Posted by Brittany Stepniak - Tuesday, January 17th, 2012
The Fed and central banks are off to a questionable start this year...
Quantitative easing has already begun in Europe. And they've got the U.S. to thank for the bail out.
"Essentially, we just bailed out Europe’s banking system with the full faith and credit of the United States" according to the New York Post's Jonathon Trugman. He goes on:
"Most Americans associate a covert action with the CIA, not the Fed. But that’s exactly what Ben Bernanke did at the end of November...In reality, the Federal Reserve has just extended essentially unlimited lines of credit, camouflaged as a swap to the world in US dollars."
Here's a run down on why you should be concerned:
* The Fed essentially borrows or is backed up by US taxpayers, already in debt through mortgages, credit cards, student loans.
* The ECB in turn borrows from the Fed and then leverages that money up under its ECB umbrella.
* The ECB then lends it out to 523 of Europe’s most overleveraged banks.
* The desperate banks keep some to fortify their balance sheets, and use the rest to buy sovereign debt in some of the most overleveraged countries in the world, like Italy and Spain, which were just downgraded Friday by S&P.
17 January 2012
Gold & Silver Banker-Cartel Prolonged Price Suppression Has Set the Foundation for an Explosive Move Higher in 2012
At the end of last year, there was a lot of chatter on the internet, due to the end-of-the year slam down effected on gold and silver futures by the global banking cartel, that silver prices were going go collapse to $20 an ounce and gold prices were going to collapse well below $1000 an ounce by the first quarter of 2012. We felt that these discussions and the consequent, induced panic selling out of gold/silver mining stocks and physical gold/silver at the end of 2011 was highly unwarranted and the result of people falling for the global banking cartel price suppression tricks. In fact, we sent Special Alerts to all of our clients at the end of 2011 informing them that the banking cartel often paints charts in gold and silver to fool people and that one cannot make accurate predictive behavior based upon the assessment of technical charts alone.
Today, there are still many reasons to expect a stellar next couple of years from gold and silver performance, including the mining stocks. From a technical standpoint, gold and silver appear to be on the verge of making a very significant run higher. I’m not saying that this will happen tomorrow, but it does look very probable within a short-time period. From a manipulation factor standpoint, gold and silver also look poised for a run higher too. So the two factors I use to assess gold and silver’s direction both appear aligned with one another to move gold and silver higher very soon.
Today, there are still many reasons to expect a stellar next couple of years from gold and silver performance, including the mining stocks. From a technical standpoint, gold and silver appear to be on the verge of making a very significant run higher. I’m not saying that this will happen tomorrow, but it does look very probable within a short-time period. From a manipulation factor standpoint, gold and silver also look poised for a run higher too. So the two factors I use to assess gold and silver’s direction both appear aligned with one another to move gold and silver higher very soon.
Joint US-Israel drill called off by Netanyahu, to Washington's surprise
DEBKAfile Exclusive Report January 17, 2012, 12:36 PM (GMT+02:00)
debkafile's sources disclose exclusively that, contrary to recent reports published in Washington, Jerusalem - and this site too - it was Israel Prime Minister Binyamin Netanyahu, not the Obama administration, who decided to call off the biggest ever joint US-Israeli military exercise Austere Challenge 12 scheduled for April 2012.
Washington was taken aback by the decision. It was perceived as a mark of Israel's disapproval for the administration's apparent hesitancy in going through with the only tough sanctions with any chance of working against Iran's nuclear weapon program: penalizing its central bank and blocking payments for its petroleum exports.
This was the first time Israel had ever postponed a joint military exercise; it generated a seismic moment in relations between the US and Israel at a time when Iran has never been so close to producing a nuclear weapon.
debkafile's sources disclose exclusively that, contrary to recent reports published in Washington, Jerusalem - and this site too - it was Israel Prime Minister Binyamin Netanyahu, not the Obama administration, who decided to call off the biggest ever joint US-Israeli military exercise Austere Challenge 12 scheduled for April 2012.
Washington was taken aback by the decision. It was perceived as a mark of Israel's disapproval for the administration's apparent hesitancy in going through with the only tough sanctions with any chance of working against Iran's nuclear weapon program: penalizing its central bank and blocking payments for its petroleum exports.
This was the first time Israel had ever postponed a joint military exercise; it generated a seismic moment in relations between the US and Israel at a time when Iran has never been so close to producing a nuclear weapon.
China, Hub of the Global Gold Market?
By: Julian D. W. Phillips, Gold/Silver Forecaster - Global Watch - GoldForecaster.com
The growth of China’s presence in the global gold market has been phenomenal in the last dozen years. Prior to this century, HSBC sent a delegation from their London gold department to see the Chinese financial authorities and were rebuffed as ‘trying to sell gold to China’. Since then, the Chinese financial authorities switched on and set off with a purpose.
In 2001, the Chinese government lifted its final controls on the gold market, releasing a pent-up demand that since then has become stronger. From 2001 to 2010, China's annual consumption of gold grew at a 7.5% compounded annual growth rate. This chart shows how China's demand for gold jewelry has increased from just over 15.55 tonnes [500,000 ounces] in the late 1980’s to over 373.25 tonnes [12 million ounces] at the end of 2010, in spite of gold going from $200 $1,650 an ounce.
The growth of China’s presence in the global gold market has been phenomenal in the last dozen years. Prior to this century, HSBC sent a delegation from their London gold department to see the Chinese financial authorities and were rebuffed as ‘trying to sell gold to China’. Since then, the Chinese financial authorities switched on and set off with a purpose.
In 2001, the Chinese government lifted its final controls on the gold market, releasing a pent-up demand that since then has become stronger. From 2001 to 2010, China's annual consumption of gold grew at a 7.5% compounded annual growth rate. This chart shows how China's demand for gold jewelry has increased from just over 15.55 tonnes [500,000 ounces] in the late 1980’s to over 373.25 tonnes [12 million ounces] at the end of 2010, in spite of gold going from $200 $1,650 an ounce.
Gold is the most favoured asset in 2012: Nomura investor poll
Bullion Vault
A Survey of investors carried out by Japanese investment bank Nomura has found Buying Gold to be this year's number one investment choice.
The poll found that 19.5% of the 164 investors said they would Buy Gold and hold it to the end of the year. The next favourite assets were stocks and developed market investment grade corporate bonds, into which around 13% of respondents said they would invest money.
A Survey of investors carried out by Japanese investment bank Nomura has found Buying Gold to be this year's number one investment choice.
The poll found that 19.5% of the 164 investors said they would Buy Gold and hold it to the end of the year. The next favourite assets were stocks and developed market investment grade corporate bonds, into which around 13% of respondents said they would invest money.
Graphical Representations of Bernanke's Effort to Stimulate Bank Lending
Bernanke is trying every way he can to get banks to lend (printing coupled with a multitude of lending facilities and Fed programs).
It's easy enough to prove the printing: Base money supply is up about $1.8 trillion since the start of the recession.
Base Money Supply
It's easy enough to prove the printing: Base money supply is up about $1.8 trillion since the start of the recession.
Base Money Supply
Portugal Downgraded to Junk; Bond Yields Soar; Record Spread vs. Germany; Portugal to Follow Greece Into Default Abyss
Portugal is poised to quickly follow Greece into the default abyss following a debt downgrade to junk status by the S&P on Friday.
The Wall Street Journal reports Portugal's Bond Yields Rise Sharply After Rating Cut To Junk
Portuguese borrowing costs rose sharply Monday as some investors were forced to sell their government bond holdings after Standard and Poor's Corp. downgraded the country to junk status late Friday.
The Wall Street Journal reports Portugal's Bond Yields Rise Sharply After Rating Cut To Junk
Portuguese borrowing costs rose sharply Monday as some investors were forced to sell their government bond holdings after Standard and Poor's Corp. downgraded the country to junk status late Friday.
Revisiting Our Proposal for an Overnight Gold Fund
Saturday, January 14, 2012 at 11:18PM
In August 2010 we wrote an article entitled “Proposing An Overnight Gold Fund” in which we explored the potential for launching a fund that held long positions in gold overnight and was short gold during the day. We pointed out that “a hedge fund starting in 2001 with $100m, with the strategy of being long gold from the PM to AM fix, and short gold from the AM to PM fix...would be worth $2.16billion today, before any fees and expenses.” We have been monitoring this trading strategy since then and therefore would like to take this opportunity to update readers on its astonishing progress.
Firstly we will introduce the thinking that led us to investigate this trading strategy. There is much debate within the precious metals industry regarding the alleged suppression, or at least manipulation to an extent, by either central banks or the proprietary trading divisions of large banks, or a combination of the two.
In April 2010 the US Commodity Futures Trading Commission CFTC fined Hedge Fund Moore Capital for manipulation of the New York platinum and palladium futures market, as the firm was found to be “banging the close”, which involves entering orders in a manner designed to inflate the closing price, which other various derivatives contracts could be based on. So that is irrefutable evidence that the precious metals futures market is, at least to some extent, being manipulated. However a large concentration of this debate is based not on platinum and palladium, but on gold and silver, and particularly gold.
In August 2010 we wrote an article entitled “Proposing An Overnight Gold Fund” in which we explored the potential for launching a fund that held long positions in gold overnight and was short gold during the day. We pointed out that “a hedge fund starting in 2001 with $100m, with the strategy of being long gold from the PM to AM fix, and short gold from the AM to PM fix...would be worth $2.16billion today, before any fees and expenses.” We have been monitoring this trading strategy since then and therefore would like to take this opportunity to update readers on its astonishing progress.
Firstly we will introduce the thinking that led us to investigate this trading strategy. There is much debate within the precious metals industry regarding the alleged suppression, or at least manipulation to an extent, by either central banks or the proprietary trading divisions of large banks, or a combination of the two.
In April 2010 the US Commodity Futures Trading Commission CFTC fined Hedge Fund Moore Capital for manipulation of the New York platinum and palladium futures market, as the firm was found to be “banging the close”, which involves entering orders in a manner designed to inflate the closing price, which other various derivatives contracts could be based on. So that is irrefutable evidence that the precious metals futures market is, at least to some extent, being manipulated. However a large concentration of this debate is based not on platinum and palladium, but on gold and silver, and particularly gold.
The Next Bubble in China’s Economy
We've battled this argument before, so we apologise if we repeat ourselves. But it needs to be said because the mainstream media continues to talk gibberish about China’s economy. This is the argument: a falling inflation rate in China allows the authorities to ease monetary policy to avert a hard landing. Or, as today's Financial Review puts it:
China's government has been given room to ease credit policy further to bolster growth in the world's second largest economy after inflation fell to a yearly pace of 4.1 per cent in December. The fall in the consumer price index from 4.2 per cent in November, down from a 37-month high of 6.5 per cent in July, is likely to increase Beijing's confidence that inflationary pressures are being brought under control while policymakers look to provide additional support to the economy as export demand slows and the housing market turns down.This simplistic view fails to take into account complex monetary mechanisms of China's economy. Firstly, China pegs its currency, the yuan, to the US dollar. And because China’s economy runs a trade surplus with the US, it ends up with excess US dollars. To maintain the peg and stop the yuan from appreciating, the People's Bank of China (PBoC) must print yuan to buy these excess dollars.
The dollars make their way into the vaults of the PBoC (and are known as foreign exchange 'FX' reserves) while the yuan make their way into the domestic banking system.
So, the build up in FX reserves matches the build-up in the reserves of the domestic banking system. The more reserves a bank has, the greater its lending power.
This is inflationary. And when the government encourages its banks to lend without discrimination, you tend to get things like property bubbles forming. In an attempt to offset this wildly inflationary impact, the PBoC raised reserve requirements.
But here's the point. Placing a higher reserve requirement on the banks was not an example of monetary policy 'tightening'. It was merely a way to try and neutralise the impact of an expanding FX account.
Recently, the PBoC began to lower the reserve requirement. According to most analysts, this represents an easing of monetary policy. But we disagree.
Let us explain why...
China's huge FX reserves are no longer growing. In fact, they are widely tipped to have contracted in the final quarter of 2011. Sensing the party is over, speculative money is quietly flowing back out of China’s economy. As FX reserves fall, so do banking system reserves. Left unchecked, this represents monetary policy tightening. A lower reserve requirement merely offsets the effect of falling FX reserves.
That's all pretty technical. If you're still following, we've got a much simpler reason why looser credit policies won't work in China - a lack of demand. Banks can supply all the credit they want. But unless there's a willing borrower, it's useless. Ask Ben Bernanke.
When a bubble bursts, as the property market in China has, the effect is financial and psychological. The emotion of greed (which fuels demand for credit) wanes. Fear (which restricts the flow of credit) takes over.
China's policy makers will now attempt to do what just about every policymaker since the South Sea bubble has done - reinflate. But as history has shown, you can't reinflate the same bubble. You just create others.
Where will China's next bubble appear? Hmmm...how about gold?
China's imports of physical gold via Hong Kong have soared in recent months, as the following chart from Reuters shows. In November alone, gold imports totalled nearly 103,000 kg.
Are Chinese citizens trying to protect themselves from falling property and equity markets? With deposit rates less than the inflation rate, there's no respite by placing funds in the banks either. Gold seems like a sensible option.
And judging by the volume of imports, there's a good chance the PBoC is in there buying too.
China merely took advantage of this stupidity.
But gold is not just going to be the next bubble in China. It will be international in scope.
President Obama has just asked Congress to raise the US debt ceiling, again, by US$1.2 trillion - to US$16.394 trillion. It's getting monotonous. You can't create gold at anywhere near the same rate or ease. The result? Gold will rise against all currencies.
Which brings us to the euro. Overnight, both Spain and Italy enjoyed successful bond auctions - courtesy of Mario Draghi, head of the European Central Bank. This is one deceptive bloke. While talking tough on the ECB's mandate not to finance sovereign nations, he's gone and done it anyway.
The ECB recently changed the rules on acceptable collateral. Europe's impaired banks can now hand the ECB the lowest, illiquid asset on their books. And the ECB will give them cash in return.
The banks can then use this cash to buy high-yielding sovereign debt, which they are clearly doing. The 'spread' - the difference between the cost of funds and the yield on the purchased debt - is huge, meaning a windfall for the banks.
This is a huge ponzi scheme and will end like all the others. It's just a matter of time. That's why Greece remains so important. If Greece defaults, the ponzi is over. The hedge funds (from yesterday's discussion on Greek debt ) know this and are rightly betting on Greece getting another bailout package.
But who's really getting bailed out? A large portion of the money due to Greece from the IMF simply goes to repaying existing debt holders - the majority of which are hedge funds. The term 'bailout' is Orwellian. The IMF and EU are really providing Greece with 'Default Deferral Funds'.
The system is a mess. Attempts to fix it are only causing deepening long- term problems.
Regards,
Greg Canavan
for The Daily Reckoning Australia
Putin, a thorn in Washington's flesh
By: F. William Engdahl Special to Salem-News.com
Why Putin?
The salient question is why Putin at this point? We need not look far for the answer. Washington and especially Barack Obama’s Administration don’t give a hoot about whether Russia is democratic or not. Their concern is the obstacle to Washington’s plans for Full Spectrum Dominance of the planet that a Putin Presidency will represent. According to the Russian Constitution, the President of the Russian Federation head of state, supreme commander-in-chief and holder of the highest office in the Russian Federation. He will take direct control of defense and foreign policy.
We must ask what policy? Clearly strong countermeasures against the blatant NATO encirclement of Russia with Washington’s dangerous ballistic missile installations around Russia will be high on Putin’s agenda. Hillary Clinton’s “reset” will be in the dustbin if it is not already. We can also expect a more aggressive use of Russia’s energy card with pipeline diplomacy to deepen economic ties between European NATO members such as Germany, France and Italy, ultimately weakening the EU support for aggressive NATO measures against Russia. We can expect a deepening of Russia’s turn towards Eurasia, especially with China, Iran and perhaps India to firm up the shaky spine of resistance to Washington’s New World Order plans.
It will take more than a few demonstrations in sub-freezing weather in Moscow and St. Petersburg by a gaggle of corrupt or shady opposition figures such as Nemtsov or Kasparov to derail Russia. What is clear is that Washington is pushing on all fronts—Iran and Syria, where Russia has a vital naval port, on China, now on Russia, and on the Eurozone countries led by Germany. It has the smell of an end-game attempt by a declining superpower.
The United States today is a de facto bankrupt nuclear superpower. The reserve currency role of the dollar is being challenged as never since Bretton Woods in 1944. That role along with maintaining the United States as the world’s unchallenged military power have been the basis of the American Century hegemony since 1945.
Weakening the role of the dollar in international trade and ultimately as reserve currency, China is now settling trade with Japan in bilateral currencies, side-stepping the dollar. Russia is implementing similar steps with her major trade partners. The primary reason Washington launched a full-scale currency war against the Euro in late 2009 was to preempt a growing threat that China and others would turn away from the dollar to the Euro as reserve currency. That is no small matter. In effect Washington finances its foreign wars in Iraq, Afghanistan, Syria, Libya and elsewhere through the fact that China and other trade surplus nations invest their surplus trade dollars in US government Treasury debt. Were that to shift significantly, US interest rates would rise substantially and the financial pressures on Washington would become immense.
Faced with growing erosion of her unchallenged global status as sole superpower, Washington appears now to be turning increasingly to raw military force to hold that. For that to succeed Russia must be neutralized along with China and Iran. This will be the prime agenda of whoever is next US President.
Why Putin?
The salient question is why Putin at this point? We need not look far for the answer. Washington and especially Barack Obama’s Administration don’t give a hoot about whether Russia is democratic or not. Their concern is the obstacle to Washington’s plans for Full Spectrum Dominance of the planet that a Putin Presidency will represent. According to the Russian Constitution, the President of the Russian Federation head of state, supreme commander-in-chief and holder of the highest office in the Russian Federation. He will take direct control of defense and foreign policy.
We must ask what policy? Clearly strong countermeasures against the blatant NATO encirclement of Russia with Washington’s dangerous ballistic missile installations around Russia will be high on Putin’s agenda. Hillary Clinton’s “reset” will be in the dustbin if it is not already. We can also expect a more aggressive use of Russia’s energy card with pipeline diplomacy to deepen economic ties between European NATO members such as Germany, France and Italy, ultimately weakening the EU support for aggressive NATO measures against Russia. We can expect a deepening of Russia’s turn towards Eurasia, especially with China, Iran and perhaps India to firm up the shaky spine of resistance to Washington’s New World Order plans.
It will take more than a few demonstrations in sub-freezing weather in Moscow and St. Petersburg by a gaggle of corrupt or shady opposition figures such as Nemtsov or Kasparov to derail Russia. What is clear is that Washington is pushing on all fronts—Iran and Syria, where Russia has a vital naval port, on China, now on Russia, and on the Eurozone countries led by Germany. It has the smell of an end-game attempt by a declining superpower.
The United States today is a de facto bankrupt nuclear superpower. The reserve currency role of the dollar is being challenged as never since Bretton Woods in 1944. That role along with maintaining the United States as the world’s unchallenged military power have been the basis of the American Century hegemony since 1945.
Weakening the role of the dollar in international trade and ultimately as reserve currency, China is now settling trade with Japan in bilateral currencies, side-stepping the dollar. Russia is implementing similar steps with her major trade partners. The primary reason Washington launched a full-scale currency war against the Euro in late 2009 was to preempt a growing threat that China and others would turn away from the dollar to the Euro as reserve currency. That is no small matter. In effect Washington finances its foreign wars in Iraq, Afghanistan, Syria, Libya and elsewhere through the fact that China and other trade surplus nations invest their surplus trade dollars in US government Treasury debt. Were that to shift significantly, US interest rates would rise substantially and the financial pressures on Washington would become immense.
Faced with growing erosion of her unchallenged global status as sole superpower, Washington appears now to be turning increasingly to raw military force to hold that. For that to succeed Russia must be neutralized along with China and Iran. This will be the prime agenda of whoever is next US President.
Noda Says Japan Must Heed Lessons From Europe’s Credit-Rating Downgrades
By Lily Nonomiya and Toru Fujioka - Jan 15, 2012 4:01 PM GMT+0100
Prime Minister Yoshihiko Noda said containing Japan’s public debt load, the world’s largest, is critical after Standard & Poor’s downgraded credit ratings on France, Austria and seven other European nations.
Europe’s fiscal situation “isn’t a house burning on the other side of the river,” Noda said on TV Tokyo Holdings Corp.’s program on Jan. 14. “We must have a great sense of crisis.”
Noda reshuffled his cabinet last week, aiming to win support for doubling Japan’s 5 percent national sales tax by 2015 to trim the soaring debt. S&P said in November Noda’s administration hadn’t made progress in tackling the public debt burden, an indication the credit-rating company may be preparing to lower the nation’s sovereign grade.
Japan’s government, which has enjoyed borrowing costs that are around 1 percent, wouldn’t be able to manage its finances if bond yields surged to 3 percent, Noda said last week. The country risks seeing a spike in government bond yields unless it controls a debt load set to approach 230 percent of gross domestic product in 2013, the Organization for Economic Cooperation and Development said on Nov. 28.
Prime Minister Yoshihiko Noda said containing Japan’s public debt load, the world’s largest, is critical after Standard & Poor’s downgraded credit ratings on France, Austria and seven other European nations.
Europe’s fiscal situation “isn’t a house burning on the other side of the river,” Noda said on TV Tokyo Holdings Corp.’s program on Jan. 14. “We must have a great sense of crisis.”
Noda reshuffled his cabinet last week, aiming to win support for doubling Japan’s 5 percent national sales tax by 2015 to trim the soaring debt. S&P said in November Noda’s administration hadn’t made progress in tackling the public debt burden, an indication the credit-rating company may be preparing to lower the nation’s sovereign grade.
Japan’s government, which has enjoyed borrowing costs that are around 1 percent, wouldn’t be able to manage its finances if bond yields surged to 3 percent, Noda said last week. The country risks seeing a spike in government bond yields unless it controls a debt load set to approach 230 percent of gross domestic product in 2013, the Organization for Economic Cooperation and Development said on Nov. 28.
Iran Cracks Down on Dollar Trades
By BILL SPINDLE, BENOÎT FAUCON and FARNAZ FASSIHI
Iranian authorities sent police into the streets of the capital Monday to crack down on informal currency trading and support the rial, signaling Iranians' heightened insecurity over their dwindling buying power and Tehran's increasingly hard-handed efforts to stave off economic panic.
The move follows last week's steep Iranian Central Bank interest-rate increase, a bid to try to stem the growing demand for U.S. dollars in the country as the economy lurches amid fears over a new round of sanctions promised by the U.S. and Europe.
Iran's rial currency has declined 40% to 55% against the dollar on the black market since December. Iranian inflation, meanwhile, now exceeds 20% a month, according to the Central Bank. While the rial has been falling for almost a year, the latest drop appeared to be triggered by a recent U.S. announcement that it would penalize companies that do business with Iran's Central Bank, and a proposed plan to ban Iranian oil purchases in the European Union later this year.
Iranian authorities sent police into the streets of the capital Monday to crack down on informal currency trading and support the rial, signaling Iranians' heightened insecurity over their dwindling buying power and Tehran's increasingly hard-handed efforts to stave off economic panic.
The move follows last week's steep Iranian Central Bank interest-rate increase, a bid to try to stem the growing demand for U.S. dollars in the country as the economy lurches amid fears over a new round of sanctions promised by the U.S. and Europe.
Iran's rial currency has declined 40% to 55% against the dollar on the black market since December. Iranian inflation, meanwhile, now exceeds 20% a month, according to the Central Bank. While the rial has been falling for almost a year, the latest drop appeared to be triggered by a recent U.S. announcement that it would penalize companies that do business with Iran's Central Bank, and a proposed plan to ban Iranian oil purchases in the European Union later this year.
Irish banks will shrink and shrink
January 16, 2012 Post by David McWilliams
The European debt crisis is moving swiftly to the next phase following the downgrade of France and the collapse of the Greek negotiations with its creditors last Friday night.
It is becoming increasingly obvious that there will be no deal in Greece. This is good news because it means the end of the pass-the-parcel-ponzi-scheme, whereby the bill for more and more institutional debt was passed on to more and more innocent people who had nothing to do with the debt in the first place.
Greece will default – as it should. The bondholders will get roasted – as they should – for making bad investments. The laws of capitalism will be allowed to do their thing. Debtors and creditors will pay – as they both should – with both parties sharing the cost.
Whether this leads to Greece being pushed out of the euro remains to be seen. An opportunistic play by a desperate Greek government might be a total default, followed by the reintroduction of a new currency and then the restart button is hit. Initially, it would be an international pariah, but over time it would recover.
The European debt crisis is moving swiftly to the next phase following the downgrade of France and the collapse of the Greek negotiations with its creditors last Friday night.
It is becoming increasingly obvious that there will be no deal in Greece. This is good news because it means the end of the pass-the-parcel-ponzi-scheme, whereby the bill for more and more institutional debt was passed on to more and more innocent people who had nothing to do with the debt in the first place.
Greece will default – as it should. The bondholders will get roasted – as they should – for making bad investments. The laws of capitalism will be allowed to do their thing. Debtors and creditors will pay – as they both should – with both parties sharing the cost.
Whether this leads to Greece being pushed out of the euro remains to be seen. An opportunistic play by a desperate Greek government might be a total default, followed by the reintroduction of a new currency and then the restart button is hit. Initially, it would be an international pariah, but over time it would recover.
GEAB N°61 is available! Global Systemic Crisis - 2012: The year of the world’s great geopolitical swing
According to LEAP/E2020, 2012 will in fact be the year of the world’s great geopolitical swing: a phenomenon which will without any doubt be the bearer of serious difficulties for most of the planet but which will also allow the emergence of geopolitical conditions favourable to an improvement of the situation in the years to come. Contrary to the previous years, 2012 will not be a “wasted” year, stuck in the “world before the crisis”, through lack of audacity, initiative and imagination on the part of the world’s leaders and because of people’s great passivity since the beginning of the crisis.
In addition in this issue, our team gives an in-depth analysis of the nature and consequences of a possible QE3 which the US Federal Reserve might launch in 2012 (4). Hoped for by some, dreaded by others, QE3 is generally presented as the ultimate weapon to save the US economy and financial system which, contrary to the dominating chatter of these last weeks, continues to deteriorate (5). Whether the FED launches out with QE3 or not, QE3 will be without any doubt the major financial event of 2012 whose consequences will mark the world financial and monetary system definitively. This GEAB issue will enable you to have a precise idea on the subject.
In addition in this issue, our team gives an in-depth analysis of the nature and consequences of a possible QE3 which the US Federal Reserve might launch in 2012 (4). Hoped for by some, dreaded by others, QE3 is generally presented as the ultimate weapon to save the US economy and financial system which, contrary to the dominating chatter of these last weeks, continues to deteriorate (5). Whether the FED launches out with QE3 or not, QE3 will be without any doubt the major financial event of 2012 whose consequences will mark the world financial and monetary system definitively. This GEAB issue will enable you to have a precise idea on the subject.
When Will Silver Make a New High?
By Andrey Dashkov, Research Analyst
In last week's Metals, Mining, and Money, Jeff Clark estimated that given the magnitude of the correction that started last September, it may take until May 2012 for gold to reach a new high. This week let's take a look at how long it may take for silver to rebound.
It's a commonly known fact that silver is more volatile than gold. Already in this decade, silver has risen by a factor of 12 from its ten-year low ($48.70 vs. $4.07), while gold has seen about a sevenfold climb ($255.95 vs. $1,895).
This volatility – as you'll see in a minute – holds for corrections as well. On average, silver's retreats have been deeper and longer than gold's. The three big gold corrections we looked at last week averaged 22.8%. Take a look at the three biggest for silver, along with how long it's taken to recover and establish new highs.
In last week's Metals, Mining, and Money, Jeff Clark estimated that given the magnitude of the correction that started last September, it may take until May 2012 for gold to reach a new high. This week let's take a look at how long it may take for silver to rebound.
It's a commonly known fact that silver is more volatile than gold. Already in this decade, silver has risen by a factor of 12 from its ten-year low ($48.70 vs. $4.07), while gold has seen about a sevenfold climb ($255.95 vs. $1,895).
This volatility – as you'll see in a minute – holds for corrections as well. On average, silver's retreats have been deeper and longer than gold's. The three big gold corrections we looked at last week averaged 22.8%. Take a look at the three biggest for silver, along with how long it's taken to recover and establish new highs.
(Click on image to enlarge)
SilverDoctors: Jim Willie: Large Physical Gold Orders Are Clearin...
SilverDoctors: Jim Willie: Large Physical Gold Orders Are Clearin...: Entire 3-part Jim Willie interview With the S&P massively downgrading the Eurozone nations Friday, The Doc interviewed Jim Willie of golden...
Part1:With the S&P massively downgrading the Eurozone nations Friday, The Doc interviewed Jim Willie of goldenjackass.com regarding his thoughts on the Euro crisis and the implications to gold and silver.
Part2:Part 2 focuses on gold, physical gold and silver tightness, and the decoupling of the price of actual physical metal from the paper futures price.
Part 3:Part 3 focuses on the future of silver and gold prices.
Part1:With the S&P massively downgrading the Eurozone nations Friday, The Doc interviewed Jim Willie of goldenjackass.com regarding his thoughts on the Euro crisis and the implications to gold and silver.
Part2:Part 2 focuses on gold, physical gold and silver tightness, and the decoupling of the price of actual physical metal from the paper futures price.
Part 3:Part 3 focuses on the future of silver and gold prices.
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