Monday, March 12, 2012

Why Were The Trillions In Fake Bonds Held In Chicago Fed Crates?

While there is precious little in terms of detail coming out of the latest and literally greatest "fake" bond story in history, the BBC has been kind enough to release the pictures of the boxes that the supposedly fake bonds were contained in. While we reserve judgment on the authenticity of the bonds, what we wonder is whether the boxes were also fake. Because while we can understand why someone would counterfeit the Treasury paper itself, what we don't get is why someone would go the extra effort to also create a "fake" compartment in which to store it. In this case a compartment that is property of the "CHICAGO FEDERAL RESERVE SYSTEM." Perhaps Fed uberdove and Chicago Fed President Charles Evans will be kind enough to explain why Versailles Treaty Chicago Fed crates are floating around in Europe (and filled with $6 trillion in supposedly fake bearer bonds)?

What is also interesting is that a simple google search for Mother Box Treaty of Versailles yields the following:

Transferring rights over Mother Box Treaty of Versailles 1934-Illinois Bank

We transfer rights over Mother Box Treaty of Versailles 1934-Illinois Bank having the next status:
1. Has been verified by the authorities, being legal, certain and real existence.-
2. With SKR in an Reputable Security House in an European Country .-
3. History of mother box and baby boxes (13 ) certified by a public notary.-
4. Print amount in the front of Mother Box includes:
M.B. Control...G7777xxxxxxxxxxxx
Sec Code
Public Debt Nº
Total Face Value: Three Trillions
5. Inside 13 baby boxes closed, with certificates, numbers, size and height.-
6. 13 JPG Images (In High Definition) Front, Up, Down, Right, Left, Inside, each with notary seal and sign.-

Transfer rights under conditions as follows:
1. Deal only with direct interested with Bank POF (Proof of Funds) in hands (Non negotiable point).
2. No broker chains or pretenders in the middle.
3. Verification when buyer wants and wish face to face.
4. Meeting with the owner without problem, ever in the European Country.
5. We are able and open mind about any reasonable offer.
6. We not send images, numbers of information in advance.
7. First step for any interested person: LOI and Passport.
8. Second step: We reply with the same.
9. Third Step: Both parties disclose addresses, phone numbers, mails and skype (Owners don´t speak english)
10. Operation is clear: after all previous steps is Box against Money.
If interest please write to

And some other examples of Chicago Fed Mother Boxes courtesy of divinecosmos:

And below is a fascinating, if entirely uncorroborated account on the provenance of these boxes, once again courtesy of Divine Cosmos. Unwittingly, the counterfeiters may have stumbled upon something they had no idea about:

America Is Being Transformed From A Wealthy Nation Into A Poor Nation At Breathtaking Speed

America Is Being Transformed From A Wealthy Nation Into A Poor Nation At Breathtaking Speed

America is losing wealth far faster than any other nation on earth is. In fact, since the mid-1970s there has been a transfer of wealth of almost 8 trillion dollars from the United States to the rest of the world. Sadly, most Americans have no idea what is happening. Most of them are completely unaware that America is being transformed from a wealthy nation into a poor nation at breathtaking speed. Most Americans just assume that America will always have the largest economy on earth and will always be the wealthiest nation on the globe. Unfortunately, just because something was true in the past does not mean that it will be true in the future. Right now, the United States is bleeding wealth at a pace that is almost unimaginable. Every single month, tens of billions of dollars of wealth is permanently transferred from the American people to the rest of the world. That means that the overall economic pie is shrinking. While the rich and the poor are busy fighting over the distribution of wealth in this country, the size of the pie that they are dividing up is continually getting smaller. America is poorer than it was last month, and next month it will be even poorer. If this continues, it will result in a complete and total economic nightmare.

Let's break this down to a real simple example. Imagine that you are playing a game with a whole bunch of people, and you have been chosen to play the role of the United States. So you go stand on a giant map of the United States and you are given much more money than anyone else in the game. However, with each turn 50 billion dollars is taken out of your pile of money and is given to the other players.

What is going to happen eventually?

Yes, that is right - you are going to run out of money at some point.

In order to continue playing you will need to borrow more money from the other players or you will need to print up some more money.

Does that sound familiar?

In January, the U.S. trade deficit with the rest of the world hit 52.6 billion dollars.

That means that we bought 52.6 billion dollars more stuff from the rest of the world than they bought from us.

That 52.6 billion dollars is gone and it is not coming back. Next month another 50 billion dollars will leave the country.

Are you starting to get the picture?

Imagine a giant hourglass filled with dollar bills. Dollars are pouring out of the United States and into the pockets of foreigners at a pace that is absolutely astounding.

In 2011, the U.S. trade deficit with the rest of the world was about 560 billion dollars.

We have a trade imbalance that is more than 5 times larger than any other nation on earth has. That means that we are getting poorer at a far faster rate than anyone else is.

Most of the money that we spend does not even do any lasting good.

For example, a huge chunk of our trade deficit is spent on importing oil. Once we burn that oil up in our cars it is gone for good and we have nothing to show for it.

But the people we sent our money to end up with bulging bank accounts.

How in the world do you think those oil barons build those outrageous palaces and are able to afford those exotic car collections?

They buy all those things with the money that we sent to them.

Meanwhile, our once great major cities are degenerating into festering sores.

Our foolish policies are causing our own destruction.

Another reason why we have such a huge trade deficit is because of our trade relationship with China.

Our trade deficit with China was approximately 26 billion dollars during the month of January.

That is absolutely horrifying.

For the entire year of 2011, our trade deficit with China hit a grand total of about 295.5 billion dollars.

That was the largest trade deficit that one country has had with another country in the history of the world.

Back in 1985, the U.S. trade deficit with China was only 6 million dollars for the entire year.

In 2011, our trade deficit with China was more than 49,000 times larger than it was back in 1985.

That is not a good trend.

Have you ever noticed that it seems like half the stuff we sell in our stores says "Made in China" on it?

Well, that is because China is wiping the floor with us on the global economic stage.

Just look at how the overall U.S. trade deficit has exploded over the past few decades. In the chart below, we see that the U.S. trade deficit really spiked when the price of oil reached unprecedented heights a few years ago. Then it dropped during the recession when the price of oil fell like a rock. But now the U.S. trade deficit is almost back to where it was before....

Today, the U.S. trade deficit with the rest of the world is about 5 times larger than it was back in 1996.

That means that we are getting poorer as a nation at a rate that is 5 times faster than back in 1996.

All of that money that is going out of the country could be going to support jobs and businesses inside the United States.

But instead we have been losing jobs and businesses over the past decade at a rate that is absolutely amazing.

According to U.S. Representative Betty Sutton, an average of 23 manufacturing facilities a day closed down in the United States during 2010.

23 every single day!

That means less jobs for American workers.

Right now, there are approximately 6 million fewer jobs in America than there was back in December 2007.

Because there are not enough jobs, we now have millions of working age Americans that simply cannot take care of themselves.

But it isn't just jobs that we are losing.

There are a whole host of other statistics that show that economic conditions in America continue to get worse and worse and worse. An all-time record 46.5 million Americans are on food stamps and poverty continues to explode all over nation.

Instead of addressing the root causes of our problems, our leaders continue to support our false standard of living by borrowing gigantic piles of money.

In many instances, we go back to the very same people that we sent our money to and we beg them to borrow it back.

How stupid can we be?

Debt always makes you even poorer in the long run.

Take a look at how our budget deficits on the national level have absolutely exploded in recent years....

Anyone that tells you that America is in good shape financially is lying.

Just look at that chart.

Sadly, the truth is even worse than the chart shows. For example, there never was a "surplus" under the Clinton administration. The U.S. government simply stole money from Social Security and used a bunch of other accounting tricks to make things seem a lot better than they were.

And the U.S. government is still using all sorts of accounting tricks to hide the true size of the national debt. If you doubt this, just read this article.

If the U.S. government was forced to use GAAP (Generally Accepted Accounting Principles), the U.S. budget deficit would be far larger each year.

But it is not just the federal government that is drowning in debt.

All over the country right now, municipalities are going broke....

*Harrisburg, Pennsylvania has announced that it will be skipping debt payments.

*Stockton, California is on the verge of becoming the largest U.S. municipality to ever file for bankruptcy.

For years, our politicians borrowed immense amounts of money to make up for all of the wealth that we were bleeding as a nation.

But now we are absolutely drowning in debt and all of this reckless spending is not going to be able to last much longer.

When all of this reckless spending ends, our false prosperity is going to disappear.

Did you know that the U.S. national debt is growing by about 150 million dollars every single hour?

150 million dollars an hour is being stolen from our children and our grandchildren so that we can maintain our false standard of living.

Most Americans expect things to get back to "normal", but the truth is that "normal" has left the building.

Our transition from being a wealthy nation to being a poor nation continues every single day, and our politicians are doing nothing to stop it.

Enjoy these good times while you still can, because they are not going to last too much longer. The debt bubble we have been living in is going to burst, and when it does we are going to get hit with a cold dose of reality.

Greece is 'likely to need third bail-out'

A third bail-out for Greece cannot be ruled out, a senior European Central Bank (ECB) official said, as the country's troika of lenders prepared to rubber-stamp its €130bn (£109bn) second financial rescue.

Greece is likely to need third bail-out
 Germany's Wolfgang Schaeuble said it would be a 'big mistake to give the impression that the crisis has been resolved' and warned Greece must make good on austerity promises.

Greece concluded a complex debt restructuring with private sector creditors on Friday, leading to the declaration of a "credit event" that will trigger about €3.5bn of credit default insurance payouts.
There were doubts over the exact impact of the credit default swaps, as Austria said it would need to inject up to €1bn into a state-owned bank as a result.
Even as ECB policymaker Ewald Nowotny hailed Greece's debt restructuring a "clear success", he today admitted a third aid package was a possibility.
"You have to see this very realistically," he said. "It would be negligent to rule such a thing out completely but I don't see any need for this at the moment."
Alastair Winter, chief economist at Daniel Stewart & Co, said he was certain a third bail-out would ultimately be needed. "I don't see how they can possibly return to the capital markets in 2015," he said.

French President Nicolas Sarkozy was an isolated voice in declaring the Greek problem "solved", with German finance minister Wolfgang Schaeuble saying "It would be a big mistake to give the impression that the crisis has been resolved" and warning Greece must make good on austerity promises.
The Greek prime minister's top economic adviser, Gikas Hardouvelis, said Greece hoped to get €1bn financing from the European Investment Bank (EIB) this year as a stimulus for its ailing economy.

“Not Owning Gold Is A Form of Insanity,” Says Broker To The Queen (GLD, SLV, IAU, SGOL, PHYS, AGOL)

Dominique de Kevelioc de Bailleul:  If those words sounds familiar, that’s because you may have read it somewhere  on the Web some time in January of 2011.  “Not owning gold  is a form of insanity,” Robin Griffiths of Cazenove Capital (believed to be the  private broker for the British royal family) told CNBC on Jan. 11. “It may even  show unhealthy masochistic tendencies, which might need medical attention.”
Though Griffith’s apparent flare for offering up salacious soundbites for  financial journalists, his diagnosis directed at investors who worry whether their financial future is intact, yet, don’t hold a meaningful portion of their wealth in gold may not have wandered too far from making a valid point, especially considering that since January 2011 the world’s unresolved issues have only mounted rapidly in  quantity and severity.  Get my next ALERT 100% FREE
Consider the news of just the past two weeks, alone, and never mind the  events that have shaped the world’s radical change in public consciousness since  the fall of Lehman Brothers in 2009.  Griffith’s seemingly flippant remark of more than a year ago appears more and more worthy of repeating as the endgame to the crisis unfolds.

On the Feb. 29, the European Central Bank announced a massive QE program in  the amount of $712 billion for approximately 800 European banks—a move so  audacious that Mr. Gold,  Jim Sinclair, felt compelled to alert investors of the troubling event, underscoring the desperate manner by which the announcement was obviously  camouflaged, obfuscated and provisioned in the hopes of not triggering a panic into the gold  market.
“Today does qualify as one of the biggest injections of liquidity into the  system in the history of the system,” Sinclair told King World News.  “Today was a cover-up by the U.S. Federal Reserve and by the mainstream media of  one of the largest injections of liquidity into the system that has ever  occurred.”
Sinclair continued to explain that, in essence, the Fed has embarked on a course as the buyer-of-last-resort to, not only the U.S. debt market, but Europe’s equally-sized debt market, as well.  In total, the U.S. dollar  and euro represent approximately 88 percent of central bank currency reserves (excluding gold reserves).  These reserves have been debased at a staggering rate, with no end in site.
“This money flows, in order, through these entities—Federal Reserve to the  IMF; IMF to the ECB; ECB to the member banks.  This is pure QE on a global  scale,” he said.
On Thursday, following the decision by the ECB to maintain its member bank rate at one percent, reporters ask ECB president Mario Draghi about contingency plans for the euro in the event of a Troika failure in dealing with the European sovereign debt crisis.  Draghi said, pointedly, “We have no Plan B. Having a Plan B means to admit defeat.”
Translation: The ECB will print, print and print more money (or get it in a  circuitous way from the Fed)—or die.
Again, on Thursday, in response to the ECB’s latest $712 billion injection of  capital into the European banking system, former ECB executive member Juergen Stark told the Frankfurter Allgemeine “. . . the balance sheet of the euro  system, isn’t only gigantic in size but also shocking in quality.”
In total, the ECB’s balance sheet now stands at more than (euro)3 trillion,  or nearly one-third larger than the Fed’s ‘official’ balance sheet, with more to come, according to some prominent analysts.
On March 8, German newspaper BILD ran with a story about the rumblings in Germany regarding the status of its 3,401 tons of gold reserves.  A growing  mistrust of the United States as the custodian of Germany’s gold has reached critical mass, according to BILD sources. Many Germans wonder if they’ll get their gold back.
According to the article, German politicians are feeling heat from a growing concern among the German people regarding the euro and Germany’s financial obligations to a failed euro experiment.  Germans wants an audit of its gold and repatriation to Frankfurt in the event of a euro collapse and an  emergency reinstatement of a gold-backed deutsche mark.
When elected member of the Bundestag, Phillip Missfelder, made an inquiry of  the Bundesbank as to why Germany’s gold was not audited in 2010 as required by  law, the Bundesbank’s response sent chills throughout Germany’s fiscally  conservative electorate.
“I was shocked,” Missfelder told BILD.  “First they said that there was  no list [of gold bars].  Then there were lists that are secret.  Then  I was told, demands endanger the trust between alliance bank and the Fed.  [Google translation]”
On the heals of the BILD article comes another article about a country and a  people known for prudent fiscal behavior: the Swiss.  They, too, have come  to the realization that the euro is sinking and that a Swiss franc peg to the  euro will take the franc down with it.  They want their gold.
Zerohedge posted on Thursday:
“Gold Initiative”: A Swiss Initiative to Secure the Swiss National Bank’s  Gold Reserves initiative, launched recently by four members of the Swiss  parliament, the Swiss people should have a right to vote on 3 simple things: i)  keeping the Swiss gold physically in Switzerland; ii) forbidding the SNB from  selling any more of its gold reserves, and iii) the SNB has to hold at least 20%  of its assets in gold.
Contrary to propaganda spewed by the Fed, U.S. media and America’s unofficial spokesman and cheerleader for a broken Bretton Woods scheme, Warren Buffett, in  the end, it all comes down to the gold.  How much.  Where it is?
And if the two countries known for their level-headed approach and reputation  for maintaining a strong currency are now lurching for the gold, it’s most  likely that other Western countries will follow suit—and quickly.
While the news turns from the latest scheme to bailout Greece, to gold, why  then would an investor put off acquiring a 3,000-year-old, tried-and-true asset that holds value under the most dire of financial and geopolitical circumstances—such real-time textbook examples of profound currency debauchery from each G-7 nation, imminent war and political upheaval?
Obvious to a long-awakened bunch, crunch time approaches, and, as Swiss  economist and money manager Marc Faber has said in the recent past, it’s also time for each investor to become “your own central bank.” And if investors  cannot or will not see the consequences and market reaction to bizarre policy actions taken by the stewards of 88 percent of the world’s reserve currencies, Cazenove Capital’s Robin Griffiths’ characterization of “masochistic” investors knowingly taking no action in response to this abomination won’t seem so sensationalist after all.
Related ETFs: SPDR Gold Trust (NYSEArca:GLD), iShares Gold Trust (NYSEArca:IAU), ETFS Physical Swiss Gold Shares (NYSEArca:SGOL), Sprott Physical Gold Trust (NYSEArca:PHYS), ETFs Asian Gold Trust (NYSEArca:AGOL), iShares Silver Trust (NYSEArca:SLV).
By Dominique de Kevelioc de Bailleul From Beacon Equity Research is committed to producing the highest-quality insight and analysis of small-cap  stocks, emerging technology stocks, hot penny stocks and helping investors make informed decisions. Our focus is primarily OTC stocks in the stock  market today, which have traditionally been shunned by Wall Street.  We have particular expertise with renewable energy stocks, biotech stocks, oil stocks, green energy stocks and internet stocks. There are many hot penny stock opportunities present in the OTC market everyday and we seek to exploit these hot stock gains for our members before the average daytrader is aware of them.

Life after Collapse + Alternative Energy + The Idiocy of Bankers and Gov...

Prepare Now For The Total Collapse. By Gregory Mannarino.

Biderman's Daily Edge 3/9/2012: Rigged Market Conventional Wisdom

And other markets as well.

There will be a 'reversion to the mean' and a return to the primary trends. And if it happens precipitously, it will shake the nation.

The problem with the Fed's 'stimulus' is that it is a blunt instrument, and is largely channeled by those with their hands on the financial throttle into their own pockets, and not into the productive efforts of the real economy.

'Modern Monetary Theory' merely shifts the money printing power from the Fed directly into the hands of the Treasury and the politicians.

This is not Keynesianism but crony capitalism. Austerity is also another Wall Street alternative, allowing the monied interests to obtain productive assets on the cheap.

There is only one path that the status quo hates and fears, and that is genuine reform.

Gov\'t is the Cancer That Will Not Stop Growing

The Land of the Mega-rich: No Jobs For Americans

March 9. Today the Bureau of Labor Statistics (BLS) announced that 227,000 new nonfarm payroll jobs were created by the economy during February. Is the government’s claim true?
No. Statistician John Williams ( reports that 44,000 of these jobs or 19% consist of an add-on factor derived from the BLS’s estimate that 44,000 more unreported jobs from new business start-ups were created than were lost by unreported business failures. The BLS’s estimate comes from the bureau’s “birth-death model,” which works better during normal times, but delivers erroneous results during troubled times such as the economy has been experiencing during the past four years.
Taking out the 44,000 added-on jobs reduces the February jobs number to 183,000, but does not provide a full correction. In an economy as troubled as the US economy is, most likely the deaths exceeded the births, but we don’t know what the number is. Was it 20,000? 50,000? What number do we deduct from the 183,000? We simply do not know.
Williams reports that seasonal adjustment factors do not work properly during troubled economic times and add their own overstatement to the jobs figure. If anyone could estimate the overestimate of new jobs that results from malfunctioning seasonal adjustments, it is John Williams, but he doesn’t provide an estimate.
Most likely, the new jobs did not exceed 150,000, a figure that would merely keep even with population growth and thus not reduce the rate of unemployment, which, consistent with this deduction, remained constant.
Let’s look now at the kind of jobs that were created. Of the new jobs reported by BLS, 92% are in services. Of this 92%, only 7% could possibly relate to exportable services--architectural, engineering, and computer systems services.
Of the reported new service jobs, 29% are in health care and social services. The categories that account for the health services jobs are ambulatory health care services and hospitals. Waitresses and bartenders account for 20% of the reported new jobs. Employment services account for 29% of the new reported jobs. Transportation and warehousing accounted for 5% of the reported new jobs, despite a loss of 60,000 jobs in general merchandise and department stores.
In other words, the vast majority of the new jobs are low paying jobs, except for a few truck drivers.
Other conclusions that we can draw are:
The US has nothing to export to reduce its massive trade deficit, which has, sooner or later, disastrous implications for the US dollar.
Middle class income jobs are declining, with polarization at the two extremes.
US economic policy continues to focus on the mega-rich at the expense of 99% of the population. US interest rates are kept at, or near to, zero in order to maximize mega-bank earnings, while depriving tens of millions of retired Americans of interest income on their lifetime savings, forcing them to spend their capital in order to live, thus depriving their heavily indebted children of inheritance.
In short, the US is well on its way to becoming a third world country, as I predicted would be the case in 20 years at a Brookings Institution conference in Washington DC early in the 21st century.
America is no longer the land of the free and independent. It is the land of the 1% mega-rich.

Paul Craig Roberts is a frequent contributor to Global Research.  Global Research Articles by Paul Craig Roberts

“A harder Default To Come”

“We owed it to our children and grandchildren to rid them of the burden of this debt,” said Greek Finance Minister Evangelos Venizelos about the bond swap that had just whacked private sector investors with a 72% loss. While everyone other than the bondholders was applauding, the drumbeat of Greece’s economic horror show continued in its relentless manner.
In central Athens, a stunning 29.6% of the businesses ceased operations, up from 24.4% in August; in Piraeus 27.3%, a 10-point jump since March. The whole Attica region lost 25.6% of its businesses. “This worsening of the survival index in the commercial sector ... shows that resistance is waning,” said Vasilis Korkidis, president of the National Confederation of Hellenic Commerce. “We must continue the battle of daily survival and keep our shops open,” he pleaded—while fourth quarter GDP was being revised down to -7.5% on an annual basis. The Greek economy has shrunk about 20% since 2008.
Unemployment is veering toward disaster. The overall rate of 21% in December, announced Thursday, was horrid enough, but youth unemployment rose to a shocking 51.1%, double the rate before the crisis. A record 1,033,507 people were unemployed, up 41% over prior year. Only 3,899,319 people had jobs—a mere 36.1% of a total population of 10.8 million!
No economy can service a gargantuan—and rapidly growing—mountain of debt when only 36.1% of its people contribute (by comparison, the US employment population ratio is 58.6%, down from 64.7% in 2000). Hence, another bout of red ink. The “cash deficit” at the end of 2011 hit €24.9 billion, 11.5% of GDP, far above the general budget deficit. Government-owned enterprises, such as the public healthcare sector, couldn’t pay their bills. Total owed their suppliers: €5.73 billion.
Yet, forcing down the deficit is one of the many conditions that the bailout Troika of EU, ECB, and IMF have imposed on Greece. And: “If the Greek people or the Greek political elite do not apply all of these conditions, they exclude themselves from the Eurozone,” said Luxembourg’s Finance Minister Luc Frieden. All of these conditions. Then he added the crucial words: “The impact on other countries now will be less important than a year ago.” Read.... Firewalls In Place, Markets ready: Greece Can Go To Heck.
Under pressure to cut its healthcare budget, the government reduced the prices that the industry can charge state-owned insurers. So wholesalers are selling their limited supply outside Greece, while out-of-money state-owned insurers delay payments to pharmacies and hospitals, which then can’t pay their wholesalers for the medications they do get. In return, wholesalers turn off the spigot. And the system is locking up.
Even Health Minister Andreas Loverdos conceded that there were shortages, but that they were limited to lower-priced medications. Of the 500 most common drugs, 243 have disappeared from the shelves, including antibiotics and drugs for treating diabetes and hypertension. The Panhellenic Association of Women with Breast Cancer, for example, received many complaints from patients who claim they weren’t treated due to lack of oncology drugs. And the world’s largest pharmaceutical companies are worried that Greece and some other countries might not be able to pay them at all.
A bright spot: tourism. In 2011, receipts rose by 9.5% over prior year as the Arab Spring had scared tourists away from destinations such as Egypt and Tunisia. In July, receipts jumped 14.4% and in October 15%. Alas, in December they declined 4.9%. And that reversal has now infected 2012. Tourist arrivals so far this year are down 10.7% in Athens and 6.7% for the country. Its last growth industry has hit the skids, too.
With unemployment climbing, production and consumption tanking, businesses shutting down, and tourism nose-diving, there is only one way for tax revenues: down. Budget deficits will be worse than promised. Greece’s debt—now largely to taxpayers of other countries—will continue to balloon. The standard of living of the vast majority of Greeks will get slammed, though the elite that are negotiating these deals will do just fine.
“We still don’t have a solution for Greece, so there will be a harder default to come,” predicted Charles Wyplosz, director of the Geneva-based International Center for Money and Banking Studies. Yet, in a bitter irony, Germany—the country where tax dodging is a national sport—has decided to send 160 employees of its Ministry of Finance to Athens to fix against all odds the tax collection system, a debacle that will endear the already reviled Germans even more to the Greeks. Read.... Final Spasm: Greco-Teutonic Wrestling.

Dutch Freedom Party pushes euro exit as €2.4 trillion rescue bill looms

The Dutch Freedom Party has called for a return to the Guilder, becoming the first political movement in the eurozone with a large popular base to opt for withdrawal from the single currency.

Dutch right wing politician Geert Wilders speaks at the Parliament
Geert Wilders made his decision after receiving a report by London-based Lombard Street Research concluding that the Netherlands is badly handicapped by euro membership Photo: EPA
"The euro is not in the interests of the Dutch people," said Geert Wilders, the leader of the right-wing populist party with a sixth of the seats in the Dutch parliament. "We want to be the master of our own house and our own country, so we say yes to the guilder. Bring it on."
Mr Wilders made his decision after receiving a report by London-based Lombard Street Research concluding that the Netherlands is badly handicapped by euro membership, and that it could cost EMU’s creditor core more than €2.4 trillion to hold monetary union together over the next four years. "If the politicians in The Hague disagree with our report, let them show the guts to hold a referendum. Let the Dutch people decide," he said.
Mr Wilders is not part of the coalition. However, the minority government of Mark Rutte relies on the Freedom Party to pass legislation. The two men were in talks on Monday on €16bn of fresh austerity cuts needed stop the budget deficit jumping to 4.5pc of GDP.
The study said the eurozone cannot survive in its current form. The longer Europe’s politicians dither, the more costly it will become. "The euro can only survive if it becomes a fiscal transfer union with national sovereign debt subsumed in eurozone bonds," said co-author Charles Dumas.
Greece will opt for a "negotiated exit" later this year, once the pain becomes excruciating. This will be after the French elections in May, but before the German electoral season begins in 2013.

Portugal will follow in "short order" as markets focus on its struggling banks and nasty logic of recession for debt dynamics. "At that point, if not before, attention will turn to Spain and Italy, both likely by then to be much weakened by savage austerity programmes now being implemented," said Mr Dumas.
That is the moment when the creditor core will face the decision they have "ducked" for the past two years: either accept an EMU reflation strategy, along with debt pooling, fiscal union, and transfers; or accept a break-up.
Under an "optimistic scenario" it would cost €1.3 trillion to shore up Med-Europe, rising to more than €2.4 trillion if Italy and Spain need some form of bond relief. "The staggering trillion bill to preserve the euro only takes us to 2015. In reality, most of the debts will never be repaid and subsidies will need to continue, year in and year out," said Mr Dumas.
The report said exit by Italy would be relatively easy. The country would recover once it regained currency freedom, though foreign bondholders would take an exchange rate hit. Spain’s exit would be harder to manage since it has a primary budget deficit of 7pc of GDP, and its companies have large euro debts abroad.
Exits costs will rise relentlessly for both countries over time. Prolonged economic depression within EMU would render their debt mostly worthless in the end. So if there is to be break-up, "the sooner the better".
Italy and Spain are more likely to hang on as long as they can, until Northern patience snaps. Germany and Holland would then leave, causing a general return to the "sanity" of floating currencies.
The report said Holland had fallen behind non-euro Sweden and Switzerland since the launch of EMU. Its growth rate dropped from 3pc over the preceding 20 years to 1.25pc under the euro, compared with 2.25pc in Sweden and 1.75pc in Switzerland. The Swedes have stolen a march worth €3,500 per head over the past decade.
The report said Sweden and Switzerland have performed better on every front, relying on currency swings to check imbalances. "They created more jobs than the Dutch and especially the Germans. They enjoyed lower inflation. They were more successful in balancing their budgets. And they have run larger current account surpluses. Only wishful thinking could absolve the euro from blame."
Holland had enjoyed a "one-off" gain of 2pc to 2.25pc of GDP from the launch of the euro, and transaction costs have fallen. However, the trade benefits have been scant. The value-added share of exports has not risen.
The pan-EMU convergence in borrowing costs cited for many years as the great success of EMU proved to be a curse. It let the South borrow too cheaply and too much, lulling creditors into a false sense of security, and ultimately led to the debt crisis.
The report conclude that EMU membership "locks the Netherlands into a system in which cost competitiveness is matched by massive structural over-valuation of costs in Med-Europe, resulting in deficits that will suck cash out of the core Eurozone".
Mr Wilders said the study "goes against everything we are told in the media and by the left-wing elite on a daily basis".
The Dutch government is unlikely to pay any attention to the findings, but the Freedom Party’s populist campaign may force Mr Rutte to take an even harder line in loan talks with Greece, Portugal and Ireland, or over the expansion of the EFSF rescue fund.
The Dutch are major net contributors to the EU budget and have long resented serving as a cash cow. They rejected the European Constitution by a wide margin in 2005. A bitter edge has crept into Dutch political discourse.
Mr Wilders is known for his astute political instincts. His demarche tells us all too clearly that Dutch patience is wearing very thin.

ISDA Says Greece In Default, CDS Will Trigger

ATHENS, GREECE - JUNE 28:  Demonstrators outsi...
Greece has gone ahead with the first phase of their restructuring -  Getty Images via @daylife
UPDATE 2 (2:48 p.m.): ISDA has now declared that Greece’s restructuring does represent a default, meaning credit default swaps will trigger. Read the statement here.

UPDATE (2:43 p.m.): An ISDA spokesman told Forbes no decision has been reached regarding on whether Greece’s restructuring qualifies as a credit event, which would in turn trigger CDS protection.
A report by Derivatives Intelligence published around 2:00 PM New York time said the ISDA had indeed considered the PSI/debt restructuring deal a credit event.  Their report from the supposed ISDA release, noting the application of collective action clauses had “reduced” bondholders’ ability to receive payments, and that an auction for outstanding CDS would be held March 19.
Kevin Dugan, the journalist who published the initial report, tweeted a picture of the ISDA’s supposed press release.  Click here for the picture.
Greece did it!  The Hellenic Republic executed the highly controversial PSI or debt restructuring deal, getting 85.8% of holders of Greek-law governed bonds and 69% of foreign-law bonds to tender.  All eyes will now fall on the ISDA as the Greek government uses collective action clauses (CACs) to force holders of bonds governed by domestic law to take the debt swap, potentially triggering credit default swaps (CDS).
While Greece hasn’t missed a bond payment yet, it has effectively defaulted by forcing a 74% haircut on those creditors that held out, as Fitch’s calculations in their recent downgrade of Greece’s sovereign rating to “selective default” show.  The question of a Greek default may appear superfluous to some, given the country is relatively small and has been bailed out, but the resolution of the situation will set historical precedents that could take on massive importance if other peripherals, particularly Spain and Italy, face serious financing problems.
For more analysis, read Greek Default Provides Temporary Relief As EU Crisis Marches On.
And that is why the International Swaps and Derivatives Association’s decision on CDS is actually transcendental.  Greece announced that holders of €152 billion of bonds governed by Greek law, of the approximately €177 billion issued, voluntarily tendered their bonds and accepted a 74% haircut.  Also included in the deal were holders of laws governed by foreign law, generally British or Japanese, whom tendered €20 billion or 69% of bonds outstanding.
Using retroactively inserted CACs, Greece can force bondholders governed by domestic law to take the deal, as long as they meet a certain threshold, which they did: beyond the 85.8% of those bondholders that tendered their bonds, an additional 5.3% (about €9.38 billion in face value) voted to force the restructuring terms, without tendering their bonds.  Presumably, that 5.3% consists of bondholders that bought CDS protection, and need the CAC implementation to trigger that protection.
At the end of the day, this means Greece is forcing 9.9% of bondholders under domestic law to both accept the retroactively inserted CACs and to take a 74% haircut (according to Fitch’s calculations).  Just to clarify, an additional 5.3% held out but voted to enforce the CACs, presumably because they bought CDS to cash-in on Greece’s sovereign debt crisis.
It’s all down to the ISDA now.  The group has been under fire by the media for failing to consider Greece in default when it was clearly imposing a massive haircut on its creditors.  To the ISDA’s defense, no bondholder had actually suffered a haircut.  As of Monday, when Greece implements the swap, this will have occurred, against the will of 9.9% of those bondholders.
The ISDA was set to meet at 1PM London time on Friday to figure out if a restructuring credit event had occurred, a circumstance that would trigger CDS.  Both Nomura and Barclays have come out expecting the ISDA to rule in favor of a credit event, thus triggering CDS protection.
The net notional value of CDS outstanding is relatively small, around $3.2 billion.  Barclays’ analysts considered the process to be “relatively uneventful” given how small the actual liabilities are.  But they are missing the point.  As the ISDA has made clear in the past, these products are in their infancy and are in a process of evolution.  The Greek restructuring is a defining moment for CDS and other derivative products, giving the ISDA’s decision value in terms of precedence, much like a in a legal system based on jurisprudence.  The net notional value of total CDS outstanding is $15.7 trillion according to DTCC, that’s larger than the U.S. economy.