Thursday, September 29, 2011

SUPER HOT: Insider Reports Germany Printing Up Marks will Abandon Euro

Long-time EPJ readers know that I have long identified Philippa Malmgren as a major insider.

She was Special Assistant to the President for Economic Policy on the National Economic Council (President Bush). She was also a member of the President's Working Group on Financial Markets, aka, the Plunge Protection Team. Her client list includes every elite corporate firm in the world (The list is here.).

She is now reporting, according to the Sweden's largest business paper, Dagens Industri, that she expects the Germans will announce they will return to the Deutschmark and that they have already ordered the new currency printed up.

UPDATE: This is what appears on her web site. Apparently, she is "speculating" that Germany is printing up marks:

News to expect in the coming days and weeks...

•The Germans announce they are re-introducing the Deutschmark. They have already ordered the new currency and asked that the printers hurry up.
To get a sense on how deep an insider she is, check out this gossip she also reports:

Apparently, Lagarde and Trichet spent a day after Jackson Hole, in a heated argument with Lagarde pushing for a more realistic assessment of the Eurozone debt and of the true condition of Eurozone bank exposures to the debt. Trichet, in contrast, believes that it is possible to buy time and lead the market to believe a resolution is possible. Lagarde’s view is that many European banks are fundamentally insolvent and that’s why they are taking liquidity directly from the ECB. This is before the defaults even occur. Trichet’s view is that the banks might be able to earn their way back to health if they had more time. The cynical view is that Trichet does not want the Euro to end or a bank crisis on his watch. It is said that this was the principal issue that led to Jurgen Stark’s resignation: Stark and Lagarde favor facing the facts as soon as possible whereas Trichet does not want his legacy marred and or he believes that it is always worth buying a little more time.



  1. All I can say is about that is: Duuuuude...!

  2. I don't see how they could move to any other currency without destroying the EURO and a massive amount of German and European wealth. Grisham's law would most likely take over causing a run on the Deutschmark as people seek to abandon their Euro's. I think the German politicians know that they are stuck on a sinking ship and that they will need to have the ship sink before they can take any measures to decouple their economy from the EU.

    I think the cheaper solution, which no one seems to even consider would be to pay Greece to go away by offering to pay off 50cents of each dollar of debt when it comes due. Greece gets some relief and a fresh start and the EU saves a bundle of money that would result from a Greek default.

  3. Bob, How do think this will affect the price of gold in dollar terms?

  4. I really can't believe it at this point. But it could happen. Probably will happen but wouldn't expect this soon.

  5. Re: question on the affect on the price of gold - nevermind - I can see it now by reading Philippa's comments.

  6. ask me how many greek government workers have lost their job in the apparent government default?

  7. It would crater the Germany economy. No chance. The Germans love the Euro. Cheaper exports.

  8. Only wishful thinking I'm afraid.
    However it would be the best Eurozone minded idea in the last 15 yaers...

  9. German export prices would increase by 50%?
    Where then for Germany?

  10. Germans hate the EURO and the EUdssr! Its even better to destroy wealth with the DMark than with the EURO!!!!!
    DMark come back please!

  11. The banksters won't allow Germany to leave the Euro.
    I think the Germans are actually waking up from their 100 year prussian/socialist indoctrination and it is going to get a bit nasty.

  12. Anybody surprised? They are not stupid and all they can see is throwing good money after bad country after country would'nt we do the same thing?

  13. like Franks take, realistic, though who is these days?,,,makes sense though!,,,,recall a run on marks in the early seventies,even traveled with them in the far east, it was hard to convince locals then !, will it be any easier now ?,
    if the NWO wants a world currency, the euro is a start!, its all paper in the end !,

  14. Germans are just so obedient to external authority that returning to the DM is just not going to happen. The Germans WILL be paymasters to the beach-bum Med people regardless of how they really feel about it. The Greeks know this.

  15. Funny ...... AIN'T GOING TO HAPPEN!!!

    Biblical prophecies predict a 10 nation revived Roman empire. The Euro will survive

  16. Can I have the attention of the countries that use the Euro: You idiots! Were you even in the right frame of mind thinking the Euro would work??? You deserve what you get!

  17. The Germans structured the European Union knowing full well that nations like Greece would not survive and would be converted to slave states. That has been the plan all along

  18. Angstbude Bundestag:

  19. I guess the Germans aren't quite as smart as we and they would like to think. What were they thinking buying U.S.sub-prime mortgages and lending vast amounts of money to the Greeks and Irish.

  20. I watched the Video of Angstbude Bundestag (beautiful, strange building with a gorgeous park in front) but got nothing.

    What's the significance, Anon@302pm?

  21. The Euro-nations deserve everything they will get. And they will get it, good and hard.

  22. The Germans and French lent money to PRIVATE Irish Banks . Guess what they did not do their Due Diligence and their BETS were wrong . Capitalism says if you make bad bets you get burned !.Instead the innocent Irish tax payer whos economy was fine until our amateur government caved to the banksters demands -that the sky will fall and flesh eating zombies will kill everyone pick up the tab to "save" the Euro project .All this talk about the great Germans is B.S .Their Banks screwed up . They are de facto manipulating their currency on the downside been in the euro .Iceland told the bond holders to F@k off and are on their way back to growth . Ireland should tell the bondholders to take a flying jump in the Elbe .Also stick your united states of Europe up your Arsch . Signed Ireland .... slan

  23. Thats BS Germany cant go back to the DM - if we do it we would destroy large parts of our export-industrie... true insiders here? Use your brain before you believe such a BS....

  24. Thinking objectively about current events, and the reintroduction of the DM, this move is brilliant. It's more than possible.

    What I care most about is how to profit from it. In light of recent ideas to short the long treasury - which I know will be profitable because rates will rise- these shorts via TBT might get whacked short term from flow from the EURO and DAX. If this plays out, dollar shorts will have to cover as well. Also I think U.S. equities will drop short term. EURO short, DAX short (DAX is already off ~30% ytd) looks good.

    If the 30 Treasury hits 2.5 (2009) it wont be there long. I'll be hitting the TBT bid like pac-man. US govt. long debt is going >10% ...tick tock

    I'd like to hear some thoughts on how to play the EURO and other exchanges like the DAX in the event of the DM.

  25. Anon @655pm and 901pm and George-

    I can tell that you are not native English speakers, but I'm impressed (and humbled- meine Deutsch ist schelct) and you probably know more about what is going on at a local/regional level than any of us.

    A return to the DM would devastate German exports, but only for a while. Staying with the euro will saddle each German with tens(or hundreds) of thousands in debt from the "club med" countries. As the Bundestag vote today (355-50?) shows, your leaders are in bed with the banks, and could care less about the average citizen.

    Telling the EU to FUCK OFF would be the best thing, in the long run, for northern Europa, but you might have to raise some hell to make your leaders see it.

    Ich leibe Deutschland. I want it to be powerful (best fuckin' cars ever) but unless you cut the rest of Europa loose, you will be stuck paying for their leisure.

    Iceland is the perfect model to follow- tell the IMF, ECB and EFSF to go to hell!

  26. I love my iPad, but typing words in German is hard when it autocorrects EVERYTHING!

    Where is that umlaut (it tried to substitute impair 4 times!) key!

  27. As a German I'd truly and sincerly hope that your predictions do come true. In an ideal world they probably would.

    However, the key element for this to happen is missing:

    Politicians with brass balls.

    Germany is ruled by a political class that's totally detached from the will, the desires and the need of the people on the street.

    We have an opposition (socialist party and the greens) that both want nothing more than a total sell out to Brussles. We have a coalition government that can't agree on anything but that they don't like or trust each others and who cowardly stick to the paths that their predecessors in office laid out. They're more worried what the history books will say about them, than how they'll look once they dangle - with piano wires strung around their necks - from the street lights in Berlin. Which will happen once the public realizes that we've been hung out to dry for generations to come.

    The only German party that's in opposition of bailouts is - God help us - the bloody ex-communist party.

    I'd never thought I - as a west German and entepreneur - would have to vote for them. But it looks like they are the only half way sane group of traitors^M^M^M^M^Mpolitcians that we've got left. And even that may only be an accident, because these guys are usually against everything and eventually they had to be right with something. By pure accident and statistical odds.

    And even they (if they had anything to say) would probably lack the brass balls to show the EU the smelly finger and to bide a hasty retreat back to the Deutschmark.

    But we'll see. One can still hope for the best ...

  28. I sold Eur on hearing the idea

  29. "destroy large parts of our export-industrie" and what is going to happen anyway over next few years? Who in Europe has money or credit to buy German goods? Either way austerity will come and Germany will suffer

  30. the concern about exports is ridiculous.

    as it stands, germany would send both the goods AND the money so that the bankrupts can keep buying their products. this of course makes no sense and is already unsustainable. so, this is not an issue.

    germany´s debt is in euros. as the new dm appreciates, the value of the debt and service costs shrink--without even paying the debt off! that saving can be used to lower taxes for companies.

    imports, from raw materials to consumer goods, would become much cheaper. this would keep cost of living and wage increases subdued in germany. germany would thus have low inflation and could help the weaker countries by buying their products instead of their worthless debt.

    the weaker countries could print money and inflate their way out of debt. this is what they need. it will be inflation hell, but they have no choice. it makes no one better off for germany to be destroyed along with them.

    quite the opposite, german companies would then be able to invest very cheaply in the weaker countries, buying assets for pennies on the euro. this would benefit both the recipient states, which would start the reconstruction, and german companies, which would extend their production base. the weaker countries could thus competitively support growth of german companies--which is better than sending jobs to asia.

    germany´s exit from the euro would also attract an inflow of capital seeking a safe haven. this would help recapitalize the banks. it would also allow german companies to finance themselves at low rates, adding another competitive advantage.

    germans are not happy throwing more good money after bad and this losing strategy is also going to make politicians reelection dubious. getting out of the euro would definitely boost their popularity.

    additionally, what has recently happened confirms this outcome. one example is the exit of weber and stark from the ecb, with the selection of draghi as head of the ecb. does anyone believe that germany would let italians run the show, while footing the bill?? instead, it makes perfect sense if germany is out because italy is the biggest problem and draghi is competent. so, direct knowledge of the biggest problem country would help.

    at this point, germany´s exit from the euro is the best possible move. and, imo, the most likely.

  31. Die einzige Rettung für die Wirtschaft/Finanzwesen ist und bleibt nun die staatliche Centralbank EsCooBank ECB in Frankfurt/Offshore

  32. Die einzige Rettung für die Wirtschaft/Finanzwesen ist und bleibt nun die staatliche Centralbank EsCooBank ECB in Frankfurt/Offshore

  33. Democracy always enslave everyone and the political terrorist and banksters become the slaveowners. There is no way to be free unless you kill them or run from them. Democracy is absolute evil.