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?