S&P Says French Plan For Rolling Over Greek Debt Will Constitute A Default …. Jean Claude Juncker Says Austerity Measures Mean Loss Of Sovereignty

Open Europe provides news on the Euro for July 5, 2010

Standard & Poor’s dealt a blow to plans for private sector involvement in a second Greek bailout stating that the French plan could trigger a default, something which EU leaders and the ECB want are seeking to avoid. S&P said that any rollover would amount to a “distressed” transaction and so would require them to downgrade Greek bonds to “selective default” status.

Eurozone finance ministers agreed to release the eurozone’s share of the next tranche of the original Greek bailout funds on Saturday evening, but failed to make headway on the second Greek bailout.  A deal on the second Greek bailout is now not expected until September. Zero Hedge highlights figures showing that Greek debt and interest payments through August amount to €18.2bn, meaning that despite the release of the €12bn tranche, Greece may not have enough funding to make it through to September.

In an interview with Focus magazine, Jean-Claude Juncker, President of the Eurogroup, relates that the new austerity measures and privatisation programme mean that “the sovereignty of Greece will be massively limited”. A group of former prime ministers including Italy’s Giuliano Amato and Belgium’s Guy Verhofstadt write in the FT proposing a new solution to the eurozone crisis, featuring a eurozone bond and the delisting of national bonds from trading.

Giuliano Amato and Guy Verhofstadt in Financial Times call for a eurozone bond issued by the EIB, requiring no Treaty change.

Wolfgang Münchau writing in the Financial Times relates The Greek rollover pact is a toxic CDO and not a participation of banks, but a bailout of banks.  The SIV is designed to limited to liability of banks, reducing their haircut potential to a small amount relative to current valuations. In the meantime, Greece will have to pay interest rates on a new 30-year bond of 5.5% to 8%, something Greece will never be able to do, even if growth were to return next year.

Chart of the Euro, FXE,

Small Cap Consumer Discretionary, PSCD, rises to a new high

Consumer Discretionary: Consumer Services, VCR, rises to a new high.

Commentary:
The age of Leverage and the seigniorage of neoliberalism was based upon central bank intervention with low interest rates, quantitative easing 1 and 2, and the securitization of GSE debt into Ginnie Mae debt by REITS such as Annaly Capital Management, NLY, along with bank solvency support and real estate provided by the FDIC as well as financial deregulation with the repeal of Glass Steagall Act, and carry trade lending, ICI, by Austria Banks, and Japanese Banks.

The Age of Deleveraging and the seigniorage of Regional Economic Governance will be based upon Leaders’ Framework Agreements which wave naive national sovereignty. The new seigniorage will be political diktat, where in Europe, a Chancellor, The Sovereign, and a Banker, the Seignior, will impose austerity on all in a federalized authority, that is a United States of Europe.     

Garner Ted Armstrong saw this coming decades ago when he spoke consistently of a United States Of Europe in fulfillment of the bible prophecy of Daniel Chapter 2 where there would be a ‘progression of kingdoms’ resulting in a ten toed kingdom of global governance which according to Daniel Chapter 7:7 falls to world government of the anti-Christ and the false prophet,where they rule from Jerusalem for 3 and one half years, that is for 42 months.  
 
FXE, PSCD, VCR, NLY, ICI

Jean Claude Juncker, Seigniorage, Sovereignty, Neoliberalism, Glass Steagall Act, Authoritarian Rule, Regional Economic Governance, Framework Agreements, The Sovereign, The Seignior, United States of Europe

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