They are getting their act together – that’s the stuff which can turn markets short-term

The various summits this weekend seem to get around to a package, which will dilute the situation and get the markets to snap out of the panic selling soon. As the markets recognize that the effects translate into effective release of the the steep rising distress. One very simple indicator to see if it works will be an easing Libor market. The measures have to be put into work swiftly to limit further damage.

Europe Plans Temporary Guarantee of Bank Debt

Countries that use the euro will temporarily guarantee future bank debt to encourage lending and ease the credit crunch, according to a draft statement under discussion by European leaders Sunday.

Map of Europe

The declaration says the governments would guarantee “for an interim period and on appropriate commercial terms” new debt issued by banks for up to five years.

“This scheme would be limited in amount, temporary and will be applied under close scrutiny of financial authorities until Dec. 31, 2009,” it says.

Excerpt from

European Leaders Consider Sweeping Crisis Plan

PARIS — Leaders of the 15 nations of the European single-currency zone are considering a 14-point plan designed to stabilize their roiling financial markets, according to a draft statement issued Sunday at the start of a summit in Paris.

The sweeping plan calls for euro-zone governments to issue guarantees and insurance, to buy stock in needy companies, to issue qualifying capital to financial institutions through preferred shares and other instruments and to act to stabilize long-term maturities.

[European summit] Getty Images

From left German Chancellor Angela Merkel, French President Nicolas Sarkozy, British Prime Minister Gordon Brown and French Prime Minister Francois Fillon get ready before a financial crisis summit.

The plan also calls on the European Central Bank to create a facility to acquire commercial paper from financial institutions and other companies, to inject funds into cash-starved enterprises. The U.S. Federal Reserve last week set a similar plan into motion.

Euro-zone governments would also urge the ECB to keep a flexible stance in addressing the crisis. That could be interpreted as calling on the ECB to loosen monetary policy if needed.

The draft declaration welcomes the ECB’s participation in a coordinated round of official interest rate cuts by major central banks last week. The ECB’s measures would stay in effect through the duration of the crisis, the draft adds.

The cost for Europe is not put into numbers (Germany claims 400 bil. Euro for Germany) yet but they easily reach US proportions. If you add up the various programs, it easily will accumulate to $4 trillion for now – but I doubt that that will do the trick but nevertheless that will stop the bleeding for a while. On the other hand, it will let the last bubble burst at some point the totally overvalued Bond markets. Who on this planet should absorb $4 trillion for starters? That’s why they have to get the money printing machines working 24/7.

That is going to be another problem for the underlying negative structure – rising interest rates due to safe haven buying for the last year helped Bond markets to be stable but the new issuance of Bonds in extreme high proportions e.g. the US had a debt of $10 trillion so far and need to increase in short period by $2 tril. Those are incredible proportions and will drag Bonds down or interest rates up. One the other hand, to make the process smooth because they can not issue so much in Bonds – they create hyperinfation by the printing press. That causes problems I will discuss this week from a different angle but basically the technique is closing one whole by opening two new ones.

Basically, with few modifications this is the Japanese approach – only on an almost global scheme – and Japan did not come out of this cycle now for 19 years with a few more years to come. Interest rates close to 0% for 19 years and huge bailout programs with an incredible burden of debt for a developed country. Pluto enters Capricorn now, which happens only once in 250 years for 15-6 years, which will bring a severe and long contraction of economies and explosion of debt.

Excerpt from

In January 2008, Pluto will inch into Capricorn and be exactly opposite where it was when the Fed was created in December 1913. Pluto is also famous among astrologers for foreshadowing major changes to come, and so it is no surprise that the dollar has been falling in relation to other world currencies, especially the euro. But don’t expect our monetary system to make headlines in the coming months and years, for the Fed bankers work hard to maintain secrecy. And since our politicians depend on money to mount elections and reelections, they aren’t likely to blow the whistle on our rapidly deteriorating monetary system either. Most politicians just want to know how to raise campaign money. Few understand how the system really works, Rep. Ron Paul of Texas being a rare exception.

Astrology enables us to know when times of difficulty and change will come, but not what we will decide to do about the difficulties or how we’ll decide to change. The less-than-half a percent of the human race which now reaps bonanzas from the debt-based world monetary system (with the dollar the world’s reserve currency, replacing gold) are not likely to relinquish their control. Which means that behind the headlines and “off camera,” a lot fur will fly as the powerful decide how to downsize the USA and restructure the national debt. The alternative is a popular uprising to end the debt-based Fed-run system, but because so few people understand what it is and how it works, that isn’t likely.

Unless Uranus has its characteristic surprises in store when it squares Pluto, from 2008 to 2018, simultaneously forming a grand cross with the USA’s natal Sun square Saturn. Uranus brings the unpredictable, the key phrase for Uranus being “expect the unexpected.” The last time Uranus and Pluto formed a square and hit the US Sun-Saturn square, we went through the great depression of the 1930s, and some amazing changes emerged from those years, the enactment of Social Security being a prime example. What appears in the offing is “stagflation,” a combination of rampant inflation combined with economic stagnation. As during the 1930s, those in control will have a dozen or more explanations of what has happened to the economy, and the public will be blamed for various transgressions, such as signing questionable mortgages deals. Yet there is the Uranian possibility that a growing movement worldwide to change the debt-based system may surface into public awareness. Already in the USA and more so in Germany, local currencies are being tried, which keeps money in local communities. Global corporations and their political friends will work hard to put down that movement.

But who knows? Maybe a politician or two will rebel against being controlled by what President Van Buren called The Money Power, and lead us back to the debt-free monetary system envisioned by our nation’s most aware founders—Ben Franklin, Thomas Jefferson and Tom Paine. If that happens, it will transform the USA and world, raising billions of people out of grinding poverty.


~ by behindthematrix on October 12, 2008.

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