Planned Destruction or stupidity in Europe?

Humans confuse the hell out of me. We elect the unemployable to positions of rule. We elect the most inexperienced into the highest offices. We promote the most incompetent into the highest positions. We pay enormous sums of money to reckless gamblers to manage our money. Humans are lied to all the time and by and large are willing participants in that lie by choosing to ignore what we know to be lies to maintain civility. We are participants in 12 lies a day in our normal interactions with friends and colleagues. This is just the norm to boost our self esteem and boost our ratings with our peers and vice versa. Society could not function if every liar was challenged.  Aberrant humans take this number to different heights and exploit this weakness.
Psychopaths, sociopaths and gangsters hold sway because when humans are faced with disproportionate violence or injustice it just confuses and stuns them into submission. There is a hesitation on the recipients part when someone breaks the social norms. That hesitation is interpreted as weakness by both participants. To preserve ego the hesitant recipient allows the moment to pass and the lie is accepted.

We know what happened at MF Global was a travesty. Similarly what has occurred in Europe whereby banks are victimizing taxpayers when bank bailout costs are being borne by governments to be passed on to their respective electorates. We already know these bankers are incompetent but bailing them out we have lied to ourselves that somehow they will now be competent. Whole nations are bullied into submission and accept debt that was never theirs to begin with.
Un payable and unsustainable debt that is renegotiated ad nausea. Undisclosed sinkholes of debt or corruption popping up on a daily basis heap more debt added to the un payable. Liars or incompetents stress testing and passing banks as good only to discover they lied to us or were wrong again.
To rationalize and try to put order to the seeming impossibility and improbability of what is happening we conclude they MUST be playing a larger game. It MUST be planned. Therefore it MUST be a conspiracy or at least a centrally managed collusion. If it's a managed conspiracy then the outcome won't be catastrophic we reason. If it's sheer incompetence then the outcome is in jeopardy and unknown. By choosing to believe it's part of a larger plan we have just convinced ourselves that our masters know what they are doing and therefore we should not overly worry. Unfortunately, just based on what has happened to little Cypress we are looking at extreme incompetence. Desperate, stupid men fumbling around throwing different percentages and vanity propels them to make stupid statements only to contradict themselves hours later when they are informed of the stupidity and horrible consequences of their statements.
What has happened in Cypress has broken the bounds of civility. It can't be ignored. Justifications have been made that it is the confiscation of dirty money. Guilty until proven innocent is the norm in the press. There is only one logical outcome to Cypress regardless of whether the Russians got their money out in time; capital flight. Anyone who is using a bank in the peripheral countries is going to open an account in Germany or outside of the EU if they know how.  Calls are being made into Cypress with offers of help to setup German bank accounts for a couple of percentage points. If the banks in Cypress ever decide to reopen then checks will be cashed instead of being deposited if capital controls permit.  In a country where few pay taxes even fewer will be doing so now. Civility has been breached in a way that exposes our leaders for sociopaths, fools, incompetents and liars. If you choose to believe this is a managed event you are deceiving yourself and are a willing participant.
The damage is done and it's every man for himself.
The video below is an example of an aberrant human liar (Troika) being confronted by another human (Journalist) who is not willing to be lied to. Note the confusion by the liar when the social norms are breached. 


Anonymous said...

The problem my old darling is "human nature".

The same shit always rises to the top of any organisation. It's a scientific fact like entropy.

Most people are "sheep" they follow the flock. They always get what they "don't ask for".

Then there are the people that are "live and let live". They are all for a quiet life and don't aspire to tell everyone what to do or think. They just want to be happy.

Then there are the "power greedy psychopaths". These people are usually found in Governments or at the top of Central Banks the EU, IMF, religions or international corporations etc etc. They are the only ones who have the "burning desire" enough to reach the top.

So as I say the World and it's institutions will always be run by the shits of the World.

When you realise this you can plan accordingly for yourself.

Bullion Baron said...

Great post. But I fear the impact of the message may be lost due to how small the font is, recommend an increase in size for readability sake!

Louis Cypher said...

I changed the font type as I wrote this in word and cut and pasted instead of just writing in blogspot... not much choice in font size on blogspot.

In case anyone is wondering what the Journalist was referring to it's this ... the narrative that Germany is footing the bill and refuses to foot the bill for the PIIG's is a lie.

" “The Raspberry Reich” tells of a crisis meeting in the late 1990s when all major German bank directors were summoned to Berlin to meet the financial regulator.

“We were read the riot act,” one banker told Andres Veiel. “Germany was increasingly falling behind London and New York as a financial centre. We should get with it, get into more risk, expand the derivatives and structured finance products, finally get modern.”

Investigative journalist Harald Schumann spent months touring Europe, joining the dots between one countries’ debts and another’s liabilities, and highlighting the inconsistencies in a German crisis narrative in which blame lies solely with crisis countries.

Mr Schumann suspects Angela Merkel ’s selective crisis framing is no coincidence, but a carefully calibrated political message to ensure her continued popularity – even if it is at a risk of undermining long-term European solidarity.

German government officials concede there has been an evolution in Berlin’s crisis thinking, away from absolutist no-bailout rhetoric to recalibrating earlier deals and even bailing in private investors in Greece and Cyprus. But Ireland should expect no radical changes in its programme, says finance minister Wolfgang Schäuble.

“We're developing step-by-step as we move forward and every member state case turns out to be different,” he said.

The minister disagrees that Germany’s financial industry has been excluded from the German crisis narrative. Germany set up its own bad bank, he points out, and took stakes in leading German lenders such as Commerzbank. “German banks taken over by the German state were hit by the involvement of private creditors in taking on part of the relief for the Greek state,” he adds."

Louis Cypher said...
This comment has been removed by the author.
Louis Cypher said...

n other words Germany used it's influence to scare the shit out of the smaller countries to take on the debt of it's failing banks and so ensured that the Fatherland's banks suffered no losses for their bad bets.
The UK etc tried a similar tactic with Iceland and they almost caved.

Biosci said...


In your first line, you say, "Humans confuse the hell out of me." I don't think that's true at all. Your writing suggests you understand humans quite well.

I'm not sure I fully agree with your conclusions, though. Since 2008 (at least) we have railed against the concept of TBTF. Now, in Cyprus, at least one insolvent bank is being wound down. There's an interesting conversation to be had about exactly why it was insolvent, but that doesn't mean it's any less insolvent. (More solvent? Do financial types allow double negatives?)

Where Cyprus is going to be particularly interesting is what happens socially in the coming weeks and months. I think a fundamental flaw of the Euro system is how economic policy is divorced from politics. This is a problem of economics generally, especially among Keynesians, in that it woefully fails to anticipate the blowback of policy implementation.

So when you say this:

"If you choose to believe this is a managed event you are deceiving yourself and are a willing participant."

I absolutely agree 100%.

AdvocatusDiaboli said...

Great post.

What worries me most being a german: When will the psychopaths & sociopaths find out that they have taken from the wrong people in terms of stability and financial reasoning (not talking about it morally)?

When will they figure out, that you cannot get economic areas out of debt, by putting them further into debt? Sooner or later they will figure it out and then they will turn to the people in the nations with currency surplus in total, not deficits in total....
IMHO the most endangered people are the german savers with deposit holdings.
Greets, AD

Desperado said...

There are many who believe that this new age (and new millenia) were kicked off by one massive lie, 9/11. Either you accept and are complicit in that lie that "they" want you to swallow, or you are forced to realize how massive the evil that is doing this to us is.

So yes, I doubt that this entire Cyprus theater has been "managed". But I also have little doubt but that this take down of this offshore banking center was payback, probably Merkel's payback to Putin for some slight. Or visa versa.

Louis Cypher said...

A lot to digest in the comments section and I don't claim to be the Oracle or even close to knowing all the moving parts. I only comment on what I see. I have seen evil people preying on spineless stupid politicians to preserve their respective banks and bad bets. I see the spineless and stupid agreeing to do it thinking if they have a little more time they can get re elected or that somehow given enough time it will somehow get better. I see Germany now as the squid of Europe. Every bet is a winner and every other economy and foreign bank is a target.

Anonymous said...

I have a few technical comments.

What if the savers (at least those with more than E100k) withdraw their money from the European periphery? Will this, as you speculate above, crash their economy and depress them for years?

I think the answer is no. The reason is that deposits are not needed for banks to work. This is contrary to what the media (and sometimes the Fed and US/UK officials) tell you. Reserves are not required for credit volume to increase. In fact, if credit volume wants to expand, it first does so, and later the banks attract the required reserves. This is backed up empirically.

Even the today's US is an example. The Fed has provided the banks with some $2000bn in extra reserves, yet, credit volume has not expanded, and the economy has not improved substantially.

Conclusion: Withdrawing deposits from Cyprus has not such a big impact on their economy as people claim.

What will have an impact is that they used to live on the spreads and commissions from their boated banking sector. This won't come back (this is simply a fact of life and would have happened either way in any resolution other than a full scale complete bailout with printed money), and this is what will hurt them.

On Ireland. It was the Irish government who decided to rescue the banks and load it onto their taxpayers. I would have thought that a partial or even a full default on these bonds would have been better for their economy. It is probably a reasonable guess that they will restructure the debt at some point and thereby get rid of a good part of the excess debt.


Anonymous said...

You frame the ECB person as the idiot here. What do you think should he have said after the Irish government had decided to rescue the banks with taxpayers' money.

Do you think he would have said "Oh, it was your government's decision to bail out the banks and take responsibility for all their debt. I think they are idiots and it will seriously backfire." So what do you think should he have answered?

The next comment is one on the financial sector as a whole.

The present financial system is based on continuing expansion of credit, originating from the U.S., and on other countries shipping real goods into the U.S. and in turn stockpiling dollar paper, just to retain access to the world's oil which you cannot buy unless you have dollars.

The difficulty for the rest of the world is that the U.S.-Saudi axis have demonstrated that they are willing to raise the dollar oil price at certain moments, and so everyone else needs to be prepared to pay a lot more dollars for their oil than they anticipated.

Once credit expansion stops, this financial system is prone to systemic failure. They are patching it up with QE1,2,3,..and try to retain the flows of capital and goods, but one day these unstable flows will stop.

It does not matter whether all of Europe has a coherent plan of how to get out of the system before it eventually collapses, but some precautions are more or less obvious. Even if most in Europe are clueless, the world of business and politics will, by trial and error if necessary, find a way into a new stable financial system.

Some of their institutions, for example the construction of the Euro zone with its balanced trade account and balanced capital account, the fact that the Eurosystem has gold, marked to market, as their major reserve, and the fact that the ECB rather than the individual governments is in charge of exchange rate and reserve politics, strongly support the idea that at least some in Europe have carefully thought about it.

But even with mishaps and quite a bit of chaos, the world will find out of the trap of the dollar system.

Some steps on the way there are
(1) restructure over-leveraged banks or let them fail
(2) restructure government debt or let it fail
(3) print Euros to such a degree as to maintain purchasing power stability (ECB single mandate) and prevent deflation, but no more, in particular don't prevent deleveraging.

It is my guess that some (Schauble, Merkel, Dijsselboem, Trichet, Noyer, Draghi, Bini Smaghi) know the big picture and a good part of the plan of how to get out of the failing dollar system whereas others (Barroso, Juncker, Hollande) have no clue and just stumble along.

The next steps would be further bank restructurings, haircuts imposed on the creditors (bonds) and depositors, furthermore further restructurings of government debt. If they didn't, they would eventually go down with the dollar. Some who understand this, will help to steer the system in the right direction. Other steps will just happen. The architecture of the Euro system in which no government can dictate the monetary policy of the ECB and in which for every bailout, there is always some other country who opposes it, will help tremendously.


Louis Cypher said...

The first part I will answer in the next post.
To the second part the journalist was asking for a moral justification for the actions taken by the Troika when there is no moral justification for what happened. At minimum he expected a rational explanation as to why the payments are ongoing if the situation is stable.
I didn't expect him to answer honestly because the honest answer is the core is more important than the peripheral.

costata said...


The Irish journalist was probably wise to characterize this as a bailout of "European banks". Describing it as a bailout of English banks might have reopened some old wounds and led to the journalist being accused of prejudice.

I'm bemused by all of the hand-wringing about deposits. The practice of providing government guarantees for bank deposits is relatively recent. These are debts and traditionally depositors were the last in line to bear losses in an insolvent bank behind unsecured creditors, shareholders, bondholders and secured creditors (in that order).

If the liquidation of an insolvent bank's assets couldn't raise enough cash to pay out the depositors after the above mentioned were taken to the cleaners then depositors were exposed like any other creditor of a bankrupt company.

Putting bondholders last in line is to me the most significant development that appears to be emerging. It's a neat trick. Under this regime a government that is reluctant to be seen to be bailing out banks (and indirectly bondholders) can claim that it is actually depositors who are being bailed out simply by dropping depositors from the "batting order".

It is also richly ironic that a depositor-creditor of a bank has, under longstanding legal tradition, been least at risk of loss in a bank-ruptcy and least in need of saving. These politicians and their cronies are scallywags.

costata said...


I would also like to add to my comment the observation that by initially threatening the guaranteed depositors and then withdrawing the threat the banking system has both enshrined deposit guarantees in the system and exposed a minority of voters to pillage in order to avoid an orderly wind up of insolvent banks.

Politicians +1
Bankers +100
Bondholders +1000

So I guess everybody is happy.

Alien said...

what do you think about Mundell's views on the Euro zone?

Anonymous said...


as far as I understood the resolution in Cyprus, the bank bondholders will lose. (In the case of the banks of Cyprus, the volume of these bonds is rather small though). Government bonds are not touched in contrast as this is now a bank restructuring, but not about government debt.

Remember Greece. In March 2012, it was Greek government bonds that were defaulted on. That precedent is already there.


nice to see that he agrees with VtC. He said it would be best if Greece defaulted (if at all) inside the Euro zone. Although he didn't mention the black stuff (too touchy a subject), I agree with basically everything he did say.


AdvocatusDiaboli said...

"It is my guess that some (Schauble, Merkel, Dijsselboem, Trichet, Noyer, Draghi, Bini Smaghi) know the big picture..."

So I personally put you just in this very same camp of "knowing the big picture" and giving a damm about any kind of rule-of-law or morality, not even thinking about it, as long you can hold up your confirmation bias. Yes, you fit in the very same camp of people Louis had been writing about.

BTW: Merkel's (having studied in Moscow, former secretary of the department of propaganda&agitation during the time Putin was stationed by the KGB in the DDR) todays financial "advisor" Alexander Dibelius, guess where he's coming from? He has no clue about finance, his only capability is having been part of the GoldmanSachs gang.

Warren James said...

@AD, reality being rather big, can we agree there exists room for more than one 'big picture', with some overlapping? Better to have 'a big picture' than 'none', yes?

If anything at all is chronicled about this era of financial sludge I hope they don't omit the secret ingredient that most financial assets are debt-based, so the big losses are creating big winners ... somewhere in the system, mentioned or not. my two cents .. ;p

Desperado said...

Mundell: "so the solution is that we've got to get growth back... Its going to depend on a much more aggressive policy by the ECB..."

Mundell refuses to admit that the ECB and the Euro are the problem. None are so blind that refuse to see. One gargantuan corrupt welfare state stealing the already stolen individual sovereignty from the smaller corrupt European states does not a solution make.

Mundell and VTC do sound so similar, is there a link VTC? What do you do for a living and where do you make it? Why don't you ever tip your hand? Do you have some agenda are like Mundell, or are you really so blind?

AdvocatusDiaboli said...

Better to have 'a big picture' than 'none', yes?
Absolutely, nice sentence. But no excuse to hold up a sign with a big picture, claiming therefore it must be true.
BTW, reminds me pretty much of AlexJones (asking for a money provide you with another even bigger picture) ;P
I like to look at facts, it's just perfect how you approach PM on that basis (probably the reason that the link to the screwtape files had been removed from FOFOA blog.)
Greets, AD

Warren James said...

@AD, ok, granted. uh, yes - nothing is sacred. Darwin's theory of natural selection tends to sort out most things, theories and hyperlinks alike.

We have an interesting mix of backgrounds here including science and software development. In these fields, floating any idea also requires (accompanied) repeated testing, the harder the test, the better. Anyway, we'll see what the future holds. GM looks close to uncovering the natural oscillations of the price of gold ... ;p

Alien said...

Victor, thanks for your answer. FOFOA was so friendly as to give me too a longer lecture on M. so now I understand better where he comes from.

AdvocatusDiaboli said...


I wonder what you think about Sweden? Yes that socialist country that is right now abolishing money at all?
Isnt that great? Never ever there will be a bankrun. Never, ever some politician and crook has to stand in front of an embarrasing camera. I mean that sounds like a wonderful idea, it will solve all problems of humanity and no reason to ever again have those wheelbarrows or evil unecological yellow stones or capital controls. In case of HI, just give the evil hoaders a haircut and get them back to work, doesnt that sound fantastic?
Greets, AD

milamber said...


Are you maintaining that the ECB didn't understand the ramifications of their actions regarding Cyprus?


Anonymous said...

AD, Despetado,

It is basically the first time that the ECB have entitely taken off the gloves and let the free market run its course, and it takes merely a few minutes and the (hard money) socialists come creeping out of their holes and start whining.
Gentlemen, the old financial system is a decade past its use-by date, and you can now watch Europe install a free market system in which not only private households, but also banks and governments can default while the US turn socialist and bail out each and eveyone. If your world view cannot handle this information, it is time for a reality chrck. It is a strong indication that your perspective is too limited, if you keep being surprised by the subsequent political actions and if you cannot make sense of them any longer without assuming that everyone (except you) is stupid. Trust me, it is the converse.
World leaders have been busy with the contingency planning for the end of the dollar system for three decades now. Nobody can plan ahead for every single detail, but there are a couple of precautions and mechanisms in place, and if you understand what they are good for and how they work, you are not always taken by surprise, perhaps even able to guess tje next move.

milamber said...


I want to take a shot at defeating your argument. I have watched others, so I think I know how it works. Here goes...

Ad Hominem attack.
FOFOA is a cult leader.
Ad Hominem attack.
FIAT sucks.
Ad Hominem attack.
RPG/Freegold is stupid.
Ad Hominem attack.
You are delusional.
Ad Hominem attack.

How'd I do?


Anonymous said...

Here are the next lessons for you to ponder:

1. The Euro won't fail (although you hate fiat money) Each one of China, OPEC, Russia, Germany, France, Italy needs the Euro to survive, and should it ever be existentially threatened, each one of them will not hesitate to break the glass and press the kill switch on the dollar. (for example dump the dollar reserve and place an order for some 1000 tons of gold)

2. The free market wants paper money for transactions. Even in Germany 1923 and Zimbabwe, paper money prevailed in transactions. The free market will never spontaneously introduce silver as a medium for transactions.

3. The ECB has all the power to prevent price deflation as it has the power to prevent any excessive price inflation. Your hard money wet dreams won't come true.

4. Europe is already under a huge restructuring presure. Thid pressure is to increase, and both the economy and the governments are going to adapt. Governments will get more efficient and entitlement programmes more sustainable. The market will work as it should. The countries in the European periphery will turn the corner and begin to grow out of their hole. This is because some key aspects of "supply side economics" do work.

AdvocatusDiaboli said...

"It is basically the first time that the ECB have entitely taken off the gloves and let the free market run its course"
you have the most sick fraudulent attidute of what a "free market" is, that I ever have read.
Remember what a default is?
1.) stock holders
2.) secondary bond holders
3.) primary bond holders
4.) depositors, regardless of amount, all the same percentage, distributed by the independent liquidator.
THAT is a free market, all the 100K and outside of this chain, is just a BS, have absolutely no legal background.
Now you tell me why that has not been applied in your "free market" world? Comme on, tell me?
Greets, AD

AdvocatusDiaboli said...

and in your la-la-freemarket world capital controls (being appilied alreay in Italy as well) are propably the norm, right?

Anonymous said...

Stockholders: wiped out (Laiki). Bond holders same. Depositors under 100k transferred to BoC. Depositors funds beyond 100k expected loss around 40-60% (not yet known). What else do you want?
Greece March 2012: bond holders about 50% haircut (although select bonds exempt) Won't be the last haircut.

Anonymous said...

I suppose you are eager to get some political change as well, perhaps governments to fall, some revolution, the masses to install a new hard money regime.
I don't have any political agenda. I am just trying to understand what _will_ happen, given the institutiony we have. I am not telling people what I _want_ to happen. I am not telling you whether I love Merkel, Draghi or whether I hate thrm, just trying to undrrstand what will happen next.
I conclude that the required adjustment process and the transition away from the dollar may well work out with the present institutions, even with the same leaders to some degree (Merkel, Draghi). If you, petsonalöy, don't like this, this is a different question. I just think that your political activism clouds your judgement and makes it more difficult for you to anticipate the near future.

Alien said...

Victor, keep up your analysing, I think it helps a lot. It's not easy, at least for some to see clearly when the whole is so blurry. I would be quite interested to hear your take on Grillo. Not politically re Italy but his aim at destroying the euro. It's so damn complicated to see through this den of vipers.

AdvocatusDiaboli said...

lets face it, you are just like the people Louis addressed.
You hate free markets and the rule-of-law. What you wanted to imply: No, I dont care what "should" be, it is you looking for confirmation bias. All I want is a rule-of-law, that's all, same hair-cut for everybody.
Funny side storry of the "free-market": last monday, I studied the balance sheet of my bank, I went to my bank, I said "gimme my paper, PERIOD". The clerk said, "sorry we cant". GIMME MY FUCKING FUCKING MONEY, NOW!!!111". He telephoned, but couldnt, the complete bank with all there branches couldnt. Okay, so it was up in the air. One hour later the director of the bank called me, discussing one hour with me giving me all kinds of BS how we can maybe come to a "solution" and why I should stay with him, but refused to discuss interest. I said, gimme my money, the response have been "but that would require two amored trucks and that stuff would not be printed until thursday", I said, "fine, in case you want to prevent that, gimme the interest", the answer was "no, I cant".
Does that sound like a "free market"? Really?

Alien said...

AD, I get more and more convinced FOFOA was right to ban you from his blog. Don't you see how plain stupid your last comment is? Everybody banking in Germany for higher amounts knows that. Can it be that your stories are wishful thinking? Rich people don't talk like you do.

AdvocatusDiaboli said...

Hi Alien,
was für einen Beweis möchtest Du?
Möchtest Du ein Bild von Papier, wie es aussieht? Oder wie 'ne Menge Gold aussieht? "Rich people", was bedeutet das eigentlich, worauf Du Dich beziehst? Was für Leute kennst Du überhaupt?
Kannst Du Dir eigentlich vorstellen, dass es tatsächlich Leute gibt, die es geschafft haben, sich gegen den Willen von Staat und Bankabhängigkeit sich eine 100%ige Unabhängikeit zu erarbeiten? Ja, ist mir klar, das hört sich unrealistisch an, aber das gibt es immernoch in DE.
Gruß, AD

Anonymous said...


there was this Youtube video of one of Beppe Grillo's shows, perhaps 10-15 years ago, tweeted and probably cited at FOFOA's, too. From this video, I see that Grillo understands gold. So it should be not too difficult to explain the Euro to him.
Let's see whether he eventually becomes a Euro supporter.

In any case, he can figure out that leaving the Euro would be economic and financial suicide for any deficit country, and so I don't think he would do anything stupid when in charge. Which won't prevent him from talking in the meantime....


Anonymous said...


if in Cyprus, you would have gotten a haircut that depended on "how broke" your bank was. At Laiki you would get almost wiped out whereas at BoC it probably won't be quite as bad. And yes, shareholders go first, then bondholders and finally depositors. It is pretty much the procedure you would expect in the case of a bank failure.
What I find most funny is that it is self-proclaimed hard money advocates who are whining the loudest.
Finally, yes, it is most likely true that there are a number of local politicians in Cyprus who got their private money out before all this happened. Corruption. You can try to acquire Cyprus' citizenship and vote them out in the next election. I wasn't passing a value judgement on their actions, just trying to understand the consequences of the bank restructuring on the financial system.

AdvocatusDiaboli said...

"I wasn't passing a value judgement on their actions
oh really? Let's check where your valuation applies:
"What I find most funny is that it is self-proclaimed hard money advocates who are whining the loudest."
now tell us, where, what or whom do you find so funny?

IMHO the whole world goes to hell in a handbasket because nobody is any more responsible or liable for anything. And in finance we call that phenomenum "debt". I watch this very closely in companies management structures as well and through every fabric of the society.
But this therefore opening gap is being filled by the idiots, sociopaths and psychopath Louis had been writing about.
Again, there is no further logic behind this, nothing. But the FG folks are making instead the "hard money" strawman. Funny, eh? Now tell me, is this behaviour stupid or ignorant, or is there some science name for this disease?
Greets, AD

Biosci said...


A simple question for you: do you consider the Eurozone in its current state to be a freegold region?


Anonymous said...

What do you mean by the term "freegold region"?

Biosci said...

Does the eurozone, as a closed system, meet the requirements of freegold? Currency floating against gold, pretty free market in bullion.

Desperado said...


You decline to provide a minimal amount personal data, and you continuously sound like a shill for the ECB:

" can now watch Europe install a free market system in which not only private households, but also banks and governments can default while the US turn socialist and bail out each and eveyone.
...Nobody can plan ahead for every single detail, but there are a couple of precautions and mechanisms in place, and if you understand what they are good for and how they work, you are not always taken by surprise, perhaps even able to guess tje next move.
...The architecture of the Euro system in which no government can dictate the monetary policy of the ECB"

With Bron, when he talks about gold ETF's or Sprott/Turk, he has loads of credibility because we know where he works and he backs his arguments with hard data. You constantly shill for the Euro and hide behind a veil of secrecy and yet you claim to have no "political agenda".

In the last 2 weeks we have witnessed the complete and total take down of a sovereign country that was foolish enough to join the EU. We have seen capital controls imposed and the savings of the entire island simply seized until the ECB gets its way. We saw how the EU imposed the Lisbon accord against the clear will of the EU citizens. We saw Monti and Papademos installed by the ECB as the heads of Italy and Greece, clearly against the will of citizens of those countries. Soon we will witness ECB take down of the entire remaining financial systems eastern Europe too. The sovereign states of the EU are being systematically destroyed so that the people really running the EU and the ECB can achieve power on a scale equivalent to their cronies in the US.

Andrew Jackson was right, Central Banks are a scourge to the human race. There is simply too much power there. You make slurs about hard money while you pretend that the ECB actually has physical control over their claimed gold reserves and ignore the affects on the people in the EU by this ongoing ECB power grab.t

Sorry VtC, I think your unflinching support for the ECB and the Euro show that you DO have an agenda. My guess is that you work for the EU or the ECB in Brussels or Frankfurt.

Warren James said...
This comment has been removed by the author.
Warren James said...

..retracted my previous comment as it may have been generally misunderstood (we have no interest in tracking except for anyone called Wynter Benton /Amber).

My point was to demonstrate it's easy to jump to conclusions without good data, and noone is exempt since it's impossible to know everything. To those who have good data, the assertions and conclusions of those who don't (have good data), appears in-congruent. This has been the frustrating thing about trying to pin down the exacts of the gold market - there are so many hidden things and the ones who know the key elements aren't talking about it in public.

The idea of VtC being an ECB agent doesn't have much support :p but I personally agree that central banks are a cancer of humanity. --Warren

Desperado said...

Warren: Well if you look into it, VtC has a made many very pro-Euro statements in the past, yet in my mind this is a criminal racket. In the face of this often self-imposed and yet ever escalating European banking crisis with the ECB always lying and arm twisting, what other conclusion can one come to about anyone who supports these guys? And, at the risk of repeating myself, why all the secrecy? Do you know where Victor posts from or why he has this odd stance?

With out any background knowledge it is hard to be able to fathom positions that seem so at odds with ones own. How could Victor stand up for these guys at the ECB? They are certainly no better those at the Fed or Treasury. If we don't even know what country he is from, how can we put his positions in any kind of context.

As I recall, one of Victor's positions in the past has been that the ECB really does have possession of their claimed gold reserves and can get hold of them if need be. I strongly believe the opposite. Perhaps you could help me understand Victor here, Warren. Do you have a bar number database for the ECB's gold reserves?

Biosci said...

Seriously, people, ask yourselves this question: is it worth an ECB member's time, or even that of a paid shill (assuming such a thing exists in this context), to advocate on this blog? Don't misunderstand me; I love this blog and the worldview it represents. But it is not a thought leader in this space.

The idea that VtC or anyone else here represents any other interests than his/her own is just asinine.

Warren James said...

@Desperado, re: ECB holdings - unfortunately I don't know of any public list which has that data. The best window into that world so far is what we've got from documentaries like the National Geographic one. A commenter did post a link to a 'Germany's gold' video and we made a comment on the bar sequences there - but that's part of the problem too, seems that most of the 'deeply held' gold is decades old and we don't have enough data to even guess on its nature of whereabouts.

Biosci is right: assuming the ECB did care about public image enough to pay a few people to infiltrate the social media, targeting this blog would be inefficient. I've read most of Victor's posts and mini-posts since he first showed up including some emails and I am satisfied that everything appears consistent.

But this gets to the heart of what we read : "who has what idea in their head, how did it get there, how strong is it, is it reinforced and if so then by what and do those models square with our own model of reality and if not then which model has to change?".

I wish I had more answers and data about the gold market - I've been trying to square up most of what I've read so far but it's a deep area with multiple answers.

Slow Loris Larry said...

I thought that there was a general consensus among the STFU principals and the regular community of those who follow the blog and may occasionally post comments that we should eschew Ad Hominum attacks.

Perhaps Desperado is a newbie here, and doesn't understand what the point of this site is all about, which as I understand it, apart from the satirical attempts at humor, is to try to dig out some facts and build some arguments that can shed light on some of the oft-repeated but highly questionable assertions concerning precious metals and related issues that abound on the internet.

Victor the Cleaner has made many valuable contributions to our themes in the past, and he will hopefully continue to do so despite Desperado's scurrilous fantasies about his motives.

In fact, D's identity or provenience is not revealed on his Blogger profile, which contains no information whatsoever that I could find.

If you click on VtC's Blogger link, you will go straight to his web site, which contains extremely interesting, well-argued, and original ideas. His identity is known to many of us, who respect his desire for a certain measure of internet anonymity to shield himself from gratuitous comments impugning his motives.

Warren has, in the past, pulled some posts that he thought were unseemly due to their personal nature. I think that he should have done so with D's recent unfounded imaginings directed at ViC.

Maybe we should get together and formulate an explicit 'code of conduct' for STFU comments, so that those who will not abide by them can be asked to stop fouling the site, And then if they persist in trying to do so, will have their offensive blather deleted until they see fit to clean up their acts

Anonymous said...


thanks, but it is not really necessary to defend me here. (nor delete any of Desperado's remarks above)

On the topic of anonymity. I prefer to post under the nickname and I don't mind if others do, simply because then it's only the argument that counts rather than the occupation/position/perceived reputation in one's real world job. It's like double-blind peer review, something they have never managed to implement in academia.

Desperado, perhaps you ought to ponder what would have happened to Cyprus and its banks if they were not part of the Euro zone. Mundell (in the video linked by Alien above) explains it, too. If you cannot imagine what would happen to them if they had their own currency and would just "solve" every problem by devaluing, you can probably just watch the United Kingdom for the next few years for an example of how you do in that case. It's actually very sad.

Btw the ECB is perfectly "on your side", and they will basically implement everything you are longing for in your postings. It is just that the implementation will proceed in a way you apparently cannot imagine (yet).

PS: I would indeed accept a job offer at the ECB if they have a position to fill in one of the areas I am interested in.

Anonymous said...


not (yet). This would hold if the exporters and surplus countries (say, Germany) would no longer lend their surplus to the deficit countries, but rather buy reserves (gold, Eurosystem base money, other valuables). And in turn, if the importers (say, Spain, Greece) would no longer receive easy loans, but would have to sell reserves (gold, valuables) or have to cut down on their consumption.

To some degree, the Euro zone is moving there. Gold obviously doesn't play its eventual role yet, and its price is not yet physical only. But the easy loans have stopped, and Germany is now holding an increasing amount of Euro reserves (i.e. central bank money, the stuff that's accounted for in the infamous TRAGET2 balances).

What's bad for Greece, Portugal, Spain, is that they used to get easy loans for a decade and now, suddenly, these loans are cut off. So they got no pressure to become more efficient for a decade, and then all the pressure at once. Not nice. But it will work, and they will adapt.

What's missing is that the Eurosystem clears TARGET2 in international reserves, i.e. gold. I am happy to enter a wager that this will happen one day, but it is easy to guess that it will happen only once gold is valued as an international reserve (i.e. physical only price, replacing the dollar). This may be anything between a year and a decade off.


Alien said...

Victor, thanks for your detailed explanation. I now have just some questions:
How is gold going to be valued until then? By whom?
Can it still be paid for at the paper gold price? Won't it be completelely transferred to the East?

AdvocatusDiaboli said...

"What's bad for Greece, Portugal, Spain, is that they used to get easy loans for a decade and now, suddenly, these loans are cut off."
and I guess what you love so much about this, is that this decision is not any longer left to the free market but rather to a fashist totalitarian planning bureau? Which is not only determining who gets credit at which interests for what, but now is also determing which completely uninvolved people have to swallow their losses instead, just at random.
yes, that's the one and only greatness of the euro.

I feel very sorry for the hard working people in Cyprus, but on the other hand I am very happy that the ugly mask of fashism have now dropped, so for everybody clear to see in the open light.

Warren James said...

@AD, you mean the reverse right? .. their actions now are to leave it to the free market / natural forces. Their actions prior were to selectively and artificially prop up (like every other country did in the so-called Global Financial Crisis).

What seems to be unwinding is overleveraged risk, which should be of no surprise to anyone involved deep in the game. The depositors who thought they actually held 'money' in the bank were the only ones not properly informed of the potential exposure being applied to their funds.

By my count and your logic, this action by the ECB is 'less fachist than previous'. Or are you arguing that because they are not backstopping the losses with free money that they are bad? I'm confused with your argument - seems to be damned-if-they-do, damned-if-they-don't?

Slow Loris Larry said...

@ VtC

I should not have seriously thought that you needed defending.

I was just annoyed at D's silly attempt to attack your personal credibility.

Maybe I should just grow up and learn to ignore the noise in the system.

However, that is not easy at my advanced age.


AdvocatusDiaboli said...

My take:
"free market": never ever the central bank will buy bonds for debt monetisation PERIOD. The instrument of the ESM is highly illegal against almost all european constitutions or threaties.

"rule-of-law": In case of a default, all assets are frozen. An appointed independent insolvency trustee liable for all actions by himself runs the business, all firm excecutives are suspended. Depositors are served first, they rank all the same priority and get served the same percentage. BTW this crap of "100K EU guanteed" storry simply does not exist, it is just made up to keep down the proletarians. In case of inside trades the prosecutor takes over in a public law case with criminal charges.

In the cyprus case every single of these procedures has and is being violated. The rule-of-law has been violated as well as the free market to install a cleptocracy of nepotism to keep the phony Euro alive.
If the great ECB would act like in a free market with rule-of-law, cyprus as well as greece would already be out of the euro and the countries would be clean after the guillotines had run for a couple of weeks.
Greets, AD

P.S. what nobody of the euro-cheerleaderboys explains: Why did 10bio. come from the ESM, where did those go and who paid from them.

Desperado said...

@VtC: You wrote: "perhaps you ought to ponder what would have happened to Cyprus and its banks if they were not part of the Euro zone."

Well that would mostly depend on whether the 2 big Cypriot banks would have swallowed all that Greek debt if they hadn't been in the EZ. Doubtful, but they could well have gotten in trouble anyway. But you also ignore that the ECB forced the closure off ALL banks and the seizure of ALL accounts and capital controls on EVERYONE. All imposed from Brussels on a people who now realize what a stupid mistake it was giving up their sovereignty. Welcome to the Hotel EU, there is no escape. If Cyprus had had its own currency and CB then it could have faced this problem on its own. It could have done what these Med countries have done for centuries: inflate and devalue. Clearly the ECB is using its monopoly on the Euro printing presses to impoverish and enslave this country (among many), yet you seem to be able to rationalize this outrageous behavior.

In away it reminds me of the anti-war left that is now so noticeably silent about Obama's drone wars, which happens to be very similar to the way an EU technocrat would slough off the rape of Cyprus.

So while it is certainly is your right to remain so secretive about yourself, I will assume that there has to be something wrong with someone who would so cavalierly slough off what the EU has done to Cyprus's sovereignty.

Warren James said...

@AD, ok -> I take your point that 'free market' is an oxymoron in today's terms - anyone in power does what they like whenever they like according to what pleases them the most. History, repeats.

You guys ought to get a blog and write up stuff. You would find it very therapeutic & relaxing (I think that's what's possibly needed here the most). rgds, Warren

Desperado said...

@SLL, All: I have re-read my comments and the only "name calling" I used was "shill". I don't think these statements rise to the level of an "ad-hominem":

"you continuously sound like a shill for the ECB:"


"You constantly shill for the Euro"

I will apologize for a true ad-hominem, but I honestly believe those statements are true and I would be interested if anyone can find any indisputable "ad-hominems" that I have made.

@biosci: "is it worth an ECB member's time, or even that of a paid shill (assuming such a thing exists in this context), to advocate on this blog?"

I think you would be surprised in the extent that the PTB engage in molding and monitoring of opinion. Please also notice that Victor only said that he would accept a job at the ECB, not that he isn't an EU technocrat of one form or another.