AAA Rating or Not - Crowd Sourced Wikirating Values Your Input

Recent downgrades of European government and bank debt have fuelled the discussion on the establishment of a new European rating agency. This will bring no relief, as long as Euro politicians will be eager to exert influence in such a new entity, can be concluded after their accusations that S&P's move on January 13 was politically motivated.
Undisclosed rating processes on a 10-step ladder from AAA to D, salted with '+' and '-' signs, facilitate criticism about an opaque procedure that ultimately costs public borrowers billions in additional future interest rate payments.
Setting up another ratings agency along the same conflict-laden model will be futile as long as this economic down cycle is with us on a global scale. The strongly growing chaos in the Eurozone cannot be upheld by a new entity that follows old guidelines as this has shown the lack of effective transparency, efficiency and neutrality in an outdated system.
World Map Sovereign Debt Ratings by Wikirating

Click to enlarge

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RED ALERT: EU Finance Ministers Push Through ESM Treaty in Fishy Fly-by-Night Move

RED ALERT TO EVERYBODY INTERESTED IN THE ESM: THERE IS NO CURRENT VERSION OF THE ESM TREATY AVAILABLE!!!
Europe's most important treaty on the European Stability Mechanism (ESM), which will lead the EU into a financial dictatorship, has been pushed through by EU finance ministers late Monday evening.
But the latest version of the ESM cannot be found on English and German EU websites. A link on consilium EU only leads to a 'file not found' message and the German EU website "Europa von A - Z" does not mention the ESM at all. This reminds one of the secrecy around the Federal Reserve Act, that was pushed through in 1912. Is the EU Commission now playing the same fishy game 100 years later?
Media reports from last midnight only said that the ESM treaty was agreed on by EU finance ministers and mentioned January 30 as the date when the treaty will be officially signed.
Significant changes have been made, a few media reported.

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ECB Threatens Ireland with Bomb Terror, Ignores Journalist's Questions

In a superb example of hubris representatives of the European Central Bank (ECB) simply tried to ignore justified questions from the Irish public in the video below. Irish journalist Vincent Browne had a very simple question, "why are Irish taxpayers required to bail out the holders of unsecured bonds?" At issue is the repayment of a €1.25 billion bond by Anglo-Irish Bank that will be due on January 25.
Watch this 5-minute video to deepen your impression that the ECB is not only a bad bank with almost no reserves, but also a badly managed bank, whose arrogant representatives seem to forget that they do not dictate the Eurozone. Browne's question is truly justified. As the name of unsecured debt says, repayment should only happen if the debtor is in the position to do so. It is this difference that pays higher interest to such bond holders as the risk of default is higher than on guaranteed bonds.
Read on afterwards as the ECB Troika has truly threatened Ireland with bomb terror.



ECB Says "A Bomb Will Go Off in Dublin"

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Germany to Begin Abolishing Cash Transaction in August 2012 Step by Step

According to a report in German alternative media Kopp online Germany will begin to abolish cash transactions step by step from August 2012, putting the EU directive 2009/110/EC (PDF) into practice. Germany is the next country after Greece, where the ECB recommended such cash payment limits in May 2010 , and Italy, where cash transactions above €1,000 have been limited since December 4, 2011.
While the official reasoning says this is to combat tax fraud, it is actually another step towards total surveillance in the European Union. All forms of electronic payments can be traced completely.
Ironically a study from the German Bundesbank (PDF) from 2009 arrives at the conclusion that cash fulfills all functions of a payment device in the best way.
Germans still conclude 60% of their transactions with cash.

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Paper: Will a Fed Economist Become Slovenia's Prime Minister?

Egon Zakrajsek, FRB

Is Europe slowly becoming a colony of the Federal Reserve and its bankster friends? Will a Federal Reserve Economist become the next Prime Minister of Slovenia after the Goldman Sachs colonization of the ECB (Draghi), Greece (Papademos) and Italy (Monti)?

Austrian daily "Kurier" had a snippet in its Sunday edition, saying that Slovenian Fed economist Egon Zakrajsek is at issue to become Prime Minister. The paper did not cite a source but reasoned that the stalemate betweeen leftist election winner Zoran Jankovic and conservative Janes Jansa has sprung calls for a "third man."

Facsimile from Austrian daily Kurier.

Translation: After the political stalemate between the left- oriented election winner Jankovic and conservative opposition leader Jansa calls for a 'third man" are getting louder. At issue as new prime minister is Egon Zakrajsek. He belongs to the innermost leading circle of the US central bank Fed.

According to his official bio from the Fed's website, Zakrajsek is an economist on the Board of Governors of the Federal Reserve system since 1999.

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Unseen in Main Stream Media: Ron Paul Warns of International Currency

As these words from a Ron Paul speech given on January 12, 2012 in South Carolina, have not made it into MSM (mainstream media), here is another chance to catch up on his warnings about an International Monetary Fund (IMF) led intiative to usher in a global currency following a fabricated dollar crisis.
The IMF had first advocated a new global fiat currency in a paper from April 2010 (PDF) where the new currency was titled "Bancor".
UPDATE: The video has been removed recently. Ron Paul's message is transcripted below.



Transcript of Ron Paul's speech:

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S&P Now Spelling AustriA Correctly With Downgrade to AA+

A multiple downgrade of sovereign ratings by Standard & Poor's (S&P) has also reached Austria after the country had been put on the watchlist on December 6, 2011.
Austria was downgraded to AA+ from AAA on Friday with the negative outlook remaining. 

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8.5 Trillion Bullion vs. 750 Trillion Derivatives

Click graph for complete display.

From: Number Sleuth

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Read Here What Comes Next in the Eurozone Crisis

Parsing the multitude of ruminations about rating agency Standard & Poor's threat to downgrade all Eurozone members I am left wondering how this announcement comes as a surprise to many market observers while failing to see the bigger picture that was drawn so far in 2011.
Ring-fenced by exploding deficits, rocketing yields, stubbornly rising unemployment especially among the youth and a true inflation closer to 10% than official figures of three percent, the long term negative outlook for the Eurozone has not changed in the past 11 months.
This action was overdue but again serves more to highlight the deficiencies of an opaque rating process than act as a reliable guideline. After all, most of these Eurozone countries have smaller debt/GDP ratios than the USA, which passed the 100% mark this week and rises faster than EU deficits.

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The Next Steps in the Eurozone Crisis Will Lead into the ESM Dictatorship

A downward spiral of short-lived political announcements that have declined from the superficious to the meaningless may fill the headlines of dutiful 24/7 news outlets.
But while attention is wasted on political gobbledygook, leading Eurocrats manage to steer the train wreck aka Eurozone towards greater centralization in Brussels that will ultimately lead to a political ambush in order to push through the true monster in the backyard, the European Stability Mechanism ESM.
Published in English only, depriving 85% of Europeans of their possibility to inform themselves, it is no exaggeration to say that the ESM will lead the Eurozone into a technocrat dictatorship without any democratic oversight at all.

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Take the Money and Run

Irish finance expert Eddie Hobbs appeared on Irish TV on 11/11/11 and paints a compelling picture that the Euro is toast. His advice: Take the money (out of the bank) and run. I would add: Convert your paper savings into gold.
Watch this 6-minute video for a complete overview of the last stage of the Euro currency.

Austrian Central Bank Strikes Exotic Deal with PBoC While Entangled in Alleged Kickback Scandal

Austria's central bank, Oesterreichische Nationalbank (OeNB) delivers headlines ranging from opaque to criminal these days.
Market observers scratch their heads about a secretive agreement between the OeNB and the People's Bank of China (PBoC) that makes Austria the first non-Asian country permitted to engage in Renminbi investments with its Chinese counterpart as the intermediary. Further media inquiries were stonewalled.

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Wikileaks: Merkel Hid Reality of Greek Debt Situation From Her People in 2010

A newly released cable from the German US embassy from February 2010 proves again that Eurozone leaders were happy to hide the full dimension of the Greek debt crisis and its implications for the German budget deficit as long as possible.
The confidential document published by Wikileaks again highlights the fact that politicians prefer to lie until the last possible moment.
This snippet says it all:

Chancellor Merkel is clearly relieved she does not, for now, have to explain to the public why the German government is running up its own deficit to bail out debt-laden Greece.

Here is the full text of the confidential cable:

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The True Intrinsic Value of Euro 'Money'

Ever wondered about the true intrinsic value of Euro banknotes?
Prudent Investor blog reader Kurt Lindlgruber from Austria sent me this pragmatic approach, pulling up the calorific value of such notes once they have lost their purchasing power as did all fiat currencies in history.
Lindlgruber's calculations contradict French philosopher Voltaire's famous quote that

'Paper money will always return to its intrinsic value. Nothing.'

It is not all that bad. Your soon-to-be worthless Euros will at least keep you warm for a few minutes.
Here is his calculation:
The minimum value of paper money after the Euro crash corresponds with its calorific value.
A €5 banknote weighs 0.6 grams. The calorific value of one kilogram European fiat money (= 1,667 €5 notes) is 5 kilowatt hours (kWh).
You can fare much better with gold:
Based on Monday's Euro gold price of €1,260/oz one ounce will buy you 21 metric tons of wastepaper (current price €60/ton) which has a calorific value of 105,000 kilowatt hours.
The average heat energy consumption of a single family detached house is around 5 kWh. So 21 tons will heat a house for 21,000 hours or 2.4 years.
If you hold on to your Euros instead of gold, 252 €5 notes (=€1,260), they will deliver a calorific value of 0.76 kWh

(252 x 0.6 x 5 / 1000 = 0.76 kWh) 

will keep you warm for a mere 9 minutes instead of 2.4 years.

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Perth Mint Issues a One-Ton Bullion Gold Coin Worth $56 Million

Caution: It may prove difficult to get change when you go yacht shopping with this coin.
The Australian Perth Mint has produced the biggest 999.9 fine gold bullion coin in the world.
Featuring Queen Elizabeth II (Katie's silhouette would certainly have found more bidders) it weighs one metric ton. The coin is legal tender with a face value of one million Australian dollars.
Its current gold value is €39.6 million (39.55€ million).

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Moody's Turns Spotlight on "Austria Banks Derivatives"

Here comes the next market mover. Moody's Investors Service is apparently doing some due diligence work on Austria's banks. Austria and its banks have been overlooked in the daily market game of who gets downgraded next until now. Austria still carries a AAA sovereign rating from all Moody's, S&P and Fitch. Austrian banks have done surprisingly well during EU wide downgrading orgies by the big 3 rating agencies.
This may be about to change, given this indication from my webstats.

SCREENSHOT: Moody's Investors Service starts checks on Austria and its banks with a 'Go ogle' search on "Austrian banks derivatives". Click to enlarge.

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Are You Reft or Light?

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20.10.2011: Unofficial Death Date of the Euro

It was exactly one year ago that I announced the death of the Euro due to the fact that EU talks on the EFSF had stalled by 20.10.2010.
Now here we are one year later and the latest official statement by French president Nicolas Sarkozy after a late night meeting with German chancellor Angela Merkel on Wednesday was only a terse "talks are stuck."
While this is not exactly news - that's been the situation since 2008 - Germany's first failed auction of 10 year Bunds is all the more and comes only a day after Spain could not sell the full allotment of €5 billion in short term treasury notes.
GET IT:  Europe is not able anymore to raise the money it needs!
Germany's Failed Bund Auction Implies There Is No More European Benchmark
On Wednesday Germany had attempted to top up its September 2021 Bund by another €5 billion. Alas, there were no buyers for this amount. The Bundesbank drew only 4.5 billion in bids and had to retain €925 million for 'secondary market operations' on its own books. This is the first time in the history of post WW2 Germany that investors balked away from a German government bond issue.

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Citibank Has Clients Arrested Who Want to Close Their Accounts

So much about a free market economy: Citibank in New York had several people arrested because they wanted to close their accounts and take their money with them.
And I had thought police only gets involved in bank robberies.



These actions are likely to entail legal battles as an alleged plain clothes officer dragged a woman into the bank and had her arrested there.
So much about capitalism: YOUR money is obviously not yours when banks need it themselves to survive.

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The Hungarian Private Debt Crisis Explained in 35 Seconds

If there is still anybody out there, wondering how Austrian banks got into such a mess in Central Eastern Europe (CEE) by handing out loans for houses and cars to more or less everybody with a pulse; this Raiffeisen TV commercial from 2007 should explain it all.



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