THE ECB’S BALANCE SHEET: a licence to monetise debt?

There’s a mind-concentrating post at Zero Hedge today, in which the indefatigable Mark J. Grant argues very logically that the ECB is gaily declaring assets of this and liabilities of that, without knowing from where the Hell they came, who owns what, and whether anyone has the ability to repay.

Grant’s conclusion is that we should ‘Forget that the liabilities are greater than the assets and forget that that both have increased rather appreciably in the last several years – and just concentrate on the size of the numbers presented and then ask the central question: who is responsible for these assets and liabilities, and where are they counted?’

Sadly the answers are “Nobody” and “Nobody knows”. Such are not entirely satisfactory when observing sums of this size. To be precise, if you add the assets and liabilities together (and remind yourself that bank accounting is pure Alice in Wonderland)  we are looking at €16.3 trillion of assets and €17.3 trillion of liabilities = €33.6 trillion about which frighteningly little is known.

On the normal basis of delusional bank reporting, let’s split the difference here and say the probable net outcome is €26 trillion of wild money. That sum is roughly 30% higher than the EU’s gdp.

I wonder…do I detect in all this a less than subtle attempt to monetise mad derivative debt?

The Slog has posted before on the subject of Mario Draghi’s absolute powers under the newly defined articles of the ESM. The question we must now ask ourselves is this: are the Troika’s policies blinkered….or are they in reality focused on one end: survival of the MoUs?

Related: Can anyone unlock the secret of the Lagarde List?


18 thoughts on “THE ECB’S BALANCE SHEET: a licence to monetise debt?

  1. Well, it is not as if this sort of thing is that rare.

    This is also from Zerohedge: about the derivatives in the USA. It would seem a very similar issue. Nobody quite knows the what, where or when of much of this stuff.

    Mind you, what can the ECB do? They are allied to an institution that needs 6000 pages to describe a cabbage. Talk about inflationary tendencies … the problem is that when you investigate the data, all you do is turn up more and more problems. Answers seem to slip away over the horizon!


  2. John,

    Governments are lambasted for spending money because it is inflationary and may also benefit common people. S o money creation was turned into credit creation to enrich our oh so productive and responsible private sector. It’s all going swimmingly isn’t it? Not.

    You have often pointed out that government has abandoned public purpose for common purpose. Google it if you aren’t following this. So we are stuck with a political system that represents donors only, those who claim to own all these financial “assets”.

    They all net down to zero they tell us as deriatives expand to represent a multiple of all know global GDP.

    I hardly think thios will end well, quite frankly. I would go as far to say it may even end very badly. Sorry for such hyperbole.


  3. I read this on Zerohedge too earlier and the numbers just seem mind boggling…they sure make “part up with no more than EUR 190B or you get a smack on the wrist” look like silly pin money and the Euro itself resemble ‘Bank of Toyland’

    Should the average German be sh****ing themselves if they read this?….but there again, did’nt I read somewhere that the UK is a 17% shareholder in the ECB? ……are we British sleepwalking into something very nasty too in that case? ……..or mebbe I just don’t understand numbers this big and what these crazy figures mean. I never was much good at accounts.


  4. You forgot the 25 official languages, rather more than in the USA. Or perhaps the cabbages were already translated within the 6000 pages?


  5. Carys

    I do agree with you – but imagine if each of those 27 countries had its own stack of daft legislation … a lorry travelling from France to Slovenia would need to stop at the German frontier and declare its cabbages for inspection under German regulations – then Austria for the same and finally into Slovenia where they get sent back because they don’t accord with article 7b (page 2745 of the imaginary Slovenian cabbage diktat) which says they must be a uniform green and have the stems cut to no more than 9mm. In France the stems may be up to 12mm according to the imaginary French accord on brassicas which runs to a mere 3766 pages. Someone somewhere forgot to mention this when exporting my imaginary cabbages …

    I agree that 25 languages is difficult to handle – and each language has a document of the size mentioned. Or the likes of.

    Whilst the US is predominantly English speaking, there are a dozen more that are regularly spoken. These things are never as cut and dried as we would like them to be.


  6. The whole plan is to completely bankrupt the whole global system and for all the Central Banks, which are owned by the Global Elite, to foreclose on all nation states and own their assets and own their population as debt slaves.

    They have done this for years in Africa and third world countries through the World Bank.

    They will then form the New World Order, a one world government under the United Nations run and controlled by a banking elite through the chief Central Bank, the Bank of International Settlements in Switzerland.

    It has been planned for more than a hundred years. The architects are the Jewish House of Rothschilds, who are behind the formation of the fascist zionist state of Rothschild … sorry, Israel.

    Their agents are the likes of the Rockefellers, JP Morgan and Goldman Sachs.


  7. GrahamD: “Their agents are the likes of the Rockefellers, JP Morgan and Goldman Sachs…………….”

    ……..and the US Military. You left out the machine, with it’s millions of personnel, and all the hardware, the budget, and the thousands of deliverable nukes.

    They also make up part of the “agents”.


  8. Off topic but does anyone remember Jimmy Saville in an advert on the telly advertising Wham o super balls? I distinctly remember him in a small room surrounded by bouncing super balls telling everyone to buy them.
    Tried Google but no luck.


  9. For several decades now all across the financial globe people have been creating money, once upon a a time it was held in check by balance sheets at normal banks and the need to actually have real object registered against the invented money and as long as everybody paid they it was all ok,

    Then hey presto the yanks said any sort of financial institution could effectively invent money too, Boom! Now as Galbraith once said, after the bust comes the bezzle, what your seeing now is the slow dawning of the greatest bezzle of all time for all mankind, imaginary money. Now a lot of so called financial institutions have gone but the packages of shit they invented and pretended were representative of something still float around out there is some form (like plastic in the ocean) and nobody knows how to get the geni back in the bottle. Answer: they can’t but that won’t stop them from trying by using the traditional milch cow, us the taxpayer and average personage.

    Can’t make sense of nonsense I am afraid and thats what those balance sheets all over the world are, sheer nonsense.


  10. Pingback: John Ward – The ECB’s Balanace Sheet : A License To Monetise Debt? – 4 October 2012 | Lucas 2012 Infos

  11. The ECB balance sheet mystery of the many trillion euro assets and liabilities is IMHO an attempt at recording ‘contingent liabilities/ assets’ all that off balance sheet stuff that is hidden from view.

    Further the more I read the more I realise that there is no consistency between any county’s GDP, unemployment rate, deficit, debt, inflation rate etc and add to that mess definitions are constantly changing and statistical massaging of a subjective nature frequently occurring the whole thing is a game in obfuscation that has been accelerating for the best part of 40 years lead by all those ‘creative accounting’ auditors.

    Given the parlous state of the current worldwide financial system I wonder if the only true creditor countries are the Tax Havens that it is rumoured have upwards of $30 Trillion in their dirty grasp


  12. Thanks for the link but, alas, no Jimmy featured. Was on holiday on the isle of Sheppy in the early sixties and my brother threw one from one hundred yards away and it boshed me on the lip. I’ve never forgiven him. I’m still plotting my revenge but that’s another story.


  13. Paul,
    Click on the number 4 link on the page that I have pointed to.. It’s Jimmy Savile in the advert for Wham-O Superballs. You have to save the file (british.asf) to your computer and play it with something like VLC media player. It ain’t Youtube !


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