The End is Near!
Well maybe not that cryptic. Besides its so shop worn it is almost anticlimactic. But when the shoe fits…..
National Bank of Greece SA, the country’s biggest lender, needs to raise 9.8 billion euros, according to an e-?mailed report by the Athens-?based Bank of Greece (TELL) today. Eurobank Ergasias SA (EUROB) needs 5.8 billion euros, Alpha Bank (ALPHA) needs 4.6 billion euros and Piraeus Bank SA (TPEIR) needs 7.3 billion euros, according to the report. Total recapitalization needs for the country’s banking sector amount to 40.5 billion euros, the report said.
The above articles tell us point blank that Europe’s banking crisis is neither fixed nor even close to over. However, the numbers need some perspective: sure, €27.5 billion sounds like a lot of money, but just how big is it relative to Greece’s banks.
The entire capital base of the Greek banking system is only €22 billion.
By saying that Greek banks need €27.5 billion Greece is essentially admitting that is needs to recapitalize its entire banking system. Also, you should know that Greek banks are still sitting on €46.8 billion in bad loans.
There is a word for a banking system with a capital base of €22 billion and bad loans of €46.8. It’s INSOLVENT.
Source: Gains Pains & Capital newsletter
We also have this going on —
But the biggest news of the day comes from the official Buba announcement that, in its official capacity as a prudent central bank, it – as first of many – is looking to repatriate some 300 tons of gold from the New York Fed. That, however, is not today’s news – that was Monday’s news.
What is news is that courtesy of the supplied calendar of events in the Buba statement, it will take the Fed some seven years to procure Germany’s 300 tons of gold. This is the same Fed that, in its own words, holds some “216 million troy ounces of gold” or some 6720 tons, in its vault 80 feet below ground level.
Putting the above in perspective, the amount of gold that Germany will have to wait 7 years for is shown in red. The amount of gold the Fed supposedly holds, is shown in yellow with a shade of tungsten. Why it will take the Fed 7 years to part with an amount of gold that is less than 5% of its total holdings is anyone’s guess…
By the way, Netherlands is also considering asking for their gold back as well.
Now it is interesting that it will take 7 years to get the gold back to Germany. That probably ought to be looked into. But that is the needle. Take a look at the haystack. Why would the Germans want their gold back? Lack of trust is why. One central bank is not trusting another central bank with assets. Sounds like the govt to govt version of a bank run to me and we know how those go.
The fact that the Greek national bank needs capital infusions higher than their total deposits means insolvency. But this not just any bank going bust. This is the Greek central bank going bust. Short for Greece the nation is bust.
We can probably expect more countries to ask for their gold back in the near term. In the long term I suspect that this is the opening salvo in watching the globalist dream start to unravel.