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I married well, and I chose my parents expertly. Peter Schiff is king of the economic connect, his radio show, is not to be missed. Food is the future. Without secure supplies of food, you have no future. So I have the solution for you. Infact, banking is getting quite... More
  • EMF-Birth of Repo Land 0 comments
    Mar 9, 2010 12:18 AM


    that policy should not be geared towards preventing

    failure, but preparing for it.

    We should by now have learned

    In addition, the EMF could contribute decisively to the

    transparency of public finances because its intervention

    mechanism in the case of failure would penalise all

    derivatives and other transactions that had not been

    previously registered with a special registry of public

    debt, which the EMF would maintain.

    The creation of a European Monetary Fund should be

    seen as the best way to protect the interests of the

    (relatively) fiscally strong member countries. Without

    such an institution, a country like Germany would

    always find itself in a ‘lose-lose’ situation if a country

    like Greece is on the brink of collapse. If Germany

    agrees to a rescue package, it puts its public finances at

    risk. If it does not, its financial institutions would bear

    the brunt of the considerable losses that would arise

    from a disorderly failure and the ensuing contagion.

    Given the weak state of the German banking system,

    this would destabilize trust.


    The excert above was from a study done in Febuary, in Belgium by, Daniel Gros and Thomas Mayer. I have also read on the FT that the new EMF could be up and running by June. Given that the strongest country in the EU is Germany, and given that the banks in Germany are heavily exposed to the bad debt in Greece. Portugal is also showing it is the closest to Greeces poor credit rating.... This will be a summer of scorching waves of sweat, and not just from the sun.
    I also imagine that as explained in the policy study that regarding the IMF, due to its Nato member the USA, the IMF wôuld be too soft on Greece, as Greece is a Nato member.

    The key here to me, is that things have not even started to heat up. Stock up on MREs and popcorn...this will be some new age Repo action, German style.

    Disclosure: no disclosure
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