European Banks and You

I don't think most people understand that after the crash of 2007, the Federal Reserve "lent" hundreds of billions of dollars from the TARP fund to European banks. In addition, to provide liquidity, they also traded billions of dollars for a supposedly equivalent amount of Euros and other European currencies. At the time this happened I wrote about how badly it exposed us to European bank failures, it still does.

The reason I mention the above is so that when you read the following two linked articles you will understand that this is not just some problem over there; but, was intended to make their guaranteed failure take our banks with them. None of this is an accident. I used to play poker a lot, I even beat a couple of professionals and won a few tournaments (I am talking about in person tournaments at proper casinos - I won hundred on line and with non-pros). What I learned from playing pros is that they don't make mistakes very often and watch everything that goes on even when they are not in the hand.

People that are real professionals do the same thing. I am not talking about stock traders, I am talking about smart investors and money managers. People like Greenspan and Bernanke and Paulson do not make mistakes no matter what some media might like you to believe. They are the smartest guys in the room. They would have us believe that Greenspan was a follower of Ayn Rand and he was; but, he is also really smart and violated Ayn Rand's philosophy by agreeing to lend money to failed institutions. He believes in something even more than free markets, he believes in globalism.

Yahoo - Reuters - Europe edges toward plan to close failing banks. The European Union has been working on a program for closing failing banks. Now you have to ask why, don't they have laws for closing banks and businesses, they do, they have bankruptcy law too. The claim is that because of how Europe is now integrated, they have to agree on how to close banks. NO, they don't. There is a line somewhere in the article where it says that because they are not like the United States having the same power to change things is more complicated. They made it clear previously that the EU believes the past problems were not fixed because they lacked a true political union. This is all being used to achieve that goal.

Yahoo - CNBC - Europe outlines plan on closing troubled banks. What a shock, they arrived at a plan, it just happens to be in agreement with the IMF plan and the same one that has been agreed to by the United States and the European Central Bank, it just took them more time to adopt it. Maybe that's what they meant in the previous article? LOL.

In poker, the best don't play the cards, they play the player. It is no different in finance. When a group of poker players is working together, we call that cheating. In finance, they call it cooperation. The game is rigged and the purpose is simple. European banks are going to fail and they already decided which ones, read the second article where it says they have already identified the banks that could not survive their stress tests and are at risk.

Lets assume for the moment, as the Europeans apparently do, that some European banks are going to fail and go away, not just restructure, go away. What happens if a country like Greece ceases having any national banks? They financial system would then be completely dependent on the EU.