The PHANTOM collateral των Τραπεζών

21:04 1/5/2012 - Πηγή: Olympia

We can also ask “where’s the collateral?” of the banking sector.

As frequent contributor Harun I. observed about the European banking sector’s phantomcollateral:

European banks do not have enough money for deposit redemptions (people withdrawing their cash from the banks) and the only way to get it is to have the European Central Bank (ECB)

print money out of thin air thereby devaluing every euro, thereby destroying purchasing power (you get your money but it buys less).

And what collateral are the banks providing for these loans?—-> The sovereign debt of countries that are insolvent.

( EINAI ΓΙΑ ΓΕΛΙΑ ΚΑΙ ΓΙΑ ΚΛΑΜΑΤΑ, ΚΑΙ ΕΔΩ ΚΑΙ 4 ΧΡΟΝΙΑ ΟΙ ΤΡΑΠΕΖΕΣ ΧΡΗΜΑΤΟΔΟΤΟΥΝΤΑΙ ΑΠΟ ΤΟΥΣ ΕΥΡΩΠΑΙΟΥΣ ΠΟΛΙΤΕΣ…

ΧΩΡΙΣ ΟΙ ΔΕΥΤΕΡΟΙ ΝΑ ΓΝΩΡΙΖΟΥΝ ΚΑΙ ΝΑ ΟΡΙΖΟΥΝ ΣΕ ΠΟΙΑ ΜΑΥΡΗ ΤΡΥΠΑ ΠΑΝΕ ΤΑ ΛΕΦΤΑ ΚΑΙ Ο ΙΔΡΩΤΑΣ ΤΟΥΣ. )

- Why not sell the bonds to raise the capital that is rightfully owed to depositors so that they could receive their money at par?

- Why then bond prices would tumble and governments would be forced to borrow at much higher interest rates. ( ΤΙ ΜΑΣ ΘΥΜΙΖΕΙ… ! )

But borrow from whom? Insolvent banks that must have money printed to give depositors their money back at a fraction of its worth from when they deposited it. Not due to market forces which indicate their labor is worth less but because everybody just wants what’s rightfully theirs.

So to summarize this, the ECB prints money to buy the bonds of insolvent banks which are backed by the bonds of insolvent nations.

The result of which is insolvent nations or in reality the people thereof are not only poorer, theyare now responsible for paying back money that was their property to begin with… at interest… ( ΤΙ ΜΑΣ ΘΥΜΙΖΕΙ..! )

Put these two factors together and you get a global economy dependent on debt borrowed against phantom collateral and an economy in which only the top 10% have credible collateral and income to leverage into more debt.

In a sane system, when the collateral vanishes, so too does the debt (writedowns, write-offs, bankruptcy, take your pick).

In an insane system, then phantom collateral supports ever greater mountains of debt.

How long do you reckon the insane system we have now will last?

The collateral is phantom, but

the interest payments are very, very real.

ΠΠ

Filed under: ΕΠΙΚΑΙΡΟΤΗΤΑ