Socio-Economics History Blog

Socio-Economics & History Commentary

LaRouchePAC: Italian Explosion Coming Soon!

  • The era of bailouts has come to a close. In this report we review how Spain exposed that the financial system is in fact collapsing at a rate faster than can be dealt with. Now the talk of the town is, before any official announcement of Spain’s promised 100 billion euro rescue: “Does Italy, too, need emergency funds?” .

    Backfire of Spain Bailout Triggers Euro Panic; About To Demand `Global Bailout’? 
    by http://larouchepac.com/
    The instant failure of Saturday’s attempted “step-by-step” bailout of Spain’s banks has triggered a Europe-wide debt panic in which only one policy has a chance of working: Helga Zepp-LaRouche’s Mediterranean development plan beginning with immediate national exits from the fatal euro and imposition of the Glass-Steagall principle on the banking systems.

    The 100-billion-euro proposed bailout was risible against the conservative estimate of 450-500 billion euros of bad debt on Spanish banks’ books; but it was a big enough new debt, piled on mountains of unpayable debt, to send Spain’s sovereign and bank debt reeling. Spain’s 10-year bond yield did not just jump, as on Monday; it skyrocketed, from 6.48% to 6.80%. (The flip side: Swiss government bond rates are now negative for everything up to and including 5-year bonds.) The Wall Street Journal reported Tuesday afternoon, “The euro debt crisis deepened, as a sharp rise in Spanish government bond yields to their highest levels since the inception of the euro fanned speculation that the country might need a bailout of its own, just days after Spain sought a support package for its beleaguered banking system.” The quick deterioration of Spanish government debt, in turn, hit the Spanish banks which are loaded with it. Fitch Ratings downgraded Spain’s biggest banks, Santander (“the world’s biggest bank”) and BBVA, two notches to BBB, not far above junk.

    Spain is in the deadly “Greek” debt spiral: despite the Rajoy government’s 45 billion in cuts and tax increases — equivalent to 4% of GDP — the EC says Spain’s debt/GDP ratio will rise to 6.4% in 2012 and 6.3% in 2013, due to collapsing revenues.

    Italy was also swept in, its 10-year debt rate leaped again, to 6.28%, and the Austrian Finance Minister, Maria Fekter, said Italy may need an EU bailout in the coming months — ritually denounced, of course, by Italian fiat-premier Mario Monti. But suddenly, all the “experts” were talking about the panic of bondholders whose bonds become subordinated to masses of new supranational-institution (bailout) debt.

    This bailout was also the first to not only destroy its intended target, Spain, and a civilian bystander, Italy, but also the bailout funds making it. Spain’s EFSF commitment is obviously gone; that raises Italy’s quota from 18% to 22% and piles 25 billion euros on Italy’s required new debt issuance this year; pushing Italy toward bailout, which will eliminate Italy’s EFSF commitment; and so on.

    Any attempt at a massive bailout by the EU of Spanish and Italian sovereign and bank debt is patently impossible; as Gordon Brown wrote in the NYT less than three weeks ago, with “uncontrolled bank runs across Europe,” “a global bailout of Europe’s banks” is what will be demanded next. Re-enacting Glass-Steagall in the United States will stop it.

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June 14, 2012 Posted by | Economics, GeoPolitics, Social Trends | , , , , , , , , , , , , , , | Comments Off on LaRouchePAC: Italian Explosion Coming Soon!

Mike Rivero: Ron Paul, Rand Paul & COLLAPSE Before The November Election!

June 14, 2012 Posted by | Economics, GeoPolitics, Social Trends | , , , , , , , , , , , , , , , , | Comments Off on Mike Rivero: Ron Paul, Rand Paul & COLLAPSE Before The November Election!

EU Discusses ‘Limiting ATM Withdrawals’ And Imposing Capital Controls!

Global collapse super storm in the summer or fall of 2012?

  • The Euro will collapse! The global economic, financial and monetary collapse will start in the PIIGS, spread to the rest of Europe, UK, Japan ….. and finally America! All fiat currencies will go down the toilet bowl of currency debasement! Got physical gold yet?

    EU discusses ‘limiting ATM withdrawals’! 
    by http://www.irishtimes.com/ 
    European finance officials have discussed limiting the size of withdrawals from ATM machines, imposing border checks and introducing euro zone capital controls as a worst-case scenario should Athens decide to leave the euro.

    EU officials said the ideas are part of a range of contingency plans. They emphasised that the discussions were merely about being prepared for any eventuality rather than planning for something they expect to happen.

    But with increased political uncertainty in Greece following the inconclusive election on May 6th and ahead of a second election on June 17th, there is now an increased need to have contingencies in place, the EU sources said.

    The European Commission said today it was helping with legal advice in discussions of contingency scenarios regarding Greece by the Eurogroup working group.

    “I’ve not said that I’m not aware of any discussions, I’ve said I’m not aware about any plans, which is a slight difference,” Commission spokesman Olivier Bailly told a regular news briefing, when asked about Commission involvement in discussions about the contingencies were Greece to leave the euro.

    “What I said also is that some people are working on scenarios. We are providing information about EU law, as the guardian of the treaty,” he said. The discussions have taken place in conference calls over the past six weeks, as concerns have grown that a radical-left coalition, Syriza, may win the second election, increasing the risk that Greece could renege on its EU-IMF bailout and therefore move closer to abandoning the currency.

    read more!

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June 14, 2012 Posted by | Economics | , , , , , , , , | Comments Off on EU Discusses ‘Limiting ATM Withdrawals’ And Imposing Capital Controls!

The Next Domino! Europe Unprepared as Euro Crisis Deepens!

Illuminists are lining up the dominoes for a collapse of the Eurozone!

  • Europe Unprepared as Euro Crisis Deepens! 
    by Stefan Kaiser, http://www.spiegel.de/ 
    The Next Domino
    The weekend announcement that Spanish banks would be bailed out briefly drove up markets around the world. But optimism was short lived. The euro crisis is rapidly intensifying and Europe is not prepared.

    The Asian markets are something of a canary in the coalmine when it comes to foreseeing how the day will unfold for European and US financial markets. And on Tuesday, that canary was looking woozy indeed.

    After widespread investor optimism on Monday in the wake of the weekend news that Spain would receive up to €100 billion ($125 billion) in emergency aid for its wobbling banks, Tuesday has brought a return to realism. Black stock-exchange numbers have once again nudged back into the red and worries about the survival of the euro zone have returned despite the Spanish bailout.

    The apparent skittishness isn’t surprising. Greek voters go to the polls on Sunday in an election that many believe could determine whether the country remains in the euro zone or is forced out. Potentially more ominously, numbers released on Monday indicate that the Italian economy is in disastrous shape, having shrunk in the first quarter faster than it has in three years. It is the third quarter in a row that the Italian economy, the euro zone’s third largest, has contracted. Many believe that it is merely a question of time before Italy also has to apply for emergency aid from the euro backstop funds.

    Meanwhile, despite official optimism from Madrid — and even from the oft-dour German Finance Minister Wolfgang Schäuble — it is doubtful that €100 billion will be enough to save Spain’s banking industry and put the euro zone back on the road to recovery. For one, recent history has shown just how quickly banks can run into significant trouble should the economic situation rapidly worsen.

    More Oversight for Spain
    For another, it seems unlikely that the Spanish government will undertake the significant reforms necessary to establish lasting banking-sector stability. Thus far, success has been elusive. For far too long, Madrid painted a rosier-than-warranted picture of the country’s banks and made only half-hearted efforts at reform. Prime Minister Mariano Rajoy was far too slow in asking for help from the euro bailout fund.


    Indeed, it is now imperative that the troika — made up of the European Commission, the European Central Bank and the International Monetary Fund — take over control of banking reform efforts in Spain. Rajoy’s fear of outside influence notwithstanding, oversight of Spain must be strengthened. Troika experts must make sure that the bailout money is used wisely and that the banking sector is made more efficient. Such an effort might include closing bank branches and shedding jobs, a task that the government would like to avoid at all costs.

    read more!

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June 14, 2012 Posted by | Economics | , , , , , , , , | Comments Off on The Next Domino! Europe Unprepared as Euro Crisis Deepens!

We Are Within Months of This Crisis Blowing Wide Open!

  • We Are Within Months of This Crisis Blowing Wide Open! 
    by www.kingworldnews.com
    Four-decade veteran John Hathaway told King World News, “we are within months … from this thing blowing wide open.  When that happens, money will look to find whatever it can in order to participate.” The prolific manager of the Tocqueville Gold Fund also said, “I think at that stage you are going to see gold go ballistic because it will be an admission of failure on the part of policymakers.”  Here is what Hathaway had to say about the ongoing crisis:  “All of the political leaders and policymakers are frantically trying to put their fingers in the dyke.  The euro is on its last legs.  It’s very late in the game to expect anything like the coordinated action that would be necessary to restore confidence.  People are moving to the exits.”
    ….
    “You’ve got slow motion bank runs taking place.  People who see this and understand it are moving into gold.  You’ve got rot in the periphery (of Europe) that’s spreading to the core.  The core is Germany and ultimately the United States. The idea that somehow the dollar is protected by some firewall is ridiculous.  They are (all) basically fiat currencies, and I don’t think this stops with the euro.  This attack is ultimately going to affect the dollar, and it will eventually be reflected in the dollar/gold price.

    They (central planners) are buying time right now with the euro.  It’s clear to me that policymakers are resorting to prescriptions in order to deal with economic sluggishness, but they are using very shop-worn Keynesian monetary stimulus applications. They are so mentally bankrupt in their thought process, that it’s clear to me they don’t understand what’s happening….

    read more!

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June 14, 2012 Posted by | Economics | , , , , , , , , , , , , , | Comments Off on We Are Within Months of This Crisis Blowing Wide Open!

We Will Now See Extreme Turbulence in Global Markets!

  • We Will Now See Extreme Turbulence in Global Markets! 
    by www.kingworldnews.com
    Today top Citibank analyst, Tom Fitzpatrick, warned that despite the initial enthusiasm surrounding the Spanish bank bailout, “this is yet another over-promise, under-deliver dynamic coming out of Europe.”  Fitzpatrick, a 28 year veteran and top analyst at Citibank, which has $1.3 trillion in assets, also said, “we are moving to the point where we’re no longer going to be able to see the stabilization on false promises and under-deliveries.”  He also remained bullish on gold and let KWN readers know when the attention will shift to the problems in the US.  But first, here is what Fitzpatrick had to say about the ongoing crisis:  “Well, obviously this past weekend we had the announcement that we were going to see some type of bailout package for Spain.  But I think as we move through this week there is a certain amount of disillusionment as people look at the structure of it.”
    ….
    “At the end of the day you are getting a sovereign nation that people are already concerned about in terms of their borrowings.  Now Spain is looking to borrow even more money to give to the banks.  You are not getting a European type of solution.  So we saw a lot of euphoria on Sunday night and early Monday, but that seems to have dissipated. We just had the announcement that Moody’s is downgrading Spain, so equity markets came off late in the day.  At the same time we’ve seen the yields in Spain and Italy go straight up again, pushing right back towards the trend highs….

    read more!

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June 14, 2012 Posted by | Economics | , , , , , , , , , , | Comments Off on We Will Now See Extreme Turbulence in Global Markets!

Lauren Lyster and Heidi Moore Infiltrate JP Morgan’s Mafia Hearings in Washington DC!

June 14, 2012 Posted by | Economics, GeoPolitics | , , , | Comments Off on Lauren Lyster and Heidi Moore Infiltrate JP Morgan’s Mafia Hearings in Washington DC!

Jeff Steinberg: West Seeks To Sabotage P5+1, Iran Talks!

June 14, 2012 Posted by | GeoPolitics | , , , , , , , | Comments Off on Jeff Steinberg: West Seeks To Sabotage P5+1, Iran Talks!

Webster Tarpley: Russia will confront Any US-Led Attack on Syria!

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Jesse Ventura: TSA is A Pedophile Playground !

June 14, 2012 Posted by | GeoPolitics, Social Trends | , , , , | 1 Comment

Transhumanism: The New Dark Age!

June 14, 2012 Posted by | EndTimes, Social Trends | , , , , , , | Comments Off on Transhumanism: The New Dark Age!

US Military Reins in White House Warmongers!

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‘Syria in Full-Scale Civil War’ – UN Peacekeepers!

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Whistleblower: Obama is Superman with Blood on His Hands!

June 14, 2012 Posted by | GeoPolitics | , , , , , , | Comments Off on Whistleblower: Obama is Superman with Blood on His Hands!