Happy Thanksgiving!
May God keep you and your family healthy and prosperous! Mosesman
Has The Bank Run Begun in Europe?
- Friendly advice to all who have the ears to listen! The world is on the cusp of a global economic, financial and monetary meltdown! Got physical gold yet?
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Has the Bank Run Begun in Europe?
By: John Carney , Senior Editor, www.CNBC.com
In many ways, the answer to that question is obviously yes.
Money-market funds in the United States have quite dramatically slammed shut their lending windows to European banks. According to the Economist, Fitch estimates U.S. money market funds have withdrawn 42 percent of their money from European banks in general.
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And for France that number is even higher — 69 percent. European money-market funds are also getting in on the act. Bond issuance by banks has seized up because buyers have gone on strike. From the Economist’s Free Exchange Blog:
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In the third quarter bonds issues by European banks only reached 15 percent of the amount they raised over the same period in the past two years, reckon analysts at Citi Group. It is unlikely that European banks have sold many more bonds since. Corporate depositors are also pulling their cash.
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Free Exchange:
“We are starting to witness signs that corporates are withdrawing deposits from banks in Spain, Italy, France and Belgium,” an analyst at Citi Group wrote in a recent report. “This is a worrying development.” And there are troubling signs that banks are even running out of collateral to back their borrowings from the European Central Bank.
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… for more click here!
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Euro on ‘Death Watch’ After Investors Spurn German Bonds!
Will not be missed !
- The message is now pretty publicly! The Euro is dying and will be buried publicly soon! Should you hold this currency when the fundamentals are so doubtful? When there are so much uncertainty surrounding it? It is obvious!
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Euro on ‘Death Watch’ After Investors Spurn German Bonds
By: John Melloy, http://www.cnbc.com/
Investors began to fear the worst for the euro after unusually weak demand at an auction for bonds from Germany, the region’s largest economy. One analyst went so far as to put the currency on a “death watch.”
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Germany sold just 60 percent of the 6 billion euros in 10-year bunds it brought to auction, about the weakest demand seen for the country’s debt in the currency’s 16-year history, economists said. The rejection of debt from Europe’s safe harbor marks a new stage for the crisis.
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“No bunds wanted equals no Euros wanted equals the Euro death watch,” wrote Mark Steele, an analyst with BMO Capital Markets. “We have seen many poor German auctions. This is not the issue. The issue is how badly the euro is doing after the weak auction.”
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The euro// // fell more than 1 percent against the dollar to a 7-week low against the Greenback. The currency threatened to break through the October lows that came amid the height of turmoil in Italy and Greece. Both countries would go on to install new Technocrat leaders, lifting confidence in the currency briefly.
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… for more click here!
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Ex-Senator: World Fears US as a War-Hungry Drunk !
- General Smedley Butler:
WAR is a racket. It always has been. It is possibly the oldest, easily the most profitable, surely the most vicious. It is the only one international in scope. It is the only one in which the profits are reckoned in dollars and the losses in lives.
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A racket is best described, I believe, as something that is not what it seems to the majority of the people. Only a small “inside” group knows what it is about. It is conducted for the benefit of the very few, at the expense of the very many. Out of war a few people make huge fortunes.
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In the World War [I] a mere handful garnered the profits of the conflict. At least 21,000 new millionaires and billionaires were made in the United States during the World War. That many admitted their huge blood gains in their income tax returns. How many other war millionaires falsified their tax returns no one knows.
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How many of these war millionaires shouldered a rifle? How many of them dug a trench? How many of them knew what it meant to go hungry in a rat-infested dug-out? How many of them spent sleepless, frightened nights, ducking shells and shrapnel and machine gun bullets? How many of them parried a bayonet thrust of an enemy? How many of them were wounded or killed in battle?
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Out of war nations acquire additional territory, if they are victorious. They just take it. This newly acquired territory promptly is exploited by the few — the selfsame few who wrung dollars out of blood in the war. The general public shoulders the bill. And what is this bill? – This bill renders a horrible accounting. Newly placed gravestones. Mangled bodies. Shattered minds. Broken hearts and homes. Economic instability. Depression and all its attendant miseries. Back-breaking taxation for generations and generations.
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For a great many years, as a soldier, I had a suspicion that war was a racket; not until I retired to civil life did I fully realize it. Now that I see the international war clouds gathering, as they are today, I must face it and speak out.
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…. to continue reading click here! War Is A Racket
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Super Committee Equivalent To Super Fail?
- The Super Committee is just political theatre. There is no intention of bringing the deficit down. There is every intention to create even more debts which the FedRes will monetize. Until finally, the whole system collapses!
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“Holy Jeepers,” Sprott to Buy $1.5B of Silver Bullion!
- Silver Bugs don’t be too discouraged. Our pay day is coming! I expect silver to hit US$100/oz in 2012!
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“Holy Jeepers,” Sprott to Buy $1.5B of Silver Bullion!
by Dominique de Kevelioc de Bailleul , http://www.beaconequity.com/
The silver price could explode higher in coming months.
As the silver and gold price predictably fade ahead of option expiration, JP Morgan’s bullion manipulation scheme could be headed for unprecedented problems, not from the record purchases of gold and silver from the Chinese, Indians or Russians, but from one Canadian billionaire.
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Canadian-based Eric Sprott Management CEO Eric Sprott filed a follow up prospectus for the purchase of an additional $1.5 billion of silver bullion to cover expected demand for the company’s exchange traded fund, PSLV.
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Combined with the recent decline in the PSLV premium to spot silver to 14 percent from the typical 20 percent, along with Sprott’s reported sale of some of its holdings of PSLV at the rich premium, it appears a familiar hallmark of a gigantic $580 million silver bullion purchase in December of last year emerges once again. Since demand for silver products at Sprott remain brisk, it should come as no surprise to the silver world that Sprott needs more silver.
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Yet, only two Web sites mention the breaking news, The Globe and Mail and bullion market reporter Harvey Organ, HarveyOrgan.blogspot.com. Don’t expect Eric Sprott to herald the milestone purchase; he’s trying to avoid investors front running the purchase.
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“Since Sprott filed its prospectus last Friday, PSLV units have come down 12 percent, while the price of silver has dropped only 6 percent,” stated Canada’s daily newspaper, The Globe and Mail, on Nov. 18. “Whether or not the new filing is the root cause of the difference doesn’t affect Mr. Sprott much. He has been selling his PSLV units for most of the year (as documented by kid dynamite.)”
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Because Sprott today represents ½ the size of the Hunt brothers wallet and their attempt to corner the silver market in 1979-80, nimble investors have taken advantage of the bulky Sprott in the past by front running his purchases, as his size and legal entity requires him to file with Canadian regulators—an issue he laments of during his interviews.
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But for silver investors, the regulation could be a boon to the silver price, as the last time Sprott needed substantial inventory, the silver price soared 177 percent, though Sprott’s purchase cannot directly be proven to be responsible for all of that monstrous move.
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… for more click here!
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Graham Summers: Here’s The Real Financial Situation For Europe… Clear as Day!
Source: Phoenix Capital Research
- This is an excellent overview of the situation in Europe!
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Here’s The Real Financial Situation For Europe… Clear as Day!
by Phoenix Capital Research, http://www.zerohedge.com/
Let’s rehash the European situation for those who still don’t get it. Taken as a whole, the US banking system is leveraged at 13 to 1. Leverage levels at the TBTFs are much much higher… but when you add them in with the 8,100+ other banks in the US, total US bank leverage is 13 to 1.
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The European banking system as a whole is nearly twice this at over 25 to 1. That’s the ENTIRE European Banking system leveraged at near Lehman levels (Lehman was 30 to 1 when it collapsed).
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To put this into perspective, with a leverage level of 25 to 1, you only need a 4% drop in asset prices to wipe out ALL capital. What are the odds that European bank assets fall 4% in value in the near future?
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Now let’s consider TOTAL debt sitting on Financial Institutions’ balance sheets in Europe. The below chart shows this number for financial institutions in several major EU members relative to their country’s 2010 GDP.
Situation is terrible!
As you can see, financial institutions in Germany, France, Italy, Spain, the UK, and Ireland are all ticking time bombs. Indeed, taken as a whole, European financial institutions have more debt than Europe’s ENTIRE GDP.
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These leverage levels alone position Europe for a full-scale banking collapse on par with Lehman Brothers. Again, I’m talking about Europe’s ENTIRE banking system collapsing.
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This is not a question of “if,” it is a question of “when.” And it will very likely happen within the next 10-12 months if not sooner depending on how soon Greece defaults.
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The reason that this is guaranteed to happen before the end of 2012 is that a HUGE percentage of European bank debt needs to be rolled over by the end of 2012. Between now and then…
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- French banks need to roll over 30% of their TOTAL debt.
- Spanish banks and Italian banks need to rollover more than 33% of their TOTAL debt.
- German banks need to roll over nearly 40% of their TOTAL debt.
- Irish banks need to roll over almost HALF (50%) of their TOTAL debt.
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Good luck with that.
The situation is no better for European Sovereign states themselves, which are facing their own debt roll over issues at a time when investors are rapidly losing their appetite for sovereign debt.
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To wit, Spain, Portugal, and Italy have all relied heavily on the ECB to buy their debt at recent auctions. Germany actually just had a failed debt auction this morning. And in this environment , these nations need to meet the following debt roll over obligations: (see top of post)
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… for more click here!
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Germany’s Finances Not as Sound as Believed !
- Do not believe all the official statistics coming out from western governments. They are largely shenanigans and even outright lies. Their application of accounting principles is highly suspect. Many toxic crap are hidden off balance-sheet !
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Germany’s Finances Not as Sound as Believed
By Ralf Neukirch and Christian Reiermann, http://www.spiegel.de/
Flawed Role Model
The German government likes to pride itself on its solid finances and claim the country is a safe haven for investors. But Germany’s budget management is not nearly as exemplary as it would have people believe, and the national debt is way over the EU’s limit. In some respects, Italy’s finances are in much better shape.
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Role Model Position at Risk
…. it is debatable how much longer Germany can be seen as a refuge of stability and security. In reality, German government finances are not nearly in as good shape as the chancellor and the finance minister would have us believe. The way that certain important indices are developing suggests that Germany may not retain its position as a role model in the long term. Government debt as a percentage of GDP is already at more than 80 percent, which compared to other European Union countries is by no means exemplary, but in fact average at best.
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When it comes to their debt-to-GDP ratios, even ailing countries like Spain are in better shape, with values significantly lower than 80 percent. Critics, irritated by Merkel’s and Schäuble’s overly confident rhetoric, are beginning to find fault with Europe’s self-proclaimed model country. “I think that the level of German debt is troubling,” says Luxembourg Prime Minister Jean-Claude Juncker, whose country has a debt-to-GDP ratio of just 20 percent.
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Despite the nascent criticism, Merkel and Schäuble will be patting themselves on the back once again at this week’s final debate on the 2012 federal budget in the Bundestag, the German parliament. They will point out that Germany is in much better shape than its partners in the euro zone, not to mention the United States. They will also praise conditions in the labor market, rising tax revenues and the declining budget deficit.
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It is certainly true that Schäuble expects the German deficit to decline from 1.3 percent of GDP this year to less than 1 percent next year. But it’s none of his doing. In fact, he wants to incur more debt next year than in 2011. It is only state and local governments that are slated to borrow less next year, thereby helping to reduce Germany’s deficit. In contrast, Schäuble expects €26 billion ($35 billion) in net new borrowing in 2012, an increase of several billion euros over this year.
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Flush with Cash
The reason for the embarrassing increase is a noticeable reduction in austerity efforts. Flush with cash, Germany’s coalition government of the conservatives and the business-friendly Free Democratic Party (FDP) has rediscovered its taste for spending money. At their most recent meeting, the leaders of the CDU, its Bavarian sister party, the Christian Social Union (CSU), and the FDP approved new spending that will place a significant burden on the federal budget in the future.
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For example, Transportation Minister Peter Ramsauer of the CSU will see his funding for 2012 increase by €1 billion over the previously budgeted amount. Ironically, in its most recent assessment the German Federal Audit Office already criticized Ramsauer for not spending the funds allocated to his ministry sensibly.
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Some €1.5 billion have been earmarked for a child-care subsidy that the government plans to grant parents who choose not to use public child-care facilities but to look after their pre-school children at home instead. The German government is also reintroducing the full Christmas bonus for civil servants, to the tune of €500 million.
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The government will spend €1 billion to fund a planned subsidy for private long-term care insurance, as well as €4 billion on previously announced tax reforms. “Merkel and Schäuble have now abandoned the goal of budget consolidation,” says Carsten Schneider, budget affairs spokesman for the opposition Social Democrats (SPD). “The money is being squandered on child-care subsidies and tax cuts.” Jens Weidmann, the president of Germany’s central bank, the Bundesbank, warns that the tax cuts at least will have to be offset elsewhere in the budget. “Germany mustn’t lose any time in balancing its budget,” he says.
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The mood of generosity has also taken hold at lower levels within the coalition. For instance, the budget committee approved €60 million in additional funding for the government commissioner for culture and the media, Bernd Neumann, whose budget was originally targeted for €15 million in cuts.
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Other key figures also suggest that Germany is not doing as well as some believe. Admittedly, the budget deficit continues to shrink. And the federal government budget actually seems to be well on its way to complying with a new “debt ceiling” rule in the German constitution that requires the government to reduce new borrowing to almost zero by 2016.
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… for more click here!
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German Auction ‘Disaster’ Stirs Crisis Contagion Concern; Bonds, Euro Fall !
Soon, feel free to wipe your ass with it !
- The Euro will collapse. It will affect all major currencies. The sheeple will wake up and realize that all fiat currencies are a CONfidence Job! It has no intrinsic value and is backed by ZERO! There will be a stampede towards physical gold (and silver) in 2012! (emphasis mine)
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German Auction ‘Disaster’ Stirs Crisis Contagion Concern; Bonds, Euro Fall
By Paul Dobson, http://www.bloomberg.com/
Germany failed to get bids for 35 percent of the 10-year bonds offered for sale today, propelling borrowing costs in Europe higher and the euro lower on concern the region’s debt crisis is driving away investors.
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“This auction is nothing short of a disaster for Germany,” Mark Grant, a managing director at Southwest Securities Inc. in Fort Lauderdale, Florida, said by e-mail. “If the strongest nation in Europe has this kind of difficulty raising capital, one shudders concerning the upcoming auctions in other European nations.”
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Turmoil that began more than two years ago in Greece and snared Ireland, Portugal, Italy and Spain has closed in on France and now risks engulfing Germany, the region’s biggest economy. Political leaders are struggling to find a fix for the crisis, with German Chancellor Angela Merkelrejecting proposals for common currency-area bonds, while the European Central Bank resists calls to boost sovereign-debt purchases.
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The yield on Germany’s 2.25 percent securities maturing in September 2021 climbed 15 basis points to 2.06 percent at 4:46 p.m. London time. The price of the bonds slid 1.370, or 13.70 euros per 1,000-euro ($1,335) face amount, to 101.550. The cost of credit default swaps on German debt rose seven basis points to 108, according to CMA prices. The euro weakened as much as 1.3 percent to $1.3327.
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Belgian 10-year yields surged 41 basis points to 5.48 percent, after reaching 5.53 percent, the highest since November 2000. French 10-year bond yields climbed 16 basis points to 3.69 percent. The yield on Greek two-year notes jumped to more than 120 percent for the first time, before slipping back to 116.59 percent.
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… for more click here!
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“Disastrous” Bond Sale Shakes Confidence in Germany!
The Eurozone is on fire!
- The contagion is affecting Germany. The beginning of the end for the Eurozone is here! The world is about to face a global monetary meltdown. It will start with the Euro, spread across Europe, to the UKP, JPY … and finally USD. All major fiat currencies are toast. Minor fiat currencies will not survive the hyperinflation onslaught! Got physical gold yet? (emphasis mine)
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“Disastrous” bond sale shakes confidence in Germany!
By Stephen Brown and Noah Barkin | Reuters
BERLIN (Reuters) – A “disastrous” German bond sale on Wednesday sparked fears that Europe’s debt crisis was starting to threaten even Berlin, with the leaders of the euro zone’s two biggest economies still at odds over a longer-term structural solution.
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With contagion spreading, a majority of twenty prominent economists polled by Reuters predicted that the euro zone was unlikely to survive the crisis in its current form, with some envisaging a “core” group that would exclude Greece.
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Investors were also unnerved by reports that Belgium is leaning on France to pay more into emergency support for failed lender Dexia under a 90-billion-euro ($120-billion) rescue deal that had appeared done and dusted.
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A special report by Fitch Ratings suggested France had limited room left to absorb shocks to its finances, such as a new downturn in growth or support for banks, without endangering its triple-A credit status.
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“The debt crisis is burrowing ever deeper, like a worm, and is now reaching Germany,” one of the more eurosceptic backbenchers in Angela Merkel’s center-right government, Frank Schaeffler of the junior coalition partner Free Democrats (FDP), told Reuters.
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The German debt agency could not find buyers for almost half a bond sale of 6 billion euros. That pushed the cost of borrowing over 10 years for the bloc’s paymaster above those for the United States for the first time since October. “It is a complete and utter disaster,” said Marc Ostwald, strategist at Monument Securities in London.
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The new bond promised to pay out a 2.0 percent interest rate – the lowest ever on an issue of German 10-year Bunds. The auction’s average yield was 1.98 percent, down from 2.09 percent for the previous benchmark in October.
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After one of the least successful debt sales by Europe’s powerhouse economy since the launch of the single currency, the euro fell to 1.336 against the dollar and European shares sank to 7-week lows.
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Bunds slumped after the auction. Ten-year yields rose 14.5 basis points to 2.056 percent, yielding more than U.S. Treasury notes for the first time since early last month.
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…. for more click here!
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China Media Says US Sitting on Debt ‘Bomb’!
US debt bomb will explode!
- Ignore the shenanigans of the Super Committee. It is just political theatre. The plan is for a collapse of the American economy. The situation in US is far worse than the PIIGS. America has lit the fuse on its debt bomb. It is a matter of when the collapse will happen. The USD and US treasuries will collapse. This will reverberate around the globe. The world will reel in shock as the dominoes keep falling one by one. Asia will not escape this coming crisis! Paper assets and fiat currencies are going to be whacked by a huge dose of inflation! Got physical gold yet?
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China media says US sitting on debt ‘bomb’!
(AFP) – China’s state media Tuesday blasted the United States over its “ticking debt bomb” and urged American lawmakers to be more responsible after they failed to agree on deficit-cutting measures. China is the world’s largest foreign holder of US Treasuries with a portfolio of around $1.15 trillion, prompting Beijing’s keen interest in the state of the US economy.
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“Washington’s political elites… are obligated to muster the courage to defuse the ticking debt bomb and start to show the world they have the wisdom and determination not to further jeopardise the fragile global economic recovery,” Xinhua news agency said in a commentary.
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A US Congress “supercommittee” Monday failed to reach a deal to rein in the government’s galloping deficits due to angry partisan battles over how best to revive the nation’s sluggish economy.
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The move confirmed widespread expectations that the 12-member committee would miss its goal to cut US deficits by $1.2 trillion over 10 years amid political feuds over tax hikes on the rich and cuts to social spending.
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Xinhua, a mouthpiece for the Chinese government, blamed partisan in-fighting, saying both Democrats and Republicans were ignoring the impact of a possible US default on the global economy. “US politicians have never shied from lecturing other countries about global responsibility and now it is high time they showed a sense of true global leadership,” Xinhua said.
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The commentary made no specific reference to China.
Chinese state media have previously savaged the US over what they call its “addiction to debt” with one analyst going so far as to compare US debt to a “Ponzi scheme”.
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About
Societal and economics observer and commentator with an endtimes, future history perspective. Follow me at Twitter: socioecohistory
