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The Gig In Europe Is Not Going So Well…

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  • Wed, May 09, 2012 - 12:21am

    #1

    dshields

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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-officially-begun

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  • Wed, May 09, 2012 - 12:48am

    #2

    dshields

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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 ?

  • Wed, May 09, 2012 - 01:28am

    #3

    dshields

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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…

  • Wed, May 09, 2012 - 11:30am

    #4

    pinecarr

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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!

  • Thu, May 10, 2012 - 12:51am

    #5

    dshields

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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.

 

  • Mon, May 14, 2012 - 03:01am

    #6

    dshields

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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.

 

  • Mon, May 14, 2012 - 10:18am

    #7
    jumblies

    jumblies

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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.

 

  • Tue, May 15, 2012 - 12:27am

    #8

    dshields

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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.

 

  • Tue, May 15, 2012 - 10:31am

    #9
    jumblies

    jumblies

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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?

 

  • Wed, May 16, 2012 - 03:33am

    #10

    dshields

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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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