SGM Metals: EU Mega Banks Have Horrendous Ratings & Poor Liquidity, Get Ready!

June 20, 2012 - PRLog -- Uncommon Wisdom reports: [EU Banks Under Siege * Drowning in Massive Losses * Swamped with Withdrawals * Lining up for Bailout Money

Among the largest EU banks (with $200 billion or more in assets), there are now SIXTEEN institutions receiving a Weiss Rating of D+ or lower illustrated in the above chart. What does our rating of D+ mean? According to a landmark study by the U.S. Government Accountability Office (GAO), it's the equivalent to "speculative grade" (junk) on the rating scales of Moody's, S&P and Fitch. And also according to the GAO, Weiss was the only one that consistently warned ahead of time of future financial failures.

Indeed, if track record is any guide, our tougher grades — based strictly on the facts without any conflicts of interests — are consistently the most accurate. Like Moody's, S&P or Fitch, we look at each bank's capital, earnings, bad loans, liquidity, and other factors. But unlike the other rating agencies, we have never accepted — and WILL never accept — any compensation from the banks for their ratings.

Nor do we give big banks special credit based on the "too-big-to-fail" theory. We've said all along that, when push comes to shove, governments will have to save their own necks first and let failing banks fail.

Or, alternatively, they will have to print money and devalue the banks' liabilities (YOUR deposits) in order to keep the banks alive. Either way, depositors are at risk!]

Yeah! Celebration time right? The Greek “bow down and accept the bailouts party” has regained the Greek throne, that’s worthy of celebration right? So now the global banking crisis has been averted and the world can go back to sleep, right? WRONG! It seems that everyone is in fact all too willing to go back to sleep now as a result of the outcome of the Greek elections but I can assure you that we are nowhere near the end of this. I personally feel that all of the drama of the Greek elections was quite possibly a completely managed distraction, much like a lot of what we have been trained to follow and be concerned about instead of focusing on the US dollar and the problems at home. This too will soon come to an end, but more on that later.

The reason why I am of the opinion that the “Greek elections may get them out of the Euro” was a farce is based on the fact that it is my understanding that in the 2nd bailout earlier this year for Greece (known as the TROIKA deal) was forced to not only technically forfeit their sovereignty but also their gold as collateral in order to get the lifeline they so desperately needed. Should this be accurate it would have neutered the Greeks options to eventually buck the EU consolidation agenda and break away like Iceland did 2 years ago and is flourishing today as a result. You see if the Greeks secretly had their sovereignty forfeited by the Goldman Sachs alumni put in power as a technocrat, as well as their gold, they would have no legal ground to stand against anything the unelected EU governing body imposed onto them as a nation nor would they have their gold to break away from this agenda and back their Drachma with said gold in order to stand on their own.

Enough about that, now onto the absolutely horrendous nature of the health of the banking system in Europe and the carnage they are sure to bring as a result of the global currency war being waged between the FED & China in the next wave of the consolidation of the global fiat dollar fractional reserve banking system. Currently all EU banks seem to be severely undercapitalized and are being beaten down as the concerned European peoples who are desperately pulling their money out having learned from prior generations that have been wiped out during fiat currency collapses. The fractional reserve banking model works as long as ALL who are party to it feel completely confident in the system and never feel the need to withdrawal their financial participation from it. Once the doubt sets in, you have people at different levels taking a more defensive positions which extracts liquidity from all levels of the inverted pyramid, thus making the institution unstable at multiple points. This is where the need for endless bailouts are needed by the banking system as they need capital injections to continuously fill these withdrawal voids from bank runs in order to keep the inverted pyramid standing a little while longer.

Be sure to take note of just how unstable the European banks are currently but do not fall for the trap of assuming that since the EU banks are so illiquid the US banks must be a better option, because they are not. It has been over three years now and the money masters & European technocrats have been given a free pass to defy any and all economic laws (apparently criminal laws as well?) at the expense of the people and nothing has changed, nor is anything more stable or better off. Let this be your motivation to establish your “Plan B” in physical gold & silver bullion and begin to participate in the sound money debate just like the central banks of the world have been desperately doing in order to prepare for the global banking panic that is just around the corner. Had we not been hoodwinked that things were better and were told just how dire the global economic scenario really was I believe that more Americans would be better prepared at this point, and yet we are not. So it is up to you to turn off the TV and listen to your gut. Look outside your window and determine for yourself if we are in a recovery, or a recession, or even a depression? Are the foreclosures disappearing? Are neighbors going back to work in newly created jobs? Are the lines outside the welfare office getting shorter? Are prices at the pump and at the grocery store going down? I don’t think you can answer any of the above questions with a yes so maybe it is time for a what if “Plan B”. Time is no longer your friend. Tick, tock.