The ECB Has Opened Pandora’s Box
The European Central Bank, in a very misguided attempt to protect itself, has now opened Pandora’s Box. I doubt if they even realize what they have done; but they will, most assuredly they will. The consequences of their horrendous mistake will soon be upon them as institutions not coerced or forced into buying European sovereign debt will be leaving the playing field en masse as the realization dawns upon investors of just what has taken place. You cannot fool all of the people all of the time and the people that manage money for a living are not a forgiving group when governments try to supersede their lawful rights.The Race To Debase In All Its Glory
Lest
anyone forget what the real story is, here is a reminder. Thank you
neo-Keynesian economics for making a mockery of non-scientific notation.Iran Stops Oil Sales To British, French Companies
The geopolitical game theory escalates once again, as Iran, which four days ago halted exports to peripheral European countries took it up a notch, and has as of this morning halted sales to British and French companies. Reuters reports: "Iran has stopped selling crude to British and French companies, the oil ministry said on Sunday, in a retaliatory measure against fresh EU sanctions on the Islamic state's lifeblood, oil. "Exporting crude to British and French companies has been stopped ... we will sell our oil to new customers," spokesman Alireza Nikzad was quoted as saying by the ministry of petroleum website." Here is the actual statement from MOP.ir. As a reminder, on January 27 we said how Iran was about to "Turn Embargo Tables: To Pass Law Halting All Crude Exports To Europe." And so it has - now, the relentless media campaign about China isolating Iran in response to American demands has to be respun: recall that in early February Reuters told us that "China will halve its crude oil imports from Iran in March compared to average monthly purchases a year ago, as a dispute over payments and prices stretches into a third month, oil industry sources involved in the deals said on Monday." Apparently that may not have been the case, as there is no way Iran would have escalated as far as it has unless it had replacement buyers of one third of its crude. Incidentally, this is just as we predicted in "A Very Different Take On The "Iran Barters Gold For Food" Story." The end result of this senseless gambit by the west: Europe has less oil, the Saudi fable that it has endless excess suplies is about the be seriously tested, China has just expanded a key crude supply route, and Russia is grinning through it all as Brent prices are about to spike. Iran didn't invent chess for nothing.Bill Gross Gets It
Guest Post: Mental Contortions Of A Printing Machine Operator
All the pseudo-scientific yada-yada on economic theory are just hollow bones thrown to journalists and pundits to have something to “chew” on and write about. The only thing that matters is the monetization of more and more government debt, and how to sell it to the public. Paul Krugman would argue that despite all the “quantitative easing” inflation has not really picked up. At zero percent interest rates, money has no preference – there is no opportunity cost of just “lying around” without interest. Investing money for 4 years for 0.15% return is not “riskless return” – it’s “return-less risk”. Perversely, the Fed has created a situation where raising interest rates would probably lead to inflation. It is boxed into ZIRP (zero interest rate policy) for infinity. Things will get serious once the Fed adopts a policy called N-GDP targeting. Instead of inflation, the Fed will try to “target” nominal GDP. If real GDP growth is zero, the nominal GDP growth will be made up entirely of inflation. Debt is a nominal unit, and it is supported by nominal GDP. In order to keep the ratio between GDP and debt halfway bearable, GDP must be inflated. It is a tax on everybody holding dollars, since the value of those will decline. Meanwhile, the Japanese are resorting to stealth interventions to break the Yen’s strength. Currency wars have gone from “cold” to “hot”. The Fed’s printing of dollars is forcing other central banks to purchase them and selling their own currency in the hope of stemming their own currency’s rise. This makes them involuntary buyers of Treasury bills and bonds, making it easier for the US government to finance its deficit.
How To Play: Own Real Assets
Admin at Jim Rogers Blog - 48 minutes ago
My way of playing this is to own real assets like commodities. You now have
the Bank of England, the Bank of Japan, the Federal Reserve printing money.
The way to protect yourself at a time like this is to own assets. - *in CNBC
*
*Jim Rogers is an author, financial commentator and successful
international investor. He has been frequently featured in Time, The New
York Times, Barron’s, Forbes, Fortune, The Wall Street Journal, The
Financial Times and is a regular guest on Bloomberg and CNBC.*
Japanese Economy: They Have Deleveraged And The Household Sector Is In Good Shape
Admin at Marc Faber Blog - 54 minutes ago
I think the Japanese economy isn't in such a bad shape. They have
deleveraged and the household sector is in pretty good shape. - *in CNBC*
Related, iShares MSCI Japan Index ETF (EWJ)
*Marc Faber is an international investor known for his uncanny predictions
of the stock market and futures markets around the world.*
Nutrition Nazis
noreply@blogger.com (Patrice Lewis) at Rural Revolution - 3 hours ago
Here's my latest WND column called Nutrition Nazis.
If you read the comments which follow, it appears I annoyed more than a few
people. (There was a typo in the original title which has since been
corrected -- you'll see references in the comments).
Since sending in the column on Friday, there have been more Nutrition Nazis
at work, notably this article.
This example, as my husband noted, is ugly. "They tell you the bag lunch
isn't good enough," he noted. "They make your kids eat their slop and then
send you a bill." Yep, Nutrition Nazis.
And to those who object to the use of the ... more »
Insight: Japan slowly wakes up to doomsday debt risk
Eric De Groot at Eric De Groot - 4 hours ago
Japan should have awoke to their doomsday debt risk when the Yen (FXY ETF) traded above 97 in 2008. The sequence of failure will be as follows: (1) Europe, (2) Japan, and finally (3) the United States. Once the United States becomes the last man standing, it's will receive full attention from the wolf pack (global capital). Cycle dates and statistically significant short-side concentration... [[ This is a content summary only. Visit my website for full links, other content, and more! ]]
On The Greek "Glitch", Systemic Instability And Skating On Water
When the prospect of a nation being unable to roll over a paltry few Euros of maturing debt is enough to galvanise the entire financial world into monetary excess exceeding anything imaginable as recently as late 2007, one must conclude that the markets are skating on the thinnest ice in their entire existence. But skate they are.Germany, Greece Quietly Prepare For "Plan D"
For several weeks now we have been warning that while the conventional wisdom is that Europe will never let Greece slide into default, Germany has been quietly preparing for just that. This culminated on Friday when the schism between Merkel, who is of the persuasion that Greece should remain in the Eurozone, and her Finmin, Wolfgang "Dr. Strangle Schauble" Schauble, who isn't, made Goldman Sachs itself observe that there is: "Growing dissent between Chancellor Merkel and finance minister Schäuble regarding Greece." We now learn, courtesy of the Telegraph's Bruno Waterfield, that Germany is far deeper in Greece insolvency preparations than conventional wisdom thought possible (if not Zero Hedge, where we have been actively warning for over two weeks that Germany is perfectly eager and ready to roll the dice on a Greek default). Yet it is not only Germany that is getting ready for the inevitable. So is Greece.Shadow Stats John Williams on the End of the Dollar
02/19/2012 - 11:07
The
German finance ministry is actively pushing for Greece to declare
itself bankrupt and to agree a “haircut” on the bulk of its debts held
by banks, a move that would be classed as a default by financial
markets.
Today
Michael Pento told King World News that central banks are in the
process of destroying their paper currencies. Pento, who founded Pento
Portfolio Strategies, also said it is incredibly important for investors
globally to protects themselves in this environment. Pento had this to
say about the situation: “This is the age of a globalized phenomenon,
where central bankers around the world view the market forces of
deflation as public enemy number one and inflation as the panacea for
anemic growth.”
John
Williams, of Shadowstats, discusses some extraordinary prices for gold
and silver as well as giving an update on his hyperinflation watch.
Williams also says that there is no recovery in the economy and
inflation is picking up steam. Here is what Williams had to say about
the situation: “Hyperinflation Watch: The upside pressure on oil
prices, at the moment, largely is from escalating political tensions in
the Middle East, not from significant new weakness in the U.S. dollar.
Risk remains high, though, of a sharp sell-off in the U.S. dollar and
dumping of dollar-denominated paper assets, particularly as the euro
area crises come to head and the damages are absorbed, in due course, by
the global financial system.”
History
is replete with the carcasses of failed currencies destroyed through
misguided intentional debasement by governments looking for an easy
escape from piling up too much debt. James Rickards, author of the
recent bestseller 
In
the past, insurance companies and pension funds have been keen to
advertise the benefit of compounding arithmetic for savings. Over the
last 30 or 40 years the rate has been lifted by inflation, but to
understand the cost inflation brings you have to consider the whole
savings cycle: not just the accumulation stage, but also annuity values
in retirement. Furthermore, the historical experience of a typical
working life should be compared with a theoretical sound-money
alternative.
Click Here to Listen to the Podcast
Popular
technician Frank Barbera joins Jim on the program this week. Frank sees
gold stocks poised for a strong advance and the dollar ready to roll
over and move significantly lower. In addition, Ryan Puplava joins John
with his market update, and Rob Bernard joins Jim for the Fixed Income
Report.
When
gold was undergoing its latest (and certainly not greatest)
near-parabolic move last year, there were those pundits consistently
calling for comparisons to 1980, and the subsequent gold crash. Yet even
a simplistic analysis indicates that while in the 1980s gold was a
hedge to runaway inflation, in the current deflationary regime, it is a
hedge to central planner stupidity that will result as a response to
runaway deflation. In other words, it is a hedge to what happens when
the trillions in central bank reserves (at last check approaching 30% of
world GDP). There is much more, and we have explained the nuances
extensively previously, but for those who are only now contemplating the
topic of gold for the first time, the following brief summary from 
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