The EFSF presently has €440 billion sitting in it, which obviously isn’t enough money to bail out Greece, much less Spain, Italy, and Portugal.
What to do, what to do…?
So the Europeans have come up with an incredible solution.
“Magical currency.”
Magical currency is not like normal currency, you see. With normal currency, it is either already in someone’s possession, at which point their giving it to you is either an investment, loan, or gift, or else you’re printing more of it which is sort of like forcing everyone who has that currency to “give involuntarily.”
Not true with magical currency.
Magical currency is so much more special than regular currency. With magic currency, you can simultaneously procure funding for any need, at zero percent interest rates, without borrowing from anyone, while also not printing money.
See, wasn’t that fun.
So little inconveniences, like the EFSF needing about €1 trillion to keep their crushed economies afloat, can be casually ignored.
Gently, you ask, “How are you doing on getting more funding?”
“Why, the EFSF will lever itself several fold, of course,” they respond in kind.
“Who are you borrowing the money from?” you politely inquire.
“The EFSF will backstop the debt, as opposed to buying it,” they say back.
“But,” you suggest playfully, “if you’re levering the fund, where is the real bailout funding coming from?”
“But,” they nudge back, “we will lever the EFSF to backstop even more.”
“So you’re printing the money,” you ask quite straightforward.
“No leverage they say,” sun gracing their eyes.
“Who are you borrowing from,” you begin to grow weary.
“We’re leveraging our money several fold,” they quip, “why,…”
“Why do you ask so rudely where the money comes from.” “It must come from somewhere,” you irately point out, when one of them shouts “we’re using the money to leverage our bailout fund so that we can go and bail everyone out.”
“So you’re printing the money!?” “NO, we don’t need to print it,” one of them exasperatedly chokes. “THEN WHO HAS THE FUNDING TO FUND ALL YOUR LEVERAGE?”
“GO FUCK OFF YOU A-HOLE, IT’S MAGIC YOU DOLT.”
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Beautiful.
amen indeed !
.
B R A V O !!
Indeud, well said sir. I quite enjoyed reading this.
My current theory is that the money is coming from Germany and the Bundestag doesn’t realize yet that by voting to allow the leverage they have implicitly voted to pony up the additional money.
The more benign mkt reaction to the can kicking will just lead to more kicking
Indeed, and the pain will be that much greater down the road…
Magical indeed. This market is seriously messing with my head. I dumped my ERY that I picked up yesterday, and since I never moved my stop when I stepped out for lunch, instead of making a quick five percent, I lost two percent. Stupid mistake, but this market is so F’d up right now, I really can’t even get down on myself about it. Probably because I’m in disbelief at how on any whisper of a BS rumor everything shoots to the moon.
in other words, that fucking lunch becomes quite expensive, since they fucked you from +5% to -2%, a move of 7% …
I guess from now on, you have to trade through lunch …
Eh, what’s done is done. No use in crying about it now. Good luck to all of us moving forward. The only thing I’m holding onto at this point is my VXX.
Well said. I think this idea can be applied to all problems currently facing our planet. Politicians are literally betting on magic.
In other news, it looks like Italy has solved all their problems:
http://www.zerohedge.com/news/italy-concedes-full-blown-austerity-raise-retirement-age-65-67-2026
Italy:
We fight tomorrows problem fifteen years from now.
we will just let the next generation take care of the current generation