The DOW will rally 1,000 points on Monday. Forget the bread crumbs–nothing but beluga caviar is on the way:
The report, which echoed a Reuters report on Friday from Brussels, quoted German government sources as saying that the crisis fighting plan could possibly be announced by Merkel and Sarkozy in the coming week.
The report said that because it would take too long to change existing European Union treaties, euro zone countries should avoid such delays be agreeing to a new Stability Pact among themselves – possibly implemented at the start of 2012.
It could be similar to the Schengen Agreement that allows for uninhibited cross border travel for citizens in countries that take part. Among the countries in the Stability Pact there would be a treaty spelling out strict deficit rules and control rights for national budgets.
The European Central Bank should also emerge more as a crisis fighter in the euro zone. The ECB is independent and governments cannot tell it what to do. But the expectations on the ECB are clear, Welt am Sonntag wrote.
“Based upon these measures, there should be a majority within the ECB for a stronger intervention in capital markets,” Welt am Sonntag said. It quotes a central banker as saying: “If the politicians can agree to a comprehensive step, the ECB will jump in and help.”
In Brussels on Friday, euro zone officials said a push by euro zone countries toward very close fiscal integration could give the ECB the necessary room for manoeuvre to scale up euro zone bond purchases and stabilize markets.
The ECB, which cannot directly finance governments, has been buying Italian and Spanish bonds on the secondary market since August to try to keep down borrowing costs for the euro zone’s third and fourth largest economies and contain the spreading of Europe’s sovereign debt problem.
Such tight fiscal integration is being considered by France and Germany, the officials said, with Berlin pushing to change the European Union treaty so that a country could be sued for breach of EU budget rules in the European Court of Justice.
As I noted in my previous post, this is about Europe (Germany) sorting through a coordination problem. With every country staring down yields headed for, like, OMG, 100%, they have now become totally on board with abdicating their sovereignty to the Reich, leaving Nazis wondering why they never became central bankers. Now that Europe is, for lack of a better word, coordinated, we can resume the Clam’s regularly scheduled programming, aka SANTA MELT UP.
5 Responses to Merkel’s Truth Shall Set You Free
Unelected politicians allocating monies they don’t have. Sounds like a fairytale solution.
Hope this gets put to a referendum, or else Europe might just burn.
Dude, more fucking speculation. The market moves faster then the politicians. Tomorrow night Merkel will probably come out in a Goebels costume screaming about the master race and how it caused the fall of the free world.
rhino, I respectfully disagree. This is what it has been about all along–fiscal coordination. The EFSF–and its ridiculous concept of 1,000 times leverage–was nothing more than a diversion, a medium to buy more time. Germany isn’t dumb enough to be concerned with inflation at this stage; they know deflation is the risk. Their concern is has been the “moral hazard” problem all along. Some semblance of fiscal integration is what they’ve been driving towards the entire time-they’ve adopted the hard line stance on monetary policy just to ensure that they weren’t entirely on the hook for this thing. In many ways, I’m inclined to concede, “Well played, Merkel.”
hope your right pedro. fucking finally the music starts again with clamato cocktails all around.
so merckels’ the “fat lady”?