How 500 Billion Euros Will Become Trillions In Quantitative Easing

[dharma]

Clever folks, those ECBers. This is an article purportedly primarily about precious metals which incidentally gives the best explanation I've seen as to how the ECB is going to do an end run around restrictions on "printing money" and provide massive liquidity to the European banking system.

Hey, if you get collateral, it's a loan, not a gift, right? Too bad the collateral is nearly worthless. Fractional reserve banking is ultimately just another form of leverage. Works great as long as you follow the rules. Hurts a lot when you don't, and this pain is going to make whole nations suffer.

http://seekingalpha.com/article/3156...money-printing

[Ross]

When Europe goes down they will not be alone .

[Ross]

Wholesale bank lending in the EU approximates $30T versus only $3T in the
US .

Assuming $30T of loans spread over 3 years , EU banks have a requirement
for $800B / month of rollover financing for wholsale lending outstanding .

The ECB has been lending to banks against trash collateral ( PIIGS bonds ) and is
insolvent and now running out of money . Further the ECB is currently prevented
from printing money . Either the ECB is allowed to print or the ship will
soon sink .

http://www.scribd.com/doc/76610619/A...eral-Contagion