Wednesday, 17 April 2013

Germany Is In Default - And Lies About It

GREECE, Italy, and now Cyprus, are all in the process of claims for unpaid German war debts.

Germany in turn currently pretends to be the leading light of fiscal responsibility (its not there in reality, hence they have to propagandise it), whilst having tried some truely jaw dropping manuevers in an attempt to avoid payment or allowing markets to smell blood. They are in default! Yet they have covered it up like this:

It started in the 1920’s when Germany issued series of bearer bonds in the USA for revitalisation of its economy following the devastating effects of WWI. Acting as trustees, financial institutions such as JP Morgan and Lee Higgins & Co. produced and sold bonds in America raising funds that would be invested in Germany. 

These bonds corresponded to Agricultural Loans signed by 14 German banks and guaranteed by the German government. Of these 14 banks four are still active and are part of the troika mechanism.
From 1933, Germany defaulted on interest repayments to Bondholders, as the new Nazi leadership considered the debt that Germany faced following WWI as illegal and issued a moratorium on bonds owed to foreign investors.

In 1953 following years of German debt crisis, the London Debt Agreement restructured Germany’s debt to be sustainable by the agreement of its creditors.

The way this deal would function was to provide the option to the bondholders of German debt, to either accept the repayment terms of the LDA, or to forego attempts to claim their debt until 1993. The rationale being, that you can cash in today from a weak Germany, or wait for a full settlement after 40 years of German growth and development.

Assenting Bondholders: For bondholders who wanted to cash in their bonds immediately, they could receive partial payment, and new bonds, with a discount on the value of their bonds (depending on the issue, between 20% - 60%). For this to be implemented correctly, a procedure of Validation was set up to ensure that anyone presenting bonds for payment, could prove that they were indeed the beneficial owner. This would guarantee that all of the disbursements paid went directly to Germany’s creditors in the correct manor.

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