Wednesday, May 30, 2012

Assets to be pledged for debt?

Europe’s debtors must pawn their assets for Eurobond Redemption

Southern Europe’s debtor states must pledge their reserves and national treasure as collateral under a €2.3 trillion stabilisation plan gaining momentum in Germany. The German scheme — known as the European Redemption Pact — offers a form of “Eurobonds Lite” that can be squared with the German constitution and breaks the political logjam. It is a highly creative way out of the debt crisis, but is not a soft option for Italy, Spain, Portugal, and other states in trouble.

Posted by general congreve @ 09:56 PM (1761 views)
Please complete the required fields.



8 thoughts on “Assets to be pledged for debt?

  • If they are living beyond their means (eg Greece), how is this going to help in the longer term?

    The gradual increase of debt will build and build, won’t it?

    Reply
    Please complete the required fields.



  • Once normal lines of credit have dried up and you end up in the EU version of the pawnshop with the family silver then its game over.

    Reply
    Please complete the required fields.



  • Sounds like Monopoly: Nations Edition.

    Reply
    Please complete the required fields.



  • Too many echoes of Nazi art theft. This will never fly.

    Reply
    Please complete the required fields.



  • TC,
    “F*** the pension funds”

    I see that you are in favour of restricted austerity. Austerity for others.

    When sovereign bonds get a “haircut” it means someone isn’t repaid the principal which was originally lent.

    The telco engineer, ticket collector and tea cake salesmen worked hard for their cash which they put in a pension fund to pay for their retirement (or a care home). When you tell the pension funds to go screw, you impoverish the owners of these funds – the little people who have paid in their cash. If you study the financial and economic process, the big pension funds just get an admin fee for managing retirement cash which belongs to others.

    Reply
    Please complete the required fields.



  • general congreve says:

    @4 – Take it you like the subtlely tailored changes to get through the arbitrary filter? Mainstream Eurozone news? Good. Mainstream Eurozone news including news relating to real assets? No problem. Mainstream Eurozone news broadly outlining what those assets include, RED ALERT, RED ALERT, RED ALERT!!!!

    @5 – Perhaps TC is being a bit harsh on the poor end users there. However, while it is terribly unfair that the ordinary hard working man who has been suckered into the ponzi, who in the worst cases stands to lose a lifetime of his savings and pension contributions, the fact that this is an unpalatable truth doesn’t make the likelihood of those people ever seeing their money again any more likelihood. Right and wrong don’t stop facts, and the facts is the system is a con and is broken and a lot of people are completely unaware they are standing in front of an oncoming freight train.

    What will make things slightly better is when those same people get p1ssed off enough by their losses to string up the bankers and politicians from lamp posts, at least they’ll be some poetic justice.

    Reply
    Please complete the required fields.



  • general congreve says:

    @6 – likely and there’ll. Typo central 😉

    Reply
    Please complete the required fields.



  • general congreve says:

    @8 – I would say QE creates inflation by funding deficits that otherwise would not be affordable, as the QE money ended up in gilts and the government spent it into the economy, driving up aggregate wages. QE also hold down interest rates, keeping them in negative real territory, which is also inflationary.

    The full inflationary effect is still to be felt, as monetary inflation takes time to feed through the system into price inflation.

    As for cover already existing assets with new money not being inflationary because it already exists, you are right on the second part, it already exists. Take savers deposits for example, they exist in customers accounts, but the reality is they have been lent out, they are in someone else’s pocket. So when the bank run occurs and the cupboard is bare, if the govt. prints to cover deposits, there is now double the money in existence there was before. Massively inflationary.

    Reply
    Please complete the required fields.



Add a comment

  • Your email address is required so we can verify that the comment is genuine. It will not be posted anywhere on the site, will be stored confidentially by us and never given out to any third party.
  • Please note that any viewpoints published here as comments are user´s views and not the views of HousePriceCrash.co.uk.
  • Please adhere to the Guidelines

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes:

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>