Banks around the world are preparing for the possible collapse of the euro as fears of the European debt crisis increase.
from PressTV.ir:
Several banks are even installing systems capable of coping with trading in old European currencies.
Meanwhile finance firms, corporations, and different governments have also turned to plans that aim at preparing them for harsh times.
Regulators have asked banks in the US and UK to provide updates on readiness levels in case of a possible euro collapse.
Some corporate firms have also started transferring their cash on a daily basis out of European countries, including debt-ridden Greece instead of once every two weeks.
Europe has for months grappled with an economic and financial crisis. Insolvency now threatens in-debt countries such as Greece, Portugal, Italy, Ireland and Spain.
Since its formation, the European Union had been a haven for those seeking refuge from war, persecution and poverty in other parts of the world.
Read More @ PressTV.ir
from PressTV.ir:
Several banks are even installing systems capable of coping with trading in old European currencies.
Meanwhile finance firms, corporations, and different governments have also turned to plans that aim at preparing them for harsh times.
Regulators have asked banks in the US and UK to provide updates on readiness levels in case of a possible euro collapse.
Some corporate firms have also started transferring their cash on a daily basis out of European countries, including debt-ridden Greece instead of once every two weeks.
Europe has for months grappled with an economic and financial crisis. Insolvency now threatens in-debt countries such as Greece, Portugal, Italy, Ireland and Spain.
Since its formation, the European Union had been a haven for those seeking refuge from war, persecution and poverty in other parts of the world.
Read More @ PressTV.ir
On Europe, Inflation, And Gold.
In an interesting analogy to the 'tragedy of the commons',
Philipp Bagus, of Madrid's Universidad Rey Juan Carlos, explains how
European governments have 'outfished' their respective pools of
spending/borrowing capabilities as the enforcements of the Maastricht
Treaty were entirely impotent. After addressing his perspective on how
Europe got here, he discusses, with Alasdair Macleod of the GoldMoney Foundation,
possible solutions to (and consequences of) the euro crisis. Bagus
points out that there are basically three different ways to go about
it. Firstly, governments could make drastic cuts in
public spending and privatise public assets in order to balance their
budgets. However, there will be – and is – strong political resistance
to such proposals. Secondly, the eurozone could disintegrate,
driven by a reluctance of German citizens to pay for other countries’
expenditures. And lastly, central banks and governments could decide
to print their way out of the crisis, leading to high
inflation. The thought-provoking professor provides some interesting
color on the dichotomy between the official opinion in Europe and the
sentiment on the street. Amid the ongoing expansion of the money supply
and persistent deficits, Bagus can’t see the dollar gaining in value
over the medium to long term. He also says that ECB policies are a lot more pragmatic than the ones undertaken by the US Federal Reserve. Talking about sound money, Bagus explains different ways to go about its introduction. One way would be to back all the money in existence by gold, adjusting the price of gold accordingly.
Will gold deliver another glittering year in 2012? … This year saw dizzying gains and two big crashes. So does gold still deserve its ‘safe haven’ image, or is it just another volatile and risky asset? Is it a wise decision to buy gold at present? The asset – famously given as one of the gifts of the magi – is seen as the ultimate “safe haven” investment in times of political instability, economic turmoil or rising inflation. Given world events this year – the Arab Spring, financial crisis in the eurozone, economic stagnation in the West, and the inflationary effects of central banks printing money to keep credit markets liquid – it is not surprising that the price of gold has risen again, after a decade of strong gains. – UK Telegraph
Dominant Social Theme: Gold is in a bubble. Beware.
Free-Market Analysis: Every once in a while, and with increasing frequency, major media presents a commentary wondering “how high gold can go” and whether the yellow metal is now in an official bubble. Every once in a while, we point out that gold is being driven by market manipulations, not by the free-market.
Read More @ TheDailyBell.com
Jim Rogers 2012 Outlook: Pessimism With Scattered Crises
Typically limited to 90 second soundbite-gathering exercises on mainstream financial media, Australia's Finance News Network
gives Jim Rogers the chance to discuss much more broadly his outlook
not just for 2012 but beyond. Surprised by the false optimism he sees
globally, he is not concerned that consensus is too bearish, and worries
that the political pressure and central banker un-independence
will inevitably lead to more and more money printing. We have discussed
the kick-the-can thesis extensively but Rogers moves from the
desire-to-print to the consequences while covering Ron Paul and the US
election, the myth of government job creation, his potentially controversial view of the Euro (and separately the Euro-zone)
- all the while reminding us that he expects at least another lost
decade for the US and Europe as Japan ebbs ever lower. With a view to
both his geographical location and his investments, the global commodity
bull remains optimistic that a Chinese slowdown will not be the end of
the Asian economy (as we see in Western economies) but is broadly short equities around the world while urging investors to own real assets.
Summing up, Rogers notes "...the problems are going to continue to get
worse until somebody solves the basic underlying problem of too much
spending and too much debt... [governments and central bankers] are not going to do anything until there’s a serious crisis or semi-crisis."Hold On Tight: European Bond Issuance In January Is About To Get Very Bumpy
While someone continues to guietly push the EUR offer ever higher in the quiet holiday session, the reality is that with only 5 days to go in 2011, the holiday for Europe is ending, and "the pain"TM it about to be unleashed. All 740 billion worth of it. Because while Japan is monetizing its deficit (and having to issue more debt than it collects in taxes), and America is hot on its heels (as a reminder the US also issues roughly one dollar of debt for each dollar in taxes collected), Europe is still unsure whether it will monetize explicitly (that said, we did clear up that little bit of confusion over implicit monetization, with the ECB's balance sheet having exploded by €500 billion since June, or more than all of QE2). Unfortunately, as the following analysis from UBS indicates, it won't have much of a choice. Here are Europe's numbers: €82 billion in gross debt issuance in January, €234 billion in gross debt issuance in Q1, €740 billion in gross debt issuance in 2012. And then it really picks up because what is largley ignored in such "roll" analyses are the hundreds of billions in debt that financials (i.e., banks) will also have to roll in 2012. In other words, the biggest risk for 2012, in our humble opinion, is that the global repo perpetual ponzi engine (where every primary dealer buys sovereign debt than promptly repos it back to its respective central bank, and courtesy of Prime Broker conduits is allowed to do so without ever encumbering its balance sheet - explained in detail here) is about to choke.
Globalization, The Decade Ahead, And Asymmetric Returns
It
is not unusual for us to note the Knightian uncertainty that lies
ahead of us (the unknown unknowns) and question the nth-decimal-place
accuracy of VaR-based risk budgeting when the next long-only strategist
suggests 90% allocation to high-dividend-US-Equities. In a quick and
thought-provoking Q&A from the Swiss Private Bank Pictet, they see the world in a similarly non-normal manner and focus in one case on the growing tension that globalization has created between winners and losers.
As the crisis of confidence spreads from asset class to asset class
and from sovereign to financial entity to macro-economy and back in its
viciously circular manner, the realization that forecasts are useless when judged in the linear normal bias
that investors have carried with them for decades, must bias current
and future investment decisions to more asymmetric or 'hedged'
perspectives. With the veil of financial complexity (and
implicit opacity) being taken down brick-by-brick (by us as well as many
others), we suspect the credit creation process and project-financing
in general will shift from a game-theoretically optimal 'one-in-all-in', to a more nuanced 'if-you-don't-know-who-the-sucker-is-at-the-table-it's-you!' view of investing
- especially given the balance between indefinitely long low real rates
and the insatiable need for yield - leaving the cost of funding
indefinitely floored at a much higher premium than in the past.Bull Markets, Buying Opportunities, and Gold
12/26/2011 - 10:48
12/26/2011 - 14:39
from Reuters.com:
(Reuters)
– The head of the International Monetary Fund said the world economy
was in danger and urged Europeans to speak with one voice on a debt
crisis that has rattled the global financial system.
In Nigeria last week, IMF Christine Lagarde said the IMF’s 4 percent growth forecast for the world economy in 2012 could be revised downward, but gave no new figure.
“The world economy is in a dangerous situation,” she told France’s Journal du Dimanche in an interview published on Sunday.
The debt crisis, which continues into 2012 after a European Union summit on December 9 only temporarily calmed markets, “is a crisis of confidence in public debt and in the solidity of the financial system,” she said.
European leaders drafted a new treaty for deeper economic integration in the euro zone, but it is not certain that the accord will stem the debt crisis, which began in Greece in 2009, and now threatens France and even economic powerhouse Germany.
“The December 9 summit wasn’t detailed enough on financial terms and too complicated on fundamental principles,” said Lagarde.
Read More @ Reuters.com
You Decide... In Nigeria last week, IMF Christine Lagarde said the IMF’s 4 percent growth forecast for the world economy in 2012 could be revised downward, but gave no new figure.
“The world economy is in a dangerous situation,” she told France’s Journal du Dimanche in an interview published on Sunday.
The debt crisis, which continues into 2012 after a European Union summit on December 9 only temporarily calmed markets, “is a crisis of confidence in public debt and in the solidity of the financial system,” she said.
European leaders drafted a new treaty for deeper economic integration in the euro zone, but it is not certain that the accord will stem the debt crisis, which began in Greece in 2009, and now threatens France and even economic powerhouse Germany.
“The December 9 summit wasn’t detailed enough on financial terms and too complicated on fundamental principles,” said Lagarde.
Read More @ Reuters.com
Preparing to Attack Iran with Nuclear Weapons: “No Option can be taken off the Table.”
by Michel Chossudovsky, GlobalResearch.ca:
“When a US sponsored nuclear war becomes an “instrument of peace”, condoned and accepted by the World’s institutions and the highest authority, including the United Nations, there is no turning back: human society has indelibly been precipitated headlong onto the path of self-destruction.” (Towards a World War III Scenario, Global Research, May 2011)
The World is at a Dangerous Crossroads. America’s is on a War Path.
World War III is no longer an abstract concept
The US and its allies are preparing to launch a nuclear war directed against Iran with devastating consequences.
This military adventure in the real sense of the word threatens the future of humanity.
The Pentagon’s global military design is one of world conquest.
The military deployment of US-NATO forces is occurring in several regions of the world simultaneously.
War pretexts and “justifications” abound. Iran is heralded as a threat to Israel and the World.
The war on Iran has been on the drawing board of the Pentagon for more than eight years. In recent developments, a renewed set of threats and accusations directed against Tehran have been launched.
A “war of stealth” has already commenced. Mossad intelligence operatives are on the ground. Covert paramilitary formations are being launched inside Iran, CIA drones are being deployed.
Read More @ GlobalResearch.ca
“When a US sponsored nuclear war becomes an “instrument of peace”, condoned and accepted by the World’s institutions and the highest authority, including the United Nations, there is no turning back: human society has indelibly been precipitated headlong onto the path of self-destruction.” (Towards a World War III Scenario, Global Research, May 2011)
The World is at a Dangerous Crossroads. America’s is on a War Path.
World War III is no longer an abstract concept
The US and its allies are preparing to launch a nuclear war directed against Iran with devastating consequences.
This military adventure in the real sense of the word threatens the future of humanity.
The Pentagon’s global military design is one of world conquest.
The military deployment of US-NATO forces is occurring in several regions of the world simultaneously.
War pretexts and “justifications” abound. Iran is heralded as a threat to Israel and the World.
The war on Iran has been on the drawing board of the Pentagon for more than eight years. In recent developments, a renewed set of threats and accusations directed against Tehran have been launched.
A “war of stealth” has already commenced. Mossad intelligence operatives are on the ground. Covert paramilitary formations are being launched inside Iran, CIA drones are being deployed.
Read More @ GlobalResearch.ca
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