The Gently Rotting Debt-Ridden EU

By Alasdair Macleod – Re-Blogged From http://www.Gold-Eagle.com

The EU (Euro Union) as a political construction is in a state of terminal decay. We know this for one reason and one reason alone: its core principal is the state is superior to its people. A system of government can only work over the longer term if it recognises that it is the servant of the people, not its master. It matters not what electoral system is in place, so long as this principal is adhered to.

The EU executive in Brussels does not accept electoral primacy. It shares with Marxist communism a belief in statist primacy instead. The only difference between the two creeds is Marx planned to rule the world, while Brussels is on the way to ruling Europe.

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The Next Crisis Is The Mother Of All Counter-Party Risks (Part 2)

[This is a long article – part valuable information and part rant. -Bob]

By Gijsbert Groenewegen – Re-Blogged From http://www.Gold-Eagle.com

In Part I I explained the counter-party risk that is all around us – and will come to the fore in the next financial crisis. In this second part I reflect on the rescue operations of the Fed following the 2008/2009 recession and the following QEs and ZIRP policies that have led to diminishing returns and that will ultimately weaken the US dollar: the biggest counter-party risk of all counter-party risks.

Addendum 8 – CDS, Credit Default Swaps. Ultimately it should be considered that when we encounter these systemic events that it will impact the underlying currency.  For example when the pension underfunding gets so problematic that the Government has to print more money to meet and rescue the obligations the counter-party risk will be reflected in the devaluation of the currency or the loss of purchasing power, the goods that you can buy with the same amount of nominal money will tumble.

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