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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum

GLD 398.57

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Dec 18 4:00 PM EST

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To: pogohere who wrote (81580)	10/20/2011 12:51:58 AM
From: pogohere	Read Replies (1) of 218584

Beware the credit event jabberwocky: Franco-German deadlock over ECB's role in rescue fund "If there isn't a solution by Sunday, everything is going to collapse," [Mr Sarkozy] told his inner circle before an emergency trip on Wednesday night to see German Chancellor Angela Merkel in Frankfurt. . . . Mr Sarkozy wants the fund to operate as a bank, able to leverage its rescue power by tapping the ECB's credit window. This is less likely to endanger France's AAA credit rating. Yet the idea is anathema to Germany and Bundesbank purists. . . . German finance minister Wolfgang Schäuble cannot stem the crisis by embracing eurobonds or fiscal union without a change in Germany's constitution, requiring a popular vote. He has instead offered an ungainly compromise to boost the EFSF to €1 trillion or so by turning it into a bond insurer, perhaps taking the "first loss" of 20pc on Club Med debt. Even this may be going too far in Berlin. Peter Schäffler, economics chief for the coalition's Free Democrats (FDP), said Mr Schäuble had broken a pledge given to the Bundestag when it voted for the revamped EFSF last month. "People feel deceived. He said there would be no leverage," he told The Telegraph. "It is absurd for him to claim that this plan is not leverage." Mr Schäffler said escalating liabilities threaten Germany's AAA credit rating. "That is what worries me about this whole situation." . . . Mr Redeker [currency chief at Morgan Stanley] said the proposals risk setting off a chain reaction in which France loses its AAA rating, followed by Germany and the creditor core as ever greater liabilities engulf them, too. (more) (emphasis added) http://www.telegraph.co.uk/finance/financialcrisis/8837424/Franco-German-deadlock-over-ECBs-role-in-rescue-fund.html

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