The Dirty Game Called Economic Warfare

It has become a habit, reading about the downfall of the Euro in the daily newspaper. After years of appreciation against the Dollar the Euro has now began to fall rapidly, even though economic indicators are not all that bad. They say it is Greece that made the Euro waver, which is to some extent true, but is the fear that caused this volatility well-grounded?

The Greek economy only accounts for approximately 2,5% of the entire Eurozone economy. Therefore, one would wonder why the Greek woes have affected the Euro's stability so badly. Among the reasons is speculation, more specifically naked short selling, which in very simple terms works as follows:

Quick refresher on how short selling works. Shorts borrow a share, sell it immediately, then if the bet pays off they later buy it back at a lower price, pocket the difference and return the share to the person they borrowed it from.

Naked short selling is when an investor essentially shorts a stock that he hasn’t actually borrowed. During the worst of the financial crisis some corporate executives blamed the tactic for their companies’ plunging stock prices. In the U.S., regulators put new temporary rules in place to curb the practice in the fall of 2008. That rule was made permanent in July 2009.

Why is a naked CDS different from a naked short sale of bonds and stocks?

Buying a credit default swap in effect buys insurance against the risk of a default by either a company or country. This is essentially a short sale, since the holder profits from the contract if the entity does default. Even before that happens, the CDS holder benefits if the outlook for the entity deteriorates, because the insurance premium for that default risk will rise and the holder can profit by selling the insurance and closing out their trade.

Some investors holding debt issued by an entity buy credit insurance to protect their portfolios from such a risk, but most buying comes from investors who simply want to express a negative bet. As such, buying credit protection without owning any of the entity’s debt is a “naked” short bet. source

This explains why large hedge-funds benefit from negative news about their ''victim''. Greece is solely responsible for the weak economic condition it is in, which made them a suitable target for hedge-funds, which opened a large-scale attack on the country and the Euro, which almost caused Greece to collapse only barely averted by the EU and IMF's bail-out package.

I've often wondered why credit ratings haven't downgraded the credit ratings of the US, Japan and the UK. After all, they are not in a situation that is much better than that of Greece or Portugal for that matter. Moody's has merely threatened to downgrade the credit ratings of the UK and US while they actually did do it to smaller economies such as Greece and Spain. Do you wonder where Japan on this graph is? They are literally off the chart with enormous debt and a huge deficit.



Yet, they remain to have a triple A credit status. How, on earth is that possible? If they would downgrade the credit status of, for instance, Japan, they would never ever be able to pay off their debts and that would effectively usher in their bankruptcy. There is no need to discuss the sequel of their collapse. For the very same reason, they cannot downgrade the status of the US and to a lesser extent that of the UK. This confirms that credit rating agencies are market manipulators.

As a result, countries like Italy and Spain are made to face the consequences of their poor economic performance while others that perform as bad are deliberately protected. So we have credit rating agencies and hedge funds, which are among the important factors determining the destiny of a country. If you are on their cross hairs, you are unlucky.

The mainstream media is another important factor. As explained previously, they are used as a tool to worsen the financial woes in a certain country by increasing volatility through stirring up the market sentiment.

Especially the British and US press are guilty of deliberate rousing. This is a good example from ABC NEWS EU Turns to 'Nuclear Option' to Halt Euro Speculation

Until a couple of weeks ago, the EU had no need yet to create money out of thin air until it had no other options left than doing so with its aid package of 1 trillion Euro. The British and US economy are having a big time feasting on this news. The Eurzone is using the nuclear option is what they say... but what they fail to mention is that the US has been doing this already for twelve months with approximately $1500 billion a year and the UK does the same with $200 billion / year. They are deliberately putting the focus on Europe and hence vastly contribute to the man-made creation of the Euro crisis while keeping their own countries remain into the shadows, because if you consider the severity of the financial woes in the US and UK, it would have made more sense if we would have had a Dollar or Sterling crisis. Until a couple of months ago that was the case. The fears of a Dollar collapse where greater than ever, until they found themselves a perfect target of distraction from their own financial problems: Greece.

What they did is exactly similar to what the press did to Toyota. They have exaggerated the news so badly that no American wants to buy a Toyota anymore, whereas their recalls where not out of the ordinary. Every car manufacturer has recalls. It comes as no surprise that the traditional US car brands recently announced that they are heading into the right direction and are growing healthy again, partly at the expense of Toyota, thanks to the media hype.

Who is next? Hungary, but eventually reality will meet the Dollar as well. The financial woes in the US are bigger than ever before, the importance on a global level of its economy is known, making it only a matter of time for the Dollar to cotinue its downfall.

[edit on 7-6-2010 by Mdv2]

The plague of locusts phenomenon.

"Professional" institutional investors seeking the highest returns as possible. These are the same investors who created our country's two unprecedented bubbles -- technology and then real estate. They're too sophisticated for their own good.

Right now, shorting has been shown to provide the best returns vs any alternative investment strategy (i.e. legit stock investing; real estate; money market, etc). When you have enough of a mass, the effect is like a tsunami.

This is what's happening right now against the Euro. I'd argue it's what happened to the dollar two years ago.

There is a quote from some economist, paraphrasing,

When financiers can make more money by trading/manipulating financial instruments than actual real investments it sucks the money out of the real, productive economy.

(me) Probably crippling & undermining the whole economy over the longer term.

Financial manipulation is exactly like fraud. You merely misrepresent the situation to your benefit & the marks loss.

Taxpayers & working people are the marks & Bankers conspiring with politicians are the criminal, lying predators.

One does have to take into account the raging disparities on the displayed chart, (providing it is a real & reasonably accurate presentation)
that political clout is the tail wagging the dog of financial realities.

One does have to wonder though, how long before the SHTF because mere political clout won't hold back the tide of reality forever.
If the US got its fiscal house in some kind of order,
but when you spend a Trillion dollars on a war over imaginary things & create future terrorists with it, how can anything be sane?

You have been betrayed, often by yourselves with blind 'support the troops' as a substitute for real, analytic, cognitive patriotism, as well as flat out lied to.

After Greece, Portugal and Spain suffered rating downgrades in April due to escalating fiscal problems, investors ask if the same standards are being applied to advanced economies.

While there is a broad agreement among investors that credit rating agencies were justified in downgrading peripheral European sovereigns last month, investors are questioning why advanced economies such as the UK, the US and Japan – which face mounting fiscal problems of their own – have managed to retain their triple-A ratings.

According to the International Monetary Fund, US debt-to-GDP is predicted to hit 109.7% in 2015, up from 83.2% at the end of last year. Over the same period, the UK’s debt ratio is expected to increase from 68.2% to 90.6%; while Japan’s debt burden is forecast to reach 248.8% in 2015, up from 217.6% at the end of 2009.

“The rating agencies haven't been consistent and some countries have been singled out more than others,” says Achilles Risvas, a managing partner at Dromeus Capital in Geneva.

source

Let there be no misunderstanding, I am happy that they downgrade the status of these advanced economies as I wish our system to exist as long as possible, but it does show that credit rating agencies can decide about the destiny of a country.

[edit on 7-6-2010 by Mdv2]

If TPTB want to bring down the entire global economy, then the strategy is clear: attack other economies, such as the EU, so that investors flee to the dollar as a safe haven. Then when everyone is seeking shelter under the dollar, initiate a sudden dollar collapse. That way the whole thing is brought down in one fell swoop, like a tall sky scraper under controlled demolition. Who wins in this scenario?

Not the people. They will be bankrupt and scrambling for survival. Not the governments. They will likewise be bankrupt and fighting the people, who will be outraged. Not the corporations. They will also be bankrupt and going out of business. Who wins? The central banking establishment, which will suck up all the real property used to collateralize the humongous debt of the world, like a giant vacuum cleaner. And the kicker is that all of the central banks of the world are PRIVATELY OWNED--mostly by their prime member banks, such as the Big Wall Street and European banks.

This is war, my friends, real economic war. In an actual war, the banks again are the only winners. They finance both sides in the build up of the war, the waging of the war, and reconstruction after the war.
Follow the money--it tells the whole story.

It is not the governments or corporations that are our primary enemies--it is the central banking establishment, which has the big Wall Street Banks and hedge funds as their armies--and their sights are set on us, the clueless masses of the world.



[edit on 7-6-2010 by Angiras]

reply to post by Mdv2


ALERT HUNGARY LIKELY TO DEFAULT

online.wsj.com...

As expected one by one european countries deliberately going down and defaulting and idea is to crash the entire set and replace it with new world currency

Surprise, surprise. The Euro is under attack again:

The thought that Spain could default on its debt and require a bailout from fellow EU members -- a course of action Greece is currently considering -- is not going over well in Madrid. In February, Infrastructure Minister José Blanco blamed an "international conspiracy" to damage Spain via "apocalyptic editorials in foreign media." Indeed, around the same time, daily newspaper El País reported that the country's intelligence service was investigating the motives for "speculative attacks" on Spain's economy in the English-language press. source

and:

On the 27th of May, the Financial Times published a story without mentioning a source suggesting that China was planning to change it's investment policy regarding Europe by selling its Greek, Portugese and Spanish bonds. Result: the Euro plumped instantly. China quickly reacted and denied it. The Financial Times made no move to rectify the report.

The Financial Times and The Telegraph are merely tools of WallStreet and the UK government, which try to avert attention from their own financial troubles, which are of a much bigger significance than those of Greece. In the end it won't matter as the US economy is going down; this is merely a tactic to delay that from happening.

and an interview with a man who predicted the economic crisis long before 2008:

The euro is being deliberately destroyed! Namely by speculators who collude with the media, and the Financial Times is one of the culprits. No, you are not a conspiracy site, but you read the summary of a message in a quality newspaper that was published the other day . The Spanish Minister Jose Blanco said he's strongly convinced in a conspiracy to discredit his country. According to author, entrepreneur, financial reporter Willem Middelkoop, the Financial Times plays a remarkable role indeed.

Mr. Middelkoop, do you believe in the conspiracy?
"Spain have an interest in keeping up appearances. On the other hand, huge interest from England play a role in putting the focus on Spain, in an attempt to make the financial problems across the Channel to be forgotten. "

But the Financial Times is part of the plot?
"We have often seen that the FT's carries its own activist agenda. Years ago, the newspapers was already very anti-Duisenberg and anti-Euro. The newspaper was years ago, has always been very anti-Duisenberg and anti-euro. While the Wall Street Journal is the "club paper" of Wall Street banks, the FT is the "club paper" of the City and they find it very nice when there are problems in Euroland. "

Why do they laugh at the euro countries?
"The problems in Greece and Spain are nothing compared to the financial problems in the United States, Japan and Britain. Wait until it really goes wrong. "

Do you think that will happen then?
"You can wait for it."

You predicted that after the banks, countries will fall.
"Almost all states except China are threatened to go bankrupt. And of course Russia, which has gone bankrupt three times in the last one hundred years alone. "

But what does the situation look like?
"Greece has a national debt of 50 billion. In England, 200 billion was created out of thin air in a few months to cover the budget deficits, but they rather don't talk about that. The world is not going to go down on the financial turmoil in Greece, but rather on the financial woes in America, where the public debt is nearly 100 percent of GDP. If you add the additional planned expenditure of 60.000 billion dollars, the land can mathematically not even pay off its debt. Only when all the dollars earned in that country are immediately used to repay the debt, but then they've got nothing to keep the economy afloat. "

reply to post by Mdv2


You know the answer (or should)....


let the Casino finance markets wager their 'bets' in some proprietary 'trading money' instead of using the real, hard currency of the individual soverign Nations [[ and thereby debasing its value by
unregulated/ uncontrolled creation of these toxic assets ]] ...

TopxicAssets that have little to no currency backing and are created at the whim of a broker/trader/financier = these assets are then given a value and status of being 100% convertable into a countries sovereign currency by each countries 'central bank' (or the FED in the USA)
A Cartel of self-regulating profiteers out to pillage everyone...including their peers


Leave them to counterfiet toxic assets till the cows-come-home...
but limit them to trade/buy/pass around their monopoly money in their casino markets like at Wall Street....
not here on Main Street where our Dollars or Euros are not convertable to cover their paper @ 100% of the face value of the document...


a Short or a CDS or any casino paper is only worth .01 cent on the dollar not 100 cents on the dollar as the FED supported on that fateful day when Wall Street strong-armed Congress into providing $700Billion+ to this band of thieves and cons dressed in tailored suits