Now you may be suprises leverage under different circumstances do have a different meaning.
Meaning if used by politicians: “more fire power”, hardly “more” risk, telling markets stories of drunkeness and cruelty sorry, sedation. It’s just for the “bigger” good. Just well the base for this leverage still is money they do not have in the second case this is named differently, here it is named saving the taxes of the population.
Meaning if used by not politicians, greed, high risk if done with money on does not have speculating on credit. Ah yes Lehmann was gone because of leverage but you see leverage is not leverage every where.
In short the politicians use what the doom in the private economy. To be true, I guess we have to go back far in time to find a similiar decision day in parliament. Last time it ended in WW II.
Deledefs is just to kind to this kind of men…..
well you can call me arrogant but I think I found the biggest political mistakes (well I’d name them criminal offenses) which have lead to our current misery
1) fractional reserve system. I think there can be no discussion about it. if you have fractions you have leverage and leverage can work in both direction. However see the problem:
You have 100 CU (currency units), as a private person you can lend maximally 100 CU. Not in a fractional system. you can lend by fractional reserve of 10% roughly 1000 CU. Now let us assume you get the money for 1% (this is currently realistic) than in one year you have to pay back 101 CU to the central bank. Well if all went well you can expect at least 3-5 % for the lending of the 1000 EUR so if all would go well roughly 1050 EUR. Now let’s calculate 50/100 = 0.5 Now tell something about getting rich quick. But this is not the end. What will happen if 20% of the money will not get paid back? you the will get back around 840 EUR and 160 EUR are missing. But now we come to the second sin
2) subsidies you can read it also as any hindrance to free trade and bearing what was caused by yourself. Let’s proceed with the situation above. We lacking at least 161 CU. Well we do not have the money but know the subsidies come into play (you can see the results in reality for bonds of Greece, Spain, Portugal, Ireland and yet a few others). Now the “genius” strikes back. You are bankrup but now the governments jump in an guarantee the other debts. Result you get the 50% gain, risk free.
I leave it to your imagination what will result.
Well why does it happen. Now just see who really are the worst debtors. They are the governments. And so we have an alliance against those acting within their bounds. Banks want to lend money the more the better, governments want to have money in extreme Amounts, and how brings the government bonds to market? Banks. So governments to not act for the public but their own survival and growth. Their own survival just can be guaranteed in a parasitic way, if they overdraw the host will die. This is bad for any parasit, some of them are “stuid” enough to risk it. But bureaucrats an politicians have one “gurantee” of survival if there are any men left. They can find a way to seize the properties of them. You can see it here in Germany, after the world wars, money was worthless, but still something of value was left, and so they taxed this. You see government is not the solver it’s the “base problem”. The only thing which can help us is being as unfriendly as host as possible. That means, if the dedebets want more power, resist in any way.
Just imagine if 5.33 % of the credits are probably failing, spanisch banks will brought to their knees. So you can see what “fractional” lending is one of the safest ways to
an economic hell. It would be that simple. You just be allowed to lend what you own. Then 5% were enough starting to get “angry” but you won’t have to file for bankruptcy.
There is a song the refrain is “wann wird man je verstehen” which roughyl translates to.
“when will we ever learn”.
Well the english title seems to be
“Where have all the flowers gone?”
Well we have to leave this question open. Will they ever learn that money has to be earned and “saved”?
Will they ever learn that the whole purpose of money is having a thing to preserve value….
Every honest earned penny is a value. Why don’t they leave it it’s value? Why are they taking risks to pauperize everyone?
Indeed when (if anytime) will they ever learn?
Yeah guys. the TARP money has “vanished” like snow in the sun. Nobodoy know cares or ask where it’s gone. Now the EU has seen it and though by themselves.
What a great thing. Money for nothing and the gigs for free… And voila now it’s there the EUR TARP program. Well it’s not Troubled Assets Reliefe Program for banks but
TMMAR (take my money and run) for defrauders. Greece is the first which will take this money, of course they will not thank the EU for buying them out. No that would be for “normal people”, Germany is “enemy” number one and well Germany is the biggest payer (well they pay with debts not even fiat-money, but that’s another story) Welll so the start are around 22.4 Billions. Well the “planned tax
releaf was 24 Billion. But now the “iron” cancecellor has cancled it. It’s not tax relief the next 3 years. It’s more important to safe other countrioes and especially the Euro. But
how can you save a currency if you devaluate it? I don’t know the US has started the big number game and now EU starts their game. Who will went south first?
Who will be the winner. Could it be that the Chinese just can’t get to sleep because the laugh at us? Could it be that now the Chinese simply buy whatever they can an “extend” their market place?
Just see what they do in Africa, the help buiding the infrastructure and get crucial things in return. Germany and the US simply do not get that an burn their money in wars without sense. Yes I think it could be the chinese time. Howerver be cautious to not get in conflict with the Partei….. If the chinese would be clever they’d bound their currency to something of value and soonner or later they will get all the US and EU area stuff for “an apple and an egg”…. On the other hand just imagine China starts selling their US-$ Bonds…..They do not even need an apple or an egg, civil war will finish the US and EU and they litereally get it all for “free”…
Exaggerations? May be, but just tell me what worth is the FIat money? Indeed nothing…. It’s just numbers on a paper….
However just see this numbers
8 700 000 000 000
750 000 000 000
The first is the “total debt” of the EU countries, and the second is the TARP money. It’s not even 10% of the “open debt sum”. Now tell me something about leverage….
How much worse does it have to get before start improving?