World Now Faces ‘Monetary Armageddon’

By Mike Gleason – Re-Blogged From Gold Eagle

Mike Gleason (Money Metals Exchange): It is my privilege now to interview our good friend, Greg Weldon, CEO and President of Weldon Financial. Greg has decades of market research and trading experience specializing in the metals and commodity markets and he even authored a book back in 2006 titled Gold Trading Boot Camp where we accurately predicted the implosion of the U.S. credit market and urged people to buy gold when it was only $550 an ounce. He’s made some fantastic calls over the last few years here on our podcast and it’s great to have him back with us.

We did speak to you back at the end of February before all this madness started. At the time, COVID-19 had begun seriously impacting economic activity in global markets, maybe not so much in the U.S. Now, just two months later, more than 30 million people have filed for unemployment, GDP was deeply negative in the first quarter and figures to be even worse here in Q2. But the equity markets are acting as if the worst is behind us. We got a major correction followed by an almost relentless rally. Our take is that equity markets are completely disconnected from reality. They are hitched, instead, to the Fed’s magic money machine. What is your take on how stock markets are behaving here, Greg?

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The Chinese-virus lockdowns that have done their job

By Christopher Monckton of Brenchley – Re-Blogged From WUWT

In Italy and Spain, two of Europe’s hardest-hit nations, the compound daily growth rates in cumulative cases of Chinese-virus infection have fallen to 2.8% and 3.4% respectively. The lockdowns in these two countries are, for the first time, being eased.

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Fig. 1. Mean compound daily growth rates in confirmed cases of COVID-19 infection for the world excluding China (red) and for several individual nations averaged over the successive seven-day periods ending on all dates from March 28 to April 12, 2020. A link to the high-definition PowerPoint slides is at the end of this posting.

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The Italian Connection

By Willis Eschenbach [Note updates at the end] – Re-Blogged From WUWT

Since the earliest days of the current pandemic, Italy has been the scary member of the family that you absolutely don’t want to emulate, the one cousin that gets into really bad trouble. The Italians have the highest rate of deaths from the COVID-19 coronavirus, and their numbers continue to climb. Here’s the situation today.

Figure 1. Deaths from the COVID-19 coronavirus expressed as deaths per ten million of the country population. Percentages of the total population are shown at the right in blue. All countries are aligned at the date of their first reported death. Most recent daily chart and charts of previous days are available by going here and scrolling down.

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Will Brexit And Coronavirus End The EU?

By Alasdair Macleod – Re-Blogged From Gold Eagle

The EU and euro face a sudden deterioration in economic conditions due to the coronavirus, which seems certain to widen the differences between Germany and the spendthrift Mediterranean members. But a more immediate problem is the increasing likelihood that the ECB will lose control over financial asset prices, particularly those of government bonds.

In the short-term, it seems likely the euro will rise against the dollar as currency and financial distortions, principally in the fx swap market, are unwound. However, the eurozone faces a developing financial crisis comprised of the following elements: a collapse in economic activity, escalating payment failures, a drastic contraction of bank credit and a collapse in bond prices, as well as the medium used to buy them (the euro).

Eventually, Germany is could go it alone by introducing a gold-backed mark, which will only happen after the European Project is finally abandoned.

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Vote-Weary Spain Holds Election

By Reuters – Re-Blogged From IJR

Spain held its second parliamentary election in just over six months on Sunday, with voters likely to deliver an even more fragmented parliament with no clear winner and a sizeable showing by the far-right.

Opinion polls show the Socialists in the lead but likely to win slightly fewer seats than in April’s vote, while the conservative People’s Party (PP) could gain strength and the far-right Vox could become the country’s third-largest party, just months after winning its first parliamentary seats.

Spain has been struggling to put stable governments together since 2015, when new parties emerged from the financial crisis following decades during which power oscillated between the Socialists and the PP.

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Is Turkey The Snowflake That Unleashes The European Banking System Avalanche?

By Mark O’Byrne – Re-Blogged From Gold Eagle

Week in Review – Science Edition

By Judith Curry – Re-Blogged From Climate, etc

A few things that caught my eye the past 4(!) weeks.

A hidden province of volcanoes in West Antarctica may accelerate sea level rise [link]

The Dominant Role of Extreme Precipitation Events in Antarctic Snowfall Variability buff.ly/2U3stFU

The Strength of Low-Cloud Feedbacks and Tropical Climate: A CESM Sensitivity Study buff.ly/2NiqxqB

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ITALEXIT: Italy’s Debt Crisis

By Mark O’Byrne – Re-Blogged From Gold Eagle

ITALEXIT: Italy to crash out of Euro and ‘rock EU to its foundations’
– Italy’s debt crisis will lead to default, exit from the euro, or both claims respected economist Bootle
– Italy has fallen back into recession with its economy shrinking by 0.2% in the last quarter
– “When Italy finally blows up, it will cause both a banking crisis that will shake the European economy and a political crisis that will rock the EU to its foundations”

by Roger Bootle of Capital Economics in the  Daily Telegraph

Last week’s data showing a drop in Italian GDP in Q4 of last year confirmed what many observers had already suspected: Italy is in recession.

Or rather, in another recession, for this follows similar phases in 2008, 2011 and 2012.

Where is this going to end?

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Italy Calls Europe’s Bluff, And The Euro Loses Either Way

By John Rubino – Re-Blogged From Gold Eagle

When Italy elected a bunch of rowdy populists back in March, the rest of the eurozone assumed (or at least hoped) that the weight of responsibility would bring Rome back into line. But so far the Italians appear to be serious about ending austerity and forcing the ECB to finance their spending ambitions. The just-passed Italian budget calls for a rising deficit, in direct disobedience of Continental (read German) authorities.

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Germany Fails to Meet EU Climate Targets, Will Get Billed Billions

By Anthony Watts – Re-Blogged From WUWT

From Focus Magazin (h/t to GWPF)

The failure to meet European Union climate targets will cost Germany billions. According to a report, the German deficit means the government will have to buy CO2 certificates from Eastern Europe for two billion euros.

While Germany is missing its climate target by just under three percent, countries such as Bulgaria, Croatia, Slovakia and Hungary are doing significantly better, according to a report by Wirtschaftswoche.

Apparently Berlin is already preparing to make the payments. A spokesman for Federal Environment Minister Svenja Schulze (SPD) told “Wirtschaftswoche”: “We would rather invest the money in climate protection and the modernization of the infrastructure in Germany.”

Full story (in German)

(I predict that Germany,when officially told they have to buy billions in CO2 certificates, will tell the EU to go “stuff it” -Anthony)

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Weather Station (Lack Of) Maintenance

By Anthony Watts – Re-Blogged From WUWT

In Spain, Paco Eslava García has been following my lead on the poor quality of weather stations that produce record-high temperatures. I recently pointed out how the tentative all time high temperature in Africa could very well be due to being at an airport. I also pointed out that high temperature records in the Los Angeles area could be a product of poor siting. Such as this station on the roof of the Santa Ana fire station:

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Why The Global Collapse Will Be Devastating

By Egon von Greyerz – Re-Blogged From King World News

As the world edges closer to the next crisis, today the man who has become legendary for his predictions on QE and historic moves in currencies, told King World News there is no way out and this is why the global collapse will be devastating.

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Interest Rate Rises will Trigger Renewable Business Collapses

By Eric Worrall – Re-Blogged From http://www.WattsUpWithThat.com

h/t Willie Soon – the President of Spanish Energy Giant Iberdrola has suggested interest rate rises will wipe out large numbers of highly leveraged “unskilled” renewables businesses.

Iberdrola chief says global renewable sector facing Enron-style endgame

Ignacio Sánchez Galán, Presidente de Iberdrola

Ignacio Sánchez Galán, Presidente de Iberdrola. By Pabloherreros (Own work) [CC BY-SA 3.0], via Wikimedia Commons


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A New Year Brings Familiar Challenges for the EU

Re-Blogged From Stratfor

Highlights

  • In 2018 the European Union will try to close the free trade agreements it has been negotiating in recent years and to sign new deals with additional countries.
  • The European Union will continue pressuring Russia to cooperate on a solution for the conflict in Ukraine but will be reluctant to increase its sanctions on Moscow.
  • Initiatives to cooperate with the countries migrants hail from and travel through will be easier to approve than will plans to reform the bloc’s rules on migration.

The EU flag flies over the stock exchange building in Brussels.

(sharrocks/iStock)

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Paris Agreement Architect Calls the End of Coal – in the Middle of a Coal Rush

By Eric Worrall – Re-Blogged From http://www.WattsUpWithThat.com

Former UNFCCC secretary Christiana Figueres, architect of the Paris Agreement, has called Australia’s planned giant new coal mine a “Kodak moment”, a doomed investment in a superseded technology, right in the middle of an unprecedented global rush to new coal capacity.

The ‘Kodak moment’ for coal, and why the Adani mine could be a financial disaster

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Fragmenting Countries, Part 1: Catalonia Is Just The Beginning

By John Rubino – Re-Blogged From Dollar Collapse

Picture a life where you do most of your shopping through Amazon.com and the local farmers’ market, most of your communicating through Facebook and Instagram, much of your travel via Uber, and much of your saving and transacting with bitcoin, gold and silver.

Do you really need an immense, distant, and rapacious central government? Maybe not. Perhaps your region or ethnic group would be better off forming its own independent country.

This question is being asked — and answered — in a growing number of places where distinct cultures and ethnic groups within larger nations now see their government as more burden than benefit. The result: Secession movements are moving from the fringe to mainstream.

In just the past couple of weeks, Iraqi Kurdistan and Spain’s Catalonia declared their independence. Neither succeeded, but the fact that they felt free to try illustrates how times have changed.

This is fascinating on a lot of levels, but why discuss it on a gloom-and-doom finance blog? Because secession is about the messiest event a country can experience short of civil war. And few things are more financially disruptive for an already over-leveraged society than potential dissolution.

Today’s fiat currencies depend for their value on the belief that the governments managing them are coherent and competent. Let a major region break away and plunge a debtor country into political/civil chaos and the markets will abandon its currency in a heartbeat. Note the sense of panic in the following article:

EU TURMOIL: Finland preparing to go against Spain and RECOGNISE Catalonia’s independence

(Express) – FINLAND could be the first country to officially recognise Catalonia as a republic state, in a move that would put the Scandinavian country in direct opposition to the European Union (EU).

The country’s MP for Lapland Mikko Karna has said that he intends to submit a motion to the Finnish parliament recognising the new fledgling country.

Mr Karna, who is part of the ruling Centre Party, led by Prime Minister Juha Sipila, also sent his congratulations to Catalonia after the regional parliament voted earlier today on breaking away from the rest of Spain.

Should Finland officially recognise the new state of Catalonia this will be yet another body blow to the the EU which has firmly backed the continuation of a unified Spain under the control of Madrid.

European Commission President Jean-Claude Juncker warned today that “cracks” were appearing in the bloc due to the seismic events in Catalonia that were causing ruptures through the bloc.

Mr Juncker spoke in favour of unity. He said: “I do not want a situation where, tomorrow, the European Union is made up of 95 different states. We need to avoid splits, because we already have enough splits and fractures and we do not need any more.”

The Scottish Government has also sent a message of support, saying that Catalonia “must have” the ability to determine their own future.

Scotland, of course, is itself considering secession from the UK, which recently voted to leave the European Union.

The political class, meanwhile, is trying to figure out where it went wrong. See the New York Times’ recent What Is a Nation in the 21st Century?

If the combination of long-term financial mismanagement and sudden technological change really has made large, multi-cultural nations dispensable, then some of them are going to fragment. This in turn will contribute to the failure of the fiat currency/fractional reserve banking system that’s ruining global finance. Poetic justice for sure, but of an extremely messy kind.

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Globalism in the Eyes of Two Beholders

By Rodger Baker – Re-Blogged From https://worldview.stratfor.com

The relative peace and prosperity in Europe may have shaped an idealistic approach to globalism.

The world over, the topic of globalism rarely fails to elicit a strongly held opinion. At its extreme in Europe, the march of globalization is accepted as a near-inevitability: In that view, it is no longer merely a path that should be taken, but the inexorable destination of humanity. As such, there is little room for assessing, much less understanding, alternative perceptions about the structure of the world, either internationally or domestically. Whether talking with a German economist, a British investor or an expatriate businessman in Spain, there is a near-bewilderment as to why anyone would want to pursue nationalism over globalism. As such, the bump in popularity for the Alternative for Germany party, the independence referendum in Catalonia and the Brexit are all seen as anti-historical trends. To them, the European Union remains the moral and political compass for the world, the guiding principle upon which the nation-state will be subsumed and a new global society will emerge.

In Asia, globalization is seen as a potential path, but not an inevitable one, and is viewed more often in economic than political terms. The nation-state firmly remains the unit of political and social organization, and while there are numerous initiatives to enhance cooperation among national entities, there is little movement toward the creation of a pan-national umbrella along the lines of the European Union. The Association of Southeast Asian Nations (ASEAN), one of the most aggressive Asian attempts at pan-national cooperation, explicitly promotes a policy of noninterference in national politics, recognizing the very different systems in each member country, rather than seeking to replace them with a regionwide political and economic structure.

Over the past 12 months, I have engaged with business leaders, government officials, researchers and members of the media in London, Berlin, Paris, Rome, Barcelona and The Hague, and in Auckland, Seoul, Beijing, Hong Kong and Singapore. Over the course of those discussions, a distinct difference in worldview between the “elites” of Europe and those of Asia became apparent. I use the word elite loosely here to describe the thin layer of society with the economic and social freedom to observe and assess the world in a manner disconnected from daily life. These are the economists, political scientists and bankers, the pundits, heads of major corporations, politicians and journalists. Their views shape much of the popular narrative, but one that often misses the underlying realities and beliefs held by a large portion of the societies in which they reside.

Now, all such broad-brush assessments are, by their nature, simplistic and superficial. There are certainly those in Asia who subscribe to the ideals of extreme globalism, and some among the European elite who recognize clearly that the Continental vision is just that — a vision and not an inevitability. But nonetheless, I noted the striking difference in tone between those I met in Europe and those in Asia. In part, the geopolitical developments in each region over the past several decades could explain this dichotomy.

 

Whereas Europe views the United States in ideological terms, Asia sees it in transactional terms.

Following the end of the Cold War, with the exception of the breakup of Yugoslavia, Europe has experienced perhaps its most stable multidecadal period in centuries. The European experiment appeared to be working. The peace and prosperity that spread across the continent allowed for the European Union to spread in kind, absorbing elements of the former Soviet bloc and even parts of the former Soviet Union itself. In guiding the economic and political directions of individual European nations, the European Union sought to erase the underlying nationalism that had riven Europe for millennia. But that noble goal failed to take into account the realities that remained below the surface. These were exposed dramatically with the global financial crisis in 2008, which forced the differences between the economic, social and political predilections underlying its systems to the surface once again, leaving the Europeans struggling with the growing gap between the globalized ideal and the national realities.

In Asia, no substantial periods of post-Cold War peace and cooperation ever really materialized. Even as it emerged as the region’s dominant economic regional power, China’s attention focused inward as it sought to manage internal social upheavalJapan fell into economic malaise. The two Koreas (despite a brief moment of sunshine) continued to spar. Extra-constitutional political change swept across Southeast Asia. The financial contagion that spread throughout the Asia-Pacific in 1997 sharpened many of these trends, leaving simply no long space of regional economic prosperity and political integration. Moves toward regional economic cooperation never went so far as seeking a common currency or centralized economic authority, and they certainly avoided linkage of economics and domestic politics.

Those differences in fortune play into the way each region views and reacts to both the perceived changes in U.S. policy direction and to rising nationalist sentiment around the world. In Europe, U.S. President Donald Trump is seen as globalization’s greatest threat, caricatured as the dangerous buffoon — a mirror image of the U.S. perception of North Korean leader Kim Jong Un. European nations have found it difficult to manage relations with the United States because they cannot accept that it may be sliding away from the extreme vision of globalization. In Asia, there are concerns about the direction of U.S. policy, but less in regards to globalization and more in terms of its direct economic and security effects. Whereas Europe views the United States in ideological terms, Asia sees it in transactional terms. Thus Asian leaders like Japan’s Shinzo Abe and even China’s Xi Jinping have been more adept at interpreting and engaging with Trump.

The geopolitical currents that have brought the continental neighbors to these dichotomous viewpoints will continue to shape the perceptions of their thought leaders, who in turn influence the political, economic and social directions of their societies. It’s clear that globalism will continue to evolve, both as an ideal and as a reality. Where it ends up may be a matter of perspective.

 

Rodger Baker leads Stratfor’s analysis of Asia Pacific and South Asia and guides the company’s forecasting process. A Stratfor analyst since 1997, he has played a pivotal role in developing and refining the company’s analytical process, internal training programs and geopolitical framework.

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The German Elections Matter — and Not Just for Germany

Re-Blopgged From https://worldview.stratfor.com

Highlights

  • Germany’s Sept. 24 election will likely result in one of the most fragmented parliaments the country has seen in decades.
  • The country’s two largest parties will try to avoid renewing their current coalition partnership, meaning smaller parties will play a big role in the formation of the next government.
  • The ideological composition of the new administration will affect negotiations to reform the European Union, and when it comes to Southern Europe’s proposals for reform, a center-right coalition would be more skeptical than a center-left coalition.

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Use and Abuse of History

By Reva Goujon – Re-Blogged From https://worldview.stratfor.com

A lot of history is being casually tossed around these days. We see it from energized segments of the “alt-right” throwing up Nazi salutes, calling for a “revolution” against “the Bolsheviks” and marching to chants like “Jews will not replace us.” We see it from their anti-fascist adversaries on the left, branding themselves antifa, a movement that draws its roots from the Antifaschistische Aktion resistance from 1930s Germany. We see it from world leaders when Turkish President Recep Tayyip Erdogan brazenly calls his German and Dutch counterparts Nazis and fascists and when U.S. President Donald Trump ardently defends Confederate statues as symbols of “heritage not hate.” We see it from jihadist groups like the Islamic State when a member of the Barcelona attack cell calling himself Abu Lais of Cordoba spookily reminds Spanish Christians to remember “the Muslim blood spilled” during the Spanish Inquisition as the group fights to reincorporate “Al Andalus” into a revived caliphate.

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Spain’s New Big Bubble Begins to Wobble

By Don Quijones – Re-Blogged From WOLF STREET.

Since hitting rock bottom in 2013, Spain has been one of the biggest engines of economic growth in Europe, expanding at around 3% per year. But according to a report by the Bank of Spain, most of the factors behind this growth — such as cheaper global oil prices, the ECB’s expansionary monetary policy, and the subsequent decline in value of the Euro — are externally driven and transitory in nature.

This is particularly true for arguably the biggest driver of Spain’s economic recovery, its unprecedented tourism boom, which some local economists are finally beginning to call a bubble.

In large part the boom/bubble is a result of the recent surge in geopolitical risks affecting rival tourist destinations like Turkey, Egypt, Tunisia and, in smaller measure, France, which helped boost the number of foreign visitors to Spain in 2016 to a historic record of 75.3 million people — an 11.8% increase on 2015.

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Technology Disrupts White Collar Workers

By David McWilliams – Re-Blogged From http://www.Gold-Eagle.com

– Every era, every century, every generation has its massive technological disruption
– Taxi drivers being “disrupted” by technology of Uber
– History shows how “middle men” frequently made redundant
– Skill set of many professionals today can be replicated by machines and technology
– Technology may make lawyers, accountants, architects and doctors redundant
– We risk “cannabalising ourselves” with internet and emerging technologies

Jean-Luc Picard “assimilated” by the Borg in Star Trek

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Martel, Patton, and Burnside… Warriors Three

By Larry Usoff- Re-Blogged From iPatriot 

Martel, Patton and Burnside…warriors three:

Charles Martel, born around 686, and died in 741 was a Frankish statesman and military leader who as Duke and Prince of the Franks and Mayor of the Palace, was de facto ruler of Francia from 718 until his death.  Building on his father’s work, he restored centralized government in Francia and began a series of military campaigns that re-established the Franks as the undisputed masters of all Gaul.   After he established a unity in Gaul, his attention was called to foreign conflicts, and dealing with the Islamic advance into Western Europe was a foremost concern.

Arab and Berber Islamic forces had conquered Spain, crossed the Pyrenees, seized a major dependency of the Visigoths, and after intermittent challenges, under the Arab Governor of al-Andalus Abdul Rahman Al Ghafiqi, advanced toward Gaul and on Tours, “the holy town of Gaul”; in October 732, the army of the Umayyad Caliphate led by Al Ghafiqi met Frankish and Burgundian forces under Charles Martel in an area between the cities of Tours and Poitiers, leading to a decisive, historically important Frankish victory known as the Battle of Tours, ending the “last of the great Arab invasions of France,” a military victory termed “brilliant” on the part of Martel.

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Brexit One Year Later, In Five Charts

By Frank Holmes – Re-Blogged From http://www.Gold-Eagle.com

One year ago, British voters cast their ballots in favor of leaving the 28-member European Union, defying multiple opinion polls leading up to the Brexit referendum that said the “remain” camp would notch a narrow victory.

In a pre-Brexit Frank Talk last year, I wrote that Brexit would be regarded as the most consequential political event of 2016. President Donald Trump’s surprise election notwithstanding, I stand by my earlier comment.

 

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An Empire Self-Destructs

By Jeff Thomas – Re-Blogged From International Man

Empires are built through the creation or acquisition of wealth. The Roman Empire came about through the productivity of its people and its subsequent acquisition of wealth from those that it invaded. The Spanish Empire began with productivity and expanded through the use of its large armada of ships, looting the New World of its gold. The British Empire began through localized productivity and grew through its creation of colonies worldwide—colonies that it exploited, bringing the wealth back to England to make it the wealthiest country in the world.

In the Victorian Age, we Brits were proud to say, “There will always be an England,” and “The sun never sets on the British Empire.” So, where did we go wrong? Why are we no longer the world’s foremost empire? Why have we lost not only the majority of our colonies, but also the majority of our wealth?

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Falling Rocks In The Promised Land

By Gary Christenson – Re-Blogged From http://www.Gold-Eagle.com

Yes, traumatic market events (falling rocks) occur, even though markets are “managed,” statistics are manipulated, and politicians pretend to care about something besides their next election.

From John P. Hussman, Ph.D. Fair Value and Bubbles: 2017 Edition

“Unfortunately, investors seem to have concluded that central bank easing is omnipotent, despite the fact that the Fed eased persistently and aggressively, to no effect, through the entire course of 2000-2002 and 2007-2009 market collapses.”

From Bill Gross: Bill Gross Says Market Risk is Highest Since Pre-2008 Crisis

“Central bank policies for low-and-negative-interest rates are artificially driving up asset prices while creating little growth in the real economy and punishing individual savers, banks, and insurance companies, according to Gross.”

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Deposit Bail In Risk As Spanish Bank’s Stock Crash

 By Mark O’Byrne – Re-Blogged From http://www.Gold-Eagle.com

– Banco Popular stock crashes most on record – down 63% this year to 34 euro cents

– Spanish bank tells employees – “Don’t panic”

– Risk of Spanish banking crisis as Banco Popular credit curve inverts

– Banco Popular needs to find at least €4 billion more capital – analysts

– Deposits over €100,000 (euro) vulnerable to bail-in

– EU, U.S., UK push for bank ‘bail-ins’ poses risks to depositors

Source: Google

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Importance Of Randomness

By Alasdair Macleod – Re-Blogged From http://www.Silver-Phoenix500.com

The greatest strength of a truly free market economy, where money is sound and does not corrupt prices, is the absence of cyclical action. With sound money, and consumers deciding for themselves their wants and satisfactions, having to choose between this or that instead of deploying unbacked credit to have this and that, there can be no cycle of credit, and no credit-driven business cycles.

Central bank manipulation of money is intended to force everyone to act the same way at the same time. Central banks direct the quantity of money and credit to encourage us en masse to spend money we do not have, supplanting the randomness of Schumpeter’s “creative destruction” with a synchronized destruction, deferred to the end of the credit cycle.

The constructive and continually evolving process of reallocation of capital from uneconomic projects to more productive uses is ruined by unsound money. To this damage can be added extensive regulation, promoted by governments as being in the public interest, but more accurately, designed to protect established businesses from competition. You cannot sell ice cream without a license, and even then, its composition is regulated by the state.

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Business Cycles Are Credit Cycles

By Alasdair Macleod – Re-Blogged From http://www.Silver-Phoenix500.com

This article gets to the heart of why central banks’ monetary policy will never succeed. The fundamental error is to regard economic cycles as originating in the private sector, when they are the consequence of fluctuations in credit. It draws on the author’s submission of evidence to the UK Parliament Treasury Committee’s enquiry into the failure of monetary policy in the wake of the 2008 crisis.

Summary

  • It is incorrectly assumed that business cycles arise out of free markets. Instead, they are the consequence of the expansion and contraction of unsound money and credit.
  • Monetary inflation transfers wealth from savers and those on fixed incomes to the banking sector’s favoured customers. It has become a major cause of increasing disparities between the wealthy and the poor.

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What Color Is Southern Europe’s Parachute?

Re-Blogged From Stratfor

Uneven Recoveries

In Spain and Portugal, unemployment figures decreased more quickly last year than anywhere else in Europe. In February, the year-to-year unemployment rate fell from 20.5 percent to 18 percent in Spain, while Portugal’s rate decreased from 12.2 percent to 10 percent. A drop in official unemployment rates can be misleading: people who have given up looking for work are not included in certain joblessness calculations. But in Spain and Portugal, the drop in unemployment was accompanied by an actual increase in the number of people working. In Spain, 16.9 million people had jobs in 2014; by 2016 that number had increased to 18.5 million. In Portugal, job numbers rose from 4.4 million to 4.6 million between 2013 and 2016.

Eurozone Unemployment Chart

Nonetheless, the improvement in both countries largely reflects an increase in non-permanent jobs. Around 90 percent of new contracts in Spain and 80 percent in Portugal are for temporary jobs. Among EU states, according to Eurostat, only Poland has more workers under temporary contracts than Spain and Portugal. In addition, the demographic profile of workers in those countries under temporary contracts is anomalous: More than half of temporary workers in countries like Germany or Sweden are younger than 29. In Spain and Portugal, on the contrary, around a third of temporary workers are 30–39 years old. According to a report by the European Parliament, only one in five workers under temporary contracts in Spain and Portugal actually transition to permanent contracts.

EU Part-Time Employment Chart

To some extent, the way Spanish and Portuguese employment markets operate account for the labor precariousness. Despite recent reforms, labor laws in both countries are still relatively rigid, and the cost of dismissing workers remains high. This makes many companies opt for temporary contracts when hiring staff. Sometimes employers offer temporary contracts to reduce costs, but the practice also gives them flexibility to downsize during times of economic uncertainty.

Economic structures also play a significant role in the type of jobs created. For example, the services and agriculture sectors rely more heavily on temporary jobs than does industry. In services and agriculture, jobs tend to be more seasonal, with particularly high rates of temporary and off-the-books positions. In Southern European countries, tourism (and associated service industries like hotels and restaurants) provides a bigger source of employment than in most of their northern peers. Tourism accounts for roughly 12 percent of all employment in Spain, the second highest proportion in the European Union after Malta. Spain and Portugal have experienced a recent tourism boom, driven partially by rising political and security concerns in competing destinations in the Mediterranean. A significant agricultural sector in both countries also adds to their temporary job totals. Agriculture represents around 7 percent of employment in Portugal and 4 percent in Spain, compared with around 2 percent in countries like Germany or Sweden. These economic structures mean that job precariousness is not an entirely new phenomenon in Spain or Portugal.

Meanwhile, the effects of the European economic crisis have led to shrinking salaries. In Spain, the average wage fell by about 3.5 percent between 2011 and 2014. (It has recovered slightly since then.) In Portugal, the average wage has been stagnant since 2012. Recent reforms in labor legislation, which had the goal of making these economies more competitive, account for a portion of the earnings decrease. As members of the eurozone, Spain and Portugal cannot use currency devaluation to regain competitiveness during crises. As a result, they chose to take measures to reduce labor costs (a process commonly known as “internal devaluation”), including reducing the role of collective bargaining in salary negotiations and making it easier and cheaper for employers to dismiss workers. In Spain, hourly labor costs increased by 28 percent between 2004 and 2011 but remained flat between 2011 and 2015. In Portugal, labor costs per hour had increased by almost 18 percent between 2004 and 2012, but dropped by 0.7 percent between 2012 and 2015.

Both countries are grappling with high rates of youth unemployment, which during the peak of the crisis in Spain exceeded 50 percent of the active young population (people under 24 who are looking for a job, excluding students) and reached about 40 percent in Portugal. To a certain extent, emigration and financial support from family members mitigated the effect of high unemployment rates among young workers.

Long-term joblessness presents perhaps a greater problem. Roughly half of those unemployed in Spain and Portugal have been out of work for more than a year. In general, the longer that people are out of the workforce, the harder it is for them to find a job. Motivation to keep looking for work also drops off. This suggests that even if the economic recovery consolidates in these countries, the pace of the decline in unemployment rates could slow in coming years.

Misleading Improvements

In another southern economy, Greece, structural factors and the economic crisis have likewise fueled high unemployment. But even before the crisis, the highest share of employment came from sectors with more temporary positions: tourism, retail and agriculture. Meanwhile, labor productivity rates in the portion of the Greek industrial sector with labor- and resource-intensive activities were often below the EU average.

EU Temporary Employment Chart

Greece’s unemployment rate has shrunk over the past five years, but so has the labor force (that is, the number of people either employed or looking for a job) — a result of multiple factors, including retirement, emigration and the fact that unemployed people who quit looking for a job are not considered part of the workforce. In the fourth quarter of 2016, according to the Hellenic Statistics Office, 3.64 million people had jobs in Greece, virtually the same as a year earlier. As in Portugal and Spain, unemployment in Greece fluctuates seasonally: employment rates rise in summer and decrease in winter. While the total number of people with jobs in Greece rose from 2015 to 2016, the figure is still below what it was in 2012. Moreover, official statistics tend to hide the fact that hundreds of thousands of Greek workers have accepted jobs that offer either low pay or only part-time or temporary status. According to Eurostat, the percentage of involuntary part-time jobs — those held by workers who would rather have full-time employment — in Greece rose from 45 percent to 72 percent over the past decade.

As in Spain and Portugal, the Greek government sought to limit wage growth during the height of the economic crisis with policies such as those replacing collective bargaining with company-based collective agreements. According to data compiled by the Organization for Economic Co-operation and Development, the average wage in Greece fell by 20 percent between 2009 and 2015. Meanwhile, labor costs per hour have dropped by 15 percent since 2008. Greece is the only eurozone country where the minimum wage is lower today than it was a decade ago. But broader and deeper reforms to make the Greek economy more competitive, including modernizing the country’s education system, moving toward deregulation in some areas, and accelerating the privatization process, have been only partially introduced. Tax hikes and spending cuts introduced during Greece’s three bailout programs have cut domestic consumption and turned a recession into a depression.

Slow Rebounds

Italy offers another interesting case: unemployment never reached the levels it did in Greece, Spain or Portugal, but joblessness has resisted the efforts by several governments to decrease it. Since 2012, the unemployment rate has consistently hovered above 11 percent. (It was 6 percent a decade ago.) Unlike Spain or Portugal, Italy did not respond to the crisis with a unified package of comprehensive labor reforms, but instead implemented a series of smaller reforms, most notably during the governments led by Mario Monti in 2012 and Matteo Renzi in 2014. These reforms sought to weaken protections against dismissal for permanent workers and to increase protection for the unemployed.

In spite of the reforms, the pace of job creation has not fulfilled government promises. According to Italy’s statistics office, 22.8 million Italians had a job in the fourth quarter of 2016 — a modest increase from the 22.4 million registered four years earlier. At the same time, the proportion of the country’s working-age population with jobs grew from 56.3 percent to 57.4 percent. However, many people have been unable to find the kind of job they want. According to Eurostat, the number of Italians working part-time grew by almost 10 percent between 2002 and 2015, while the average increase for the European Union during that period was 4 percent. Of Italians working part-time, six in 10 would rather have a full-time position. That ratio in 2007 was less than 4 in 10.

Political issues certainly play a role in the trend, as Italian governments tend to be fragile and subject to pressure from multiple sources, including from trade unions and local and regional economic and political interests, making reforms difficult to introduce. Italy also remains beset with pronounced geographic contrasts, as employment rates remain considerably higher in its relatively less-developed and largely agricultural south than in its industry-heavy and more prosperous north. Italy’s weak economic growth does not support robust job creation, another factor keeping unemployment numbers high. Since Italy’s economy emerged from recession in 2014, it has not exceeded 1 percent annual growth.

A Potential Threat to Long-Term Growth

Job insecurity is not exclusive to the southern members of the eurozone: Countries in Central and Eastern Europe like Poland and Bulgaria also have high rates of temporary employment or jobs with low salaries. And a high number of jobs in wealthier countries like the United Kingdom and Austria include employment conditions that labor rights, such as “zero hour contracts” that offer no guaranteed minimum hours of work.

But unemployment rates rose faster in Southern Europe, where the crisis hit harder. High unemployment and insufficient economic growth in that region exposed the fragility of the banking sectors in several countries, raised questions about the sustainability of their public and private debts, and created a fertile ground for the emergence of anti-system political parties that could threaten the survival of the eurozone.

The creation of temporary and precarious forms of employment is a normal phenomenon during the early stages of an economic recovery. Over time, however, they could drag down an economy by limiting the room for growth in domestic demand, for example. In addition, rising income inequality feeds growing social and political tensions. While unemployment rates are dropping across the board, issues such as job insecurity, low pay, long-term unemployment, and few opportunities for training or career advancement could weigh down Southern Europe’s incipient economic recovery.

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The Decline And Fall Of The Euro Union

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

This article identifies the headwinds faced by the EU in the wake of Brexit. Without the UK, not only does the EU lose much of its importance on the world stage, but the Commission’s budget is left with an enormous hole. That is the decline. The fall is well under way, with capital flight significantly worse than generally realised, as a proper understanding of TARGET2 imbalances shows. Not only is the ECB running out of options, but without major support from Germany, France and Italy, Brussels itself faces a financial crisis. In a highly unusual move, Jamie Dimon of JP Morgan in a letter to his shareholders this week backtracked on his earlier pre-Brexit threat to move jobs from London, declaring that the problem is Europe itself.

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The Next Crisis Is The Mother Of All Counter-Party Risks (Part 1)

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

What is counter-party risk? And how many people really are aware of the consequences of systemic counter-party risk?

Counterparty risk also know as default risk is the risk to each party of a contract that the counterparty will not live up to its contractual obligations. Counterparty risk is a risk to both parties and should be considered when evaluating a contract. In most financial contracts, counterparty risk is also known as default risk, a risk that a counter-party will not pay as obligated on a bond, derivative, insurance policy, or other contract. Financial institutions or other transaction counterparties may hedge or take out credit insurance or, particularly in the context of derivatives, require the posting of collateral. Offsetting counterparty risk is not always possible, e.g. because of temporary liquidity issues, malfunctioning of markets or longer- term systemic reasons.

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Brexit’s Potential to Fracture the U.K.

Re-Blogged From http://www.Stratfor.com

Analysis

Splitting from the European Union will inevitably strain the United Kingdom’s territorial integrity. Those pushing for Scotland and Northern Ireland to secede from the United Kingdom are using Brexit to justify their agendas. Brexit will also open a debate between the central government in London and the country’s devolved governments about who will control the powers that will be repatriated from Brussels. With authority over policy areas such as agriculture, fisheries, industry and the environment returning to the United Kingdom after Brexit, the administrations of Wales, Scotland and Northern Ireland will push London to transfer many of those attributions to them.

Brexit's Potential to Fracture the U.K.

The independence movement in Scotland stands to gain momentum from the Brexit. (JEFF J. MITCHELL/Getty Images)

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French Election Could See Euro Break Up

By Mark O’Byrne – Re-Blogged From GoldCore

David McWilliams, economist, writer and journalist, has warned that the coming French election may lead to the euro breaking up and that Ireland should have a ‘plan B’ and ‘print punts’ in order to be ready for the collapse of the “single currency.”

David McWilliams at Ireland’s Banking Inquiry

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Reports of Widespread Rioting Across UK Takes Government by Surprise

[Europe is suffering from fruit &vegetable crop failures due to cold & wet conditions in Spain and Italy, which supply the UK and most of Europe. Several super markets are rationing lettuce and broccoli. This article is (likely) a tongue in cheek description of some of the havoc being caused by the shortages. The quiet sun today, and the quiet sun during the Maunder Minimum a couple hundred years ago are thought to be causes of the untoward climate. – Bob]

Tonight, the U.K. Is in disarray. The major cities of London, Manchester, Liverpool, Leeds and Birmingham are in lockdown with reports of outbreaks of vegans rioting.

There has been widespread looting in independent fruit and veg shops. Suppliers have been stripped of their produce and burned to the ground. Several grocers have been badly trampled as vegetarians in their thousands plunder local shops for lettuce.

The War On Cash: Now Spain

By Jeff Berwick – Re-Blogged From Dollar Vigilante

India, Uruguay, Australia and now Spain. The Minister of Finance and Public Service, Cristóbal Montoro has reportedly just announced “anticipated measures in order to ‘reduce the use of cash.’

In other words, Spain is going to make cash transactions even more difficult. As of press time, from what we can tell, this has yet to be reported anywhere in English media except here now at TDV.

As you can see, the chaos is increasing. Combine cash bans with attacks on fake news (more on that tomorrow), and you end up disturbing a significant amount of people as we wrote here recently.

This amounts to a trend of course, of the sort we’ve been analyzing for several years now. We’ve predicted increased social chaos throughout the West and beyond because globalism is not built by votes but by violence and widespread disaffection that allows globalist “solutions” to be rammed home.

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Can You Imagine The Fed Raising Rates In This World?

By John Rubino – Re-Blogged From Dollar Collapse

I know it’s bad form to express sympathy for the people running the world’s central banks. But come on, they’re human beings in an impossible spot with no idea how to escape. The pain they feel is both intense and legitimate, and we should respond with at least a bit of empathy.

Just kidding. It’s schadenfreude all the way down.

The Fed in particular has painted itself into a very tight corner with its never-ending threats to raise interest rates while the rest of the world is still cutting. Millions of words have been written about its reasons for behaving this way and the difficulties of the road it has chosen. But for now it’s enough to note that Yellen et al are still at it, dropping hints that come October rates are really, seriously going up because the US is a healthy, well-run country whose borrowers should borrow more and whose voters should reward incumbent politicians with four more years!

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Hungarians Vote 98% AGAINST Forced Muslim Quotas For Their Country

By Walid Shoebat – Re-Blogged From http://freedomoutpost.com

The divide between East and West, Christian and Muslim just became deeper after not only the Hungarians voted against the European Union’s Muslim “quotas” for Hungary, but they rejected it by an overwhelming 98% margin:

98.3% of Hungarian voters have rejected mandatory EU asylum seeker quotas in a referendum proposed by PM Viktor Orban. But the opposition boycott of Sunday’s ballot appears to have worked, as turnout failed to clear the key 50 percent threshold.

Only 1.7 percent of the voters answered ‘Yes’ to the question “Do you want the European Union to be able to mandate the obligatory resettlement of non-Hungarian citizens into Hungary even without the approval of the National Assembly?

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The Biggest Bubble In History Will Lead To An Even Bigger Collapse

By Egon von Greyerz – Re-Blogged From http://www.Gold-Eagle.com

In a world full of bubbles that will all burst, it is of course impossible to forecast which will be the first ones to cause havoc for the world economy. One of the biggest bubbles that would clearly bring down the financial system is the bond market. Here we have a $100 trillion market which has grown exponentially in the last 25 years and which has virtually gone vertical since the 2006-9 crisis.

Desperate governments are raising money as if there was no tomorrow in the hope that they can keep the world afloat for another few years. But as I have stressed so many times, you can create neither economic stability nor wealth by printing money or increasing the debt burden.

Governments cannot afford interest rates above zero.

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Weekly Climate and Energy News Roundup #218

The Week That Was: March 12, 2016 – Brought to You by www.SEPP.org

By Ken Haapala, President, Science and Environmental Policy Project

Quest for Precision: One of the characteristics of scientific activities is the quest for precision to describe the physical world. Precision in understanding the error, or uncertainty, of one’s knowledge is an example of this quest. In some of his many essays on the philosophy of modern science Bertrand Russell, a prolific writer, used the ability to articulate uncertainty of knowledge as an example of what separates a scientist from an ideologue. The scientist defines with empirically established boundaries of the certainty of his findings. For example, a finding may be within plus or minus 5% using rigorous procedures that are well established. The ideologue is certain, absolutely, without boundaries of error.

Another issue is false precision, that is presenting numerical data in a manner that implies greater precision than is possible with the instrumentation or procedures used or knowledge current. Combining high precision data with low precision data and using the error range of the high precision data is a common example. To others, this practice gives the illusion of greater understanding and overconfidence in the accuracy of the results. Scientists and engineers have various techniques to correct for false precision.

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Brexit Vote

By Alasdair Macleod – Re-Blogged From http://www.Silver-Phoenix500.com

David Cameron, Britain’s Prime Minister, has negotiated terms with the other EU member states, which he feels justified to put to voters in an in/out referendum called for 23rd June. At this early stage in the campaign, the terms are not sufficient to give a clear lead in favour a vote to stay, contributing to a slide in sterling on the foreign exchanges. However, if voters do vote to leave the EU, it won’t be just sterling which suffers, but the euro will face considerable challenges as well.

It is thought that arranging for the referendum to be held at the earliest possible date will limit disaffection with the EU. Within this time-scale, the strategy is to emphasise the dangers of Brexit, highlight the advantages of being able to influence EU policies from within, and to emphasise the security benefits of being in as opposed to out. It is essentially a weak and negative campaign strategy designed to scare the electorate against change. Negative campaigns are a weak strategy, which tend to wane through repetition.

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An Escalating War On Cash

By John Browne – Re-Blogged From http://www.Silver-Phoenix500.com

On February 16th, The Washington Post printed the article, “It’s time to kill the $100 bill.” This came on the heels of a CNNMoney item, the day before, entitled “Death of the 500 euro bill getting closer.” The former cited a recent Harvard Kennedy School working paper, No. 52 by Senior Fellow Peter Sands, concluding that the abolition of high denomination notes would help deter “tax evasion, financial crime, terrorist finance and corruption.” In recent days, former Treasury Secretary Larry Summers, ECB President Mario Draghi, and even the editorial board of the New York Times, came out in support of the elimination of large currency notes. Apart from the question as to why these calls are being raised now with such frequency, the larger issue is whether these moves are actually needed or if they merely a subterfuge for more complex economic manipulations by central banks to extend control over private wealth.

In early 2015, it was reported that Spain had already limited private cash transactions to 2,500 euros. Italy and France set limits of 1,000 euros. In France, all cash withdrawals in excess of 10,000 euros in a single month must be reported to government agencies. In the U.S., such limits are $10,000 per withdrawal. China, India and Sweden are among those with plans under way to eradicate cash.

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Euro Bond Crisis Returns As Germany Pushes Euro Sovereign Debt Bail-in Clause

By Mark O’Byrne – Re-Blogged From http://www.Silver-Phoenix500.com

European Banks holding European sovereign debt may have to take haircuts and be part of bail in plans should that same debt default, according to a plan being pursued by German government advisers. In another attempt to shelter German tax payers from the largess and excess of fellow European neighbouring countries’ national banks, the move could trigger a run on billions of euro of sovereign debt of said banks. In an article penned by the Telegraph’s Ambrose-Evans Pritchard, one of the council’s dissenting members describes the plan as the “fastest way to break up the Eurozone”.

The plan, by The German Council Of Economic Experts, calls for banks to be bailed in should losses occur from a sovereign default before the European Stability Mechanism steps in to stabilise the situation.

Italian and Spanish banks hold vast amounts of their national government debt; in Italy’s case they are supporting the Italian treasury. Should that debt default, which is a very real possibility, then Italian banks would have to take significant losses first, only then would the ESM be allowed to step in.

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Catalonia and the Move Against Empires

By Jeff Thomas – Re-Blogged From http://www.internationalman.com

Recently, the people of Catalonia voted in favour of seceding from Spain.

In the recent election, secessionist parties secured 72 out of the 135 seats, confirming that the majority of voters want secession. Artur Mas, region president of Catalonia and the leader of the Junts pel Sí movement, is seeking independence from Spain in 18 months.

This is great news for libertarians the world over, as, to our minds, this is a clear step forward for the Catalan people and for those who seek greater freedom from governments worldwide. And, of course, any blow against the present trend toward empires is a step in the right direction.

Catalonia and the Move Against Empires

But, this is not the whole picture and, if we’re going to look at the greater truth instead of the truth that we’d like to see, things get a bit more complicated.

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Prove You’re Not a Terrorist

By Jeff Thomas – Re-Blogged From http://www.Silver-Phoenix500.com

Recently, France decided to crack down on those people who make cash payments and withdrawals and who hold small bank accounts. The reason given was, not surprisingly, to “fight terrorism,” the handy catchall justification for any new restriction governments wish to impose on their citizens. French Finance Minister Michel Sapin stated at the time, “[T]errorism feeds on fraud, money laundering, and petty trafficking.”

And so, in future, people in France will not be allowed to make cash payments exceeding €1,000 (down from €3,000). Additionally, cash deposits and withdrawals totaling more than €10,000 per month will be reported to Tracfin—an anti-fraud and money laundering agency.

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The Existential Danger To The Euro Is Elections

By Daniel R. Amerman – Re-Blogged From http://danielamerman.com

There is a respectable chance that the euro will collapse sometime in the next several years, with implications for employment, economic growth and investment markets on a global basis.  And the biggest threat is not directly money, debt, a potentially rapidly approaching Greek default, or a failure of central banking policies – but is instead something much simpler.

The risk is elections. That is, the near term existential threat to the euro – and indeed the global financial system – is when voters don’t do what the status quo politicians, the media and bankers want them to do.

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Greeced Lightning!

By Bill Holter – Re-Blogged From http://www.Gold-Eagle.com

We seem to have finally arrived at some sort of moment of truth regarding Greece and their inclusion in the EU.  The speculation is they will be out of money by April 9th, this Thursday, unable to make a less than 500 million euro payment.  Please keep in mind they have already been raiding the country’s pension plans to fund day to day services.  How large of a “dent” they have already made remains to be seen but that is not the point.  The point is this, any person, corporation or government who needs to dig into retirement savings for daily operations is like buying a carton of cigarettes with a credit card at 14.99% …and then carrying the balance!

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