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  • The Euro Fiasco Suicide Formula (EFSF)

    Alexander Gloy

    There is one simple rule for investors: avoid all things beginning with “Euro-“. Eurotunnel ended in bankruptcy. Eurodisney was a disaster for public shareholders. And so the Euro itself is following the same path. “Euro” birds European politicians are faced with one problem: none of their plans to end Europe’s debt crisis has worked. Absolutely…

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  • Mystery solved: ECB can’t afford the Greek barber shop

    Alexander Gloy

    Whenever you come across a mystery in finance there always is an explanation. Like the question why the ECB would so ferociously resist any “haircuts” on Greek debt. Despite all the evidence that current debt, now expected to peak at levels exceeding most calculators’ capacity, is unsustainable. Why would the ECB, the largest single holder…

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  • The Greek (Ministry) Mystery of Finance

    Alexander Gloy

    The Greek January – September budget deficit was EUR 19.16bn versus 16.65bn same period last year (+15%). This only includes the central government. The initial deficit target for 2011 was EUR 17bn. We blew past that after only 8 months. The revised target (July) is now 22bn (9.5% of GDP). Latest estimate from the Greek…

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  • To EFSF or not to EFSF – a Franco-German drama

    Alexander Gloy

    (with simultaneous translation from Euro-lingo into plain English) 4:05: “Direct help for bank recapitalization from EFSF is not at all doable” – German Economy Minister (Translation: “Frogs, I thought we told you already, your plan doesn’t fly”) 6:00: “It is important to us that all banks are equipped for all eventualities and must go to…

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  • High Noon at the Swiss National Bank

    Alexander Gloy

    Tomorrow, Thursday (October 6th), the Swiss National Bank will report its foreign currency reserves for September at 9am local (3am EST). We will know then how much Euros had to be gobbled up in order to defend the “peg”. Increasing tick volume in recent days looks suspicious – why would there be more volume than…

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  • The Fed, ZIRP and the French boomerang

    Alexander Gloy

    Ben Bernanke promised to sit, like an elephant, on short-term interest rates for another two years  – at least. What were US Money Market Funds (MMF) going to do? US Treasury yields are 0.09% for 12 months, 0.02% for 6 and negative 0.01% for 3 months:   Source: Bloomberg 9/23/2011 You can’t deliver negative yields…

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  • Bundesbank ready to pull the Euro’s ripcord

    Alexander Gloy

    Something odd is happening. Germans are leaving the ECB. First Weber, then Stark. Why would senior German officials withdraw from the ECB just at a time when they should seek greater influence? One explanation: to avoid having a conflict of interest once Germany re-instates the Bundesbank as the leading central bank of Europe. Currently, Germany…

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  • Get your half-yearly dose of hopium from the IMF

    Alexander Gloy

    With the publication of the half-yearly “World Economic Outlook” by the IMF it’s time again to look confidently into the bright economic future – or is it? Let’s examine how the IMF wizards fared compared to their own (past) forecasts: Source: IMF World Economic Outlook, Table 2.2 (Selected European Economies); October 2010 (page 75), April…

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  • Save the Swiss Gold

    Alexander Gloy

    According to an article in Swiss newspaper NZZ (Neue Zuercher Zeitung) the SVP party (Swiss People’s Party) launched a referendum to “protect” the 1,000 tonnes of gold owned by the Swiss National Bank (SNB). Their aim is to: make it unconstitutional to sell gold force the SNB to hold 20% of its assets in gold…

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  • Why China really needs to step up its gold purchases

    Alexander Gloy

    Central banks own most of the world’s gold (30,562 tonnes compared to 2,158 tonnes in ETF owned by private investors). Why? Our entire monetary system is based on fiat currencies (the paper is not worth anything – the value stems from the trust someone else will accept this paper for the value printed on it).…

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