Full Retard Engaged: EFSF Starts Buying Its Own Bonds

Praise Mao.

For those of you who don’t understand what this means:  They flat out printed money in order to finance a failed bond auction.

The entire ponzi is coming to a head, and we now know it will end in Zimbabwe style hyper-inflation, for the euros at least.

Zero Hedge reports:

We have long mocked and ridiculed the Fed for being the ultimate ponzi instrument: after all, why worry, when your central bank will buy up almost three trillion in US paper in about 2 years (a very comforting fact for US politicians who never have to fear that those trillions in new porkbills, pardon fiscal stimulus programs, may end up without funding). Well, as it turns out those wily veteran bankers from across the Atlantic have just one upped America yet again. According to the Telegraph, the abysmal, and barely successful, 3 EUR billion issuance of EFSF bonds (which was originally supposed to be 10 EUR billion, on its very very gradual climb to 1 EUR trillion) had one more very curious feature to it, aside from confirming that it is Dead On Arrival as expected. It turns out that in addition to being the most convoluted and complex creation ever conceived by JPM which is advising Europe on coming up with structured finance products that are so complexnobody will ask any questions and will automatically assume someone else has done the homework, it is also the quintessential ponzi instrument. The Telegraph reports that the already reduced 3 EUR billion “target was only met after the EFSF resorted to buying up several hundred million euros worth of the bonds.” You read that right: in its first bond issuance since its transformation to the European Bank/Soveriegn Bailout Swiss Army Knife, the EFSF not only failed to raise a minimum token amount, but also had to...buy its own bonds. We can assume that the money the EFSF needed to fund said purchase came from the money growing tree, as at last check the ECB was still not funding the EFSF with crisp, new zEURq.PK equivalent binary 1s and 0s. But at least we all know what happens when the global ponzi goes full retard.

more at link

  • Chris Granneman

    Currency backed by anything other than a rare commodity is (It is really hard to say the as a devout agnostic raised by two atheists but..) pure evil…like the horned pitchfork wielding guy that likes to torture people for all eternity.

  • Christian

    All fiat currency is based in faith. If you don’t have a demand for it who is going to have any faith in it? It’s an interesting strategy that is playing out. Printing (electronically creating) all this currency and giving it away (low to no interest rates) to have it reinvested in government bonds. It will guarantee the expansion of the currency supply that is needed. But what happens if banks decide to loan out money, hyperinflation? What if they sit on the money and use it to pay bills stagflation?
    Either way the economy goes in the toilet. Either way they are sitting on a time bomb of fiat currency as the interest on the debt needs to have it’s pound of flesh sacrificed to it. When the house of cards falls down do you think bankers will jump out of windows or mow down as many people as possible with their cars?

  • Christian

    What about Bill Still? He says to float a currency based on paper but regulate the amount in existence. It seems like a good idea on the surface.

    • If I gave you a monopoly privilege on the ability to print money -how much would you print?

      Would you print enough to fund an army and then use that army to stop anyone from preventing you from printing more?

      Would there be any way to stop you from printing more money short of a violent revolution?