News & Analysis
ECB Blows Up Europe? Creates 'Super-Immune' Elite Bonds ... Throws Credit Market into Disarray
Investors call on ECB to play fair in sovereign credit ... Resentment at the European Central Bank's immunity from losses on Greek debt has left fund firms wondering about the strength of their creditor rights and whether they should blacklist bonds purchased during emergency sprees by the lender of last resort. By sidestepping markdowns on Greek bonds, the ECB has effectively robbed fellow senior creditors of their top rank status, investors say, forcing each to forgive a greater proportion of the debt than they might otherwise have needed to. "I think many investors believed that as they were holding the same bond as the ECB, they should therefore be considered in the same boat as the ECB," said Michael Krautzberger, head of the Euro fixed income business at BlackRock. – Reuters
Dominant Social Theme: What central banks do is "legal." What YOU do is something else again.
Free-Market Analysis: We have often written the goal of the Anglosphere power elite is to create a worldwide depression on the way to one-world government. They are seemingly well on their way to doing that using the power of monopoly central banking, which they certainly seem to control.
The Anglosphere elites (as we have often indicated) – are made up of Jewish, Catholic/Vatican, religious, corporate and military elites. They wield enormous, world-spanning power. Thus, the evolution of the ECB's immunity was surely predictable. Around the world, those who secretively run these banks are getting bolder and more obvious about their hold on power.
In fact, this is manifested in the high-handed manner in which European Central banks are refusing to mark down the face value of its bonds, no matter the provocation. In the event of an extreme financial "event" (disaster) the ECB shall remain "whole" – theoretically anyway – while others shall not.
This means (as we can see in the article excerpted above) that others shall have to accept LARGER writedowns of their bonds because the ECB is refusing to do so. This is how monopoly fiat money distorts a marketplace.
Monopoly (mercantilist) central banks are ruinous in part because in the modern era those running them simply assert private benefits to a coterie of insiders and then declare these benefits legal via the force of law.
This is why those who argue that central banks are "private" miss the point. Central banks are mercantilist entities, assuming power via the force of law. If central banks WERE fully privatized, we'd have no trouble with them. Let them play on a level playing field with other financial entities. And other monies as well.
But the Anglosphere elite families apparently control central banks and the trillions they throw off. This control has allowed them to campaign covertly for world government. It also gives them control of governments and the opportunity to "make the rules." Here's some more from the article:
"We've now learned that the ECB in a really stressed scenario or default will be senior to you ... so there's still a lot of nervousness in the market," he added. When borrowers issue bonds the bond is structured so that so-called senior bondholders rank first for repayment, but in cases where borrowers cannot repay they may be forced to write off some or all of the loan.
The Institute of International Finance, the body that represents most private holders of Greek debt, is pushing its members to accept a 53.5 percent loss on the face value of their bonds to help Greece avoid a disorderly default.
The ECB, though, was made exempt and is due to be repaid in full. The ECB argued it had no choice but to buy Greek debt to help calm markets, unlike other senior bondholders who had a choice over whether to invest - even if they did so before the extent of the Greek crisis was clear.
And there are now fears that the central bank might one day insist on special treatment for bonds issued by other beneficiaries of its Securities Markets Programme - Portugal, Ireland, Spain and Italy - if those economies continue to falter.
Yields on 10 year Portuguese debt are currently nudging 14 percent after a short-lived relief rally during February having peaked at 17.4 percent at the end of January in the wake of a ratings agency downgrade. The rise shows that Portugal is having to pay out bigger sums to encourage investors to buy their bonds, hiking their funding costs over the long-term.
We can see from this excerpt that the current ECB position is not a hypothetical one. It is already having severe ramifications.
Why is the ECB insisting on this regnant power nonetheless? We repeat: The ECB, rather than trying to stabilize the European situation, is likely actively trying to undermine it. Almost everything the top elites put into practice works in reverse to stated intentions. That's our view anyway.
This is the outgrowth of the mercantilist strategy in the modern era. Those who run the banks and those who stand behind them (and evidently and obviously control them) can wrap themselves in the governmental immunity they have purchased.
Additionally, the bought-and-paid-for Western media will treat the abuses of central banking as a legislative necessity. In other words, the justifications the bankers themselves offer shall be reported with authority by the mainstream media and thus their credibility is reinforced.
It is for this reason that central banks have been able to release something like US$50 TRILLION into the marketplace to shore up failed and failing financial entities. These entities inevitably have close ties to the ruling elite.
We are on record as pointing out numerous times that what worked in the 20th century does NOT work in the 21st – mostly due to what we call the Internet Reformation. Everything that central bankers did to enrich their cronies in the 20th century has been exposed on the Internet in the 21st.
For this reason, we've maintained that the dollar reserve system is likely finished. People who are losing their job, houses and families are well aware that central bankers have propped up the system and enriched their cronies at the behest of the top elites. There is likely too much rage. And it is growing.
The elites, in our view, have created a growing depression in America and Europe. With the demise of China's economy – whenever that occurs – the final leg of the stool shall shatter. A full-scale depression may ensue.
This alongside of a regional (Middle Eastern) or global war shall provide the overwhelming crisis to announce global government, or so the elites seem to hope. While we're not sure they will get that far thanks to the Internet Reformation, we are equally sure they will continue to try.
However, the Western financial consensus is breaking down as the elites continue their assault against modern civil society (what's left of it). People, even top, monied professionals, are well aware of elite manipulations. Read here, from the same article as excerpted above:
But talk is cheap, said Jerome Booth, head of research at blue chip debt investment specialist Ashmore, one of a growing number of managers who feel Europe will pay a high price for changing the rules on which healthy credit markets rely. "What they do not understand is the word precedent. Saying it won't apply in the future is rubbish. Absolute nonsense. They have no credibility when they say that. Zero," he said.
What Booth is saying is that the ECB is "taking down" the European sovereign fixed income system as it has existed for decades. This can't be coincidence, can it? Does the ECB really need the money? They claim to be protecting the financial system but they are really only protecting certain top-level, monied interests.
The ironic thing is that these interests in our view CONTROL central banking. Anything under a couple of trillion is pocket change. Here's more from Booth:
"Did you spot the clause in your bond documents that said that you were buying the subordinate tranche of the government bond market?" M&G Fund Manager Jim Leaviss said. "Of course it never existed...the law is torn up and rewritten."
See? The ECB has "made sovereign bonds almost impossible to price. That is preventing a fall in yields to more sustainable levels ... 'There is more comfort in investing in corporate credit and high yield bonds, than in sovereign debt credit,' Chris Iggo, head of fixed income at AXA Investment Managers argued."
And here is a statement toward the end of the article: "Restoring the trust of creditors is just as important as pushing forward with the structural reforms Greece needs to grow its way out of bankruptcy, managers said."
For these top financiers, hope springs eternal. They still do not understand the system in which they have chosen to work has not been created to generate "trust" but to foment world government via various destabilizing regimes.
For decades, bright and numerically adept men (and women) have made (in aggregate) trillions "playing by the rules" of modern central banking systems. But the top elites are moving aggressively ahead and part of the new plans – as the world depression is apparently consolidated – includes attacking the monied classes themselves.
This is part of the fundamental wrongheadedness of operations like Occupy Wall Street (probably controlled opposition). Those running OWS do not make a distinction between the monied classes and the very tip-top elites running central banks. The former are disposable. The latter DO the disposing.
Revolutions eat their children. Soon, very soon, the monied classes that have considered themselves immune from blowback shall likely find out just how wrong they were. This happened in the 1930s as well. We shall see if their eventual disaffection contribute to the current disabuse that has overtaken the impoverished and middle classes.
We shall also see if the Internet itself acts as a vast echoing chamber. If so, then the strategies that the elites have counted on perhaps for centuries may prove ineffective this time around. The de-stabilizing may finally destabilize them as well.
Conclusion: Perhaps they shall have to take a step BACK rather than forward ...
Posted by 4irw4y on 03/08/12 02:02 PM
Yes, pardon me. I really see no other "second" path instead, because it's Sole for all Soles. Can't figure out how to collect all those shares from the uninformed and un-organised Souls... therefore the only appearing question is how much per a central bank who'd wish to co-operate?
Posted by amanfromMars on 03/08/12 02:08 AM
Share blame out equally to all and personal responsibility for failing is limited allowing opportunity for systems repair at failing levels, is another path, 4irw4y
Posted by 4irw4y on 03/07/12 01:35 PM
"tales told" --
Please blame no one. Invincible.
Posted by speedygonzales on 03/07/12 05:14 AM
Frog and scorpi. Scorpi asked frog to carry him on other bank. Somewhere durin' transportation being in progress scorpi realized that he is hungry. So he said the news to frog. Frog answered: There is plenty of food on other side. If you eat me now we both die. Scorpi answered: It is my nature. When am hungry I must bait whoever is arround.
It is similar with elites. They just take oportunity anytime they can. Even suicidal.
Posted by speedygonzales on 03/07/12 04:04 AM
Hat off! Look here. One word makes it: "It would be a mistake to set up a CENTRAL committee for anticapitalist struggle. That is characteristic of the unsuccessful military model."
Centralization is killin' diversity.
My favorite is POST 45 Click to view link
Posted by amanfromMars on 03/07/12 01:43 AM
They stand petrified at the point of losing everything, Col, to the light of their plans being displayed as conceived and it is thought to cost them nothing? Methinks they make an increasingly expensive mistake to think that the System is not Aware of ITs Own Virtual Controls and Semantic Levers and how to Driver itself in ARG Networks Exercising Creativity in AI with Remote Universal Command and Control of Space Transmissions. Virtual Broad Band Casting to Sensitive Attentive Players in Alternate Reality Game Realities. ... .. where the Sublime trumps the Ridiculous to Present the Impossible as being Probable and therefore tales told have painted a false and counterfeit picture of what is to be and coming.
Posted by Abu Aardvark on 03/06/12 10:20 AM
DB: "We repeat: The ECB, rather than trying to stabilize the European situation, is likely actively trying to undermine it. Almost everything the top elites put into practice works in reverse to stated intentions"
Ambrose Evans-Pritchard had a good day, yesterday, it would seem:
"The Spanish rebellion has begun, sooner and more dramatically than I expected.
As many readers will already have seen, Premier Mariano Rajoy has refused point blank to comply with the austerity demands of the European Commission and the European Council (hijacked by Merkozy).
Taking what he called a "sovereign decision", he simply announced that he intends to ignore the EU deficit target of 4.4pc of GDP for this year, setting his own target of 5.8pc instead (down from 8.5pc in 2011).
In the twenty years or so that I have been following EU affairs closely, I cannot remember such a bold and open act of defiance by any state. Usually such matters are fudged. Countries stretch the line, but do not actually cross it.
With condign symbolism, Mr Rajoy dropped his bombshell in Brussels after the EU summit, without first notifying the commission or fellow EU leaders. Indeed, he seemed to relish the fact that he was tearing up the rule book and disavowing the whole EU machinery of budgetary control.
There comes a point when a democracy can no longer sacrifice its citizens to please reactionary ideologues determined to impose 1930s scorched-earth policies. Ya basta.
What is striking is the wave of support for Mr Rajoy from the Spanish commentariat.
This one from Pablo Sebastián left me speechless.
My loose translation:
"Spain isn't any old country that will allow itself to be humiliated by the German Chancellor."
"The behaviour of the European Commission towards Spain over recent days has been infamous and exceeds their treaty powers… these Eurocrats think they are the owners and masters of Spain."
This then is the fermenting mood in the fiercely proud and ancient nation of Spain in Year III of depression, probably the worst depression the country has seen since the 1640s - or have I missed a worse one?
The Latin Bloc is awakening"
Click to view link
Posted by Col on 03/06/12 09:37 AM
Because it costs them nothing to do it.
Posted by amanfromMars on 03/06/12 05:41 AM
"It is for this reason that central banks have been able to release something like US$50 TRILLION into the marketplace to shore up failed and failing financial entities. These entities inevitably have close ties to the ruling elite."
Why on Earth would anyone want to do that Madness?
Posted by memehunter on 03/06/12 04:31 AM
DB: This is why those who argue that central banks are "private" miss the point. Central banks are mercantilist entities, assuming power via the force of law. If central banks WERE fully privatized, we'd have no trouble with them. Let them play on a level playing field with other financial entities. And other monies as well.
If it is truly a level playing field, then these banks should not be called "central" banks. Also, what do the DB elves have to say about banking cartels? It seems to me that these banking cartels could flourish even with fully privatized "central" banks, leading once again to a quasi-monopolistic control of the money supply.
Finally, this does not take into account that, as long as we are using interest-bearing debt-based currencies, this will lead to instability, wealth transfer from poorest to richest, and increased capital costs for everyone, whether the banks issuing these debt-based currencies are private or public, and regardless of the nature of the currency (fiat or commodity-based).
Posted by clark on 03/06/12 03:50 AM
I've always thought of The Federal Reserve as a cartel:
"Kevin Phillips, a political and economic commentator for more than three decades and onetime Nixon strategist reports that President Richard Nixon asked his Federal Reserve chairman, Arthur Burns, to concoct a new inflation number that would be split off from traditional headline CPI, dubbed 'core' inflation-and thus make inflation look less threatening."
Click to view link
Greece = a trigger for the dreaded cascading-cross defaults Greenspan mentioned?
Posted by nervo on 03/06/12 02:00 AM
"When will the eprogressives ever learn... ... ... ... ... ... "
Regulation is the product of everyone else applying controls on the psychopaths (Koch Bros, et al) who have gamed every level of the culture/economy/politics they operate in.
Money is power - and inordinate amounts of money convey inordinate amounts of power.
The "Free Market" never existed - and never will. It's a manipulative fantasy generated by those who have the most money and power in order to keep their power & advantages - and increase them until their control is TOTAL: a captive government and a central bank (BIS, The FED, the ECB). BIS was run by the Rockefellers and the heads of IG Farben in the 30's and throve on the deposits of gold looted from the treasuries of conquered countries, and the jewelry and teeth of the Jews cremated in the ovens designed & built by I.G. Farben, after being gassed by the Zyklon B produsced by your favorite aspirin maker - Bayer. Wake up you guys - you're caught in the fantasy that it's "The Progressives" who want "total control". WTF do you think Citizens United was all about?
Posted by kktemecula on 03/06/12 01:24 AM
The ECB's activity in creating "Super-Immune" Elite bonds reminds me of the plot in a 1960's movie called "Goldfinger". Destroy your wealth and my wealth will become exponentially greater. The Money Power CB's plant the device in the bastion of the commonweal, ignite the fuel of fiat currency, and voila!- "One World Government" with the Elites occupying the Towers and the rest of us reduced to serfdom.
Just as Bond became the spoiler in the movie then, so does the Internet Reformation today as the light of Truth is shined upon the Elite's best laid plans.
Posted by jurist on 03/05/12 10:11 PM
A bank is a court. A court is a banc. Sovereignty is exercised through both judicial power (the right to determine who gets disbursements of what property/money), and the collecting on and paying on official accounts.
There is no payment without money/specie. An insolvent debtor cannot pay, and therefore is subject to the creditor. He is a bond servant, citizen.
Without land, one is subject to the land one treads upon. Thus, the control of both a land-mass, and movable-land in the form of money, are imperative to exercise sovereignty. All sovereign governments have a central bank and exercise control over a land mass. Under law, the party exercising title over the land is the sovereign.
Collect all the precious metals from the people on a particular land-mass and put it into a central bank, and you have captured the people. You have made them subjects upon the land. The people are insolvent. And, if they have allowed you to take their money off their land, it is clear that they don't control the land either.
When you deposit money into a bank without a specific contract for the bank to hold your money segregated, you become an investor in the bank. Your deposits become the bank's money, and you receive a reasonable right of recovery of your money. The exchange is evidenced by a commercial instrument in memorandum of the deed. Thus, governments/central banks are really commercial ventures, and the citizens are mere common stock holders of that banc. Of course, citizens also share the liabilities. Citizens are subject. The banks must be made whole. They are the sovereign.
Is it sinking in that government/money/and banks are all part of the same organization? This is the structure to consolidate power.
Is not the BIS a world bank? Well, then we have world government already, don't we? Is the structures of world wide land control already in place? There seems to be resistance.
Is there land not under control of the BIS? Is there specie not under control of the BIS? Well, then world government isn't complete.
Everyone who possesses specie money and controls his own land is a sovereign. Every sovereign is on equal footing with every other sovereign. Sovereign governments are no exception in that there is a man or woman behind the veil of government. He/She is the party who claims title to the land. And, he/she is also subject to common law/law of nations. There is no sovereign immunity amoung equals.
Sovereign power can be multiplied by sovereigns acting in cooperation with other sovereigns. These are Free men in alliance. This is called a confederation. Two of the most powerful confederations are the grand and petit juries.
Corporate states cannot be hung. They can be dissolved though.
There is no sovereign immunity from a grand jury true-bill of indictment. Nobody is above the law - unless everyone believes that they are.
When two or more sovereigns agree to share property such a road, then the common property becomes part of the public bank/banc, the public holdings. That property is held in a federation. Thus, the separate sovereigns have jurisdiction/say-so over the common property as well as their own private property.
From this perspective it should be fairly easy to see how a public confederation of unsuspecting ignorant individuals can be manipulated by clever agents of ancient landlords into investing themselves into a private commercial venture in which they have no title interest, and thus the landlord enjoys sovereign immunity.
Posted by nonedare on 03/05/12 09:30 PM
Hey, DB. That link is kinda mean. The comment sounds genuine to me. I copied the same exact quote with the intention of thanking you for putting it so well! I am in an argument with some guy over at Amazon (on the Thrive comments!) in which I am trying to make essentially the same point. Here's what I wrote:
"There was plenty of "regulation" out there, and there always is. The problem is that when government gets involved to choose winners and losers, it must BY DEFINITION use its regulatory power (coercion) to advantage one group over another. And when it ends in failure, the progressive always wants to blame "capitalism" and lack of proper regulation. It stopped being capitalism the moment the government role became anything more than ensuring the validity of contracts. There is no way to stop the use of government coercive power from being abused by those who seek advantage. The only way to stop the abuse is to not give government the power in the first place. When will progressives ever learn that you can't keep doing the same dumb things over and over and expect different results."
Reply from The Daily Bell
OK, if he wasn't being sarcastic, he has our apologies. How's that?
Posted by Shilo on 03/05/12 09:28 PM
The central bank in the nation where I live was set up by the Rothschilds. However we nationalised it in 1935, and today our banking system is highly regulated, and sound. I believe this proves that sovereign nations have the final sanction. Get your act together Greece. Throw the bums out !
Reply from The Daily Bell
Doesn't actually sound all that "sound." As with most fiat monopoly banks, inflation is obviously a problem ...
Click to view link
From the article (see link above) ...
High Inflation + No Growth = Economic Mismanagement
Phil Goff | Monday, April 18, 2011 - 12:30
Figures showing there has been an annual increase in inflation of 4.5 per cent and the fact it is predicted by some economists to reach the highest level in two decades later this year is proof of this Government’s economic mismanagement, says Labour Leader Phil Goff ...
“New Zealand now has the worst of all worlds – an economy that has stalled and is probably back in recession. Add to that very high inflation and high unemployment and we’re in real trouble.
“Middle and low income families are suffering as prices of everyday items like milk, cheese, fruit and vegetables, petrol and power soar ahead of wages. That’s not a ‘lifestyle choice’ as John Key claims. It’s a reality for many New Zealanders who cannot afford basic necessities – forget about luxuries.
“Top earners are doing okay though under this Government. They’ve never been better off. But John Key’s generosity to them has not been matched when it comes to middle and low income earners. They’re stretched to the limit.
“Labour will try to ease some of that pressure by eliminating GST on fruit and vegetables. We will also give some financial relief through a tax-free zone and are committed to growing the economy to create better jobs with higher incomes,” said Phil Goff.
Posted by jurist on 03/05/12 07:36 PM
Central banks ARE purely private. It's just that the institutions masquerading as public governments are ALSO private organizations. This puts the claim of sovereign immunity in a whole new light.
Are citizens members of a private club? If so, there is no place for a claim of unalienable rights because all controversies arising under the jurisdiction of the club must be addressed in the rules of membership.
Under common law, where there is an injury, there is a remedy.
Law is: agreement of the parties. Agreement of the parties = whatever you allow someone to get away with = whatever you can get someone to believe the law is = whatever someone has gotten you to believe the law is.
All organizations have individuals controlling them, and individuals receiving benefits from them. Alleged governments are no exception.
Has a deceptive scheme caused you an injury? Don't seek remedy from the fiction, the organization. It is illusive. It is an illusion. It is immune to attacks from other fictions, straw men, which are necessary to create an interface for the purpose of litigation - and defeat. Seek your remedy against the men perpetrating the fraud, and the ones creating the illusion for the purpose of deceit, the ones telling the tall tales and inducing you who rely upon those tales to give up valuable property or rights.
Large organizations which are presented to the people as public government are likely established by expert organizers for their own benefit and the benefit of their cronies. Public government is VOLUNTARY participation, open to all, and not secretive.
There are few truly public governments around the world. Those that do exist have little power over members and exercise little power over nonmembers. Yet, they have great influence in society. They cooperation amongst their participants who are franklins rather than citizens. In other words, real public government honors the freedom of the people. The participants are free, and not bound to a course of civil law as citizens are.
Reply from The Daily Bell
The US Fed's very creation was dependent on an Act of Congress. It is a MERCANTILIST ENTITY, chartered by government, organized by government and dependent on government for the choosing and vetting of its top staff people and, generally, for its credibility and power. It also has a government mandate for its monopoly printing. This is nothing like any PRIVATE (market-based) entity that we are aware of.
Posted by NAPpy on 03/05/12 07:27 PM
I'm embarrassed to admit that my portfolio at one time contained sovereign bonds. Since learning that a sovereign bond is a loan to a criminal gang with the veneer of an "institution", I've sold them. Now, I can't help thinking that if you loan money to the mafia, you should not be surprised when they steal your money.
Posted by johnblenkins on 03/05/12 06:35 PM
A system designed to fail,helped by. "Make up the rules as you go along"
I can't help thinking that Greece is important to the "elites"
" From the Craddle of democrocy to the Grave"
Posted by alexsemen on 03/05/12 06:33 PM
Please read :
The Daily Reckoning Presents
What the Greek Rescue is Really About by mr. D. Danning