Daily Digest

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Daily Digest 3/29 - Aussie Consumers Gloomy, Critical Atlantic Ocean Circulation Slowing

Sunday, March 29, 2015, 8:52 AM


EUROPE: 19 economists call on the ECB to make ‘QE for the people’ in a letter to the Financial Times (Sean W.)

Rather than being injected into the financial markets, the new money created by eurozone central banks could be used to finance government spending (such as investing in much needed infrastructure projects); alternatively each eurozone citizen could be given €175 per month, for 19 months, which they could use to pay down existing debts or spend as they please. By directly boosting spending and employment, either approach would be far more effective than the ECB’s plans for conventional QE.

Yellen Says Fed Will Increase Rates Slowly (jdargis)

And her message was that the return to normal conditions was likely to come slowly. There will be no repeat of the two-year period beginning in June 2004 when the Fed raised rates by 0.25 percentage points at every meeting.

Survival in Venezuela: The constant struggle of finding Food (pinecarr)

Thanks to J. Robert for sending me this video. It illustrates very well the problem people face in Venezuela on daily basis. It’s amazing how simple things such as going to a store and buying anything you need, when you want and as much as you can afford are taken for granted. Also, this is just the tip of the iceberg. Freedom of expression has been suppressed in Venezuela, political adversaries killed or locked behind bars and people not only have to live with the worst inflation on the planet, they also have to deal with terrible crime. Murder and assassinations are just facts of daily life in Venezuela.

Why so grumpy Australia? Consumers among Asia's gloomiest (Arthur Robey)

The tone of national politics has added to the pessimism. A noticeable improvement in the consumer mood following the election of the Abbott government in September 2013 has faded. Focus group feedback suggests the Abbott government's "debt and deficit" rhetoric has undermined confidence in the economy and raised fears about job security.

Demasi said this negative message has come on top of a host of worries lingering since the global financial crisis.

Cinderella's new moral: Be rich or be a pumpkin (Arthur Robey)

Economists like Thomas Piketty have been warning that if we don't do something to stop growing income inequality, we may end up back in a 19th-century world, where hard work won't lift you up the economic ladder because the income you can expect from labor is no match for inherited wealth. This is the world of the new "Cinderella."

Finally The "Very Serious People" Get It: QE Will "Permanently Impair Living Standards For Generations To Come" (pinecarr)

One argument is that if central banks were not created to execute fiscal policy, then why require them to maintain any capital at all? Capital is that which is held in reserve to absorb losses. If losses are to be anticipated, then a reasonable inference is that a certain expectation of risk must exist. Therefore, central banks must be expected to take on some risk for policy purposes, which implies a function beyond the creation of a monetary base to maintain price stability.

Blackstone CEO Sees ‘Remarkable’ Opportunities in Slumping Oil (jdargis)

His firm agreed this month to buy an office building in London for 268.4 million pounds ($400 million) from Land Securities Group Plc. Blackstone may have $100 billion of low-risk real estate under management in a decade, Schwarzman said in July.

Critical ocean circulation in Atlantic appears to have slowed (jdargis)

In addition to applying this index over the last hundred years of the instrumental temperature record, they also attempt to go back a thousand years using temperature reconstructions based on physical climate records like tree rings and ice cores. The results indicate that the AMOC was pretty stable for most of the millennium, but show a marked slowdown of roughly 14 percent over the 20th Century, culminating in a low point between the 1970s and mid-1990s. After that, it strengthened a bit, but is still short of its strength in the early 20th Century.

Gold & Silver

Click to read the PM Daily Market Commentary: 3/27/15

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."


thc0655's picture
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Hugo Salinas Price encourages Alexis Tsipras to "go silver"


Mexican billionaire Hugo Salinas Price wrote a letter to Alexis Tsipras on July 25, 2012 to encourage him to introduce a silver Greek coin alongside a new Drachma.  He says this would save the Greek economy and nation, and I have trouble disagreeing with his concept. Price recently updated his letter.

Read it and see if you can poke any holes in his logic.  I can't.  It seems to me that Price's proposal would work WITH human nature and the "laws" of economics to allow the Greek people to pull themselves up by their bootstraps because of the introduction of "sound money" (in this case, silver coins which go up in value with the price of silver but NEVER go down in value).  I wish we would do this in my country!

The silver coin in parallel with the Drachma is the formula for national unity and reconstruction. The reconstruction of Greece will require of savings and nothing furthers saving more efficiently that silver money.

How can a silver coin be put into circulation in Greece?

I outline the basic principles:

1. The silver coin will circulate in parallel with the Drachma. The Drachma will remain the monetary unit of Greece. The silver coin will have a monetary value expressed in Drachmas. (Note as of March 17, 2015: Alternatively, the silver coin might have a monetary value expressed in terms of the Euro or of the Dollar.)

2 . Greece will coin a small silver coin, using the Greek symbols: Athene on one side, with the Owl on the other, following a tradition of thousands of years.

3. This small coin – the “Owl” – will contain 1/10 of a Troy ounce of silver, alloyed with copper to .9166 to give it hardness.

4. This coin will be assigned a monetary value by the Monetary Authority, which shall be preferably, the Greek Treasury. This coin will bear no engraved value; otherwise, the coin will go out of circulation immediately as the price of silver rises, whether in Drachma, in Euros or in Dollars. (This phenomenon caused the disappearance of silver money from circulation in the world, in the course of the XXth Century).

5. The monetary value which is assigned to the coin shall be slightly higher than the value of the silver contained in the coin. This condition is necessary, to keep the coin in circulation and prevent its being melted down for a higher value in silver, than its value as Greek money.

6. Whenever the price of silver rises, the Monetary Authority will raise the monetary value of the coin, to a point always slightly higher than the value of the silver contained in the coin.

7. However, if the price of silver falls, the Monetary Authority will retain the last value assigned to the coin. All experience has shown, that a population does not fear falls in the value of silver contained in a silver coin.

8. The population will retain these coins as savings; these will not be susceptible to deposit in the banking system; there will be no “Silver Owl” bank accounts.

9. The banks may establish “Custody Accounts” for the public who wishes to store their “Owls” in a safe place. This will be a storage service, and the coins will remain the property of the owner of a Custody Account.

10. The public may carry out payments either in Drachmas or in “Owls” according to their monetary value. Most Greeks will retain “Owls” in savings, and spend their drachmas – “Gresham’s Law”.

There, in one page, you have the essentials of a formula to revive Greece and the Spirit of Greece.

I also can foresee that the Greek coin, the “Owl”, of 1/10 of a Troy ounce of silver, will become much more desirable on the part of Greeks, than any foreign currency. Your government will have no further problems with “Capital Flight”, because Greeks will prefer to own “Owls” rather than any other foreign currency. And banks will have no need to offer high interest rates to attract savings; the silver coin will be so desirable that people will save it simply for its superior quality and future rise in value.

Nor will the Greeks be the only ones to wish to own “Owls”; all of Europe, which uses no silver, will want them. Thus Greece will receive Capital from Europe, for the purchase of “Owls”: the purchase of silver is subject to taxation, but the purchase of silver coins that are money is tax-free.

(Note as of March 17, 2015: The Greek Government may opt to receive silver objects from individuals, to be returned to them in the form of “Owls”. Thus assisting the economic recovery.)

Jim H's picture
Jim H
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Posts: 2391
Agree THC... well done to highlight this from Hugo Salinas Price

I had read this at the time and appreciated it.  What's really innovative about the proposal is that, for the first time I know of, the PM money would not have a permanently fixed exchange value, but rather it would be able to float.  This is not a Gold or Silver std., but rather a means by which PM money could co-exist with paper money.. giving the paper money, at least as long as it is managed in a smart way, special value due to it's natural convertibility. 

Simple, and yet revolutionary.  Today's bankers would never allow for it.      

Doug's picture
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Posts: 3207
yes thanks thc

This seems particularly relevant given Steve Keens interview today.

rhelwig's picture
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Posts: 10
Coins won't work

People hate coins. They are too inconvenient. Price should modify his plan to instead use either my Shire Silver or Valaurum (or both). My cards have long had a QR code on them allowing easy look up of the current suggested trade value, which is rounded in a similar fashion to the Liberty Dollar. They can be easily integrated into Point Of Sale systems which means no training needed for cashiers (which is a big problem with most other alternative currency attempts). The rest of his plan can be implemented as he stated, and using better tech than coins might make it actually work.

Cherihuka's picture
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Posts: 41
Surviving in Venezuela (LINK to article) has no place to comment

The article really left me perplexed - it seems so far out in left field, like there must be something being left out. 
I like the exposing, educational, work that FerFal does, but this story seems a little off kilter.

While listening to the BBC video on conditions for those struggling to find food in Venezuela, it occurred to me that they are not banding together for their survival. Are there are no community-wide efforts for longterm food security? Not only do the people seem to live with the typical American expectation that it (foods) should be provided, but like there is no other choice. 

Spending 8 hours a day seeking foodstuffs? Using their cell phones to text msgs about where specific food products can be found? It sort of sounds like a "GPS with coupons" kind of game. (I know survival isn't a game, it just seems weird for people to be scattered all over a city sharing food finds.) 

If they are all one truck-delivery from starvation, why are the people not saving seeds and planting massive community-wide and personal gardens, like Cuba did when it's nation faced starvation on a massive scale?  Why are they not rigging up some presses for making cheese, oil, etc. and providing for themselves? Where are the country farmers and the city guerrilla farmers?  Are they unable to organize into collective neighborhood groups, is there any cohesion or community? 

Someone bring some perspective to this article/BBC broadcast news story that makes more sense than an entire population working full time just looking for bread and oil over and over again!


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