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The problem with Angela Merkel
The problem with Angela Merkel
One of the most baffling things that happened in the past few years is Angela Merkel’s 180 degrees turn from saying that “multi-kulti doesn’t work” in 2010 to publicly defying EU laws to usher in over 1.5 million pseudo Syrian refugees in the past 2 years.
What happened? What could have possibly made her change her song so suddenly?
Well, the interesting part is that Merkel changed her song again, namely immediately
after last year’s US elections. This may have something to do with the fact
that 2017 is a German elections year and the anti migration party AFD has been
making dents in Markel’s coalition’s seats, but one has to wonder whether
Merkel hasn’t been changing her song back because certain pressure areas on
Germany and the EU have been relieved by the departure of Barack Obama from the
Until autumn 2016, Merkel had been a faithful follower of Obama’s external policy, from sanctions against Russia to welcoming the “Syrian refugees” into Europe by openly demanding that the border Schengen states break their lawful obligations in order to wave in hundreds of thousands of migrants without even performing the necessary checks on their provenance.
Ever wondered why?
According to the Government Accountability Office (GAO), Deutsche Bank received cumulative loans totaling $77 billion under the Federal Reserve’s Primary Dealer Credit Facility (PDCF) and $277 billion in cumulative loans under the Term Securities Lending Facility (TSLF) for a total of $354 billion. Lehman Brothers received only $183 billion in Fed emergency lending programs according to theGAO report. (See GAO chart below.) These loans were made at below-market interest rates, thus constituting a bailout.
Furthermore, we have this IMF Report that names Deutsche Bank as
“the most important net contributor to systemic risks” .
Yes. The Fed, as in the US central bank, had to bail out Germany’s main bank to the tune of 354 BILLION dollars.
Only it turns out there’s more than that
“But Deutsche Bank received additional forms of bailouts during the crisis. According to Fed data turned over to Bloomberg News after a multi-year court battle, two units of Deutsche Bank borrowed at least $2 billion in low-cost loans from the Fed’s Discount Window during the crisis. And, it was finally revealed that Deutsche Bank was one of the banking behemoths that got a back-door bailout via the failed insurance giant, AIG. Deutsche Bank received $11.8 billion from the taxpayer for derivative transactions and securities lending obligations AIG was on the hook for. The U.S. government paid these obligations at 100 cents on the dollar, despite AIG being insolvent at the time and requiring a $185 billion taxpayer bailout itself for making casino-like bets with the big banks. Public pressure eventually forced AIG to of these taxpayer payments.
One of the most egregious aspects of the bailout of Deutsche Bank is that it has serially defrauded both U.S. taxpayers and investors. Its history suggests it would have been far more appropriate to yank its charter in the U.S. than to bail it out using U.S. taxpayers’ dollars.
In 2015 Deutsche Bank settled charges with British and U.S. authorities for $2.5 billion for rigging the interest rate benchmark known as Libor. Deutsche Bank pleaded guilty to the U.S. charges.
According to the U.S. Justice Department, Deutsche Bank also has a history of “participating in transactions used to defraud the IRS.” In 2014 Deutsche Bank, along with Barclays, was probed by the U.S. Senate’s Permanent Subcommittee on Investigations. The two banks had created elaborate schemes to assist hedge funds in converting millions of short-term trades into long-term capital gains to produce a much lower tax rate thereby cheating the U.S. Treasury of tax revenue. Called “basket options” or MAPS at Deutsche Bank, the bank effectively loaned out its balance sheet to hedge funds to conduct billions of trades each year in trading accounts under the bank’s name. Leverage as high as 20:1 (which would be illegal in a regular Prime Brokerage account for a hedge fund client) was often deployed. The banks got paid through margin interest, fees for stock loans for short sales, and trade executions.“
Now, doesn’t this
just strike you as something rather odd? Surely, Germany, a rich and successful
economy, shouldn’t need that kind of a bailout. Germany went through the crisis
unscathed and imposed grossly harsh terms on all the EU countries that needed
But a rich
Germany wouldn’t need to have its main bank bailed out by the US taxpayer. So why is Germany, whose sole justification
in investing itself as the de facto leader of the EU is “we are the richest EU
country and biggest contributor” not act like a rich country when it comes to
So… good ole Ockham might just be able to solve the mystery for us. Or to quote Sherlock Holmes, “Once you eliminate the impossible, whatever remains, no matter how improbable, must be the truth.”
Obviously, this sort of repeated favour from the Fed doesn’t come cheap. Considering how the US/EU politics have worked in the past, it’s rather clear that having the US bail out its main bank is the least possibly pleasant idea for a Germany with ambitions of global importance.
So, since we know Germany is a rich country, why didn’t it bail it Deutsche bank by itself?
Probably because it
couldn’t afford to.
You see, GDP as a
measure as one’s success even when judged as PPP is not even remotely a good
indicator. And even if it was, “falsifying the information to make one’s
economy appear better than it actually is” is such a simple task even Greece
could do it, for years and years.
This is significantly more likely than not, considering Germany’s unique situation. While we are being told that Germans are prosperous, the reality is rather different. Germans might have disposable income, but they are heavily taxed and home ownership is at a record low.
Which means that, while Germans might be somewhat money rich, they are asset poor. Add to that a negative population growth and already too large immigrant communities to be supported by the taxpayer and the result is that Germany’s rosy façade is… just a façade.
Now, I don’t work in the finance industry, but it sure looks as if the myth of Germoney is maybe just a little bit exaggerated. Add to the above the unbelievable hysteria caused by Brexit, which stinks to high heaven of desperation, and the result seems to be that Germany isn’t quite the powerful stallion dragging the EU cart as much as a dying asthmatic donkey.
So, what exactly is happening here? Well, by the looks of it, it seems as if Merkel had to take money from the US to save Germany’s biggest bank. And in return she seems to have been forced to follow the US line of foreign policy.
The results have been seen. Europe is breaking. Brexit is go, Marine Le Pen seems to be a certainty for France and Geert Wilders is growing in the Dutch polls to the surprise of everyone without eyes.
Merkel has started to
talk about removing illegal asylum seekers etc.
Either that or she had a personality transplant. Make your choice.
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