Daily Digest

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Daily Digest 3/22 - Eating On The Poverty Line, Will Cyprus Go The South American Way?

Friday, March 22, 2013, 12:53 PM

Economy

Le Monde Headline "No, France is Not Bankrupt" (adam)

Economic illiteracy is nearly everywhere you look and that article is a prime example. Bruno Moschetto suggests France is not bankrupt because the state is not indebted in a foreign currency.

Actually, France does have its debts in a foreign currency, euros. Note that France cannot print euros at will to pay its debts (the very essence of a foreign currency).

Will Cyprus go the South American way? (Nervous Nelly)

In her first act, Zelia, as she was known, went on national television to tell the country that all bank accounts were being frozen and that no-one could access more than 50,000 new cruzados in the currency of the time (a sum then worth about $1,250).

US Begins Regulating BitCoin, Will Apply "Money Laundering" Rules To Virtual Transactions (westcoastjan)

But while precious metals have been subject to price manipulation by the legacy establishment, even if ultimately the actual physical currency equivalent asset, its "value" naively expressed in some paper currency, may be in the possession of the beholder, to date no price suppression or regulation schemes of virtual currencies existed.

Shopping on the poverty line - what can you eat? (westcoastjan)

I remember I was in the Wall Street area. You see a lot of people with suits and ties, nice sunglasses, nice iPods. But on the street, you also see beggars. You see people sleeping on the trains, you know, in the wee hours in the morning because that is the only way you can sleep.

When I was in Calcutta, I remember that as we were driving from the airport to the city itself, the left lane on the roads were actually full of homeless people sleeping.

Indonesia's wage wars (westcoastjan)

Said Iqbal, the head of Indonesia's confederation of trade unions and the man behind many of the protests, has become a hero of sorts for Indonesia's workers.

Labelled aggressive and uncompromising by industry bosses, he has helped to secure a 40% jump in the minimum wage in some parts of Indonesia - mainly through a combination of organising massive protests and threatening to shut down factories.

What You Think Is True Might Be False and Costly! (GE Christenson)

Cyprus Bank Accounts – Depositors believed their accounts were insured up to 100,000 Euros. According to the news, they are insured unless the EU, the IMF, Cypriot Bankers, the Parliament, or whoever chooses to “tax” (steal, appropriate, bail-in, confiscate) perhaps 10% of those accounts. Ouch! A 10% (maybe nothing, maybe 15% – still negotiating) theft of “insured” assets and pension funds is being discussed now. Could a 10% or 20% confiscation occur when the next crisis strikes? (This is not the first theft of deposits or pension assets – there have been other examples throughout history.) If you have money in Spanish or Italian banks, you might want to reconsider its safety.

Michael McKay: 'We're On The Verge Of Being Mugged By Our Governments' (Adam)

Andy and Michael discuss Cyprus and what it may means to individual property rights, the euro project and the future nature of money.

They then discuss a few of the ideas and concepts that will be the focus of some lectures at the Austrian Economics Research Conference 2013. McKay considers whether hyperinflation can happen and the current global fiat currency architecture.

Energy

Why Renewable Energy is so Attractive to Google (James S.)

One reason for the opposing trends that renewable energy and fossil fuels are experiencing can be found within the basic fundamentals of the energy sources:

The renewable energy industry relies on mass manufacturing and ever more efficient technologies to harvest energy from limitless natural resources; this leads to constantly cheaper prices of electricity.

With a Big If, Science Panel Finds Deep Cuts Possible in Auto Emissions and Oil Use (Mike K.)

“Feebates,” rebates to purchasers of high-fuel-economy (i.e., miles per gallon [mpg]) vehicles balanced by a tax on low-mpg vehicles is a complementary policy that would assist manufacturers in selling the more-efficient vehicles produced to meet fuel economy standards.

Petroleum Use, Greenhouse Gas Emissions of Automobiles Could Drop 80 Percent by 2050; Efficiency, Alternative Fuels, and Strong Government Policies Will Be Needed (Mike K.)

Improving the efficiency of conventional vehicles is, up to a point, the most economical and easiest-to-implement approach to saving fuel and lowering emissions, the report says. This approach includes reducing work the engine must perform -- reducing vehicle weight, aerodynamic resistance, rolling resistance, and accessories -- plus improving the efficiency of the internal combustion engine powertrain.

Gold & Silver

Click to read the Gold & Silver Digest: 3/21/13

Provided daily by the Peak Prosperity Gold & Silver Group

Article suggestions for the Daily Digest can be sent to [email protected]. All suggestions are filtered by the Daily Digest team and preference is given to those that are in alignment with the message of the Crash Course and the "3 Es."

6 Comments

Tall's picture
Tall
Status: Platinum Member (Offline)
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Posts: 564
Ancient Extinction Has Ominous Lessons for Today: Study

Scientists have nailed down the cause of a planet-wide catastrophe that wiped out nearly all living species 200 million years ago and paved the way for the rise of the dinosaurs. The culprit was carbon dioxide, the same greenhouse gas that’s causing global warming today says a new report.

http://www.climatecentral.org/news/ancient-mass-extinction-has-ominous-lessons-for-today-study-15767

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saxplayer00o1
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Posts: 4167
Economists See No Crisis With U.S. Debt as Economy Gains

"Three years after a government spending surge in response to the recession drove the U.S. past that red line -- the nation’s $16.7 trillion total debt is now 106 percent of the $15.8 trillion economy"

Other headlines:

  1. Chicago to close 54 schools to address $1 billion deficit
  2. Hunt for Yield Boosts Junk-Bond Debt
  3. Italy tries for stimulus, at a cost
  4. San Jose Updates Unfunded Liabilities for City Pension Funds
  5. Cyprus cash crisis hits small business (Video)
  6. Fitch may downgrade U.K.'s triple-A rating

=======================================================

Reposting this, since it goes along with my main headline:

Federal Debt: Total Public Debt as Percent of Gross Domestic Product (GFDEGDQ188S)

Federal Debt: Total Public Debt as Percent of Gross Domestic Product (GFDEGDQ188S)

2012:Q4: 103.66867 Percent of GDP   Last 5 Observations

 

2012:Q3:  101.61433  
2012:Q2:  101.72876  
2012:Q1:  100.67048  
2011:Q4:  99.35996  

 

Quarterly, Seasonally Adjusted, Updated: 2013-03-13 10:31 AM CDT

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saxplayer00o1
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16 3/4

$16,750,130,322,121.01 (National Debt)

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saxplayer00o1's picture
saxplayer00o1
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Posts: 4167
Russian Leader Warns, “Get All Money Out Of Western Banks Now!”

Note: I do not consider this a reliable news article. Rumors can move markets though and the decisions currently being made will only fuel more rumors:

 

Russian Leader Warns, “Get All Money Out Of Western Banks Now!”

Doug's picture
Doug
Status: Diamond Member (Offline)
Joined: Oct 1 2008
Posts: 3176
Can you say contagion? How about black swan?

 

saxplayer00o1 wrote:

Note: I do not consider this a reliable news article. Rumors can move markets though and the decisions currently being made will only fuel more rumors:

Russian Leader Warns, “Get All Money Out Of Western Banks Now!”

http://www.zerohedge.com/news/2013-03-23/cyprus-deposit-levy-vote-delayed-will-down-wire-70-deposit-tax-contemplated

 

Quote:

Cyprus Deposit Levy Vote Delayed, Will Go "Down To The Wire" As Up To 70% Deposit Tax Contemplated For Some

Quote:

Deciding how to best bring the news to Russian, and other wealthy depositors, that not only will they not have access to their funds for a long, long time, the ultimate haircut on what they thought was safe, easily accessible cash as recently as a week ago, may be a stunning 70%!

Quote:

The way the deal is currently structured, all deposits that have EUR 100,000 and less in deposits, which in Cyprus amounts to 361,000 of a total 371,000, will not see a deposit tax, after last week's attempt to impose a 6.75% on all "insured" accounts. However, the same can not be said for the remaining 10,000 belonging supposedly to uber-wealthy Russians, but certainly to people from all over the world, and even Cyprus.

As a result, according to the rapidly shifting plan, depositors with the biggest local bank, Bank of Cyprus, may see losses up to 25%. Per Reuters:

Cyprus is considering a levy of about 25 percent on bank deposits over 100,000 euros ($130,000) in the island's largest local lender, Bank of Cyprus, Finance Minister Michael Sarris said on Saturday

Sarris told reporters that "significant progress" had been made in talks with officials from the European Union, European Central Bank and International Monetary Fund - the so-called 'troika' - and that the discussions may conclude on Saturday evening.

Cyprus' second largest bank, Cyprus Popular Bank, aka Laiki bank, where it appears the bulk of Russian cash is stored, will fare far, far worse with deposit haircuts up to a stunning 70% on the table, and that is after capital controls ease enough to allow for the deposit withdrawals!

Cyprus Popular Bank depositors with more than 100,000 euros will face losses, said Averof Neofytou, deputy president of Anastasiades’s ruling Disy party.

They will wait for many years before they see what percentage they will get back from their savings -- 30 percent, 40 percent, 50 percent, 60 percent, it will be seen,” Neofytou said during the debate in parliament.

Quote:

What is also sure, is that any bulk investments in Europe, be they held by Russian, Chinese, or any other oligarchs, will now scramble to get out, knowing quite well their cash is not only no longer welcome in the Eurozone, but most likely will be used to fund bailouts of assorted insolvent European nations. Such as all of them. This could be a very big problem because according to JPMorgan, the share of large or uninsured deposits is about half of total deposits in Euroarea banking system including the peripheral countries.

Should a stealthy "uninsured" depositor run in Europe take place following this weekend, and up to half the funding of European banks go poof - that which until recently was generously provided by the same uberwealthy who are now the target of persecution seemingly everywhere - not all the ELA, LTRO, SMP, OMT, and any other acronym free ECB money in the world will be able to hold the Eurozone together.

In the meantime, those hoping for a Saturday resolution to the Cypriot expropriation of Russian wealth are urged to step back from the computer and go for a walk - it will take a while, and will likely be after the imminent onslaught of fire and brimstone from Russia which now does everything it can - including outright threats at this point - to make it clear that should Europe indeed go ahead and impair its wealthiest depositors by up to 70%, that the European winter 2013/2014 season, will be very long, and very cold.

I have no idea how reliable any of this is, but as Saxplayer said: "Rumors can move markets though and the decisions currently being made will only fuel more rumors"

Doug

 

 

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