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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
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.
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
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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