COMMENT: The German word for power is “macht”–derived from “Machiavellian.” One of the relatively few Internet entities covering the behavior of the supposedly “new” Germany is the GermanyWatch blogspot.
They feature a post highlighting the aggressive, skillfully cynical maneuvering of German financial institutions with regard to the Eurozone crisis. Far from being the ideal role model for the rest of the continent’s financial entities, German banks in fact pumped capital into the bubble economies of the peripheral countries, thus setting those countries up for the collapse that threatens the global economy.
(In that context, one should not lose sight of the fact that the major German banks operate under the stewardship of the Bormann capital network, as discussed in FTR #232 .)
Not only did they “do everything right” while everyone else “did everything wrong,” but German banks had enormous exposure to the bursting bubble of the peripheral European economies.
Citing an article from The Independent, this post takes stock of that fact.
With Germany pushing for the afflicted nations to surrender political sovereignty as a condition for German financial assistance (fulfilling the goal enunciated by Friedrich List in the 19th century and put into action by the Third Reich in its above-ground phase), we see that German banks have been accessories or enablers for the looming disaster.
A 2012 article by Mr. Chu in The Independent details how the German bailouts have actually helped to assist German banks, illustrating “macht” or “Machiavellianism” in action.
In this context, we should not lose sight of two considerations we’ve discussed in the past.
One is the role of the mysterious Roland Arnall (“the Johnny Appleseed of subprime”) in helping to precipitate the global financial collapse that burst the European bubbles, setting the stage for the current German power play.
A refugee from Nazi occupied Europe, Arnall was altogether mysterious, masking everything but his avowed Jewishness and support for the Simon Weisenthal Center. When analyzing an individual who goes to great lengths to hide information about himself, those details he goes to great lengths to emphasize are significant–not for what they tell us about what he is, but for what they tell us about what he isn’t.
In FTR #690 , we examined the very real possibility that Arnall was a “Bormann Jew.” What better cover for a Nazi financial gambit than to have a Jew fronting for the operation?
We should also remember that the Underground Reich and its SS foot soldiers had designed to execute conspiracies on behalf of German cartels in foreign countries.
Are Arnall and the German banks that set up the Eurozone crisis, thus jeopradizing the global economy representative of those conspiracies?
(Newer listeners should make a point of downloading, printing and reading Martin Bormann: Nazi in Exile . Increasingly, the programs and posts will be incomprehensible without doing so.
EXCERPT: . . . . And of course, the very claims of economic superiority are a complete fabrication. German leaders defined the problem as an Anglo-Saxon one, and blamed America and Britain (all they have done is drop the claim that Anglo-American Capitalism is run by Jews. They still want to bring down Anglo-American capitalism).
As we have mentioned before, according to the Bank for International Settlements, Germany lent almost $1.5 trillion to Greece, Spain, Portugal, Ireland, and Italy. Add to that heavy German involvement in the credit binge in American real estate, and it is clear that wherever parties were taking place, German banks were supplying the drinks.
German banks are two and a half times more leveraged than their US banking peers, according to the International Monetary Fund.
Some of them have pulled out of the banking stress-tests that the rest of Europe has had to undertake, because they did not want the results to go public.
The article [by Ben Chu of the London Independent] also says; “A poll of Germans last month indicated that 71 per cent of the population are either partially or completely in the dark about the technical reasons behind the single currency crisis.” . . . .
EXCERPT: Poor Germany, forced to provide massive guarantees for its profligate European neighbours.
The Federal Republic did everything right – pushing its domestic labour costs down, keeping public borrowing low. And its neighbours did everything wrong – letting wages spiral and running up big public debt piles. But now prudent Germany is being forced to foot the entire bill.
And even without the additional costs of bailing out Greece, Ireland, Portugal, Spain and Cyprus, Berlin is facing a catastrophic bill thanks to the European Central Bank’s (ECB) provision of liquidity life support for the eurozone’s banking system. The Bundesbank has racked up vast claims against other central banks through the monetary clearing system known as “Target 2”.
That’s the standard narrative from Germany. And it’s largely false. The guarantees that Germany has extended – and the huge liquidity operations of the ECB – have indeed been used to assist the struggling nations of the eurozone periphery. But they have also, as new research from Goldman Sachs show, been used to bail out German banks. . . .
. . . . German banks have been steadily extricating themselves from their exposure to southern Europe since 2007, as Chart 3 shows. German banks’ gross credit claims against the nations of the eurozone periphery have fallen by 50 per cent, down to €300bn. They have been busily off-loading eurozone assets to reduce the risks to their balance sheets.
And that has been taking place as the ECB has been extending its own balance sheet by providing cheap lending for banks across the continent to prevent them from running out of money. Here’s how that works:German banks have stopped lending to eurozone periphery banks. And those banks have been forced to fund themselves, instead, by tapping the ECB for cash.
But the risks return. Eurozone periphery nations are still running trade deficits with Germany. Those deficits that were previously financed by private German banks are now financed by the ECB. And thanks to the mechanics of the European monetary system that has resulted in the ballooning of the Bundesbank’s claims against other eurozone central banks.
“It is no coincidence that the increase in net foreign assets on the Bundesbank’s balance sheet roughly matches the decline seen on banks’ balance sheets,” said Dirk Schumacher of Goldman. “The Target 2 imbalances … have mainly replaced financial risk that was previously sitting on private-sector balance sheets.”
What this means is that the ECB and eurozone governments, as well as bailing out other members states, have quietly been rescuing German banks and, by extension, German savers. Without these emergency operations, the eurozone would have broken up, German banks would have gone bust and the savings of many ordinary Germans might have been wiped out. More likely the German taxpayer would have had been forced to bail out those banks.
So, as the German people distribute blame for the situation in which they find themselves, they should not ignore their own bankers. If those institutions had not made these investments and financed the current account deficits of Germany’s neighbours for so many years, their country would not be on the hook for hundreds of billions of euros of bad debts.
Yet this is something German politicians refuse to acknowledge. . . .