The Gig In Europe Is Not Going So Well...

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The Gig In Europe Is Not Going So Well...

The gig in Europe is not going so well.  Since the French and Greek elections the problems are coming to the surface.  This situation could create a major financial issue in the global economy.  Wealth is not created by debt.  Wealth is created by production.  Debt taken on to finance new production demanded by markets is good debt as it creates output and generates sufficient money to service the debt and create real wealth.  Debt taken on to service pre-existing debt and pay operating expenses is bad debt.  In both Europe and America governments have been taking on bad debt to finance welfare and warfare for some time.  This was a huge mistake.  The politicians have lied to the people about this and now it is all coming to a head.  Keep watching Europe.  That will be America a year from now.  Maybe sooner.  When the super debt bubble pops all hell is going to break lose.  The majority of the population in America is so ignorant they do not know what is coming.  People barely behave now.  Imagine what will happen when the class of dependency discovers the free ride is over.  The Homeland Secutiy Department recently purchased 450 million rounds of ammo.  Why would Homeland Security need that much ammo ???

http://www.zerohedge.com/contributed/2012-19-08/countdown-break-euro-has...

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More...

The Homeland Security Department data.

http://www.munknee.com/2012/04/u-s-govt-making-preperations-for-expected...
 

The government is preparing.  Are you ?

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And still more...

http://etfdailynews.com/2012/05/07/we-are-preparing-for-massive-civil-wa...

...and there is a lot more.  Pretty depressing...

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Thanks for the links,

Thanks for the links, dshields; checking 'em out. 

I am not familiar with munknee.com; looks interesting, thanks for posting!

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pinecarr wrote: Thanks for

pinecarr wrote:

Thanks for the links, dshields; checking 'em out. 

I am not familiar with munknee.com; looks interesting, thanks for posting!

One of the links is kind of a wild eyed point of view but if you look around the net you see a lot of stuff in the blog sphere about the future. I do not believe that anyone knows what is coming - just that something is coming. We are on an unsustainable path and it seems like everyone who studies this kind of thing knows it. The politicians certainly know it. It looks like the fed gov is preparing for some kind of unpleasant event.. It looks bleak to me because while everyone who thinks about our situation realizes that we are on an unsustainable path but nobody in positions of power are doing anything about it. In 2010 I had great hopes for the tea party and the mid-term elections. Sure enough, a lot of responsible people got into local, state, and federal offices. Then it got real quiet. Too quiet. There are a few who speak out, bless them, but the rest are very quiet. Nobody is taking action to really try to being spending in line with revenue. It is just lip service. Last August the repubs started out making an effort to get spending under control during the debt ceiling debate. Then there were secret meetings and they turned right around and gave Obama a blank check and ran for the hills. They caved in totally. At that point I lost faith. I used to have faith now I do not. I now realize that my faith was misplaced. At that point I started taking preparing for the event that is coming more seriously. And I have been. And I feel good about it. I encourage people around me to do the same. There is going to be some kind of financial disaster. The media is keeping the people dumb. The government is preparing. It is coming - whatever it is. Some event will trigger a loss of confidence and there will be a run. There will be a bank holiday (government closes the banks). The government will try to manage it but they will probably fail. There will be civil unrest and the military will move in. The rest can only be guessed at.

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Intreresting Week Ahead

This should be an interesting week in the global economic system...

1) The Greeks seem to be falling into political chaos.  They have the same exact problem America has - they spend way more money than their economy will support.  Spending all that money has created the illusion of an elevated standard of living.  Same thing as in America.  Now they are going to get a full dose of the real world and they are not going to be happy campers.  They are going to have to exit the EUR.  That is going to be a rude shock for them.  I expect civil unrest.

2) The French elected a lier.  He basically told them elect me and we will not have to cut spending and the illusion of their elevated standard of living will continue.  That is a lie and they are going to have to cut.  They are not going to be happy campers either.  I expect civil unrest.

3) Spain is in trouble also.  They just nationalized their third largest bank.  That is pretty serious stuff.  The 5 largest banks in America are -

Rank Institution Name (RSSD ID) Location Total Assets 03/31/2012 Total Assets 12/31/2011
1 JPMORGAN CHASE & CO. (1039502) NEW YORK, NY   $2,265,792,000
2 BANK OF AMERICA CORPORATION (1073757) CHARLOTTE, NC $2,180,055,682 $2,136,577,907
3 CITIGROUP INC. (1951350) NEW YORK, NY   $1,873,878,000
4 WELLS FARGO & COMPANY (1120754) SAN FRANCISCO, CA $1,333,799,000 $1,313,867,000
5 GOLDMAN SACHS GROUP, INC., THE (2380443) NEW YORK, NY   $923,718,000

That would be the same as America nationalizing Citi.  A fairly shocking turn of events.  Of course we already bailed out Citi once.  We as in the tax payers.  Funny how that works.  They do a bunch of dumb (and possibly illegal) stuff and lose their ass and the tax payers pay the price while the big shots become multi-millionaires.  Pretty sweet gig if you can get it.

4) There has been some unusual market activity.  For one, in times of instability one usually sees gold and silver go up.  They have been going down.  The EUR dropped to 1.31XX to 1.29XX last week.  I would have thought it would have dropped a lot more.  Oil has been going down as I would expect.  But I would have thought it would have gone down more.  There will be more news on these things this week.

5) Calif is flat broke.  That should make for some interesting media coverage.  They are going to have to cut.  They are going to have to cut big time.  They are used to spending, not cutting.  I expect civil unrest before that is all said and done.

6) And then there is the good old USA in general.  We have masive overspending to support the illusion of prosperity.  That can not continue.  Nobody is going to cut anything until after the election.  The government is gearing up for trouble.  They are not stupid.  They have been lying about the national financial situation for some time now.  The media has been lulling the population to sleep with a constant drone of everything is good.  Unemployment is going down.  It is a buyers market in real estate.  Blah blah blah.  The massive government overspending is hardly covered at all.  And, nobody is telling the people what is coming to America soon.  We have a government we can not afford.  The economy will not support it.  We simply do not produce enough.  We have created a huge class of dependency.  The Federal Government has grown way to big, expensive, and intrusive.  I suppose I am a person who believes in freedom and liberity for the people - the constitution.  We are way past that.  However, like everything else this seems to be self correcting.  When spending comes in line with revenue the Federal Government is going to be 40% smaller or so.  They simply will not have the resources to do to the people what they have been doing.  Big change is coming.  When the people of America finally figure out what the government has done to them they are not going to be happy campers.  I expect civil unrest.

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Interesting few months ahead

Meanwhile in the UK the banks are putting up their mortgage rates, while the Bank of England keeps the base rate at 0.5%. The increase in mortgage rates is slowly strangling the property market (which I believe is still in a bubble).

http://www.thisismoney.co.uk/money/mortgageshome/article-2142779/Mortgage-giant-Halifax-raises-rates-despite-base-rate-freeze.html

Halifax, Britain’s biggest mortgage lender, yesterday increased its rates, despite the Bank of England keeping the base rate at 0.5 per cent for the 38th month in a row.

It is the latest in a round of rate hikes that has seen the cost of the best new mortgages rise substantially in just a few months, with around 0.5 per cent added to top deals.

The bank increased mortgage rates by up to 0.3 percentage points, adding £27 a month to a typical £150,000 loan.

Something like 70% of mortgages in the UK are on standard variable rate (SVR) which makes them vulnerable to rate changes and therefore these stories are important.

And the govts response seems to be to try to keep inflating the bubble. This is just one article but there have been many stories along these lines.

http://www.dailymail.co.uk/news/article-2113704/New-scheme-allow-buyers-buy-500k-homes-just-FIVE-PER-CENT-deposit.html

Tens of thousands of people could be helped to buy newly-built homes worth up to £500,000 after the Government said it would use £1billion of taxpayers’ money to ensure they get mortgages with just a 5 per cent deposit.

Prime Minister David Cameron today launched a scheme that is designed to guarantee risky mortgages for all home buyers in a bid to kickstart the flagging property market.

The move heralds the return of 5 per cent deposits rather than the 20 per cent typically demanded by lenders since the credit crunch. It could save buyers £34,000 on the average house.

But MPs were warned that the NewBuy scheme, which could allow people to put as little equity as £11,000 into a £228,000 house, could spark another credit crisis.

So if you're going to buy a 500K house and put down only 5% deposit then you're borrowing 450K and to borrow that much using the normal 3.5x salary multiplier you need a salary of approximately £130K. That's quite a large salary so who are these legions of shoppers? Or perhaps the banks will again increase the multiplier so that those on less can borrow even more?

Gearing up for the Olympic debacle there are missle launchers put on top of residential buildings. Think about that for a second, potentially shooting down commercial aircraft over a densely populated city. But what's the rationale for these extreme measures? What threat are we trying to protect against?

http://www.bbc.co.uk/news/uk-politics-18049764

[Defence Secretary Philip Hammond] said an elaborate military exercise carried out in London last week was to prepare for any threats that might arise in a dangerous world.

"I am pleased to say there is no specific threat," he added.

My personaly belief is that London will begin to fall after the Olympic games are done and dusted. Then people will be faced with the harsh reality of a large bill that needs paying (both financially and socially).

http://www.guardian.co.uk/commentisfree/2012/apr/04/price-of-london-olympics

Host cities routinely underestimate the costs and overstate the benefits of the Games. London is no exception. The city's bid proclaimed: "Every sector of the economy will benefit from the staging of the Olympic Games." Originally slated to cost about £2.4bn, Olympic costs jumped to £9.3bn by 2007. [...] A Sky Sports investigation included public transport upgrade costs, catapulting the five-ring price tag to £24bn.

£24bn and rising.

http://www.guardian.co.uk/sport/2011/aug/12/olympic-village-qatari-ruling-family

London's Olympic Village has been sold to the Qatari ruling family's property company in a deal that leaves UK taxpayers £275m out of pocket.

Jeremy Hunt, the culture secretary, hailed the sale as a "fantastic deal that will give taxpayers a great return and shows how we are securing a legacy from London's Games".

We've just lost £275m and Jeremy Hunt says this is a fantastic return? Where have I heard that name before? Oh yes, that's right.

http://www.telegraph.co.uk/news/uknews/leveson-inquiry/9260316/Leveson-Inquiry-Jeremy-Hunt-asked-News-Corp-for-advice-on-phone-hacking-new-emails-show.html

The same email shows that News Corp was given an “extremely helpful” tip-off by Mr Hunt’s office that he would refer to phone-hacking in a statement to Parliament.

It was released to the Leveson Inquiry by Rebekah Brooks, the former chief executive of News International, as part of her witness statement to the Inquiry.

As well as dragging Mr Hunt further into the row which has already claimed the scalp of his special adviser Adam Smith , the email makes uncomfortable reading for David Cameron, as it suggests his response to the phone-hacking scandal was being guided by the owner of the News of the World.

Yes, I expect civil unrest.

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and more...

Jumblies - Very interesting.  I was not aware that was going on in GB.  So we are playing the "let's have a housing bubble game" again.

Well, this is where we are at here in the jolly old USA.  Over here we already in the housing bubble deflation game - and it just keeps going down. 

That is boring compared to the new game coming - out of control welfare spending.  This will be an interesting game. 

http://www.streettalklive.com/daily-x-change/898-sex-money-and-largesse-...

Civil unrest for sure.  We have created a monster welfare state.  There is no way to pay for it so it is going to be cut.  It will either be cut through some organized legislative action (not likely) or via some unorganized disaster (more likely).

The nice folks in GB are going to have front seats to the USA city riots.  Should make for some interesting television.

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jumblies

jumblies wrote:

http://www.bbc.co.uk/news/uk-politics-18049764

[Defence Secretary Philip Hammond] said an elaborate military exercise carried out in London last week was to prepare for any threats that might arise in a dangerous world.

"I am pleased to say there is no specific threat," he added.

http://www.techweekeurope.co.uk/news/emp-bombthreat-77863

Defence Secretary Phillip Hammond will urge the government to invest into military protection against Electro-Magnetic Pulse (EMP) weapons at a conference in London today.

According to Hammond, UK’s electronic infrastructure is vulnerable to the possible use of specially developed EMP weapon, which produce a surge of electromagnetic radiation, similar to that which might come from solar activity, or from a nuclear explosion high above the earth. The response to these weapons has to go beyond conventional military means, Hammond will tell the third Electric Infrastructure and Security Council (EIS) Summit

So EMP weapons are a threat now too? Or is there also no specific threat of those either? What about the threat of killer badgers? Or brain-sucking aliens?

How about we just stop waging war?

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jumbles

There is going to be trouble soon in Euroland.  You are very close to the EUR zone.  Bless the politicians in GB that decided to keep the pound.  While everyone is complaining about politicians, with just cause, occationally they actualy do get something right.  GB not joining the EUR zone has turned out to be an excellent decision.  Every day there is more bad news from Europe.  It is on the way to getting ugly there.  Today at work (I work in the FX trading world) we watched a pretty good trading volume day.  We watched the EUR/USD pair trade down basically all day.  It dropped a lot for one day.  People were selling EUR.  It droped over one big figure.  If it did that for six months, and it will not, EUR would be worth zero.  There would be all offers and no bids.

In Ameria it looks like the government is geaing up for a war.  However, it is starting to look like a war with the people.  An internal war.  It is hard to see how anything good can come from that.  It would be far better if we were able to change things in a peaceful manner.

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dshields wrote: There is

dshields wrote:

There is going to be trouble soon in Euroland.  You are very close to the EUR zone.

As it happens we moved from the UK to mainland Europe earlier this year (to a country with their own currency) but we're considering returning (work reasons). But I agree, there is going to be difficult times ahead and I'm getting really quite concerned. Not just for the duration of the coming storm but also for the aftermath. Will there be stricter border controls? How best to position my family so my son can have some semblance of a future?

dshields wrote:

Bless the politicians in GB that decided to keep the pound.

I agree. I suspect their motives were mostly for their own political gain but still, having your own currency is important for retaining your sovereignty. Quite why the populace of EUR-member nations aren't prosecuting their politicians for treason I don't know. Still, things will change. Actually, I do know. It's because we're mostly asleep infront of the telly.

dshields wrote:

In Ameria it looks like the government is geaing up for a war.  However, it is starting to look like a war with the people.  An internal war.

Again I agree. Whilst I try not to wear a tinfoil hat the number of extensions to police and military power is quite alarming. We lived in NYC a few years back but we left partly because I was concerned about the direction things were going there. But this is also true of the UK. There have been a number of really quite draconian laws passed over the years that didn't get as much press as, say, the NDAA executive order. But the UK has a very oppressive regime. The Olympics is being used as a backdrop to bolster the efforts to quell the forthcoming uprising.

http://www.independent.co.uk/sport/olympics/the-protest-games-demonstrators-target-olympics-7601129.html

Olympic organisers were recently forced to more than double the number of security guards required for the Games from 10,000 to 23,700, pushing the cost of security up from £282m in 2010 to £553m in December 2011. They also announced earlier this month that 7,500 of the extra guards would be military personnel.

That's a lot of "security" for an event for which there's no specific threat, eh? I wonder if those security guards are trained police or just regular folks given an official looking badge and a nightstick?

http://www.independent.co.uk/news/uk/politics/demonstrations-to-be-banned-during-olympics-6265121.html

Ministers are planning legal action to restrict public protests during the Olympics, amid fears that Britain could be disrupted by lengthy and high-profile demonstrations.

So you can protest but if it interferes with the thing you're protesting about then the govt bans it. And I wonder if those who are part of the machinery, the police etc who actually have to apply these laws, are thinking about what they're being told to do? I believe there's a precedent about "i was just following orders".

http://www.presstv.ir/detail/196108.html

"Having carefully considered the legal tests in the Public Order Act and balanced rights to protest against the need to ensure local communities and property are protected, I have given my consent to a ban on all marches in Tower Hamlets and four neighbouring boroughs for a 30-day period”, said the Home Secretary.

The ban will also affect London's most important protest against the arms trade called “Disarm DSEi,” which has been organized by anti-war activists to urge the government to shut down the world's largest arms fair on September 13.

So under the guise of protecting the community they banned protests against an arms fair. Again, despite the voice of the people it's the commercial interests that dictate government policy.

I think the UK is going to implode before the US. In that regard the UK will trump the US. Yay Team GB?

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Spain

Today Moody's downgraded 16 banks in Spain.

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circus...

This week the crazy little circus continues in Europe.  EUR/USD continues to slowly fall.  It was 1.24XX today. 

http://globaleconomicanalysis.blogspot.com/2012/05/bailout-scam-collecti...

http://globaleconomicanalysis.blogspot.com/2012/05/ponzi-financing-in-gr...

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The Greek Elections

Great New Site !!!

Today we wait for the Greek election results.  This is going to be interesting. 

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The Big Meeting

Today they are having the big meeting. All the EU big shots are trying to get Germany to pay up for their irresponsible spending for the last 10 years. If the Germans agree to that they are crazy and will get what they deserve. There is a lot of data out there on this so I will not bore you with the charts and graphs.

Statism. That is the problem. The people elect politicians that promise them the good stuff - the stuff they do not have to work for. Only one problem. Someone has to pay for it. Everything a government gives to one person they have to take from another person. Somehow that gets lost in the rush to give stuff away.

America is one of the worst. Today's Supreme Court decision is a disaster. It basically says that we are going to "give" free health care to half the population and the other half is going to pay for it. That never works. There is a long history of that not working.  It is going to cost the US government 1 trillion dollars a year to actually pay for Obamacare (and all its various parts).  Where are they going to get that money ?

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4th of July

While we do 4th of July, in Europe the debt problems keep getting bigger. There is a lot of talk but nobody is showing up at the party with 1,000,000,000 EUR to bail out the current broke ones. Nobody but the ECB can come up with that much money and the ECB will have to gen it up as it doesn't have it either. Eventually the ECB will party or the EUR zone comes apart. It might come apart anyway. It is the classic problem - liberalism/socialism/statism swept through Europe and destroyed them. The same exact thing that is and continues to happen in America.

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Spain

A nice picture of people unhappy in Spain Thursday night.  There were protests in 80 cities Thursday.  The protest in Madird was broken up by police firing rubber bullets into the crowd.  They are protesting austerity.  They do not want to live within their means.

Just what do you think is going to happen in US when we are forced to live within our means ?  While I do not agree with all the actions the US government is taking as some of them are clearly not constitutional, I agree they should be preparing and they are.  Are you ?

spain%2Bprotests.png

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Monday

It has become obvious that the ECB can not save Europe - no matter what they say. It is not a liquidity problem. It is a debt and insolvency problem. The ECB just loans money. Today Italy is saying something has to be done so they can borrow large sums of money at very low rates. As people on this site are well aware, there are two kinds of loans - loans for investment purposes to create new things that will generate cash flow which will be used to pay off the loan (good loans) and then there are loans to pay operating costs (bad loans). Europe and the US (especially the US) are borrowing large sums of money to pay operating expenses - welfare and warfare. This is unsustainable and if continued will result in some kind of emergency. Unfortunately there is little or no political will to take action on this problem. The good part is it is buying us time to prepare for the result of the unsustainable activity.

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yes but how much time?

The clock is ticking and I cannot get the image of the final moments of the stadium filling with water out of my mind.

Sept 12 - that's when the Germans will tell the ECB that they will or will not continue to loan money to them. I've stepped up my preps.

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safewrite wrote: The clock is

safewrite wrote:

The clock is ticking and I cannot get the image of the final moments of the stadium filling with water out of my mind.

Sept 12 - that's when the Germans will tell the ECB that they will or will not continue to loan money to them. I've stepped up my preps.

As almost all past "predictions of certainty" on this site have borne out.....

We have much more time than we think, much less than we want.

I refuse to live my life in any fear of events I cannot control.

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Dogs_In_A_Pile wrote: As

Dogs_In_A_Pile wrote:

As almost all past "predictions of certainty" on this site have borne out.....

We have much more time than we think, much less than we want.

I refuse to live my life in any fear of events I cannot control.

Exactly! This is a marathon, not a sprint. I don't want to look back in 20 years where maybe nothing "bad" happened and I end up regretting not having enjoyed life and all that it has to offer. Continue prepping, as I am and we all are...and pass the scotch. cheeky

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Oh, did I say it was fear?

Oh, did I say it was fear? Nope. Just using the events to push myself to not be complacent!

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Europe

While most observers consider the ECB to be out of bullets, there are still some who think that the euro has a chance. Have a look here http://www.financialsense.com/contributors/axel-merk/euro-to-beat-dollar-draghi-genius If Germany can approve more funding for EFSF / ESM without getting their constitutional undies in a knot, Sept. 12 may come and go and leave smiles behind.

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too much debt

The problem is too much debt.  The ECB loaning out another trillion EUR does not solve the problem.  It pushes judgement day down the road and when judgemen day comes the nations that borrow that money still have to pay it back with interest.  It is impossible for more debt to fix a problem of too much debt.  The ECB does not "give" anyone anything.  Its primary purpose is to make money not give it away.  Sooner or later there will be some form of default.  The question is who is going to get the haircut.

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Last Week / Next Week

I work in the inter-bank foreign exchange market. I have been there 15 years. Last week had surprisingly low volumes. It is August and a lot of folks in Europe go on vacations but the volumes are real low - lower than one would expect. The NYSE volumes were very low last week also so it is not just FX. Traders by nature are aggressive and not fearful types. If they are afraid to trade it is because they fear they will lose their money or their bosses have decided to limit their activity or both. We will see how this week goes. Watching the markets is a good thing to do. Fear and greed. The DOW closed a little over 13,000 Friday. We will see where it is next Friday. Market behavior recently does not seem to be consistent with economic reality. The markets go up and up with no apparent underlying fundamental reason. Things are not good. The EUR problems are still there and not going away. The same with America. Right now America looks good - the proverbial best looking horse at the glue factory. People believe that if they buy American debt that at least they can count on the Federal Reserve "printing" sufficient funding to pay them back their principle and pitiful interest. It is probably true. A huge amount of US Treasury instruments have been purchased under this thinking over the last year or so. If interest rates go up there will be a blood bath in those markets. Owners of extremely low interest bonds will have to heavily discount them to sell them or hold them until maturity.  Once the Federal Reserve looses control of interest rates and the markets take over pricing American debt the only actions available to the Federal Reserve will be 100 percent monitization of American federal government over spending.  Will they do that ?  If market interest rates for American debt go up to even 5% it will trigger an emergency due to the amount of debt we have to sell to keep up with current over spending - this does not even count the huge sums that needs to be rolled over.  Keep watching Europe to see what is going to happen here.  At some point there will be an event and subsequent loss of confidence here.  When that happens it will get crazy.

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EUR

Looks like Greeks are going to have to leave the EUR.  That will put a major hurt'in on a lot of people including the Greeks.  Nobody understands how that will work or work out.  There is going to be a major haircut in there somewhere.  Since this has never happened before I can't imagine how it will go.  For instance, if a Greek has a car or house loan from a bank not in county and his pay starts coming in another currency and that currency is worth say half the EUR then he/she simply can not pay the payments any more.  Does every bank that holds Greek state debt get a 100% loss ?  If that happens there will be bailouts all over the place.  For the Greeks it will be just terrible for a long time.  They still have to bring spending in line with revenue.  A very difficult thing to do politically.

We have the same problem in America.  Somehow we have to bring spending in line with revenue also.  Just how are we going to do that ?  We have the same problem as the Greeks.  How to cut about 40% of Federal Government spending ?  I have no idea how they are going to do that.  People in America are completely on the gravy train.  Having to live within their means will simply blow their minds.

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Jbarney
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Joined: Nov 26 2010
Posts: 74
Thoughts about today's events?

http://news.yahoo.com/anti-cuts-protests-erupt-streets-athens-madrid-160009097--sector.html      

Just reading up on the mess in Greece and Spain.  Unemployment in both countries is now above 25%.  Part of Spain wants to break away because of the tax burden.  Violence in the streets.

Seems scary that we may not be far away from stuff like this.

Jason

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dshields
Status: Platinum Member (Offline)
Joined: Oct 24 2009
Posts: 599
Jbarney

Jbarney wrote:

http://news.yahoo.com/anti-cuts-protests-erupt-streets-athens-madrid-160009097--sector.html      

Just reading up on the mess in Greece and Spain.  Unemployment in both countries is now above 25%.  Part of Spain wants to break away because of the tax burden.  Violence in the streets.

Seems scary that we may not be far away from stuff like this.

Jason

Yep - As far as I can see it is going to get worse in the EUR zone. The ECB can buy sovereign bonds and bail the banking system out but that still leaves the rest of the economy. Remember, in the end the ECB will do anything to save the EUR as it IS the EUR. If the EUR goes down so does the ECB and whole bunch of assets. It is difficult to imagine the EUR going down hard. To stop that from happening the ECB will do exactly what the Federal Reserve is doing here. Directly buying the government debt - so called monetizing the debt. They do not have any other choices. The Fed Res will not allow a treasury auction to fail. A failed auction would generate an instant knee-jerk emergency so that will not be allowed. I think it can be taken as a fact that prosperity has never been generated by accumulating enormous debt. In both Europe and America large new debts are being accumulated to pay for operating expenses - not investment in positive things. There is simply too much debt. Sooner or later there is going to be hair cuts. The rich (people and companies) will do everything they can to make sure the debt is transferred to the public sector so they don't get the hair cut. They have been doing this quite successfully all along. So I guess the big question is who is going to get the haircut ? After the election depending on who wins we will start to see government actions of one kind or another. Both the candidates are statists. I am not sure what they will do. I am not sure it really makes much difference in the long run as we currently owe and have promised to pay in the future far far more than we can possibly pay. So, there will be some kind of major big deal in the near future - 6 months, a year, maybe 2 years if uncle ben keeps monetizing the debt.

dshields's picture
dshields
Status: Platinum Member (Offline)
Joined: Oct 24 2009
Posts: 599
nothing good

Nothing good is happening in Europe.  There is one good thing about it - it is a huge distraction and while everyone is looking at Europe they are not paying much attention to what is happening in America.  If they took a close look it will scare them.  Election in 25 days. 

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