Karl Denninger–EU Debt Crisis and Coming Financial Crash

By Greg Hunter’s USAWatchdog.com   

Plenty of financial news was made last week which gave us lots of questions for Karl Denninger.  It seems almost every week, there is a major story coming out of Wall Street, Washington D.C. or from the other side of the Atlantic.  Greg Hunter talks to Karl Denninger of Market-Ticker.com to get some answers.  Denninger is no stranger to covering the real financial news the mainstream media (MSM) won’t touch.  According to his bio, “Mr. Denninger received the 2008 Reed Irvine Accuracy In Media Award for Grassroots Journalism for his coverage of the 2008 market meltdown.  In 2011, Wiley published his book “Leverage,” detailing the causes of the 2008 financial collapse along with analysis and policy prescriptions for the future.”  (Click here to find out more about Mr. Denninger.)

The world saw another Greek debt deal hammered out where 95% of bondholders voluntarily took a 75% loss.  Is the European debt crisis behind us now, or are other financially troubled countries such as Portugal, Spain and Italy going to want the same deal?  One tip-off might be the Chicago Mercantile Exchange (CME) has also voluntarily stopped its derivative clearing house operation in Europe.  CME acted as a clearing house for many kinds of derivatives including credit default swaps (CDS).  CDS are basically insurance for things like sovereign debt that turns sour.  What reason would the CME have to suddenly stop doing business in Europe?  CME’s slogan is “. . . where the world comes to manage risk.”  Maybe the company is managing a little risk of its own?  There was, also, big market moving news on the results of bank stress tests done by the Federal Reserve.  Are they really good tests or more of a PR ploy?  Is the economy stronger today than before the 2008 meltdown?

Denninger thinks the EU debt crisis is far from over, real estate still has a lot further to drop and America is heading for another financial crash “before the end of the year.”   

Video interviews with newsmakers and experts are going to be a new segment featured on USAWatchdog.com.  We had some technical problems with the video on our side during the recording, but the audio was so good, we thought you needed to hear it.  The site is a work in progress, and we are constantly working to improve.  Please enjoy the interview.

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  1. Barry

    Greg, help me to understand this. Karl said we are using 10% of our GDP on government spending that serves no other purpose than making it appear that consumer spending is higher than it is? And how does this relate to quotes I’ve heard that the U.S. Government is borrowing about 40% of every dollar it spends?

    • Greg

      I don’t actually know but I think he was probably referring to the $1.5 (or $1.3) trillion annual deficit compared TO THE $15 trillion dollar deficit that is counted on the debt clock.

    • acepilot

      Barry & Greg,
      I think one interpretation is that the US Gov. is acting as the “consumer of last resort” i.e., buying with tax revenue what you and I would have bought with that money if it had not been withheld from our paychecks. That is how our rich Uncle Sam is keeping 10% of the economy functioning as measured by the GDP number.

  2. Barry

    On Friday, Obama signed an EO that consolidates Martial Law powers under the DHS and allows them to seize all production/agricultural assets in the U.S. (even without an emergency). Add to that the NDAA Bill in December that allows them to hold U.S. citizens indefinitly WITHOUT due process. Add to that a contract with ATK a couple weeks ago for 450 million rounds of .40 cal. handgun ammo for the DHS. This really sounds like they are getting ready for an economic collapse. Maybe a collapse that they have engineered.

    • Greg

      Wow this is getting scary. Thank you.

      • Ambrose


        That may be why Obama wants more soldiers to return to homeland – ready for the martial law implementation as needed? I just hope that they are not going to use the “450 Million Rounds of .40 Caliber Ammunition” on American citizens.

        Meanwhile, I don’t hear any complains about Obama’s excessive executive power from the MSM, the Congress, both Parties, the Supreme Court, or even the presidential candidates. Either they agree with Obama’s actions or they are just too scared to stand up and speak out. Let’s hope “God Bless America” is true.


        • Greg

          I saw a segment last night on FOX and it featured Lanny Davis. He was talking like what the President did was no big deal. James Sekulow (widely regarded as one of the foremost free speech and religious liberties litigators in the United States) said it was a big deal because it broaden executive powers so much. Other than that, I have not seen much on this latest power grab in the MSM. I think that is also disturbing. Thank you for weighing in.

          • Wayne

            Greg, seems to me we’re not asking the appropriate questions on EO’s such as… where in the Constitution is the power given to a Pres. to essentialy bypass Congress for such an action that totally ignores normal constitutional process? Would our founding fathers have actually been dumb enough to give a Pres. this type of authority? …especially after fighting a tremendous battle to rid ourselves of a despotic king?

            Do EO’s have the ‘force of law’ or is just a public policy dictate for various ‘agencies’ of the fedgov ? (Hint: if Congress can over-ride it in 30 days or less it’s just a policy and not ‘positive law’ in any respect.

            Shouldn’t there be a loud public debate on what kind of power is vested with an EO? After all, if we continue to stand by and let these go uncontested what will happen when the day comes we are ‘executive ordered’ to turn in all firearms?

            • Greg

              All good questions and points. The mainstream media has largely ignored this story in much the same way as it did the NDAA. Much of the MSM said the President could not detain Americans indefinitely but the President admitted he could in his signing statement! This is the MSM we have today and why there is no loud public debate. YES, there should be a “loud public debate on what kind of power is vested with an EO?” The country is in a fantasy land and this is the same Congress that voted for the NDAA. Both parties should be ashamed they passed this un-Constitutional law. I cannot endorse violence but it may come to that. Thank you for your comment!

    • acepilot

      Barry & Greg,
      Exactly my feelings on EO ?#? of 16MAR2012 and the NDAA of DEC2011. The ammo contract is news to me so I thank you for that additional link in a very frightening chain of megalomaniacal planning. By way of balance, here is an additional viewpoint I snatched from somewhere on the WWW:


      Obama’s executive order is nearly identical to
      EO 12919, issued by President Clinton on June 7, 1994,
      which itself was an amendment to
      EO 10789, issued in 1958 by President Eisenhower,
      later amended by
      EO 13286, issued in 2003 by George W. Bush.

      A side-by-side analysis of Obama’s order compared to
      Clinton’s, conducted by Ed Morrissey of HotAir.com,
      reveals Obama’s order is essentially an update to reflect
      changes in gov’t agency structure.


      Bottom line, it ain’t what they say to us, it’s what they are planning to do to us that matters. Understatement of the week: “Caution is indicated”.

  3. S.Murphy

    I really like the addition to your regular reports. Keep it coming. By the way, I’ve had to move my favorites quick link to your web site to the top of my list because I find myself accessing it daily now.
    The interview with Mr. Denninger was very informative. My previous thoughts on the economy was that there would be a gradual decline. It sounds like this is going to be a tough year for financials world wide. I find it amazing that the drive by media can still get away with reporting that the economy is improving. I’ve been preparing for tough times for over a year now and can’t imagine the shock to those who rely solely on the MSM when the things fall apart.

    • Greg

      S Murphy,
      Still have to work on my upload speed to capture the other side of the interview but that’s coming. Thank you for your comment.

  4. AndyB

    What Karl says and predicts is obviously true, but the question as to the “when” of the finacial implosion is still dependent on the kicking the can and extend and pretend ability of the global banking community. What is truly alarming (to me anyway)is the exponential ramp up towards a totalitarian state, with Obama’s recent EO allowing the Executive Branch to unilaterally nationalize/confiscate all resources and labor following quite rapidly on the heels of the unconstitutional NDAA. Methinks that the end game is fast approaching.

    • Greg

      Thank you for comment. Yes, I do too.

  5. George Too

    I read several places that the ECB was getting 100 cents on the dollar while the private investors took the hit. Did this change?

    • Greg

      George Too,
      The ECB was exempt from the haircut.

  6. Will


    Another great addition to your format. Absolutely love one-on-one interviews with “newsmakers”. Keep up the great work!

    • Greg

      Thank you Will. Still working on the quality of the Internet upload speed so we can see both sides of the interview but that is coming.

  7. Alyce

    Foreign central banks are selling US treasuries, so won’t they put that money into US stocks instead? And if so, wouldn’t the market do well as a result? Interview was great.

    • Greg

      Probably, my concern is the possibility of systemic failure. Best to spread your wealth around in to other areas as well.

  8. Troy

    Good interview Greg!

    The talking picture did make me smile though 😉

    • Greg

      Thank you for the comment and support.

  9. sensetti

    Great Job!

    • Greg

      Thank you Sensetti, acepilot
      and Norcar.

  10. norcar survivor

    You continue to amaze Greg. Your readers not only appreciate your sources knowledge you share with us but are providing it in their own words in voice form. This is where we separate the men from the boys in investigative reporting in my opinion. We continue to look for answers and you continue to provide. Thank you to you and to Mr. Denninger for you insights.

  11. acepilot

    I can’t thank you enough for the tremendous amount of w*rk you are doing to enrich all our lives with the free flow of honest information to counteract the lies and deceit of the MSM tool of the PTB. You can be quite proud of being linked so often from jsmineset.com; you deserve it.

  12. M SMITH

    Greg, great content, it has added much to your site. I would like to share a view point of one of our group members who stood up & spoke for the 1st time via Skype to the group. His words applied to everyone in one way or another!
    Jim said he was the youngest of five,1 brother & 3 sisters, their parents had always taught them to be savers, why it was important & how to save a little each week would add up incase of a rainy day fund only to be use in times of crisis. As the youngest ,Jim did not like school & would skip a day so he could work for a barber to save up for some thing he wanted to buy, but not on credit. His brother & sisters all were top students & went on to get their Masters degrees in differernt fields, Jim became a barber after barely passing the 12th grade. After both of their parents passed away, none wanted the working farm, so Jim bought out his brother & sisters & rented it out to a friend he had met from his barber job. He did not have to use his rainy day saving(all in PM’s & some fiat)but used cash to pay for the farm. He was debt free & now had more income & fresh food from the farm coming in, so he added to his PM savings, still no debt. Jim had wanted many material things, but would not buy if he had to go into debt or deplete his savings, he would do with out. His brother & sisters bought big homes, fancy cars, boats & are in debt up to their eye balls. All had great jobs that pay 6 & 7 figures yearly, but they never could save a dime! Jim had talked to all of them many times after their parents passed what their their parents always tried to instill into all of them the importance of saving & why, but they failed to pratice what Jim did & now are in so much debt they live week to week & it is getting worse for them as the dollar loses its value & the frames holding the degrees of the professions they work in no longer pay what they use to & now they are close to bankrupt. They envy their own brother who is doing well cutting hair at his ‘own barber shop’.

    The story is true & the emails between the group all have similar stories were some really paid attention to their parents advise & those that chose to do it their own way! Now our government seeks to find the savers & punish them for being a saver to fund the many bad policies made by our law makers who only care about their own careers, not the people who create jobs & hire productive people that innovate & produce products that make life better.

    Thanks for letting me share this true story about how some get it & some don’t, no matter how hard you try to teach them! Have a great week! M.Smith

    • Greg

      M Smith, Thank you and the group for all your support.

  13. nm

    Have you seen this piece by Roger Lowenstein in the Atlantic Monthly? (his conclusion? Bernanke saved the economy) No. He’s not kidding.


    • Greg

      He’s still a “villain” and he just kicked the can down the road but the road is nearing a cliff. Thank you for this outrageous piece of non-journalism by the MSM. This is what they MSM) want us all to think.

  14. Jeff S.

    Great interview! All we have to do is watch Europe to see where our country is headed.

    I’d love to see you interview Daniel Hannan.

    Thanks, as always, for the great work!!

    • Greg

      Thank you Jeff Future Voter and Luke for the comments!

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