Lords of Death Forums Lords of Death Forums LoD General Discussion Euro nations follow suit in stimulus package???

I know our economies are intertwined, but this just seems to coincidental to be just a "banking and loaning" or "economy" issue now. Someone is pulling some strings somewhere and things are getting out of control. Something big is going to happen, and it isn't going to have a god damn thing to do with the economy. I don't think the bailout or these proposed euro stim packs do either. They are an obvious mask for something else. There is something very very wrong here. Wake up people. I don't know if anyone else was paying attention, but when they were voting the FIRST time on the proposed bailout stocks were dropping at record rates when they were on the voting floor (keep in mind everyone had expected it to pass the first time around). The next day after they had voted AGAINST it stocks had shot back up to their original level. A week later they APPROVE the bailout and stocks plummet AGAIN and continue with no end in sight. There is some SERIOUS manipulation going on here, this is not good.

http://www.cnn.com/2008/BUSINESS/10/16/world.markets/index.html

The main economic countries have to work in unison on this for many reasons.

ie: One reason is capital flight.

FDIC insures your deposit up to $100k, lets say Ireland suddenly insures all deposits. Then you would see large depositors move their money to Irish banks as they are afraid that banks are failing.

If you had 1 million dollars in your bank, and lose faith in it surviving. If it failed you would get 100k back and lose 900k. Most folks would prefer to avoid that. So you move your 1 million to an Irish bank. Now your bank has to hand you 1 million dollars to transfer. Due to fractional reserves (they don't just keep your money in the bank, they invest it), they have to liquidate financial instruments to give you your money. People are not buying these instruments, they have a lack of faith in them. So they have to sell these at a loss to give you your million. Now due to banking laws, they do not have the minimum amount of cash on hand versus deposits. They have to liquidate more to make that ratio correct. Lets say it cost the bank 3 million dollars to give you your million. Not too big of a deal, banks can scrape up your million and not suffer.

Now 10,000 people with 1 million dollars do the same thing to the same bank. The bank suddenly has to repatriate 10 billion dollars to depositors....in a couple of days. Now the market is choking on the assets the bank is trying to liquidate, the price goes to 10 cents per dollar.... Now the bank has to sell 100 billion dollars, lose 90 billion to hand 10 billion back to the depositors. Bank dies (see Indymac).

Once this starts happening, people get nervous and start moving their money to safety (in this example Ireland), suddenly banks are detonating like popcorn in a microwave. It is a feedback loop.

Now repeat this on a national scale.

You can bankrupt a nation as fast as Iceland detonated. Iceland went illiquid instantly and is now broke, as a nation. They have 4 to 5 weeks of food left. Thier currency is now not accepted, they must pay in Euros. They are rationing Euros to get food shipped in. Suppliers will not extend them credit, they have to pay in advance. Last time I looked, Iceland is a big pile of Ice on top of volcanoes, not much in the way of making money other than cod fishing. They are in deep deep shit.

So by making these moves in unison, the countries/economies involved are saving one another from such capital flight. If one major player did not participate, then it would cause such "banking structural integrity" issues to arise in other countries.

This is just one of the reasons, it is kind of esoteric and obtuse but it has occured in the past so they knew they had to disuade such an event.

What I found astounding was how rapidly the EU concocted, and launched their effort. They argue about everything, hell they can't even agree on the shape of a tomato. This tells of the breadth, depth and danger in this mess.

As an aside, when 30 days is up on the insurers of Lehmans 400 billion dollars worth of toxic sludge, what do you think is going to happen. That load of melanine tainted assets sold for about 10 cents on the dollar. AIG and other insured that crap and are on the hook for about 360 billion bucks. Granted they reinsured it, but they're the first picket in that fence of stupidity and have to answer to that 1 million creditors. Just curious on your take on how that insurance ebola will burst through the skin of the market. Noones talking, barely mentioning it. It's like it being treated as a bedridden crazy pedaphile grandfather hidden in the back room.