Wednesday, October 03, 2012

The unrepayable excesses of the ECB

The figures were revealed on the normally highly reputable blog "Zero Hedge" two days ago, linked here, from which I quote

The ECB lists, as of the end of the 1st quarter of 2012, 16.304 trillion Euros ($ 21.032 trillion) in assets and 17.334 trillion Euros ($22.631 trillion) in liabilities. It is right there in black and white as I showed in the ECB provided data that I presented yesterday. However when you get to their consolidated balance sheet you find the numbers they bandy about in public to be a ledger of 3.240 trillion Euros ($4.00 trillion) and you catch your breath and pause. Utilizing normal American accounting practices this variance would be impossible and yet here it is; staring us all right in the face.

The balance sheets I am used to perusing usually require assets and liabilities be balance but disregarding that the figures here are mind blowingly awful and have been apparently now buried. The truth they reveal cannot for ever be so hidden.

If one country leaves the Euro Group (and now it is clearly a matter only of when and which one, not if) then these balances will have to de divided out amongst the 17 members and accounted for in some manner! Massive national defailts will have to result.

Looking at the agreed shares planned for the ESM and taking a round total of $22 trillion the liabilities for those nation's still considered as paymasters will be as follows:

Finland 1.8% ..........  $396,000,000,000
Netherlands 5.7% ...  $1,254,000,000,000
Germany 27.15% ....  $5,973,000,000,000

These amounts also assume all the other broken ex Euro Group members will meet their own shares, as laughingly assumed in the recent Spanish budget for 2013, upon which I also tweeted yesterday!

Of course there may be some offsetting assets truly with some value on the other side of the ECB balance sheet, but knowing the EU and the ECB, are there any out there, seeing the years of corruption, layers of incompetent officialdom, the lunacy of the regulations and uneconomic green policy excesses; the lavish wining and dining and useless travel of the national and EU officials involved and the sheer vantity and repulsiveness of the ideas behind the project - can all that have left much more than a row of beans on the supposed asset side of this dreadful EU project?


Anonymous Anonymous said...

I read that article, and it was nt quite clear, but dont forget bank balance sheets are revresed. Assets are the liabilities, and liabailes are the assets.

Assets= loans they have made
Liabilities = Deposits taken in.

2:06 PM  

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