Money and Finance
- Hussman Weekly Market Comment: A Brief Primer On The European Crisis
With regard to the problems in Europe, investors have taken a great deal of hope from the promise of coordinated central bank "liquidity" operations in the event of deterioration. The problem here, in my view, is that whatever amount of liquidity central...
- John Mauldin: There Will Be Contagion
… (December 11, 2009) – Greece's prime minister, George Papandreou, told reporters in Brussels on Friday that European Central Bank President Jean-Claude Trichet and Luxembourg Prime Minister Jean-Claude Juncker see "no possibility" of a Greek...
- Hussman Weekly Market Comment: Hokey Pokey
The repeated waves of fresh crisis and temporary hope in Europe are starting to look a lot like the Hokey Pokey. Last week, Italy briefly put its right foot in. Then, thanks to purchases of Italian debt by the European Central Bank, it put its right foot...
- John Mauldin: The Cure For High Price
Now let’s fast forward to Sunday and the elections in Finland. Yes, Finland, that bastion of euro correctness.It turns out that some of the nation’s voters don’t see why they should “donate” to a fund that will bail out Greece, Ireland, and...
- Hussman Weekly Market Comment: Two Choices: Restructure Debts Or Debase Currencies
In the end, as I've argued repeatedly over the years, monetary policy is only as good as fiscal policy. A central bank does not have wealth of its own. It is a zero-sum entity that can only enrich those from whom it purchases debt by debasing the...
Money and Finance
Satyajit Das: Why Germany can't bail out Europe
Germany is indirectly exposed through its support of various official institutions like the European Union (EU), the European Central Bank (ECB), the International Monetary Fund (IMF) and special bail-out funds. As of April 2012, the exposure of ECB alone to Greece, Portugal, Ireland, Spain and Italy is euro 918 billion and rising rapidly, driven by capital flight out of these countries.
German guarantees supporting the European Financial Stability Fund (EFSF) are over euro 200 billion.
Germany’s largest single direct exposures is through the Bundesbank’s euro 644 billion exposure under the Trans-European Automated Real-time Gross Settlement Express Transfer System, or TARGET2, to other central banks in the euro zone. Designed as a payment system to settle cross-border funds flows, surplus countries, like Germany, have been forced to use TARGET2 to finance peripheral countries without access to money markets to fund trade deficits and the capital flight out of their countries. Germany is by far the largest creditor in TARGET2. The Netherlands, Finland and Luxembourg are the other creditors with all other euro-zone countries being net debtors within the system.
- Hussman Weekly Market Comment: A Brief Primer On The European Crisis
With regard to the problems in Europe, investors have taken a great deal of hope from the promise of coordinated central bank "liquidity" operations in the event of deterioration. The problem here, in my view, is that whatever amount of liquidity central...
- John Mauldin: There Will Be Contagion
… (December 11, 2009) – Greece's prime minister, George Papandreou, told reporters in Brussels on Friday that European Central Bank President Jean-Claude Trichet and Luxembourg Prime Minister Jean-Claude Juncker see "no possibility" of a Greek...
- Hussman Weekly Market Comment: Hokey Pokey
The repeated waves of fresh crisis and temporary hope in Europe are starting to look a lot like the Hokey Pokey. Last week, Italy briefly put its right foot in. Then, thanks to purchases of Italian debt by the European Central Bank, it put its right foot...
- John Mauldin: The Cure For High Price
Now let’s fast forward to Sunday and the elections in Finland. Yes, Finland, that bastion of euro correctness.It turns out that some of the nation’s voters don’t see why they should “donate” to a fund that will bail out Greece, Ireland, and...
- Hussman Weekly Market Comment: Two Choices: Restructure Debts Or Debase Currencies
In the end, as I've argued repeatedly over the years, monetary policy is only as good as fiscal policy. A central bank does not have wealth of its own. It is a zero-sum entity that can only enrich those from whom it purchases debt by debasing the...