for one nation to exit the Euro Monetary Union next year. The process has no rules. The day after exit, the nation will suffer ruin of their banking system, forcing a rapid nationalization in a reverted currency. The end result will be a sovereign debt default and pure chaos across the continent. The coming depression will lay waste to the USDollar, the British Pound, and probably the Yen too. All fiat currencies will endure a powerful stress test, but based in reality, not a charade. As soon as any group of big Euro banks enter a failure and bust, the cascade of contagion will act like a fast moving virus to destroy many Western banks. We will then see a repeat of history with 20 Lehmans in bank failures, if not sooner.
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The Euro Central Bank averted 10 to 20 Lehmans with the extended Dollar Swap Facility provided by the USFed. Money is almost free. The volume of money grants is enormous, likely never repaid. Witness the effect of the central banks showing reluctance to enter into bond purchases. The system breaks down in powerful manner. The European Central Bank said demand for three-month US$-based loans surged after it announced a broader Dollar Swap Facility for European usage. The USFed cut the cost of the financing from an ultra-low 1.0% to an almost free 0.5% rate. The USFed discount window was made cheaper for foreign banks than US banks (who pay 75 basis points), an indication of the destruction. Rumors persist that a cool $1 trillion has been made available. Five other central banks participated in the coordinated move which included the Bank of Japan. The Frankfurt-based EuroCB immediately made loans for $50.7 billion to 34 big teetering Euro banks on December 1st...The borrowing done at the Discount Window catapulted by 127-fold, from a paltry $395 million to $50.7 billion in a sudden move.
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The USFed was appealed to by the EuroCB so as to prevent an estimated 20 Lehmans from occurring overnight, as in multiple bank failures from a flash event. He went on to mention that a flash event is inevitable, which the central bankers are powerless to stop. It will come in time, with an unknown trigger event that lights a fuse. Each new $trillion credit line buys less time and covers fewer obligations.
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The Wall Street banks filled a void in providing liquidity in USDollar denomination to the big European banks. In doing so, the New York banks have tied themselves with a lethal financial tether to Europe. The London banks had already been connected. The connection lies in the shadowy derivative market. It used to be kept in the shadows since the contracts provided the majority of bank profit, and even supported the artificial rates in the bond market to a great extent. Now the derivative market is kept in the shadows because the big banks are mutually destroyed by insurance awards after failures. A little publicized trend was put into effect in the middle months of 2011. The big Wall Street banks filled a void. The inter-bank lending in Europe came to a halt in response to the sovereign debt crisis, a euphemism for the Southern European Govt bond market collapse. The big US banks offered a lifeline in the form of leveraged liquidity based upon unregulated derivatives whose notional value is in the $trillions. In doing so, the Anglo banks created a mutual risk factor in the umbilical cord of shadowy structures. If a handful of big European banks go bust, the contagion will be felt instantly (as in overnight) in New York and London. To claim that the US is insulated from Europe is nonsense. To claim that the European distress makes the US more attractive is patently false. Fifty major financial firms are tied around the necks with a common thick rope, weighed down by insolvency, going down together. Matters are so bad in Europe, that most banks have shut down the inter-bank lending, [if this doesn't ring a bell, it should - B]thus isolating the weakest. Huge funds placed at the Euro Central Bank signal the failures. The big European banks are soon to fail. They distrust each other.
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Big European banks on the brink of ruin, the next Lehmans, are leasing gold in order to raise cash and stave off failure. It is simple math. The great enablers are the central banks. Cases exist of multiple sellers of the same gold bullion bars, a common trick made famous by the GLD exchange traded fund, the SPDR Gold (dis)Trust. All [gold - B] leasing is done without regulation, like the derivative market. Neilson concludes, "Here is where we come upon a seeming paradox with respect to the recent explosion of gold leasing. We know that the banksters have virtually run out of their own bullion, as the evidence is absolutely conclusive. The same Western central banks which were openly selling 500 tons of gold per year onto the market every year have now all totally ceased their gold sales. They have no more gold, or at least they had no more gold." The Washington Accord guided official gold sales, a completed process. The physical gold price is diverging from the false paper price directed by the COMEX and guardians like JPMorgan. If truth be known, over 40 thousand tons of gold bullion has been leased and sold that does not exist. In the coming years, reconciliation will assist in sending the gold price much higher, toward $5000 per ounce. As time passes, more criminal actions will be visible in the open, like MF Global.
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B - Let's save some money and leave Ft. Knox unguarded. It's been empty so long that...

If you have gold which isn't physically in your hand, figure you don't have gold.
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Pointless meaningless exercise in futility is seen in the big European summit meetings. They are wasting their efforts, biding time, deceiving the public, and supporting the bankers in last ditch attempts to salvage what cannot be saved. The sovereign bond market is loaded with rollover interactive explosive devices that will continue to explode without relief. The politicians offer no solutions, as Merkel and Sarkozy are the only members meeting in public eye, yet neither has any power left. They meet and sign deals only to be contradicted and countermanded later by the bankers with power and court judges reciting law. The German leaders at the summit meetings are all for public show, even financial market management. None has any power left. None is involved in the new alliance. The informed observer need not follow what they decide upon anymore, because in 2 to 3 weeks their pact will all vaporize into nothingness. Markets are impressed for minutes and no more. Witness their last several accords, none of which endured. The movie keeps repeating like Ground Hog's Day. They cannot solve the ultimate entrenched problem of toxic sovereign bonds within the PIIGS nations of Southern Europe. They have no tools in their medicine chest, only phony money and more debt, even silly new Uber-Bonds. They actively avoid putting their decisions to a public referendum vote, since the people would vote down any further bank welfare in the form of more bond redemptions or bailouts. No evidence of democracy can be seen. Politicians debate, dispute, then make accords, but their communiques are common graffiti.
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The USGovt cannot permit a rise from 0% in capital cost, since it is running $1.5 trillion annual deficits. Normal cost of money would result in hundreds of $billions in higher debt service costs. The United States is trapped by 0%, not stimulated by it. As time passes, more capital will be retired, more speculation will be the norm, and healthy capital formation will become a mirage. The system will hurtle toward systemic failure.

The USGovt debt ratio is about to reach 100%. The once powerful beacon of freedom and juggernaut of financial prowess looks like yet another PIIGS nation. The debt monetization is orders of magnitude greater than admitted, part of the policy landscape, a QE To Infinity. More debt downgrades are coming. In early 2009 the US populace was told that the USGovt budget deficit would return under $1 billion. It did not. According to the Jackass forecast, it zoomed up to $1.5 trillion and stayed there for consecutive years. The deficits persist chronically without remedy in the $1500 billion range annually, a staggering 43% ratio of the total budget. The other debt ratio is the cumulative debt versus the USEconomic size as measured by the Gross Domestic Product. The United States Govt is soon to hit the 100% debt mark versus GDP. The pair of debt ratios is typical of PIIGS nations in deep trouble. [we had best not hear anymore snickering when comparing profligate Washington to Greece, and if I hear one more person say "yeah but when expressed in percent GNP it's not so bad" I'm gonna lose it. - B] The profound risk to the US financial system is masked by the USFed activity. They are monetizing 10 times as much as they admit, and the Quantitative Easing programs never were interrupted. The Operation Twist was a grand deception to conceal coverage of what foreign central banks wished to dump. Look for another debt downgrade of the USGovt in coming months, after the Q4 shows a ripe $1 trillion in added deficits.

What was revealed in the audit was startling: $16,000,000,000,000.00 had been secretly given out to US banks and corporations and foreign banks everywhere from France to Scotland. From the period between December 2007 and June 2010, the Federal Reserve had secretly bailed out many of the world’s banks, corporations, and governments. The Federal Reserve likes to refer to these secret bailouts as an all-inclusive loan program, but virtually none of the money has been returned and it was loaned out at 0% interest. Why the Federal Reserve had never been public about this or even informed the United States Congress about the $16 trillion dollar bailout is obvious — the American public would have been outraged to find out that the Federal Reserve bailed out foreign banks while Americans were struggling to find jobs.

To place $16 trillion into perspective, remember that GDP of the United States is only $14.12 trillion. The entire national debt of the United States government spanning its 200+ year history is “only” $14.5 trillion. The budget that is being debated so heavily in Congress and the Senate is “only” $3.5 trillion. Take all of the outrage and debate over the $1.5 trillion deficit into consideration, and swallow this Red pill: There was no debate about whether $16,000,000,000,000 would be given to failing banks and failing corporations around the world.

“This is a clear case of socialism for the rich and rugged, you’re-on-your-own individualism for everyone else.” – Bernie Sanders(I-VT), who knows socialism.

While France is at no serious risk of a debt crisis...youth jobless rate rising to a record 27pc...The economy may have tipped into recession already...

The employers group MEDEF said business was "in revolt across the country", warning that bankruptcies were accelerating and firms were slashing investment.

"Large foreign investors are shunning France altogether," it said.

Mr Hollande has sought to rein in his industry minister Arnaud Montebourg, who first lashed out at the Peugeot family and then threatened to nationalise ArclerMittal's steel operations in Lorraine, describing Lakshmi Mittal as "unwelcome" in France.

The state's share of the economy has risen to Nordic levels of 55pc of GDP, without Nordic labour flexibility.

The International Monetary Fund warns that France risks being left behind by Spain and Italy as they cut costs and grasp the nettle of deep reform.

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Since January 2012, China has imported an absolutely stunning 1,206 tons of gold. Putting this number in context, this is 20% more than the entire reporter official gold holdings of 1054 tons, and represents roughly half of the total 2500 tons of gold mined every year.



There is an interesting stealth war going on between countries with everyone inflating their money supplies like crazy. Which instantly devalues a country's holdings in the trade and currency of the other countries they deal with.

There is also a race to nail down real wealth as opposed to paper wealth. I think Germany's attempt to repatriate their gold from vaults in America and being rebuffed in that was a real jaw dropper. The gap between physical gold and paper gold assets is one to watch closely as a telling indicator.

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