The Germans and all of the Eurozone except Greece are doing better, mostly because of the decline in the euro in quarter 2!
But that decline’s now over, the euro is back where it was before the Greek “crisis” in May.
Meanwhile, the Greeks are contracting and the bond spreads are widening again.
Gorilla says: “One quarter doesn’t yet cut the mustard in Frankfurt!”
Now that Germany’s shut down the mosque where 9/11 was implemented…
It’s a curious irony that the mosque in question became a magnet for Jihadniks worldwide, some of whom apparently went back to Afghanistan and Pakistan to wreak havoc on those countries.
Gorilla says: “When you can’t invade Hamburg, your troops become hamburger!”
Greece has sold some more debt, huzzah!!!
Ah, but only 6-month debt, apparently it’s too early to go beyond 2012, when the EU/IMF rescue package supposedly ends.
Meanwhile, Greece itself will face at least a decade of crippling deflation, mass unemployment and social upheaval, all in the name of keeping the Germans happy.
To paraphrase Krugman, it’s just great living in a one size fits one fiscal and monetary regime!!!
Gorilla says: “Greece can wag the dog, but it can’t buy a Frankfurter!”
He said that for an export-orientated country like Germany, it was sometimes necessary to deploy troops “to protect our interests… for example free trade routes”.
Of course, he’s right. Without the free trade routes that enable Afghanistan to supply 90% of the world’s opiates, where would the Taliban be?
Gorilla explains: “You can’t become a monopolist without capturing a few counterinsurgency strategies!”
No, it’s not the Gulf of Mexico, it’s German banks…
Potential losses? Over a trillion dollars, or twice their reserves!
Potential gains? Not any from a ban on naked short selling, the capital’s going elsewhere!
Gorilla says: “The Landesbanks face a hard landing!”
The Germans certainly are doing their level best to tank the Euro!
Today, a ban on naked short selling by major German banks, as clear a signal as one could wish that Berlin wants the currency to drop much further.
Not too far, of course, but far enough to keep the trade surplus going, just in case bailing out the banks sinks Das Boot!
Presumably the German banks will be allowed to dump their PIIGS bonds on the ECB, so the Germans are indeed playing the rest of Euroland for suckers.
And none of this game of denial and deception has anything to do with the fundamental Euroland problem: solvency.
Think German or any other major international banks will be willing to roll over PIIGS debt now?
Perhaps, if they’re convinced that the taxpayers will pick up the cost no matter what.
Or perhaps not, if they’re convinced the rules of the game will keep changing to satisfy the need of German politicians to extend and pretend.
Gorilla says: “Wir sind nicht alle Berliner jetzt!”
What does Germany want now, having consigned the PIIGS to years of crippling deflation as the price for last week’s bailout?
More fiscal austerity, of course!
Non-existent inflation is the objective, or the goal, or the fetish, or all three!
Meanwhile, the most sensible solution for non-Northern European elites, a break up of the Euroland currency regime, followed by devaluation, isn’t being discussed, what Krugman calls “Ignoring The Elephant In The Euro”.
Gorilla says: “Schuldenbremse is the new Schadenfreude!”
Angela Merkel is desperate to save the Euro!
Greece is one problem, but Portugal and especially Spain are much bigger problems. The spreads on Iberian debt relative to German bunds are at or approaching post-EMU highs.
Beyond crushing fiscal austerity at a time of puny global economic growth, what’s really needed is a recognition that either the so-called peripheral states or Germany itself must exit the euro.
Chancellor Merkel at last appears to understand what’s at stake, but she’s not yet willing to accept that Euroland must become smaller and allow devaluation by the most troubled, soon-to-be non-Euroland countries.
The alternative is large scale default, followed by the collapse of the European banking system.
Gorilla says: “What spreads even faster than swine flu? The contagion of German complacency!”
The rescue package is mostly about rescuing German and French banks, who are big holders of Greek debt. Greeks may not be popular in Berlin, but collapsing banks would not be more popular!
The difficulty is that Greece is small potatoes, it’s Spain, Italy, and the UK that are the juicy targets. The UK has the easiest position, because it can devalue the pound.
Sooner or later, Euroland will have to decide either to pitch out countries like Greece, Portugal and Ireland or to pony up at least $1 trillion to rescue Euroland banks.
Gorilla says: “Austerity is never having your banks say sorry!”
The tidetime folklorist wonders when Germany will come to its neighbors without hat in hand.
The Platter: Gildo Hat Euch Lieb by Gildo Horn (Unification Is Hard To Swallow)
The Bait: The Real Image HDS Grave Digger (Nana Mouskouri Is Now Full European)
