Karl Denniger: EU Central Banks Using Debt To Escape Debt Crisis

The latest from Karl Denniger:

One wonders if people think before they write in the mainstream media:

May 10 (Bloomberg) — Asian stocks, U.S. index futures and the euro surged as European policy makers unveiled a loan package worth nearly $1 trillion and a program of securities purchases to end a sovereign-debt crisis.

The solution to a debt crisis is……. more debt?

A loan is a debt, you know. So we’re going to solve a sovereign debt crisis by issuing more debt. And we will get people to buy this (new and additional) debt because……we’re pretty?

The most-amusing part of this are that nations seriously in debt and without a pot to piss in will be “contributing” some of the money to fund the debt. Spain, for instance, has pledged to do so. Where is Spain going to get the money from? Will they sell bonds at 8% to fund a loan at 5%? That’s a very nice idea…. let’s see, we lose 3% on those deals. That ought to help Spain’s fiscal situation, don’t you think?

“EU finance ministers have rushed to ‘shock and awe’ the Markets,” Mitul Kotecha, head of global currency strategy at Credit Agricole CIB, wrote in a note to clients. “The package will likely lead to stabilization of markets in the next day or so but the question further out is whether it will lead to a sustained improvement in confidence.”

It’s shocking all right Indeed, it’s stunning that anyone would believe that a nation or group of nations with too much debt could solve it’s problems by taking on more. Not even Dubai was that dumb – they instead forcibly restructured theirs, at least for a while. That makes sense – you don’t pay what you can’t, and you use the threat of outright default to get people to go along with some sort of reasonable means of restructuring existing obligations.

This action is also something that inspires awe – at the arrogance and hubris of the ECB and EU, both of whom are incapable of transferring this debt around (after all, someone would have to assume it), which makes this rather different than the game that our Federal Reserve and government played in 2008 and 2009. . ..

This is fascinating. All the problems have been caused by too much debt; solution is, “more debt.” It’s as though the banksters are giving themselves a “jubilee,” trading one set of debt for another.

But there is still the crisis. Scratch that. Crises.

The unplugged hole in the ocean is the other one.

The decomplexification of society is going to be quite a roller coaster ride. It’s going to be a golden opportunity to rewire our fellow Whites to be thinking people again – that is, “school is in session, 24/7/365. The automated society is GONE.”

Public schools – gone. The expensive mind-control complex of mass media combined with public education, – gone.

From there, it will be up to us. We’ll have a chance to set things straight, to set ourselves on a good path.


  1. I didn’t buy enough silver when it was $6. I don’t think its just my perception but in the last week or two we have gone from saving Greece to saving euro socialism. I think I’m gonna have to buy a John Robb book to read anything of any relavance to what is going to happen.

  2. Denninger is a hack and a Zionazi shill. It’s hardly a coincidence he’s going along with the anti-ECB “Greek bailout” PR campaign, because he’s a bond guy and wants a strong dollar.

    The “Greek bailout crisis” is simply financial war between the Jewish Anglo-American bankster regime vs. the EU. The Jews want the IMF to become the new world central bank, and the ECB wants to retain independence.

    ECB, along with China and India, are buying up gold, while the Jewish Anglo-American side is trying to crush gold to save the dollar, so they can move onto SDRs as a world reserve currency.

    I’m hoping the ECB wins this particular battle. Did I mention Denninger is a hack?

    Also, Debt=Money, so yes, the cure for too much money is more money, because you can never have too much money. Either everything defaults, just like in the Great Depression, which means the end of the US Federal government as it exists, or they print up dollars until they become worthless. Which one do you think they will choose? Plan accordingly.

  3. The edifice of the usurious financial system, and its debt pyramid, are crumbling. The Treasury Plunge Protection team was evidently asleep at the switch on Thursday, as market confidence swooned big time. Yet, the Fed and the IMF came to the rescue of the Greco/Euro debacle over the weekend with lotsa zogbuck$, so market ‘confidence’ is now being restored, along with the assets of the ruling plutocracy. Stay tuned for the next episode of the Casino Economy, as the melt-down, and dispossession of the White world continues….

  4. WU @ 4
    Winged Words, Sir!

    Denninger definitely criticizes the Fed Reserve very hard. I don’t know the details about supposed battles of groups of oligarchs. They are fighting each other on a sinking ship, so the hell with them. We have to have our lifeboats built and ready to stay topside.

  5. The institution of the FED itself is probably a jewish jobs programs for middling intelligent jewish kids with less ambition than Bernie Madoff. While there they can rake in an outsize portfolio because they can time the market better than the dumb money. (for ex; March 2000 the liquidity drain, cash out at Nasdaq 5k re-enter in 2003)

  6. Denninger is a strong supporter of the Federal Reserve in particular and fiat/fractional generally. He simply criticizes the current Fed’s actions because he lives in fantasy world – he thinks it’s 1985 and all we need is a good Republican like Reagan to lower the capital gains tax and cut off old people’s Social Security and we’ll be fine.

    He’s also a petty tyrant, the reason I have never posted on his site. He bans mentions of gold as an investment, any hint of “racism” or “anti-semitism” is banned with *glee* – unless you are proposing to bomb Persians or Arabs, then it’s fine. He’s also stuck on his deflationist theory seemingly not understand that printing to stop deflation *is* what causes inflation and currency collapse.

    He’s good at reading charts and explaining to laymen though. His defense of fractional reserve was eloquent and should be read by all the anti-fractionals.

    What happened in the EU over the weekend is monumental. The dollar and euro are now competitively devaluing, all debt all around the world in whatever currency is being monetized, the EU has taken a huge step towards a super-state, and has said they will fight “speculators” (read, Goldman Sachs) trying to pit the Meds vs. the Nordics.

    Consider: PIGS Portugal, Italy, Greece, Spain (or PIIGS adding in Ireland). What do they have in common? Meds, or more broadly, officially and strongly Catholic.

    One Jewish financier seriously/humorously has said the problem with the PIIGS is that they don’t have enough Jews. No, I did not make that up: http://www.futureofcapitalism.com/2010/02/pigs-without-jews

    The PIGS countries also, funnily enough, have more gold per capita than China, and one of them, Spain, was talking about issuing dollar bonds. Also, search for “Goldman Can Create Shorts Faster Than Europe Can Print Money”

    This is a financial war. It’s long been speculated that one of the reasons the US turned on Saddam is because he was flirting with euros for oil to the detriment of dollars, just as Iran has been talking about a euro oil bourse.

    The dollar has two main rivals, gold and the euro. EU will devalue euros as quickly as Bernake throws dollars out of his helicopter. It’s all baked in, go long gold and guns.

  7. Patience, WNs. Dire predictions ALWAYS pan out. Just a matter of time, and not much more of that. Each time the ZOGster-debtsters kick the can down the road, it gets heavier. Another kick or two and the foot breaks, leg collapses, body comes down. Think “Goldman Can Create Shorts…” is available at zerohedge.

  8. What can Western countries do to generate economic growth?  My understanding of globalization and its answers is as follows: 

    1) Financial activities (financing high growth activities in developing markets).
    2) Improving efficiency and innovation (making things cheaper, making new and better products).
    3) Increasing the market size for one’s own products.

    Immigration plays a role in all three of these at present, to various degrees, and with interplay between them.  

    If you were Indian and owned a high-tech start up, would you prefer investment capital from a British or American bank that sent a team consisting solely or primarily of coethnics who spoke your language and knew the lay of the land, or Japanese or Chinese investment representatives who needed to speak through a translator?  Presuming you weren’t out to swindle your investors, you’d likely prefer a business relationship with the Americans and Brits.

    Improvements in efficiency and innovation can be brought about by population growth and excellent schools, thereby providing a sufficiently large and skilled labor pool to invent, implement and improve products and processes.  In the absence of a growing native population, that means building robots like the Japanese have, or by some combination of importing labor and exporting jobs, as most Western countries have done.

    Increasing the market size for one’s own products is possible with natural population growth, but in the absence of that, marketing to foreign markets becomes necessary.  Immigration directly increases the size of a domestic market for many products, and has the added bonus of introducing the immigrants’ native lands to Western products via cultural transmission.

    The financial crisis is a serious test of the current global economic order, and to which the globalists’ solution is:  more globalization.  More immigration, more outsourcing, more welfare to maintain a modicum of social order, resulting in more of the same.  By the way, when the majority of Americans are non-White, does anyone really think they’ll vote for medical benefits for the elderly (the vast majority of whom will be White)? We’re already seeing the nascent answer in the negative via Obamacare.

    We likely wouldn’t be in this particular predicament if the courts and Congress hadn’t ruined our public schools and immigration laws in the 1960s.  But we are.  And we might never return to a White-friendly country within the entire area of the U.S., but we can try for equal protection under the law and enforcement of current immigration laws (anti-White as they are, it’s redundant to say that they bar illegal immigration).  Otherwise, a people will accept second class status for only so long before they strike off on their own.

  9. Denninger Sucks,

    Great insight. It hadn’t crossed my mind that asset inflation followed by speculative raids was focused along sectarian lines against Europe.

  10. Thanks Morphy. “Asset inflation followed by speculative raids” describes it perfectly I think.

    I went to link Currency Wars by Hong Songbing and just found out that the wikipedia article was edited recently to include these words in the beginning of the article: “blatantly anti-Semitic.” Other than the Jewish magazine Forward (?) no one else has publicly accused Hong Songbing of “anti-Semitism” much less “blatant.” Worth searching around for this.


    The EU is basically Germany and France. There’s an often overlooked difference between these two countries today: Germany is a defeated power militarily occupied by the US, while France is an independent nation with a world class nuclear deterrent. Things like this matter.

    Let me take a speculative detour. Gold is a useful money between nations that do not trust each other, or are at war. If Max Keiser is correct, Germany’s gold is located in New York. Everyone else’s gold was located in London, until the last few years. Some Asian nations have reportedly moved their gold to new vaults in Singapore and Hong Kong. India has recently “bought” a significant amount of gold from the IMF, possibly simply taking gold they already had possession of out of the IMF.

    Remember Brian Williams the New Reader who bowed to Obama on TV? Some blog somewhere posted a snippet that went something like this: During the puff piece, Jabba the Hut aka Larry Summers shows up and mentions “the Germans” and wants the cameras turned off. There’s no way to know, but it would be kind of funny if that was Germany, on the phone, wanting to take physical custody of their gold. It’s a simple bank run, but involves governments.

    What if the US said “no”?

    This weekend, France got their way, and the productive Germans are going to have to continue to subsidize the Meds/Greeks for a while longer. Merkel lost because of this, but again – France has nukes, Germany is occupied by the US military.

    At some point I would guess France is going to curtain Goldman Sachs in the EU. They did cancel a multi-billion trade from Citigroup in 2004? which they considered fraud of some kind. Last year China told Goldman Sachs to go f themselves and refused to pay on manipulated derivatives and CDS.

    Wall Street, New York, is simply no longer trusted by anyone, for obvious reasons. But as we can see, Wall Street, New York completely controls all three branches of our government (hello, Kagen) and that includes diplomatic and military power.

    I do not believe in the collapse and red dawn scenario myself, but international relationships are sure getting interesting.

  11. Re: Denninger Sucks

    Now this is a guy who can add a whole lot to the conversation.

    To DS: My thanks


  12. DS
    “The “Greek bailout crisis” is simply financial war between the Jewish Anglo-American bankster regime vs. the EU. The Jews want the IMF to become the new world central bank, and the ECB wants to retain independence.

    ECB, along with China and India, are buying up gold, while the Jewish Anglo-American side is trying to crush gold to save the dollar, so they can move onto SDRs as a world reserve currency.”

    Do you have any evidence at all, in the form of verifiable facts, that supports this fantastic construct?

    “Denninger is a strong supporter of the Federal Reserve in particular”

    That’s just a blatant lie and anybody who spends five minutes on his site can verify that.

    “I used to follow Denniger and Kunstler, but quit reading them after their dire predictions failed to pan out.”

    That you lump them together is a perfect example of how you are incapable of anything resembling critical thinking.

    Denninger’s _dire_ predictions have not panned out _yet_. His more ordinary predictions have been right on the money for several years running. So the question is why are the dire ones not coming true. Either he has his facts wrong, or he has his interpretations wrong, or something else happened he didn’t expect that is specific to the direness of the predictions. To take a few examples: he was predicting municipal funding failures and pension funds running out of money. Well, both of those ARE happening; there are plenty of news stories about it. It hasn’t caused bouncing checks yet. That fact by itself is not a reason to conclude that the checks never will bounce.

    In the case of Kunstler, he is simply ignoring a multitude of other facts (for example, you can run an internal combustion engine off of wood chips if you need to, and thorium nuclear reactors are making big headway in India) in favor of apocalypse porn.

    The logic and thought processes of these two men have absolutely nothing in common, and that should be absolutely obvious to any rational being.

  13. That’s just a blatant lie and anybody who spends five minutes on his site can verify that.

    Not sure how to respond to this Rollory. I’ve read Denninger daily for two years, and his reputation of being strong pro-fractional is notorious, and even the rules on his forum enforces this line of thinking. I can only say the opposite, five minutes on his site shows it quite clearly, and Denninger will openly say he’s against ending the Fed.

    Do you have any evidence at all, in the form of verifiable facts, that supports this fantastic construct?

    Not sure what is “fantastic” about it, I would more describe is as “conventional wisdom.” My usual sources are Bloomberg, WSJ, AT, and blogs like Zerohedge.

    “that should be absolutely obvious to any rational being.”

    Long on posturing I see.

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