Monday 8 April 2013

Japan Expands its Monetary Base; the World Holds its Breath

ZeroHedge recently re-published a series of analyst reports by Dylan Grice of Societe General Cross Asset Research which are well worth a read.

Navigator Consulting

We've written up a more complete reaction / analysis in the Navigator Consulting Group article "Japan Expands its Monetary Base; the World Holds its Breath". (free access). 

Wednesday 3 April 2013

Demonocracy Debt Graphic - Cyprus

Some of the numbers are off, but Demonocracy has another great infographic on debt - this time about Cyprus. See the high-resolution graphic here.

Monday 1 April 2013

German Bundesbank announces launch “parallel Euro” currency

The German Central Bank announced today the issue of a virtual “tracker currency” designed to track risk of its Target 2 exposure to the European Central Bank’s clearing system.

Bundesbank President Jens Weidemann announced today the launch of the “Bundesbank Unilateral Bail-in Liquidity” index (BUBL).

The BUBL is designed to track German exposure to Target 2 obligations, which at present are estimated at over EUR 1 trillion, Weidemann declared.

“By launching the BUBL, we take an important step not only towards quantifying our own sovereign risks, but we remind the grateful European peoples just how much Germany is sacrificing on their behalf” Weidemann declared.

Unlike BitCoin or the Euro, the BUBL won’t actually be traded. It will instead form the basis of virtual tracker currency, which could be used a derivatives benchmark for hedge funds and other qualified investors seeking an objective indicator for valuing the Euro.

Two BUBL indices are launched today: 

a. DE-BUBL, an absolute number, tracking Germany's Target-2 exposure

b. DE/EURO BUBL, a ratio of Germany's Target-2 exposure as a function of all net Eurozone exposure

The Swiss National Bank declared its support for the BUBL, saying that henceforth, the CHF would be pegged to a EURO:CHF rate of 1.2, as well as to a BUBL index value of 1.05 trillion. Anything over EUR 1.05 trillion, and the CHF will be devalued to assure competitiveness against the Euro.

Warren Buffet welcomed the move. “A BUBL here and a BUBL there, and pretty soon you’re talking real money!” the Sage of Omaha declared, two hours before reaching an agreement to buy the Central African Republic for $ 6.5 billion.

© Philip Ammerman, 2013