China to the Rescue! Wen Offers to Buy Greek Bonds

Subtitle: “Ticker Tape Parade for Trojan Horse” Ordinarily China’s policy of driving exports to a nation with purchases of their currency is met with resistance. The US, for example, has been chastising nations buying $US, like Japan and China, calling them currency manipulators, outlaws, etc. But China is getting very clever about it, here coming […]

Hanke on Greece

Hate to criticize someone proposing a payroll tax holiday- darn that Lerner’s law! A Big Bang for Greece There is a way out of the debt trap for Athens. By Stece H. Hanke June 30 (WSJ) — How did Greece get into the death spiral that it’s in? Unfunded entitlements. In other words, promise somebody […]


Q2 ended ECB rolled it all over Greece weathered the quarter end storm without going parabolic as in previous spikes, as ECB buying continues to provide the secondary market liquidity that enables dealers to buy the auctions. Euro back up towards 1.24 This would be the time for equity markets to bottom and start discounting […]

corrected post on IMF operations

I now understand it this way: The IMF creates and allocates new SDR’s to its members. There is no other source of SDR’s. SDR’s exist only in accounts on the IMF’s books. SDR’s have value only because there is an informal agreement between members that they will use their own currency to lend against or […]

Merkel’s Coalition Steps Up Calls for EU ‘Orderly Insolvencies’

It doesn’t get any more ominous than this. This would insure an orderly default of the entire currency union. Which is already in progress. Germany is concerned that the Greek situation resulted in larger deficits for the other members, and wants something in place so defaults don’t result in this type of fiscal expansion for […]

Greece Bailout Plan Will Include Support Fund for Domestic Banks, EU Says…

The size Greece ‘needed’ implies the others will need numbers beyond euro zone capacity, especially as the Greek deal used up euro zone capacity. So this means Greece is the last rescue possible- the rest are on there own. They wanted to stop the contagion, but that would have had to be done by showing […]

Greece CAN go it alone

Greece CAN Go it Alone Yesterday at 5:00pm By Marshall Auerback and Warren Mosler Greece can successfully issue and place new debt at low interest rates. The trick is to insert a provision stating that in the event of default, the bearer on demand can use those defaulted securities to pay Greek government taxes. This […]

It’s not too late for Greece

It remains my contention that Greece can dramatically upgrade its new securities simply by putting a provision in the default section that states that in the case of default the bearer, on demand, can use the securities at maturity value plus accrued interest to pay Greek government taxes. This makes the debt ‘money good’ for […]

Run on the European banks?

When/if word gets out that depositors can lose, that contagion spreads across the euro zone with a general run on the banking system to actual cash, gold, and other currencies, which doesn’t create a cash shortage but drives the euro down further, and further weakens the credit worthiness of all the national govts. As previously […]