Forget the PIIGS,
Europe As a Whole Is Insolvent
June 25, 2012 By gpc1981
http://albertpeia.com/europeinsolvent.htm
You
see, the debt problems in Europe are not simply related to
As
you can see, even the more “solvent” countries like
These
numbers, while bad, don’t account for unfunded liabilities. And
Let’s
consider
To
put the insanity of this into perspective, Weber’s claim is akin to Ben
Bernanke going on national TV and saying that the
What’s
truly frightening about this is that Weber is most likely being conservative here. Jagadeesh Gokhale of the Cato Institute published a
paper for EuroStat in 2009 claiming
And
of course,
Indeed,
by the German Institute for Economic Research’s OWN admission, German banks
need 147 billion Euros’ worth of new capital.
To put this number into perspective
TOTAL EQUITY at the top three banks in
And
this is
Think
BAD. As in systemic
collapse bad.
Indeed,
let’s consider TOTAL debt sitting on Financial Institutions’ balance sheets in
|
Country |
Financial
Institutions’ Gross Debt as a % of GDP |
|
|
65% |
|
|
99% |
|
|
664% |
|
|
21% |
|
|
113% |
|
|
735% |
|
|
148% |
|
|
95% |
|
EU as a whole |
148% |
Source: IMF
As
you can see, financial institutions in
Indeed, taken as a whole, European
financial institutions have more debt than
Taken
as a whole, the
The European banking system as a
whole is leveraged at nearly twice this at over 26 to 1. That’s the ENTIRE
European Banking system leveraged at near Lehman levels (Lehman was 30 to 1
when it collapsed).
To put this into perspective, with a
leverage level of 26 to 1, you only need a 4% drop in asset prices to wipe out
ALL capital. What are the odds that European bank assets fall 4% in value in
the near future as the PIIGS continue to collapse?
These
leverage levels alone position
This
is not a question of “if,” it is a question of “when.” And it will very likely
happen before the end of 2012.
The
reason that this is guaranteed to happen before the end of 2012 is that a HUGE
percentage of European bank debt needs to be rolled over by the end of 2012.
I
trust at this point you are beginning to see why any expansion of the EFSF or
additional European bailouts is ultimately pointless:
On
that note I believe we have at most a month or two and possibly even as little
as a few weeks to prepare for the next round of the EU Crisis.
With
that in mind, I’ve begun positioning subscribers of my Private Wealth
Advisory for this very possibility. We’ve already locked in
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Indeed,
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Best Regards,
Graham Summers
Chief Market Strategist