ECB Inaugurates Hyper-Luxury HQ, While Frankfurt Burns

By Don Quijones, Spain & Mexico, editor at WOLF STREET.

As official inaugurations go, few are as dramatic or eventful as today’s opening of the European Central Bank’s new headquarters in Frankfurt. Inside the skyscraper, everything was apparently calm and serene as a select coterie of invited guests shared their benighted hopes and utopian dreams of a unified Europe led by unelected bankers and bureaucrats.

Outside the building, the streets of Frankfurt’s financial district broiled with thousands of protestors belonging to the Blockupy movement, an alliance of trade unions and anti-capitalist groups sharply critical of the Troika’s austerity regime. As is the height of fashion these days, the authorities had erected a massive security zone separating the great and the good from the great unwashed. Barbed wire, security cordons and road blocks were a stark reminder of the already yawning and ever-widening gulf between the governors and the governed in Europe’s neo-medieval age.

Behind the barricades and inside the new building’s gleaming auditorium, the ECB’s Master of Ceremonies Mario Draghi spoke of the need for greater solidarity and unity in crisis-hit Europe. As for the multinational protestors outside the building, they were united in one main goal: to express their rage at an increasingly centralized, undemocratic, unaccountable system of governance run in the sole interest of bankers, lobbyists and self-important bureaucrats.

It didn’t take long for tempers to boil over, as small groups of masked protestors from countries across Europe did what masked protestors almost always do: hurl stones at police officers, smash windows, and set light to police cars. Dozens were injured in the fracas. In time-honored fashion, the police blamed the protestors, and the protestors blamed the police.

A Luxury Fortress

One of the primary triggers of public anger in Frankfurt was the shameless indulgence with which Europe’s central banking elite has feathered its new nest. Consisting of a 185/165-metre-twin-skyscraper and a low-rise structure to connect the two, the ECB’s new HQ cost an estimated €1.3 billion to build, roughly €400 million more than its original budget, making it one of the most expensive buildings in the world.

The organization regularly berates Greece and other peripheral nations on the evils of reckless spending on frivolous things like healthcare, education, and pensions. Yet, with the exception of the Bank of China Tower in Hong Kong, whose construction cost an estimated $2.1 billion, the ECB’s twin-tower complex is the most expensive bank building in recorded history. So much for austerity!

A Sturdy Façade

As a wise friend of mine recently told me, there is a rhyme to the reason: when stripped of all its verbose vernacular, colorful PR and complex equations, banking is nothing more than a giant confidence game, arguably the oldest in human history. Hence the need for a seriously sturdy façade, ideally one impressive and imposing enough to distract the masses into believing that the money they’ve just deposited in their bank is safe, despite the fact that the bank has already lent out (or gambled away) many multiples of that amount.

But if banking is one gigantic con trick, what does that make central banking, if not the nexus of all confidence games? After all, it is the central banks that make the big banks’ domination possible. During the last seven years, the supreme leaders of central banking have been on a roll of heretofore unimaginable proportions, as notes former investment banker turned best-selling author Nomi Prins:

We are entering the seventh year of US initiated zero-interest-rate policy. Biblically, Joseph only gathered wheat for seven years before seven years of famine. Quantitative easing, or central bank bond buying from banks and the governments that sustain them, has enjoyed its longest period of existence ever. If these policies were about fortifying economic conditions from the ground up, fostering equality as a force for future stability, they would have worked by now. We would have moved on from them sooner.

But they aren’t. Never were. Never will be. They were designed to aid big banks and capital markets, to provide cover to feeble leadership. They are policies of capital creation, dispersion and global reallocation.

The first central bank to begin this mad alchemic orgy was the big boss, the U.S. Federal Reserve. Since then other Western-aligned central banks have taken up the slack, most notably the Bank of England and the Bank of Japan. Now it’s the ECB’s turn to get seriously creative. As Draghi buys up covered bonds from the likes of Deutsche Bank, ING, Santander, and BNP to drive up asset prices for those few who hold them, the Euro is tanking against the dollar and sterling. But as long as the ECB’s primary stakeholders – the big banks – are alright (or not quite dead), the austerity-ravaged masses can jump off a financial cliff.

As I warned in July, if a Europe-wide banking union becomes a reality – which it did – pretty much everything that is wrong with Europe’s financial system (i.e. excessive concentration, over-complexity, moral hazard, capital shortfalls) would almost certainly get worse. Now, Europe’s newly enthroned banker overlords can pull the financial levers from the unparalleled comfort and opulence behind the purposefully confidence-inspiring façade of their new HQ. By Don Quijones, Raging Bull-Shit.

“Hands up! This is an eviction.” Read…  In its Desperation, Scandal-Riddled Spanish Government Criminalizes Solidarity Among Citizens

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  9 comments for “ECB Inaugurates Hyper-Luxury HQ, While Frankfurt Burns

  1. Mary says:

    That is what happens when you have a Keynesian-socialist legacy where the most incompetent thinks he deserves more than he has, and capitalism becomes the fall guy.

    Congratulation Europe.

  2. g kaiser says:

    The more I think about it, the more certain I become. There is only one way to stop this madness, and that is to stop feeding it.
    Tax revolt is no longer a crime, it has become fundamental and necessary if you want to survive as a free person.

  3. Michael Gorback says:

    I think it’s obvious who the main beneficiary of the EU is. Hint: not the common folk.

  4. AC says:

    Looks like the Germans have a pretty good handle on what QE means for savers, and what an appropriate response is.

  5. Ray says:

    I find it funny when they protest for profligate government spending at the bank that facilitates all this spending. They are the ones who sowed the wind and now complaining because they are reaping the whirlwind.

  6. retired says:

    This whole Swindle known as Central Banking is about to go down very hard,& western societies are going with it.
    This is not an issue of A Black Swan event bringing it down.This all about multiple Black Swan events occurring,….take your pick!
    The Bankers thought that they were clever & had the middle class chained to them, they are finding out that the facts are in reverse.They are finding out that they are chained to the working middle class or what’s left of it!If the working/middle classes are destroyed by austerity,the bankers & oligarchs will also not survive.No middle class means no consumers=no business for the int’l corporations & banks,=no customers for the goods produced by the Int’l Corporations=deflation=bankruptcy for the Financial elites!
    They need to keep the ordinary people alive in order to keep themselves alive,..& they can’t do it!
    Another issue is the fate of the Welfare State!The Welfare State is another name for mob rule or bread & circuses. As one pundit said “The bread may be all gone but the circus continues”
    The Welfare States have turned their citizens into entitlement junkies addicted to welfare! Many of these people have no other means of survival.When 100’s of millions of these addicts,suffering from welfare withdrawal symptoms, hit the streets seeking a financial fix the anarchy & chaos will be terrible!

  7. Julian the Apostate says:

    “Nothing is not something. Nothing is not so.” -Chuang Tzu

    “When the mob governs, man is ruled by ignorance; when the church governs, he is ruled by superstition; when the state governs, he is ruled by fear.”
    -Manly P. Hall

    “Power and violence are opposites; where one rules absolutely, the other is absent. Violence appears where power is in jeapordy but left to its own course it ends in power’s disappearance.”
    -Hannah Arendt

  8. Dave Mac says:

    I think the correct military term is “FUBAR”

  9. Julian the Apostate says:

    LOL, Dave Mac, the brevity of wit. Like all parasites, too many feeding will kill the host.

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