– 10 Reasons Why The Global Economy Is About To Experience Its Own Version Of “Sharknado” (Economic Collapse, July 13, 2013):
Have you ever seen a disaster movie that is so bad that it is actually good? Well, that is exactly what Syfy’s new television movie entitled “Sharknado” is. In the movie, wild weather patterns actually cause man-eating sharks to come flying out of the sky. It sounds absolutely ridiculous, and it is. You can view the trailer for the movie right here. Unfortunately, we are witnessing something just as ridiculous in the real world right now. In the United States, the mainstream media is breathlessly proclaiming that the U.S. economy is in great shape because job growth is “accelerating” (even though we actually lost 240,000 full-time jobs last month) and because the U.S. stock market set new all-time highs this week. The mainstream media seems to be absolutely oblivious to all of the financial storm clouds that are gathering on the horizon. The conditions for a “perfect storm” are rapidly developing, and by the time this is all over we may be wishing that flying sharks were all that we had to deal with.
The following are 10 reasons why the global economy is about to experience its own version of “Sharknado”…
Continue reading »
– Meanwhile, In A (European) Galaxy Far, Far Away… (ZeroHedge, July 10, 2013):
Submitted by Bill Blain of Mint Partners,
Another day of fraught wonderment ahead of us. What does it all mean? China economic data increasingly suggests there is a serious problem, (that’s still a few points below crisis – but recent experience suggests the politics of mobs can turn ugly with surprising speed!). On the other hand, yesterday’s US auctions went swimmingly well – so we can all relax about the taper? Er.. no. And while Spain gets a cheeky 15-yr bond issue completed (driven on the back of a large single order we strongly suspect), the Italians then get downgraded because of the weakening economy, deteriorating competitiveness and 1.9% negative growth outlook… “You can’t make this stuff up,” comments Chris, my head of Govvie Trading. Continue reading »
Europe’s debt-crisis strategy is near collapse. The long-awaited recovery has failed to take wing. Debt ratios across southern Europe are rising at an accelerating pace. Political consent for extreme austerity is breaking down in almost every EMU crisis state. And now the US Federal Reserve has inflicted a full-blown credit shock for good measure.
– The wheels are coming off the whole of southern Europe (Telegraph, July 10, 2013):
None of Euroland’s key actors seems willing to admit that the current strategy is untenable. They hope to paper over the cracks until the German elections in September, as if that is going to make any difference.
A leaked report from the European Commission confirms that Greece will miss its austerity targets yet again by a wide margin. It alleges that Greece lacks the “willingness and capacity” to collect taxes. In fact, Athens is missing targets because the economy is still in freefall and that is because of austerity overkill. The Greek think-tank IOBE expects GDP to fall 5pc this year. It has told journalists privately that the final figure may be -7pc. The Greek stabilisation is a mirage.
Italy’s slow crisis is again flaring up. Its debt trajectory has punched through the danger line over the past two years. The country’s €2.1 trillion (£1.8 trillion) debt – 129pc of GDP – may already be beyond the point of no return for a country without its own currency.
Standard & Poor’s did not say this outright when it downgraded the country to near-junk BBB on Tuesday. But if you read between the lines, it is close to saying the game is up for Italy.
– Airplane Of Bolivian President Denied Passage Over French, Portuguese Airspace Due To Snowden Suspicions (ZeroHedge, July 2, 2013):
Moments ago a rather surreal episode of international diplomacy, or rather lack thereof, took place when the airplane of Bolivian President Evo Morales was forced to land in Austria over suspicions that NSA whistleblower Edward Snowden was on board, a claim Bolivian authorities denied. The reason: France and Portugal reportedly refused to allow the flight to cross their airspace due to concerns that Snowden may have been aboard the plane. It is what international law allows countries to deny their airspace to presidents of sovereign countries, when the only transgression is unproven speculation of harboring a whistleblower. Of course, with both insolvent countries bent over and in dire need of some all too precious Uncle Sam liquidity, we can see how they would do anything and everything to gain some favor with Obama.Per RT, David Choquehuanca, the Bolivian Foregin Minister, refuted the idea Snowden was on the plane, saying “we don’t know who invited this lie, but we want to denounce to the international community this injustice with the plane of President Evo Morales.”
Others in South America are also angry, with Ecuador foreign affairs minister Ricardo Patino taking the lead: Continue reading »
– Europe’s EUR500 Billion Quasi-Quantitative Easing (ZeroHedge, June 12, 2013):
Submitted by Mark J. Grant, author of Out of the Box, Five Eurozone countries now have loans for half a trillion Euros.
These members of the Euro currency union are receiving loans from the one of two bailout funds which are financed by the other 12 Eurozone members. On top of that are the emergency loans from the International Monetary fund (IMF) and bilateral loans from the solvent countries to the bankrupt nations. Continue reading »
Conspiracy theorists claim it is a shadow world government. Former leading members tell the Telegraph it was the most useful meeting they ever went to and it was crucial in forming the European Union. Today, the Bilderberg Group meets in Britain.
– Bilderberg Group? No conspiracy, just the most influential group in the world (Telegraph, June 6, 2013):
“The abuse is terrible,” said Peter Mandelson, leading the walking party through the throng of protesters and carrying the group’s uniform orange ski jacket under his arm.
Amid the din, Peer Steinbruck, the former German Finance Minister, pointedly refused to break off his conversation with Thomas Enders, the head of defence giant EADS. Behind him, Eric Schmidt, the Google chairman, picked up the pace along the narrow road and kept his eyes fixed on the Suvretta hotel ahead. Franco Bernabe, the vice chairman of Rothschild Europe, grinned through the chorus of booing and chanting in German down megaphones, before ducking under the police tape and into the safety of the hotel’s grounds.
It was June 2011. Demonstrations were sweeping through the stricken eurozone, China and North Africa. And in tranquil St Moritz, high in the Swiss alps, half a dozen of the most powerful men in the West had taken a break from a weekend of intensive and strictly confidential debate to walk in the woods, when their paths crossed with the protesters who had come from around the world to keep an eye on them.
The gathering was entirely innocent, the walking party would insist. But what were they doing there?
No such encounters will take place in Watford this week, as the Bilderberg, the annual conference for 140 of the world’s most powerful, meet for four days at The Grove, a £300-a-night golf hotel close to the M25. The entire hotel has been booked out, and a high fence erected around the exclusion zone. Armed checkpoints have been set up on local roads, and locals must show their passports to enter their own driveways. The Home Office may foot the bill. A US news site dedicated to uncovering conspiracies had booked a room for last week but were told by phone not to turn up.
Tags: Banking, Barclays, Bilderberg, Bilderberg 2013, David Petraeus, Deutsche Bank, Economy, EU, Europe, George Osborne, Global News, Goldman Sachs, Government, Henry Kissinger, James Wolfensohn, Josef Ackermann, Klaus Kleinfeld, Luis de Guindos, Mario Monti, Paulo Portas, Peter Mandelson, Peter Sutherland, Peter Thiel, Politics, Portugal, Richard Perle, Robert Rubin, Robert Zoellick, Society, Spain, U.K.
– 18 Signs That Massive Economic Problems Are Erupting All Over The Planet (Economic Collapse, June 2, 2013):
This is no time to be complacent. Massive economic problems are erupting all over the globe, but most people seem to believe that everything is going to be just fine. In fact, a whole bunch of recent polls and surveys show that the American people are starting to feel much better about how the U.S. economy is performing. Unfortunately, the false prosperity that we are currently enjoying is not going to last much longer. Just look at what is happening in Europe. The eurozone is now in the midst of the longest recession that it has ever experienced. Just look at what is happening over in Asia. Economic growth in India is the lowest that it has been in a decade and the Japanese financial system is beginning to spin wildly out of control. One of the only places on the entire planet where serious economic problems have not already erupted is in the United States, and that is only because we have “kicked the can down the road” by recklessly printing money and by borrowing money at an unprecedented rate. Unfortunately, the “sugar high” produced by those foolish measures is starting to wear off. We are going to experience a massive amount of economic pain along with the rest of the world – it is just a matter of time.
But for the moment, there are a lot of skeptics out there.
For the moment, there are a lot of people that are declaring that the problems of the past have been fixed and that we are heading for incredibly bright economic times ahead.
Unfortunately, those people appear to be purposely ignoring the economic horror that is breaking out all over the globe.
The following are 18 signs that massive economic problems are erupting all over the planet… Continue reading »
Tags: Australia, Ben Bernanke, Collapse, Cyprus, Economy, EU, Europe, Fed, Federal Reserve, France, Global News, Government, Greece, Italy, Japan, Marc Faber, NYSE, Portugal, Quantitative Easing, Riots, Spain, Stock Market, U.S., Unemployment, Wall Street
– The Full List Of 2013’s Bilderberg Attendees (ZeroHedge, June 3, 2013):
The only thing more ominous for the world than a Hindenburg Omen sighting is a Bilderberg Group meeting. The concentration of politicians and business leaders has meant the organisation, founded at the Bilderberg Hotel near Arnhem in 1954, has faced accusations of secrecy. Meetings take place behind closed doors, with a ban on journalists. We suspect the agenda (how the US and Europe can promote growth, the way ‘big data’ is changing ‘almost everything’, the challenges facing the continent of Africa, and the threat of cyber warfare) has been somewhat re-arranged as market volatility picks up and the status quo begins to quake once again. The annual gathering of the royalty, statesmen, and business leaders, conspiratorially believed to run the world (snubbing their Illuminati peers and Freemason fellows), will take place this week at the Grove Hotel in London, England.
The Telegraph provides the full list of attendees below – for those autogrpah seekers – including Britain’s George Osborne, US’ Henry Kissinger, Peter Sutherland (the chairman of Goldman Sachs), the Fed’s Kevin Warsh, Jeff Bezos?, Peter Thiel, Italy’s Mario Monti, and Spain’s de Guindos.
Bilderberg delegates in full
- Chairman: Henri de Castries, Chairman and CEO, AXA Group
- Paul M. Achleitner, Chairman of the Supervisory Board, Deutsche Bank AG
- Josef Ackermann, Chairman of the Board, Zurich Insurance Group Ltd
- Marcus Agius, Former Chairman, Barclays plc
- Helen Alexander, Chairman, UBM plc Continue reading »
Tags: Barclays, Bilderberg, Bilderberg 2013, David Petraeus, Deutsche Bank, Economy, George Osborne, Global News, Goldman Sachs, Henry Kissinger, James Wolfensohn, Josef Ackermann, Klaus Kleinfeld, Luis de Guindos, Mario Monti, Paulo Portas, Peter Mandelson, Peter Sutherland, Peter Thiel, Portugal, Richard Perle, Robert Rubin, Robert Zoellick, Society, Spain, U.K.
– 20 Signs That The Next Great Economic Depression Has Already Started In Europe (Economic Collapse, April 29, 2013):
The next Great Depression is already happening – it just hasn’t reached the United States yet. Things in Europe just continue to get worse and worse, and yet most people in the United States still don’t get it. All the time I have people ask me when the “economic collapse” is going to happen. Well, for ages I have been warning that the next major wave of the ongoing economic collapse would begin in Europe, and that is exactly what is happening. In fact, both Greece and Spain already have levels of unemployment that are greater than anything the U.S. experienced during the Great Depression of the 1930s. Pay close attention to what is happening over there, because it is coming here too. You see, the truth is that Europe is a lot like the United States. We are both drowning in unprecedented levels of debt, and we both have overleveraged banking systems that resemble a house of cards. The reason why the U.S. does not look like Europe yet is because we have thrown all caution to the wind. The Federal Reserve is printing money as if there is no tomorrow and the U.S. government is savagely destroying the future that our children and our grandchildren were supposed to have by stealing more than 100 million dollars from them every single hour of every single day. We have gone “all in” on kicking the can down the road even though it means destroying the future of America. But the alternative scares the living daylights out of our politicians. When nations such as Greece, Spain, Portugal and Italy tried to slow down the rate at which their debts were rising, the results were absolutely devastating. A full-blown economic depression is raging across southern Europe and it is rapidly spreading into northern Europe. Eventually it will spread to the rest of the globe as well.
The following are 20 signs that the next Great Depression has already started in Europe… Continue reading »
Tags: Bonds, Children, Collapse, Debt, Deutsche Bank, Economy, EU, Europe, Fed, Federal Reserve, GDP, Global News, Government, Great Depression, Greatest Depression, Greece, Italy, Politics, Portugal, Spain
–The Entire Economy Is a Ponzi Scheme (ZeroHedge, April 13, 2013):
Bill Gross, Nouriel Roubini, Laurence Kotlikoff, Steve Keen, Michel Chossudovsky, the Wall Street Journal and many others say that our entire economy is a Ponzi scheme.
Former Reagan budget director David Stockman just agreed:
YouTube Added: 10.04.2013
So did a top Russian con artist and mathematician.
Even the New York Times’ business page asked, “Was [the] whole economy a Ponzi scheme?”
In fact – as we’ve noted for 4 years (and here and here) – the banking system is entirely insolvent. And so are most countries. The whole notion of one country bailing out another country is a farce at this point. The whole system is insolvent.
Tags: Barack Obama, Bill Gross, Bonds, Debt, EFSF, ESM, EU, Europe, France, Germany, Global News, Government, Greece, Italy, Joseph Stiglitz, Laurence Kotlikoff, Michel Chossudovsky, Nouriel Roubini, Obama administration, Politics, Portugal, Spain, U.S.
– Portugal Considers Paying Public Workers In Treasury Bills Instead Of Cash (ZeroHedge, April 7, 2013):
As reported late on Friday, just as the market closed, the Portuguese constitutional court decided that several provisions of the country’s 2013 budget were not constitutional. According to the high court, cuts in wages and pensions of public employees were unfair (there’s that word again) because they targeted only the public sector. The court rejected plans to cut one of the 14 paychecks that public workers usually get each year and to slash 6.4% from pensions for retirees. This coincided with the government warning that the court’s decision would put into question the country’s ability to fulfill its €78 billion international bailout program, which in turn would send bondholders of Portuguese sovereign debt scrambling for the exits as suddenly the country may find itself in the ECB’s “dunce” corner, with Draghi preparing to pull a “Berlusconi” on a government which can’t even whip its judicial branch in line. However, of more immediate concern is how will the government now plug a hole of up to €1.3 billion in its €5.3 billion 2013 budget. A solution has, luckily, presented itself: bypass the unconstitutional provisions by paying government workers not in cash, but in government bills! From the WSJ:
The Portuguese government is considering a plan to pay public workers and pensioners one month of their salary in treasury bills rather than cash after a high court ruled out wage cuts, a person familiar with the situation said Sunday.
– Betray Your Bank Before Your Bank Betrays You (Bloomberg, March 28, 2013):
What’s a Slovenian with several hundred thousand euros in the bank supposed to do? Spread it out among at least a few different banks, that’s what. Or move the money out of the country, while it’s still possible.
Imagine what must be on the minds of any savvy depositors still left at Nova Kreditna Banka Maribor d.d., now 79 percent- owned by Slovenia’s government. It was one of only four lenders in October that failed the European Banking Authority’s latest capital-adequacy test, a ritual best known for how lax its standards are. One that flunked was Bank of Cyprus Pcl, where uninsured depositors face 40 percent losses as part of the country’s bailout terms. Another was Cyprus Popular Bank Pcl, also known as Laiki Bank, where uninsured deposits will fare far worse and the bank is being shut.
Cypriot banks’ customers were complacent after uninsured deposits went unscathed in Ireland, Greece, Spain and Portugal, the first euro-area countries to seek international rescues. Slovenians won’t have that excuse should their country be next.
– EUR Fades As Portugal Admits Cyprus Deal “Sets Precedent” – (UPDATE – Denied) (ZeroHedge, March 26, 2013):
UPDATE: Well that didn’t take long – The Portuguese Finance minister just denied his earlier comments and added that the Cyprus deal is NOT a template for future actions (EURUSD doesn’t believe him).
- *GASPAR SAYS CYPRUS DEAL NOT A `TEMPLATE’ FOR OTHER COUNTRIES
The shambles continues in Europe. This morning we saw a plethora of EU officials explaining how the Cyprus ‘deal’ is a unique, one-of-a-kind debacle helping to talk back #DieselBoom‘s mis-words, only to have their credibility destroyed by the actual transcript and his actual words. Then we get the fact that a new EU-wide bill on deposit bail-ins is introduced… and now the Portuguese finance minister has added to the dysphoria by explaining that, “the Cyprus deal sets Euro precedent on deposit protection,” and we therefore assume on deposit impairment. It seems EURUSD also sees this…
– “China Accounts For Nearly Half Of World’s New Money Supply” (ZeroHedge, Feb 8, 2013):
When it comes to the creation of money in China, and specifically the asset side of the ledger, or loans, there is much more confusion than consensus, primarily because nobody knows who it is that is creating the money: private or public entities, SOEs, the PBOC, regional banks, shadow banks, or your next door neighbor.Another thing that is largely misreported: what the actual assets pledged as collateral to new loans are. Because while it is well-known that corporate debt in China is now greater as a percentage of GDP than in any other country, the comprehensive picture is still confusing (albeit GMO did a fantastic summary recently of what is known) as reporting standards are still non-existent, and the government flat out lies about its balance sheet.
Yet one very simple shortcut to get a sense of what is truly happening in monetary China is to peek at the liability side of the consolidated balance sheet, and one line in particular, namely deposits. Because unlike in the US, where the vibrant equity Ponzi scheme has rarely been stronger, in China it is still all about the cash and as a result the bulk of the newly created money once again return back to the banking sector in the form of a deposit. Ironically, that is what banking should be about (instead of the entire industry being a glorified hedge fund) although in China even this practice has gone on way too far, and like in Europe, has long passed the point where there is real collateral value backing up the new money created (which explains the emergence of various letters of credit collateralized by copper still not dug out of the ground which reappear every time Chinese inflation spikes above 5%).
So how do deposits look when comparing the US and China? Well, after having less than half the total US deposits back in 2005, China has pumped enough cash into the economy using various public and private conduits to make even Ben Bernanke blush: between January 2005 and January 2013, Chinese bank deposits have soared by a whopping $11 trillion, rising from $4 trillion to $15 trillion! We have no idea what the real Chinese GDP number is but this expansion alone is anywhere between 200 and 300% of the real GDP as it stands now. Continue reading »
Tags: Austria, Banking, Ben Bernanke, Central Bank, China, ECB, Economy, EU, Europe, Fed, Federal Reserve, France, GDP, Germany, Global News, Greece, Ireland, money supply, Politics, Portugal, Spain, World Bank, Yuan
– The Sovereign Debt Bubble Will Continue To Expand Until – BANG – The System Implodes (Economic Collapse, Jan 20, 2013):
Why are so many politicians around the world declaring that the debt crisis is “over” when debt to GDP ratios all over the planet continue to skyrocket? The global economy has never seen anything like the sovereign debt bubble that we are experiencing today. The United States, Japan, and nearly every major nation in Europe are absolutely drowning in debt. We have heard a lot about “austerity” over in Europe in recent years, but debt to GDP ratios continue to rise in Greece, Spain, Italy, Ireland and Portugal. In general, most economists consider a debt to GDP ratio of 100% to be a “danger level”, and most of the economies of the western world have either already surpassed that level or are rapidly approaching it. Of course the biggest debt offender of all in many ways is the United States. The U.S. debt to GDP ratio has risen from 66.6 percent to 103 percent since 2007, and the U.S. government accumulated more new debt during Barack Obama’s first term than it did under the first 42 U.S. presidents combined. This insane sovereign debt bubble will continue to expand until a day of reckoning arrives and the system implodes. Nobody knows exactly when that moment will be reached, but without a doubt it is coming. Continue reading »
– Eurozone crisis has pushed millions into poverty (France 24/AFP, Dec 10, 2012):
Crushed by an austerity squeeze and towering unemployment, millions of Europeans joined the ranks of the newly poor in 2012 in a crisis that showed no mercy for the old, women or children.An arc of misery spread pitilessly across southern Europe’s middle classes, engulfing bailed-out nations Greece and Portugal and tottering heavyweights such as the eurozone’s number four economy, Spain, and number three, Italy.
Most countries in Europe are already in depression.
Ask Gerald Celente and others if you don’t believe me.
The big reset, the greatest economic collapse in world history is coming.
This is the ‘Greatest Depression’.
And many people seem not to get what I am really talking about when I say ‘prepare for collapse’ and what I mean by ‘total collapse’ and the resulting consequences.
(You need food, water and full survival gear [And don’t forget that sleeping bag for extreme cold conditions!], gold & silver and if possible a fully equipped, self-sufficient remote farm … and friends.)
– Wake Up! 11 Facts That Show That Europe Is Heading Into An Economic Depression (Economic Collapse, Nov 30, 2012):
Europe is not just heading into another recession. The truth is that Europe is heading into a full-blown depression. The economy of the EU is actually larger than the U.S. economy, and we are watching it melt down right in front of our eyes. Things just continue to get worse in Europe, and yet somehow the authorities over in Europe just keep insisting that everything is going to be “just fine”. Well, everything is not “just fine” over in Europe right now. Unemployment in the eurozone has just hit another brand new record high. In some nations in Europe, the unemployment rate is already significantly higher than anything the United States experienced during the Great Depression of the 1930s. Europe is a continent that is collapsing under the weight of its own debt, and this is just the beginning. A lot more pain is on the way. Officials over in Europe are trying to hold the European financial system together with duct tape and prayers, but it could literally fall apart at any moment. Europe has a much larger banking system than the United States does, so when a financial collapse happens in Europe, it is going to be very significant for the entire globe. Sadly, most Americans do not even pay attention to much of anything that is happening in Europe. They tend to think that the United States is the center of the universe and that as long as we are fine that everything will be okay. Well, all of those people who are not paying attention need to wake up. First of all, the U.S. economy is most definitely in decline. Secondly, the European economy is imploding right in front of our eyes and Europe is going to end up dragging the entire globe down with it.The following are 11 facts that show that Europe is heading into an economic depression… Continue reading »
YouTube Added: 14.11.2012
Hundreds of thousands of Europe’s beleaguered citizens went on strike or snarled the streets of capitals of Spain, Italy, Greece and Portugal, at times clashing with riot police, as they demanded that governments stop cutting benefits and create more jobs.
Gerald Celente, the founder of the Trends Research Institute, at the Marriott Hotel in Munich, Germany, on November 3rd, 2012. Celente was holding a presentation later on on the Internationale Edelmetall- und Rohstoffmesse, the largest precious metals conference in Europe. You can find Gerald Celente at trendsresearch.com and trendsjournal.com.
Tags: Azerbaijan, Bailout, Banking, Ben Bernanke, Bonds, Debt, Economy, EU, Europe, Fed, Federal Reserve, Gerald Celente, Germany, Global News, Goldman Sachs, Government, Greece, Italy, Jose Manuel Barroso, Mario Draghi, Politics, Portugal, Society, U.S., Walmart
Gerald Celente, the founder of the Trends Research Institute, at the Marriott Hotel in Munich, Germany, on November 3rd, 2012. Celente was holding a presentation later on on the Internationale Edelmetall- und Rohstoffmesse, the largest precious metals conference in Europe. You can find Gerald Celente at trendsresearch.com and trendsjournal.com.
Tags: Afghanistan, Al-Qaeda, Al-Qaida, Banking, Barack Obama, Bonds, Bush administration, China, Debt, Economy, Euro, Global News, Government, Great Depression, Greece, Iran, Iraq, Ireland, Israel, Italy, Japan, Lebanon, Libya, Military, NATO, Nuclear, Nuclear weapons, Obama administration, Oil, Philippines, Politics, Portugal, Russia, Society, Spain, Syria, Taiwan, U.S., Vietnam, War, War Crimes, WWW III
– Marc Faber: “Fed Will Destroy The World” (ZeroHedge, Sep 14, 2012):
“Everything will collapse” is the consequence Gloom, Boom, & Doom’s Marc Faber sees from the Fed’s latest ‘stimulus’ (and the fallacy and misconception of how money-printing can help employment). In a wondrously clarifying interview on Bloomberg TV this morning, Faber explained why he was ‘happy’, since “the asset values of his holdings will go up” but as a responsible citizen he is worried because “the monetary policies of the US will destroy the world.“ It truly is class warfare under a veil of ‘its good for you’ as he notes: “the fallacy of monetary policy in the U.S. is to believe this money will go to the man on the street. It won’t. It goes to the Mayfair economy of the well-to-do people and boosts asset prices of Warhols.” Congratulations, Mr. Bernanke.
Must-watch (or read the transcript) – it is truly remarkable.
Faber on more Federal Reserve stimulus:
“It is difficult to tell what will happen. I happen to believe that eventually we will have a systemic crisis and everything will collapse. But the question is really between here and then. Will everything collapse with Dow Jones 20,000 or 50,000 or 10 million? Mr. Bernanke is a money printer and, believe me, if Mr. Romney wins the election the next Fed chairman will also be a money printer. And so it will go on. The Europeans will print money. The Chinese will print money. Everybody will print money and the purchasing power of paper money will go down. And I don’t like bonds. I don’t particularly like equities, but I think equities are a better space to be in than bonds.” Continue reading »
Tags: Barack Obama, Ben Bernanke, Bonds, Debt, Economy, EU, Europe, Fed, Federal Reserve, Gold, Government, Great Depression, Kazakhstan, Marc Faber, Nasdaq, Obama administration, Politics, Portugal, Quantitative Easing, Real Estate, Society, Spain, U.S.
The proposed rescue fund for Europe not only breaches German law and EU treaties but could condemn a generation
– Germans could be consigned to serfdom to save the euro (Guardian, Sep 9, 2012):
Some commentators have taken to referring to this Wednesday as “the day that could make or break the common currency”, and they’re not far off the mark. On that day, Germany’s constitutional court will announce its verdict on the legality of the European Stability Mechanism, the permanent rescue fund for struggling eurozone countries. If implemented, the ESM’s share capital of €700bn would be provided by all 17 eurozone members in proportion to their economic size. Fourteen have so far ratified the treaty – Estonia, Italy and Germany are the only ones remaining.The German government has defended the ESM treaty, claiming it would fix Germany’s maximum liability at €190bn, and that the Bundestag would retain control over the grant of further assistance. Either German politicians have not read the treaty they have signed, or they do not understand its small print, for there is little in the document that supports their interpretation. Because the ESM is plainly unlawful.
For example, article 25(2) of the treaty states that members are jointly liable for any losses arising from loans made by the ESM. That means if one or more of the ESM members fail to meet their agreed financial contributions, the other members are liable for the shortfall. That situation is already a reality, because Greece and Portugal are unable to make any contribution.
– Carpe Diem, Quam Minimum Credula Postero (ZeroHedge, Sep 3, 2012):
Via Mark J. Grant, author of Out of the Box,(Latin)
“Seize the day, put no trust in tomorrow.”
Tomorrow, September 4, 2012 will be a defining moment. Mr. Draghi will release to the European Central Banks his plan to save the Continent. The plan will get leaked, no doubt, and the consternation will begin throughout Europe. Today the German Economy Minister went public and announced that he supports Weidmann, the head of the German Central Bank, in his opposition to the European Central Bank’s plans to buy debt of Eurozone countries with high borrowing costs, saying that they could not replace economic reforms. I think we may all read this as Frau Merkel’s position as well as Herr Roesler does not speak without approval. The stage is now set for battle.
“A good soldier in an enemy’s country should everywhere and at all times be on the alert. It has been one of the rules of my life, and if I have lived to wear grey hairs it is because I have observed it.”
-Sir Arthur Conan Doyle, The Adventures of Gerard
Spain wants the ECB to buy their debt without limit. France, Greece, Portugal, Italy and Cypress are lined up with Spain. The “have nots” are demanding divine intervention; the “haves” are not willing to tithe or to provide the necessary “indulgence” to send Madrid into Heaven. It is not the Barbarians but Martin Luther at the gate and I expect rancor and the spitting of Hell-fire. The Draghi plan, whatever it is going to be, will cause a very serious division of the faithful in Europe and I expect quite a fight. Spain and perhaps Italy are waiting on the plan before lining up for hand-outs and the trouble in Europe keeps escalating. Over the weekend the largest mortgage lender in France had to be bailed out and I expect the cost to be between $40-50 billion. In Spain Bankia had to be rescued and besides the initial payment of $5-6 billion you may expect a $30-40 billion injection required. In Italy the oldest bank in the world, Monte Paschi, turned to the nation to get bailed out in the last few days. The events may be isolated but a pattern is beginning to develop and the amount of money required will send shell-shocks through the national budgets of a number of countries in Europe.
“Once more unto the breach, dear friends, once more…”
-William Shakespeare, Henry V
The Battle Of Frankfurt
– The Portuguese Run Out Of Gold To Sell (ZeroHedge, Aug 16, 2012):
“Business has gone from great to terrible in a matter of months. The sad truth is that most of my clients have already sold all of their gold rings,” is anecdotal evidence of a growing trend that Bloomberg reports in Portugal. Historically the home of Europe’s biggest relative gold reserves, cash-for-gold shops rose 29% in 2011 (average 2 store openings per day) – but now some are closing. Portugal’s gold exports increased by more than five times to 519.4 million euros last year from 102.1 million euros in 2009, according to data published on the Lisbon-based National Statistics Institute’s website.
– The Financial Decline In Europe Continues (ZeroHedge, Aug 14, 2012):
Via Mark E. Grant, author of Out of the Box,
As Industrial Production falls -0.6% in Europe and as the economy shrinks -0.2% there is once again a good reason to pause to consider the ramifications for this going forward. As part of the data release this morning Germany and France did somewhat better than expectations but it was fairly marginal while the rest of the EU-17 continues to be mired in difficulties. Overnight LCH increased the margin requirements for both Spain and Italy as the banks of Spain keep increasing their borrowings at the ECB which is now at an all-time record. More troubling perhaps is the recent release of data from Italy which showed that their sovereign debt had ballooned to $2.437 trillion and the trajectory is more than troublesome. In 2010 and 2011 Italy’s debt was expanding by $7.90 billion per month but in 2012 Italian debt has increased by $11.73 billion per month for a projected $141 billion by the end of this year. In fact the Italian economy is shrinking by about -2.5% while their debt is growing by 5.8% which is the baseline for an unsustainable situation if these trends continue.
To make matters worse Italy’s Industrial Production is down -8.2% from a year ago and down -1.4% in the last month. I think Italy must be reassessed in light of the recent data and I would project further downgrades for the country and an increase in their bond yields as people recognize the severity of their problems. To me it looks increasingly likely that both Spain and Italy will soon line up at the feeding trough which is going to strain Europe, in my opinion, past the limits of what France and Germany can bear and then all of the superlatives and all of the great hype are going to come face-to-face with a very tough reality I am afraid. Continue reading »