Money Supply Figures Suggests Italy Headed Into Depression; Non-Performing Spanish Loans Hit 134 Billion Euros, 7.51% of All Loans, Highest in 17 Years; Eurozone Unemployment Charts

MISH'S
Global Economic
Trend Analysis

Ambrose Evans-Pritchard says The euro is pushing Italy into depression

Here is the latest money supply chart from the Banca d'Italia. Just look at M3. Horrendous.

Italy M1, M2, M3

click on chart for sharper image

This speaks for itself. There is no clearer indictment of the dysfunctional nature of monetary union. Italy is being pushed into depression. Criminal.

Obviously, Italy and Germany can no longer share the same monetary policy. Ergo, Germany should leave EMU, pronto. 

The Euro Emperor Has No Clothes

This chart, courtesy of Moody's, shows the degree to which bank equity is exposed to the peripheral markets of the EU.

Anyone familiar with accounting, will recognize that banks are reluctant to mark their assets to market value as such actions would severely impact their balance sheets.

In the event of a Greek default, which may happen as soon as the middle of March, we can expect to see bank lending slow or even freeze as banks attempt to preserve capital.


Due to the potentially catastrophic impact of such an event, we can expect to see desperate Eurocrats racing around the clock to find some way to stop or slow the contagion.


Several ideas have been floating around including a massive liquidity (bailout) fund on the order of One Trillion up to Ten Trillion Euros.

Harvey Organ's - The Daily Gold and Silver Report: IMF in need for one trillion dollars/The Private Greek Bond fiasco/Goldman Sachs earnings abysmal

Wednesday, January 18, 2012

IMF in need for one trillion dollars/The Private Greek Bond fiasco/Goldman Sachs earnings abysmal/
Good evening Ladies and Gentlemen:

Gold closed up $4.30 to 1659.00. Silver however was the star of the day rising by 41 cents to close at 30.52. The bankers tried to suppress the metals in the wee hours of the morning but failed somewhat as the metals rallied. After the London fix they tried again as they knocked gold down by 6 dollars. That failed miserably as demand is too great for physical gold and that caused the paper boys to cover quickly.

Let us head over to the comex and assess trading, open interest on the front delivery months, inventory movements, and the amount of physical metals standing for delivery.

The total gold comex OI rose by a huge 7,554 contracts as investors try to secure metal any which way they can. The bankers were the obvious suppliers of the non backed paper. The front options expiry month of January saw the OI fall from 71 to 31 for a loss of 40 contracts. We only had 13 delivery notices so we lost 27 notices to cash settlements. The paper fiat must have been too good to pass up, courtesy of Blythe Masters of JPMorgan. The front delivery month of February is less than two weeks away as we are witnessing rollovers to April. The February OI rests tonight at 164,237. The estimated volume at the gold comex today was 166,309 which is below normal for the rollover period. The confirmed volume yesterday came in at 216,485.

The total silver comex OI rose by only 825 contracts as the bankers are loathe to supply the non backed paper. The front options expiry month of January saw its OI mysteriously rise by 4 contracts (from 77 to 81) despite 23 delivery notices. Generally this means that someone was in great need of physical silver and we lost nothing to cash settlements. The next big delivery month is March and here the OI rose from 53,786 to 54,449 which is normal as we are still quite far from first day notice in silver. The estimated volume at the silver comex came in at a lowish 40,754. The confirmed volume yesterday was also tame at 44,357.

BRIC Urged to Create Fund, Help Save Global Economy

By Esther Tanquintic-Misa: Subscribe to Esther's RSS feed

January 19, 2012 1:12 AM EST

The question looming amid the maddening eurozone financial crisis now is, will the BRIC (Brazil, Russia, India and China) nations consider lending a helping hand to a world that has yet to officially and formally recognise its economic hold in the global market today?

After the International Monetary Fund (IMF) and World Bank (WB) both forecast an impending global financial doom far worse than the one in 2008, economists and analysts now turned their focus to BRIC, to help prevent the world's financial crash.

American economist Joseph Stiglitz, who was chief economist at the WB from 1996 until 1999, said now might be the time for the BRIC nations to join forces to create a global fund similar to the lines that created the WB in 1944.

"The fact is that money is with the emerging markets," Mr Stiglitz had earlier said in the SME Times. "I am a very strong supporter of the emerging markets and creating a new international fund."

Greek Bond Talks Edge Toward 68% Haircut Deal; Will the Deal Be Accepted?Greek Bond Talks Edge Toward 68% Haircut Deal; Will the Deal Be Accepted?

MISH'S
Global Economic
Trend Analysis

Former ECB president Jean Claude Trichet said there would be no haircuts. There were. The first Greek haircut was 21% and it was insufficient. The second Greek haircut deal was 50% and that too was insufficient. On each failed attempt, the ECB and EMU poured more money into Greece.

There is now about €200bn of Greek debt held by banks, hedge funds and other investors up from about €50bn a couple years ago.

A third renegotiation is now underway, rumored to be a 68% haircut. Clearly there would have been far fewer ramification on banks if Greece would have defaulted long ago.

Such is the stubborn arrogance of ECB, and EMU officials.

Unless another haircut is approved Greece, and still more money is poured into Greece, it will default on March 20 when a €14.5 billion bond repayment is due.

The 7 Stages of Banker's Grief - Europe on the Brink of Psychosis as Obama plays with his Dolls

Silver Update 1/18/12 Capital Controls