Documents Detail a March 23 Greek Default Plan

February 17, 2012 1 Comment

Government to Freeze Bank Accounts, Eliminate Euro, Restrict Capital Flow

by Mac Slavo
SHTFPlan.com
February 16, 2012

That a default in Europe is coming has never been the question. For the astute observer the only thing at issue is how and when it will happen.  While the mainstream financial media and government officials have tried to spin this story as one that involves only Greek debt, the fact of the matter is that this isn’t isolated to a single country. Italy, Portugal, Ireland and most other European countries are in exactly the same boat.

Despite all of the propaganda and machinations from leading financial powers like the United States, Germany, and France, it’s should be clear that there is no viable solution to the debt debacle facing Europe. As such, we should understand that a situation similar to what led to the Great Depression of the 1930′s is now unfolding once again. The ability of entire nations to pay off their debt is now in question, and given the sheer size of the numbers we’re talking about, any reasonable person could agree that there is simply no plausible resolution that will make all parties whole again.

This has been playing out in Greece for nearly three years, and we may very well be just weeks away from the dreaded moment when it finally becomes official. An exclusive report detailing internal bank documents from two major Wall Street players says that we may have much less time than we think as insiders prepare for a financial doomsday next month.

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Bankers Play the Fear Card on Economic Outlook

September 7, 2011

by Tyler Durden
ZeroHedge.com
September 6, 2011

Any time a major bank releases a report saying a given course of action is too costly, too prohibitive, too blonde, or simply too impossible, it is nearly guaranteed that that is precisely the course of action about to be undertaken. Which is why all non-euro skeptics are advised to shield their eyes and look away from the just released report by UBS (of surging 3 Month USD Libor rate fame) titled “Euro Break Up – The Consequences.”

UBS conveniently sets up the straw man as follows: “Under the current structure and with the current membership, the Euro does not work. Either the current structure will have to change, or the current membership will have to change.” So far so good. Yet where it gets scary is when UBS quantifies the actual opportunity cost to one or more countries leaving the Euro. Notably Germany. “Were a stronger country such as Germany to leave the Euro, the consequences would include corporate default, recapitalisation of the banking system and collapse of international trade.

If Germany were to leave, we believe the cost to be around EUR6,000 to EUR8,000 for every German adult and child in the first year, and a range of EUR3,500 to EUR4,500 per person per year thereafter. That is the equivalent of 20% to 25% of GDP in the first year. ” It also would mean the end of UBS, but we digress. Where it gets even more scary is when UBS, like many other banks to come, succumbs to the Mutual Assured Destruction trope made so popular by ole’ Hank Paulson : “The economic cost is, in many ways, the least of the concerns investors should have about a break-up. Fragmentation of the Euro would incur political costs. Europe’s “soft power” influence internationally would cease (as the concept of “Europe” as an integrated polity becomes meaningless).

It is also worth observing that almost no modern fiat currency monetary unions have broken up without some form of authoritarian or military government, or civil war.” So you see: save the euro for the children, so we can avoid all out war (and UBS can continue to exist). The scariest thing, however, by far, is that for this report to have been issued, it means that Germany is now actively considering dumping the euro.

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Germany and France to Lose AAA Rating

August 9, 2011

Reuters
August 9, 2011

PARIS/LONDON – France and Britain are most vulnerable within Europe to a rating review following the U.S. downgrade, with anemic growth and hefty borrowing placing them among the shakiest of the world’s triple-A rated lenders.

Both countries have stable rating outlooks, making a sudden downgrade unlikely and markets have been so impressed by Britain’s debt-cutting strategy that they have pushed its bond yields to record lows.

But a surge in the cost of insuring French debt against default on Monday highlighted alarm sparked by Friday’s U.S. rating cut as banks and brokerages warned that rating agencies could now have top-rated European lenders in their sights.

“France has slipped into borderline AA+/Aa1/AA+ (one notch below AAA) territory, so risks to its AAA are rising as stresses spread,” financial services firm BBH said in a note to clients.

In another indication of mounting concern over France, spreads between French and German 10-year bond yields hit all-time highs last week and remained wide on Monday.

The most likely trigger for France to be put on negative watch would be a failure by the government to get parliamentary backing for a constitutional limit on future public deficits, with opposition left-wing lawmakers vowing to reject it.

Euro zone outsider Britain looks less vulnerable, having its own currency which could slide in value and its own interest rate, but it could also come under review given its weaker economic fundamentals.

“There are … lots of countries in Europe that should be downgraded just as the U.S. has been downgraded,” U.S. investor Jim Rogers, co-founder of the Quantum Fund, told Reuters Insider as world leaders battled to calm a market rout driven by concern about U.S. and European debt levels.

After making history by stripping America of its AAA-rating, Standard and Poor’s reaffirmed France’s top-notch status and stable outlook at the weekend. Moody’s and Fitch declined to comment, but neither has given any indication they could change their outlooks on the United States, France or Britain.

Providing further comfort, fund managers poured into French and British bonds in early trading as Friday’s U.S. downgrade forced them to shift funds out of U.S. treasuries.

However, French five-year credit default swaps (CDS) surged 15.5 basis points on the day to a record-high 160 bps, according to data monitor Markit, taking it closer to the level of AA-rated states such as Belgium, though analysts warned the market often overreacts.

“The CDS market is very dysfunctional,” said Mark Schofield, global head of interest rate strategy at Citi.

“Although France from the perspective of fiscal fundamentals looks the weakest of the triple-A issuers in Europe, I still think that given very low levels of yields, the depth of the domestic market, the ability to continue to fund at low levels, it’s unlikely France will be downgraded in the near future.”

As for Britain, he added: “It’s unlikely that the UK will be downgraded. At this point in time, we’ve seen very significant fiscal tightening put in place.”

FRENCH POLITICS IN FOCUS

In the euro zone, only Austria, Finland, France, Germany, Luxembourg and the Netherlands have a triple-A rating, and French debt costs the most to insure.

France also has the highest deficit, debt and primary deficit of any of them and it is the only triple-A euro zone country running a current account deficit.

Its debt to GDP ratio — set to hit 86.9 percent next year and described by the national audit office as nearing the danger zone — could be pushed even higher by France’s contribution to a new Greece bailout.

S&P said in June it would probably downgrade France in the long term without further reforms and that to preserve its AAA rating France must balance its budget in the next five years, something not achieved since 1974.

It could re-examine its rating outlook as soon as the autumn if President Nicolas Sarkozy fails to win backing for his constitutional budget-balancing rule. Winning would require a three-fifths majority in a two-chamber parliamentary vote and the opposition Socialist Party has vowed to vote against.

“It would be a call for action,” for ratings agencies, said Deutsche Bank analyst Gilles Moec.

He said France was “intrinsically in a better situation” than the United States and could stave off a downgrade by accelerating deficit cuts, one idea being to raise value-added taxes and trim social contributions on labor.

Also weighing on France is a possible swing to a left-wing government after a presidential election next April. The Socialists have vowed to tinker, if they win, with a 2010 retirement reform aimed at cutting future pension costs.

WEAK GROWTH UK’S MAIN RISK

Britain has an even bigger deficit, primary deficit and debt to GDP ratio than France, and also runs a current account deficit but weak growth — and the damaging effect that would have on its debt pile — is its main threat.

Moody’s warned in June that it could reconsider its stance on Britain in the event of lower growth combined with weak fiscal consolidation.

Citi’s Schofield agreed, saying: “The big risks would be a very sharp slowdown in growth and/or huge political upheavals, if you started to get a breakdown in the coalition.”

Broadly, however, markets have faith in Britain’s ability to pay back its debt, despite a budget deficit of some 10 percent, because of an austerity plan that includes tax increases and unprecedented cuts in public spending.

Yields on 10-year gilts hit a record low of 2.59 percent last week and British debt continued to outperform European debt on Monday as investors looked for safe havens.

Yet, the economy has basically stalled over the last nine months and even the government’s fiscal watchdog, the Office for Budget Responsibility, has acknowledged its growth forecast of 1.7 percent for 2011 looks too high.

Lower growth means lower tax receipts and maybe a higher welfare bill if unemployment rises, all of which will add to debt.

The opposition has called for emergency tax cuts and some observers were quick to blame riots in London over the weekend on public spending cuts and dire economic prospects.

“Notwithstanding the fact that the UK is still struggling with its own economic recovery, we are pretty confident that the coalition is going to hold in the UK,” David Beers, head of Standard & Poor’s sovereign ratings, told Reuters Insider.

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The Debt Crisis Is A Trojan Horse To Cause The Fall of America

August 2, 2011 1 Comment

by Saman Mohammadi
The Excavator
August 2, 2011

“A sovereign nation can always find the money to pay debts owed in its own currency. The U.S. could, if it wished, pay its bills using debt-free U.S. Notes or Greenbacks, just as President Lincoln did to avoid a crippling debt during the Civil War. Alternatively, it could eliminate the deficit with Ron Paul’s plan, which amounts to the same thing.” – Ellen Brown, “Forget Compromise: The Debt Ceiling Is Unconstitutional.”

Behind all the flim-flammery of this manufactured “crisis,” we are watching the creation of a new form of government — or rather, the further mutation of the new form of government that the United States has been crawling toward for a long time. We called it a “neo-feudal oligarchy backed by a militarist police state” here the other day. No doubt there are many other ways you could describe this murderous, ravenous, lopsided monstrosity of a system. But the one thing you cannot call it is a “republic.” – Chris Floyd, “If the Republic Had Not Died A Long Time Ago, This Would Indeed Be the Death of the Republic (Reprise).”
“Well, we are reportedly 48 hours out from a total default on the debt to the foreign governments and private Federal Reserve that have taken over this country through economic fraud, and have engaged in a conquest that the British Empire couldn’t succeed in, that Hitler couldn’t succeed in, that the Soviets couldn’t succeed at. They have conquered us through fraud by stealth. But, the moment you become aware of the private banking cartel’s global government that they’re publicly admitting now they’re setting up, that you’ll pay your VAT taxes to, your carbon taxes, and the rest of it – the minute you’re aware of it then their power begins to wane.
That’s why the banksters are setting up a homeland security control grid in every country they’re in under international agreements and rules to crackdown and go after anybody that criticizes the private central banks running those nations. When you get the internal training manuals from England to Australia, from Germany to Canada, to the United States, it is the same thing. The public is told, “Give your rights up because al-Qaeda is hiding underneath every table,” but when you get the actual manuals its people that don’t want to give up their sovereignty to the global government.” – Alex Jones, “The Debt Crisis: Banksters, Thugs and Crooks,” from 04:42 to 06:04.

“They are slaves who dare not be in the right with two or three.” – James Russell Lowell

The long transformation of America from a relatively free society into a full-fledged, technocratic police state is now complete. President Barack Obama and political leaders from both major parties are getting ready to completely turn over America’s sovereignty to the traitorous private banking cartel and multinational corporations.
The gang of liars and crooks behind the private Federal Reserve Bank seized America’s sovereignty on December 23, 1913, when the illegal and unconstitutional Federal Reserve Act was signed into law by President Woodrow Wilson.
The Act ensured the protection of a criminal monopoly of America’s credit in the hands of a few powerful banking families who have no loyalty to any nation, people, or system of law: they only have loyalty to their own power and their own bottom line.
With America in their pockets, the private banksters went ahead with phase two of their deceitful plan to dominate the world’s credit, natural resources, and peoples – the creation of a global authoritarian state that is beholden to their interests.
Generations of anti-freedom and anti-American turncoats in Washington have went along with this treasonous, century-long plan by elite private banking families and multinational corporations to covertly establish an unlawful global economic, governmental and political infrastructure to phase out the nation-state system and consolidate world power into a tiny global oligarchy.
The plan to destroy the American economy and establish a dictatorial global government was accepted by the political and technocratic elite in Washington a while ago. President Barack Obama and House Speaker John Boehner are simply going through the motions in the historic farce that is being presented to the American public and the world as a political debate about a debt crisis.
The truth is that most of America’s debt is fictitious debt. It is odious debt. The traitors who control the Democratic and Republican parties, the Federal Reserve, and the Department of the Treasury will never tell the American people the truth because the truth is the greatest threat to their existence and treasonous schemes.
If the American people knew the truth about the Federal Reserve they would hang their political leaders, from George H. W. Bush to Bill Clinton, to George W. Bush and Barack Obama. As Henry Ford said, “It is well that the people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.”
The last real American president was John F. Kennedy. The Presidents who came after him made peace with the fact that America is owned and operated by an international financial oligarchy that views the American people as slaves. Most politicians who climb the ladder of blood and lies in Washington believe the elitist arguments that the American people are not fit for self-government and deserve to be ruled by a small power elite.
But the exact opposite is true. Society has more to fear from an arrogant and psychopathic elite than an undisciplined mob. The dangers of a dictatorial, collectivized and privately controlled world government to humanity are beyond words. And the fact that so many people refuse to see the writing on the wall and point out the construction of this monster from hell is a big sign that we’re heading for disaster. Millions of innocent people die, get beaten, and tortured whenever political and economic power is centralized, and controlled by a ruthless, unaccountable elite.
If we do not resist the treasonous private banks and criminal corporations with our words and our lives, generations of men and women will live through a global catastrophe caused by these savage tyrants. It is a tragedy that the Russian people know well because of their experience of living under a godless, and centralized system.
America is the one nation that has been in the grips of the traitorous forces who are bringing this global government beast into the world through acts of deception, treason and fraud. America is also the one nation that can change the fate of the world by bringing down this beast before it sets the whole world on fire and reclaims it as its own after the rubble has settled.
But first, America must rediscovers its destiny as a revolutionary nation that put the freedom of the individual and the rule of law above the whim of tyrants.
In 1976, two hundred years after the signing of the Declaration of Independence, American philosopher William Irwin Thompson wrote in his book, “Evil and World Order,” that modern America has lost touch with its founders’ vision for the country and the ideals of America when it was created, saying:

As the Church lost the vision of its founder, so has the country lost the vision of its founding fathers, but now that industrial society is strangling in its own contradictions, we have one last chance to re-vision human society. (Thompson: Evil and World Order; Harper & Row, Publishers: New York; pg. 13-14).

The restoration of the rule of law and the survival of freedom rests in the hands of the American people, but the enemy of both is an undemocratic oligarchy that is destroying America’s constitutional institutions and national sovereignty from within Washington, not Jihadist terrorists.

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Despite Debt Deal, Greece Set to Default

July 25, 2011

Merkel and Sarkozy’s window dressing appearances were only that. No aid package will save Greece from defaulting. Lining up now Portugal, Spain and the U.S.

Reuters
July 25, 2011

Moody’s cut Greece’s credit rating further into junk territory on Monday and said it was almost certain to slap a default tag on its debt as a result of a new EU rescue package.

It was the second rating agency to warn of a default after euro zone leaders and banks agreed last week that the private sector would shoulder part of the burden of a rescue deal that offers Greece more cash and easier loan terms to keep it afloat and avoid further contagion.

“The announced EU program along with the Institute of International Finance’s statement implies that the probability of a distressed exchange, and hence a default, on Greek government bonds is virtually 100 percent,” Moody’s said in a statement.

Bank lobby IIF, which led private sector negotiations, aims to attract 90 percent investor participation in the bond exchange plan which comes on top of the EU’s new 109 billion euro bailout.

Moody’s cut Greece’s rating by three notches to Ca, just one notch above default, to reflect the expected loss implied by the proposed debt exchanges.

Greece now has the lowest rating of any country in the world covered by Moody’s, which, like Fitch last week, said it would review Greece’s rating after the debt swap is completed.

“Once the distressed exchange has been completed, Moody’s will reassess Greece’s rating to ensure that it reflects the risk associated with the country’s new credit profile, including the potential for further debt restructurings,” it said.

However, whereas Fitch pledged to quickly give Greece a higher, “low speculative grade” after its bonds had been exchanged, Moody’s said it could not forecast when the rating would change or how.

“It all depends how quickly the debt exchange takes place,” said Alastair Wilson, Moody’s Managing Director for EMEA Credit Policy. “Once we have greater visibility over that, we will reassess the credit profile quite quickly. Whether the rating will change, that’s a different question,” he told Reuters.

A senior EU official said on Saturday that the aim was to start a voluntary swap of privately-held Greek bonds in late August and conclude it in early September [ID:nLDE76M02I]

Greek bank shares and the broader stock market were unfazed by Moody’s action. Analysts said the downgrade and the default warning were priced in and less worrying following assurances provided by the EU deal.

“The EU Council last week effectively secured Greek banks’ continued access to ECB liquidity, even in the case that PSI (private sector involvement) triggers a selective default,” said Platon Monokroussos, an economist at EFG Eurobank.

The government has repeatedly criticized ratings firms for their downgrades and its spokesman threatened on Monday to end its subscriptions to these agencies as the new rescue package means Greece will not issue new bonds for years.

“All governments pay a subscription to these agencies. We, I think, do not need the reviews anymore. They have no practical value,” Elias Mosialos told Radio 9. “Perhaps the finance ministry should end its subscription.”

CONTAGION CONTAINED … FOR NOW

Moody’s said it would take into account the possibility of a second default while reassessing Greece’s rating.

“Our experience is that relatively small restructurings have often been followed by deeper defaults,” Wilson said, adding that he could not say if this would be the case for Greece.

The rescue package for Greece benefits other euro zone countries by containing near-term contagion risks but it was not necessarily positive in the longer run as it set a precedent for private sector involvement in rescue deals, Moody’s said.

“The support package sets a precedent for future restructurings should the finances of another euro area sovereign become as problematic as those of Greece. The impact of Thursday’s announcement for creditors of Ireland and Portugal is therefore likely to be credit-neutral,” it said.

The cost of insuring most peripheral euro zone government debt against default rose on Monday on market doubts that the fresh aid package for Greece agreed last week will protect bigger economies from contagion.

Standard & Poor’s and Fitch rate Greece CCC, broadly in line with Moody’s rating. S&P has not yet said how the EU summit deal will affect Greece’s rating.

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