By Graham Summers
I've warned time
and again that the EU would collapse in May-June. That collapse is here right
on schedule. And NO ONE will be able to stop it.
Here's why:
1) According to the IMF, European banks as a whole are leveraged at 26 to 1 (this data point is based on reported loans... the real leverage levels are much, much higher.) These are a Lehman Brothers leverage levels.
2) The European Banking system is over $46 trillion in size (nearly 3X total EU GDP).
3) The European Central Bank's (ECB) balance sheet is now nearly $4 trillion in size (larger than Germany's economy and roughly 1/3 the size of the ENTIRE EU's GDP). Aside from the inflationary and systemic risks this poses (the ECB is now leveraged at over 36 to 1).
4) Over a quarter of the ECB's balance sheet is PIIGS' debt which the ECB will dump any and all losses from onto national Central Banks (read: Germany)
So we're talking about a banking system that is nearly
four times that of the US ($46 trillion vs. $12 trillion) with at least twice
the amount of leverage (26 to 1 for the EU vs. 13 to 1 for the US), and a
Central Bank that has stuffed its balance sheet with loads of garbage debts,
giving it a leverage level of 36 to 1.
And all of this is occurring in a region of 17
different countries none of which have a great history of getting along... at a
time when old political tensions are rapidly heating up (see Germany and
France's recent butting of heads over fiscal policy).
So if you’re not already taking steps to prepare for
the coming collapse, you need to do so now. The US will not escape from this
unscathed. No one will. The global banking system is too interconnected: some
estimates put US exposure in the ballpark of several TRILLION Dollars.
Again if you are not preparing for this, YOU NEED TO
DO SO NOW.
No comments:
Post a Comment