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2011年11月26日 星期六

(Chapter 5) debt crisis in Europe: France and Germany's efforts will effectively solve the problem?




The following blog was written in November 25th, 2011

German 10-year bond auction, there is not enough of a subscription.

Germany 6 billion euros, ten-year government bonds, and ultimately only raised 3.56 billion euros, and the remaining amount by the German central bank to underwrite.

The reasons for dismal sales, in addition to not attract interest, the main investors, worried about the debt crisis in Europe, will eventually explode.

Debt crisis of the flame, the body has been burned in Germany.


In addition, the European Union requires creditors, automatic 50% reduction in the principal amount invested. These absurd proposals scared off investors.


The current instability in financial markets, even to buy German bonds, investors will worry about a loss.

Therefore, the Greek government, in the financial markets to raise emergency funds, encountered unprecedented difficulties.


Currently, those who need to rely on Greek government bonds as collateral to borrow from overseas financial institutions, Bank of Greece,have no means of obtaining funds from overseas, banks operating in Greece, and only rely on the European Central Bank, to provide funds.


Lending between banks in Europe, for fear of lending side, cannot repay the loan in accordance with the contract.

Therefore, the European money markets, short-term liquidity shortages, more and more obvious. Banks have to pay interest on, more and more.

Spain's ten-year bond auction, yield up to 6.975 PCT, he and Italy, a loser, breaking yield of 7%, only a matter of time.

A large number of investors, because of fear of European sovereign debt crisis will affect the security of funds, a lot of money, had fled Europe, the U.S. Treasury, as a safe haven, U.S. bond yields fell, the euro against the U.S. dollars devaluation.

Outside Europe, Financial market is flooded with cash, a substantial increase in the number has reached the point cannot handle.

In fact, investors who choose to put their money on the dollars, the investor is not really willing to invest.

Although investment in the U.S. who have a great risk to accept the currency devaluation; but invest in European bonds, in addition to face the reality of depreciation, but also ready to face, forced to automatically reduce the amount of investment.
For investors, this is a very cruel punishment.


Therefore, the leaders of France and Germany have an attempt to rescue the Greek fiscal imbalance; can only come up with some fantastic ways, these approaches, but tied goggles, blind recklessness, intent to turn the tide.


To solve the core problem, without any help.

Their hearts in good faith, however, the obstacles placed in front, step by step difficult to walk over.


Currently, there is no reason has been able to convince investors willing to buy euro-denominated debt.


Here, let me give an example:

Some people, they do not know how to swim, but they are full of delusions, so they jumped in the water from the ship deck, hoping to save a suicidal person.


French and German leaders, and that a person cannot swim, there is no difference.
Let ignorant people, to save incurable people.


Greece by debt, has reached the point where no solution. Those who find ways to save the Greek are facing danger of self-immolation

Before long, the French credit rating was lowered down, then Germany, this two countries, can only be combined together to solve problems.

They will eventually give up the differences stand in the European Central Bank's "quantitative easing plan", the final compromise, hoping to resolve the crisis.

When the day came when the world printing money machine, it will start at full speed, the international financial markets, will start a battle, that is: a large currency devaluation race.


At present, banks within the euro zone, especially a large number of trades with the Greek company, due to reasons of greed, all have a lot of bad assets.


When the company's credit rating was lowered down, they are no way to raise funds with goodwill.

Greek banks can only negotiate with the State, using the name of the country, a large number of bonds issued to obtain funds to fill a loss of money black hole.

Until now, if you go to ask the president of the Greek financial institutions, how deep the black hole?

They only shook his head, his hands open, to answer your questions.

Here, I can answer you.

However, you should first answer the following three questions:

1 Do you think: Will fiscal austerity, to help European countries, out of financial difficulties?

2 Do you think: a lot of cash to help the Greek debt is to solve the financial crisis of way?

3 Germany and France have done everything, to save Greece out of financial difficulties, what is the purpose behind them?

To answer these questions, the answer is very simple, because the commercial banks in Germany and France, now has an astronomical figure of Greece, Spain, Portugal, Italy and Ireland, the country's national debt, and the difficulty of acceptance of the assets.

Germany and France, a substantial increase in cash supply to financial markets, to save the European countries in financial difficulties, in fact, their ultimate goal is to save himself.

If you can answer my above questions, can be a pretty good idea, you will be able, in the investment market has a rich harvest.

If you have confidence in my analysis, then, you are welcomes to visit me often come more often?

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