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Tag Archives: default

  • Insider

    The Breakdown Has Begun

    A wave of defaults is about to crash over us
    by Chris Martenson

    Tuesday, February 9, 2016, 4:26 AM

    46

    Executive Summary

    • Oil patch defaults will be the trigger that burns down the markets
    • Defaults will ripple widely across many industries and sectors
    • The banks are suddenly turning on their central bank brethren
    • How to protect yourself from the coming era of wealth destruction

    If you have not yet read The Return Of Crisis, available free to all readers, please click here to read it first.

    Oil Troubles

    The financial sector may be suffering through a bad time, but the oil sector is experiencing something far worse. While overall demand for petroleum is flat or down nearly everywhere, every producer is pumping like mad either to achieve a geopolitical agenda (as with Saudi Arabia and Russia) or to simply survive.

    This chart of the price of WTIC oil also sports a pretty convincing head and shoulders formation, a common warning of “lower prices dead ahead”:

    It looks like the $30 mark is the area to keep a close eye on, as that represents one possible ‘neckline’ to the H&S formation drawn above.  If that fails, look out below. Expect that area to be defended pretty vigorously by those institutions long oil.

    I'm anticipating quite a skirmish over the $30 mark. But ultimately, I believe oil prices have further to fall. I think this because the economic news is dismal – no growth, only contraction right now and that’s going to hit demand – and also because the US has too much of the stuff to store. And because the next…

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  • Insider
    George Tsartsianidis | Dreamstime.com

    More Sovereign Defaults Are Coming

    Prepare for the turmoil beforehand
    by charleshughsmith

    Friday, July 10, 2015, 3:47 PM

    4

    Executive Summary

    • Energy plays a key role in sovereign economic (un)sustainability
    • The export boom is imploding
    • The neofeudal model is collapsing as 'serf' nations enter default
    • Take preparation now, while it still matters

    If you have not yet read Part 1: Why Greece Is The Precursor To The Next Global Debt Crisis available free to all readers, please click here to read it first.

    In Part 1, we examined the core dynamics that expanded Greek debt to its current unmanageable size—currency/trade deficits and bailouts—and the enormous transfer of private bank debt to the public ledger via the Troika bailouts, only 10% of which trickled down to the Greek people.

    There are two other dynamics beneath the surface theater, dynamics which are not unique to Greece but are characteristic of the most heavily indebted nations.

    Food and Fuel Imports Drive Structural Imbalances and Debt/Currency Crises

    In our recent podcast, Chris mentioned this chart of imported energy by nation. Note that the nations with crushing structural debt loads (the so-called PIIGS—Portugal, Ireland, Italy, Greece and Spain) also happen to be major importers of energy.

     

    What does this have to do with Greece’s debt crisis? Let’s go back to the key driver of Greek debt—imports that far exceeded exports, not occasionally but structurally, year in and year out.  Money was borrowed to pay for those imports, interest accrued on the loans and then austerity was pressed on the debtor nations by the lenders as a means of extracting interest on the rising debts.

    If a nation does not generate a significant percentage of its own energy and food needs, or export enough goods and services to offset its imports of energy and food…

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  • Blog
    Peak Prosperity

    Debt – Crash Course Chapter 13

    There's just too damn much of it
    by Adam Taggart

    Saturday, September 13, 2014, 1:04 AM

    13

    The fundamental failing of today's global economy can be summarized simply: Too Much Debt

    We have taken too much of it on, too fast, in too many markets around the world, to have any hope of making good on it. Not only does the math not work out, but also on a moral level

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  • Insider
    © Albund | Dreamstime.com

    Europe’s Mexican Standoff

    All's fine until someone blinks
    by Alasdair Macleod

    Tuesday, November 20, 2012, 7:08 AM

    21

    Executive Summary

    • Germany is unlikely to break solidarity with the rest of the Eurozone while Merkel remains in charge. But she may not last as long as she'd like.
    • France's economy is deteriorating at an alarming rate.
    • Most of France's "stability" to date is due to inflows of money fleeing Spain and Italy. That will stop soon – and then what?
    • The UK is suffering from many of the same ills as the U.S. However, its banks are too dependent on Eurozone debt for it to take drastic counter-measures, and so it is handcuffed to the future of the Continent.
    • All is well as long as no one defaults or no one leaves the Eurozone. With each player's position deteriorating, how long can the status quo last?

    If you have not yet read Europe Is Now Sinking Fast, available free to all readers, please click here to read it first.

    In previous articles, I have given Peak Prosperity's enrolled members the lowdown on the weak Eurozone governments and looked at the crisis from Germany’s point of view. With respect to Germany, all that can be added is that her political elite is still frozen in inaction and show no signs of snapping out of it. Mrs Merkel, particularly, is still pursuing the out-of-date Euroland ideal. It is as if she has decided that she has no alternative. Come what may, it will have to succeed in the end, and she is not going to be the one who calls “uncle.”

    I don’t know how these things work in Germany, but in the UK there comes a point where “the men in grey suits” metaphorically tap the leader on the shoulder and politely instruct him or her to resign. It happened to Mrs Thatcher, and unless she has a change of heart, it could happen to Mrs Merkel before next November’s German elections. And when that happens, the withdrawal of Germany from the euro can be expected to begin.

    In this article we will update the deteriorating situation in two other key players on Europe's chessboard: France and the United Kingdom. And we'll reveal why the current system is like a Mexican standoff: Everything is stable until someone makes a move. Then all hell breaks loose…

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  • Blog

    Debt Ceiling Dilemma: The Foul Choice Facing Investors

    by Chris Martenson

    Thursday, July 28, 2011, 2:23 PM

    0

    For the record, I still believe that there will not be a breach of the debt ceiling and no overt default for the US. Things will be worked out in the nick of time, like they always are.

    However, the media is full of articles wondering about what ‘investors’ might do in response to a US default and/or credit downgrade. What will happen to Treasury prices? Will they go down as investors dump them en masse in response to a credit downgrade forcing interest rates to climb?

    It’s a big question, and the most likely answer is “No, not really”. Partly because these so-called investors have been well-conditioned to believe that another bailout is always around the corner, but mainly because they have nowhere to go.

    The big money is trapped.

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  • Blog

    David Morgan on Silver Price Manipulation, Delivery Default & Supply Shortage Risks

    by Adam Taggart

    Thursday, July 21, 2011, 2:05 AM

    0

    “I have little doubt that most of the silver that is on the SLV’s web site with a bar number is there somewhere. But what I am really concerned about is if it is hypothecated or not, meaning is there more than one owner on that same bar. And I can almost guarantee that there are multiple owners for almost every bar that they report. It does not mean that that bar does not exist.

    It takes ten contracts to be a market maker.* (*See retraction and clarification in the comments below.) So I have got ten contracts, I have got fifty thousand ounces, and I ship it to my buddy who is a hedge fund manager over in Idaho. That is my silver. I have just sent it over to him on a lease. I have leased it to him. Now he has taken that silver and he has swapped it with somebody at the SLV, so they have got bars there. And he swapped for those and now those are on the exchange showing as part of the deal. So you can have a lease and a swap, so you could have two or three claims on those same bars. And that happens over and over again.

    So the reason I used “purportedly” is that is the correct word. There are very few bars that are actually one-to-one correspondence that are sitting on the SLV and that is their only purpose. That is not the way banks operate. That is not the way the whole system operates. So I am not against the SLV, but I also state very clearly that if you follow what I teach, you would not want that to be considered a primary silver investment. That is a paper investment. That is not silver. That is paper. It only settles in paper. People ask whether I think there is going to be a default on the SLV. I say, how could there be? I mean, read the prospectus, they settle in cash. Think they have any trouble printing that stuff up? I haven’t seen any problem with that lately.”

    So cautions David Morgan, publisher of The Morgan Report on precious metals and proprietor of Silver-Investor.com. More so than perhaps any other, the silver market has been loudly and visibly accused of rampant price manipulation. And more recently, suspicion is growing that the exchanges and ETFs dedicated to trading the metal do not hold sufficient volume of it to meet their obligations. Is the silver market free and fair? Chris delves deeply into these important questions with one of the best-known silver experts.

    In this interview, David explains why:

    • The silver market is definitely manipulated, though likely not as rampantly as some believe. And despite this manipulation, he believes the overall upward trend in silver (and gold) cannot be suppressed in the long run.
    • Holding physical bullion as a core part of one’s precious metal portfolio is absolutely critical. Many of the bars pledged to tradable securites (ETFs, futures, etc) are assigned to multiple owners – meaning there is much less actual bullion underlying these securities than the market thinks. 
    • Why his long-term outlook for silver is so bullish. Annual industrial demand for silver continues to outstrip supply from new mining, while increasing investment demand for silver as a monetary vehicle only takes more tonnage out of the market. At some point, the market will wake up to the fact that silver is in much shorter supply than currently appreciated. At that point, the price will go much, much higher.

    Click the play button below to listen to Chris’ interview with David Morgan (runtime 35m:58s):

    [swf file=”http://media.chrismartenson.com/audio/david-morgan-2011-07-20.mp3″]

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  • Blog

    Interview with Jim Rogers: Why Inflation is Raging Worldwide And He Shorted US Treasury Bonds*

    by Adam Taggart

    Thursday, January 27, 2011, 8:22 PM

    0

    “I see more inflation and more currency turmoil as we go forward. There are huge debt imbalances in the world. U.S. is the largest debtor nation in the world and all the assets are in Asia. The largest creditors in the world are China, Korea, Japan, Taiwan, Hong Kong, Singapore – this is where the assets are and the debts are in the West. Those imbalances have to be resolved. They frequently lead to more currency turmoil. We’ll see more inflation, we’ll see more governments fall. We just saw Tunisia fall – more are coming because the world is going to continue to have these problems, and especially inflation that is going to cause more social unrest.”

    So said investing legend Jim Rogers when he spoke recently with ChrisMartenson.com about the inflationary pressures rising dramatically around the globe, despite some governments’ best efforts to downplay them. Jim shares his “outside in” perspective on US monetary and fiscal policy, and how international players find themselves forced to react. He sees a lot of fundamental imbalances that need to be corrected for, as well as shortages of almost everything developing. In his words, “It’s going to be a real mess before it’s over.”

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  • Blog

    Don’t Worry; They’ll Just Change the Rules

    by Chris Martenson

    Thursday, January 13, 2011, 2:52 AM

    0

    To anyone paying the slightest bit of attention, these remain very uncertain and trying times. On one side of the intellectual divide are the folks who are counting on deflationary forces overwhelming the normal credit-operated machinery of modern life, resulting in an implosion of economic activity. On the other side are those counting on hyperinflation as the most likely outcome of the grand printing experiment currently being conducted across the globe with its epicenter located within the United States.

    In the middle of the intellectual divide are people like me, who are leaning slightly towards one view or the other. Not yet committed to any particular outcome, they are tensed and ready to spring in whichever direction necessary, like the last kids left standing in a game of dodge ball.

    Some are expecting an imminent recovery (whatever that means), some a long, slow grind downwards, and others a rapid, if not chaotic, plunge into new and unwelcome territory of one sort or another.

    There are no right or wrong views here. All sides are on equally firm intellectual standing. However, I want to let you know why it is that I lean towards the inflationary line a bit (okay, a lot, by some people’s standards) and why I think that a wide-scale, final fiscal collapse is in the cards.

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  • Blog

    Daily Digest 1/10 – Record High for World Food Prices, European Debt Worries, High Prices for Gold

    by DailyDigest

    Monday, January 10, 2011, 4:00 PM

    0
    • Debt Default Fears will Spread to US and Japan, Warns Citigroup’s Willem Buiter
    • World Food Prices Enter ‘Danger Territory’ To Reach Record High
    • Rumour of €80bn Bail-Out To Squeeze Portugese Bonds
    • Deepening Crisis Traps America’s Have-Nots
    • Massive Silver Withdrawals From The Comex
    • European Debt Worries Again Weigh on Shares
    • Gold Rises A Bit But High Prices Limit Buying

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  • Blog

    Daily Digest – August 17

    by Davos

    Monday, August 17, 2009, 2:37 PM

    0
    • Welfare State (H/T DrKirbyLuv)
    • 1 of about 500 reasons why we work until August 12 for the government (Seen on MarketTicker)
    • Why “Normal” WILL NOT Return (Video)
    • Consequences be damned . . .
    • ICN, Video (H/T iDoctor)
    • Elizabeth Warren (Video, H/T Fujisan)
    • www.COP.Senate.gov (Warren’s full report)
    • Belated Sunday Funnies
    • Real Estate with Jim the Realtor (Video)
    • United States Postal Servcie Health Pension DEFAULT!
    • U.S. Banking crisis just BEGINNING
    • End of the Recession – Closed Monday’s

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