2012 - Fear of Break Up of the Eurozone and The Run on the Greek, Irish and other Peripheral Banks

[DCon]

A vast amount of cash was generated artificially across the globe without collateral to back it, or real growth in production to justify it. No matter how much they try to evade the process, it will shrink back down to size, both through inflation and through the destruction of wealth i.e. bankruptcies and write off of bad debt.

40BN

What about the rest?

British banks are sitting on “£40bn of undeclared losses”. So says Pirc, the UK’s leading shareholder advisory group. What’s more, Pirc argues, the massive backlog of undisclosed bad debts is preventing our banking sector from making vital, growth-boosting loans to creditworthy businesses and households.

It doesn’t surprise me that some of the UK’s leading banks are technically insolvent. What does surprise me is that it’s taken until last week for a respected professional body such as Pirc to state the obvious.

The biggest financial problem the West needs to solve isn’t low growth, or unemployment. Economic torpor, and the human tragedy of joblessness, are symptoms, not causes. The issue isn’t, as some would have it, that governments are “cutting spending too far and too fast”. Western governments are barely cutting, if at all.

The most significant financial problem we face, in the UK and Europe, is that our banking systems remain gridlocked, with banks doing everything possible to conceal tens of billions of sterling and euro losses.

Attempts to keep zombie banks alive, extending the existence of commercially “dead” institutions, have seriously damaged state balance sheets. Some of the world’s “leading economies” are now keeping their debt markets afloat only by ordering central banks to issue electronic credits, then using them to buy sovereign paper.

http://www.telegraph.co.uk/finance/c...k-malaise.html

[C. Flower]

40BN

What about the rest?

http://www.telegraph.co.uk/finance/c...k-malaise.html

I don't have the knowledge to put a figure on it, but what I see of production and expenditure in the west leads me to suspect that the banks and national economies right across Europe, and to a lesser extent in the US, are spectacularly bust - as someone said, the wheel is turning still, but the hamster is dead.