We The Sheeplez- The Coming Economic Collapse.."A Nation Of Sheep Ruled By Wolves" Thomas Jefferson

This Is Europe's Scariest Chart

Surging Greek and Portuguese bond yields? Plunging Italian bank stocks? The projected GDP of the Eurozone? In the grand scheme of things, while certainly disturbing, none of these data points actually tell us much about the secular shift within European society, and certainly are nothing that couldn't be fixed if the ECB were to gamble with hyperinflation and print an inordinate amount of fiat units diluting the capital base even further. No: the one chart that truly captures the latent fear behind the scenes in Europe is that showing youth unemployment in the continent's troubled countries (and frankly everywhere else). Because the last thing Europe needs is a discontented, disenfranchised, and devoid of hope youth roving the streets with nothing to do, easily susceptible to extremist and xenophobic tendencies: after all, it must be "someone's" fault that there are no job opportunities for anyone. Below we present the youth (16-24) unemployment in three select European countries (and the general Eurozone as a reference point). Some may be surprised to learn that while Portugal, and Greece, are quite bad, at 30.7% and 46.6% respectively, it is Spain where the youth unemployment pain is most acute: at 51.4%, more than half of the youth eligible for work does not have a job! Because the real question is if there is no hope for tomorrow, what is the opportunity cost of doing something stupid and quite irrational today?

Europe Has Worst Day In Six Weeks

The divergence between credit and equity marksts that we noted into the European close on Friday closed and markets sold off significantly. European sovereigns especially were weak with our GDP-weighted Eurozone credit risk index rising the most in six weeks. High beta assets underperformed (as one would expect obviously) as what goes up, comes down quicker. Stocks, Crossover (high-yield) credit, and subordinated financials were dramatically wider. Senior financials and investment grade credit modestly outperformed their peers but also saw one of the largest decompressions in over a month (+5.5bps today alone in the latter) as indices widen back towards their fair-values. The 'small moderation' of the last few weeks has given way once again to the reality of the Knightian uncertainty Europeans face as obviously Portugal heads squarely into the cross-hairs of real-money accounts looking to derisk (10Y Portugal bond spreads +224bps) and differentiate local vs non-local law bonds. While EURUSD hovered either side of 1.31, it was JPY strength that drove derisking pressure (implicitly carry unwinds) as JPYUSD rose 0.5% on the day (back to 10/31 intervention levels). EURCHF also hit a four-month low. Treasuries and Bunds moved in sync largely with Treasuries rallying hard (30Y <3% once again) and curves flattening rapidly. Commodities bounced off early Europe lows, rallied into the European close and are now giving back some of those gains (as the USD starts to rally post Europe). Oil and Gold are in sync with USD strength as Silver and Copper underperform - though all are down from Friday's close.

As Europe Goes (Deep In Recession), So Does Half The World's Trade

Following the Fed's somewhat downbeat perspective on growth, confidence in investors' minds that the US can decouple has been temporarily jilted back to reality. It is of course no surprise and as the World Bank points out half of the world's approximately $15 trillion trade in goods and services involves Europe. So the next time some talking head uses the word decoupling (ignoring 8.5 sigma Dallas Fed prints for the statistical folly that they are), perhaps pointing them to the facts of explicit (US-Europe) and implicit (Europe-Asia-US) trade flow impact of a deepening European recession/depression will reign in their exuberance.

Greek Crisis Close to Climax

from GoldMoney.com:
Downwards plot line over Europe

Markets have been hit by another bout of selling this morning as Europe prepares for what could be a crunch week in terms of the continent’s debt crisis. As reported at The Telegraph, Greece’s prime minister Lucas Papademos warned last night that his country faced “the spectre of bankruptcy and all the dire consequences that entails”, while the weekend also saw calls from German economy minister Philipp Rösler for stronger “monitoring” of the Greek government’s finances. Unsurprisingly, Greece’s Finance Minister has rejected this, describing it as undermining his nation’s “national identity and dignity”.
European Union heads of government are due to meet in Brussels later today for more discussions on a new fiscal compact for the eurozone. Such a treaty will not be signed by participants until March, but is expected to empower the European Court of Justice to “verify the transposition of the balanced budget rule at national level.” This comes on a day when credit default swaps on Portuguese government debt have hit a record high, while the yield on that country’s 10-year government bond has hit 14.4%.
Read More @ GoldMoney.com

Europe’s Losing Game

by Stephen Lendman:

Partnering with America has consequences. Europe’s paying by shooting itself in the foot.
On January 23, EU representative for foreign and security affairs, Catherine Ashton, broke the news. She announced an “unprecedented” anti-Iranian oil embargo, effective July 1 and immediately from new contracts.
The ban covers crude oil, petroleum and petrochemical products, oil related business, equipment and technology, selling Tehran refined products, new investments, and dealing with its central bank.
Europe buys up to 20% of its oil from Iran. Ending it means greater strain on economically stressed countries. Making up lost volume won’t be easy. Putting lipstick on this pig doesn’t wash.
Read More @ SJLendman.Blogspot.com

The Fed’s Inflation Target; QE3, QE4, QE5, Etc. Are In The Queue

by David Knox Barker, GoldSeek.com:

The U.S. Federal Reserve policy announcement on Tuesday, January 25, 2012 marks an important moment in monetary history. The forecast by a majority of the members of the FOMC for interest rates to hug zero until late 2014 was of interest and points to the FOMC conviction extended global economic stagnation at best, reflecting the long wave forces at work in the global economy. However, more importantly, it was the first time that the U.S. Federal Reserve has clarified its interpretation of its mandate for price stability, i.e. the target for inflation.
This announcement is preparing global markets for the primetime monetary super bowl of inflation vs. deflation, aka U.S. Federal Reserve quantitative easing (QE) driven inflation efforts vs. a Kondratieff long wave debt deflation depression. Since bad debt is the problem in a long wave debt deflation, the Fed plans to buy all the bad debt required to hit their inflation target and put it in on their balance sheet until it matures and repaid or is written off. The Fed only has two mandates; maximum employment and stable prices. These objectives are a bit sketchy and have not been specific targets historically, so an actual inflation target sends a clear message.
Read More @ GoldSeek.com

Israel Warns Time is Running Out Before it Launches Strike on Iran

Growing body of opinion suggests that Iranian response to an attack would be muted
by Kim Sengupta, Independent.co.uk:

Economic sanctions by the European Union and the United States can only be allowed a limited time period to prevent Iran from attempting to acquire a nuclear arsenal before a military strike must be contemplated, Israeli leaders have declared.
The tough public stance from Tel Aviv comes amid conflicting reports on the readiness of the Israeli military establishment to carry out an attack on Iran.
One account claims that Israel’s security agencies have concluded that the turmoil predicted from a strike, and the likely response from Tehran, has been widely exaggerated. However, a senior British official told The Independent that the hierarchy of the intelligence service, Mossad, and the armed forces continued to have deep trepidation about conflict in the region.
Read More @ Independent.co.uk

Green Light to WW3? ‘US Needs Human Face for Iran Invasion’

State of Denial in Coming War Catastrophe

from Greg Hunter’s USAWatchdog.com:

The world economy is in the tank, and the Federal Reserve’s decision to extend its zero interest rate policy to, at least, the end of 2014 proves it. What will happen if the fragile world economy also has to deal with a war with Iran? That should have been the big headline coming out of the World Economic Forum in Davos, Switzerland, but what was reported was concern over slow or no growth in the world. All the signs are that the West is careening towards war with Iran, and there is not a peep about it from world leaders. Are they in a state of denial in a coming war catastrophe? I say yes.
One of the first shots fired by the EU was in the form of increased sanctions to boycott Iranian oil in about five months. The second shot looks like it will be fired by the Iranians who won’t wait for sanctions to kick in and will move to cut off oil exports of around 600,000 barrels a day to the Eurozone. (Click here for more on this story.) The Iranians have not yet cut off the oil. MSNBC reported yesterday, “The Islamic Republic declared itself optimistic about a visit by U.N. nuclear experts that began on Sunday but also warned the inspectors to be “professional” or see Tehran reducing cooperation with the world body on atomic matters. The International Atomic Energy Agency (IAEA) inspection delegation will seek to advance efforts to resolve a row about nuclear work which Iran says is for making electricity but the West suspects is aimed at seeking a nuclear weapon.” (Click here to read the latest CNBC story.)
Read More @ USAWatchdog.com

MF Global: A Despicable State of Affairs

Question to the Bank of Japan - How's that intervention been workin' out for ya?

Trader Dan at Trader Dan's Market Views - 9 minutes ago

Talk about a collosal waste of money... Some of the more industrious among us might want to tally up the total sum of money used to shove the Yen lower on the foreign exchange markets by the Bank of Japan as well as the ECB and the Fed. As stated many times, intervention can NEVER reverse a market trend; it can only postpone it. As a point of reference, the continued strength in the Yen is tending to keep Yen-gold on the defensive, in contrast to gold priced in terms of most of the other world major currencies.

Gold firm in spite of Stronger Dollar

Trader Dan at Trader Dan's Market Views - 56 minutes ago

Gold is coming under a bit of selling pressure in New York after opening higher in Asia alongside of silver last evening. Both markets then saw selling originating in the form of both profit taking and new short positions (from top pickers) after traders' attentions turned back to the sovereign debt woes in Euroland, particularly Greece. Also there was a bit of news that China was not going to be in a hurry to loosen the monetary strings as quickly as some were anticipating. Either way, it led to a reversal of the recent risk trades in favor of the safe havens once again with the ... more »

Greeks Reject German Plan for EU Budget Commissioner
http://www.bbc.co.uk/news/world-europe-16777322

These Major U.S. Companies On Verge Of Collapse
http://www.munknee.com/2012/01/these-major-u-s-companies-on-verge-of-collapse/

NJ Assembly Committee To Consider Ammo Ban In The Name Of Police Safety
http://www.ammoland.com/2012/01/27/nj-assembly-committee-to-consider-ammo-ban...

2011 GDP: 1.7%
http://www.businessinsider.com/2011-gdp-2012-1

Must Watch...

Ron Paul and the Pink Slip that Could Decide the Election Thanks David
http://www.reuters.com/video/2012/01/26/ron-paul-and-the-pink-slip-that-could...

Mystery Illness Leaves Upstate N.Y. Teens With Twitches, Spasms And No Answers
http://newyork.cbslocal.com/2012/01/27/mystery-illness-leaves-teens-with-twit...

Lehrman To Romney, Santorum: Join the Alliance for a Sound Dollar

2012 Is the Year for a Gold Plank in GOP Platform
by Lewis Lehrman, NYSun.com:

At a recent Presidential debate, the Republican candidates discussed a new Gold Commission much like the one to which President Reagan appointed Ron Paul and me in 1981. When asked, Jim Grant and I agreed to serve as co-chairmen of a new gold commission — proposed by Newt Gingrich if he were elected. Just weeks prior, Senator Paul was reported by the Weekly Standard as having called for just such a commission. We said at the time that we would serve on a gold commission established by any president seriously interested in monetary and Federal Reserve reform.
The next gold commission, however, must be different from the Reagan Gold Commission, the majority of which endorsed the managed paper dollar and floating exchange rates. As the two dissenting minority members of the 1981 commission Ron Paul and I filed a minority report. We called for the restoration of the gold standard — that is, a stable dollar defined by law as a certain weight of gold. The minority report, entitled “The Case for Gold,” was later republished in book form.
Read More @ NYSun.com

Gold Procrastinators: The Endless Agony

by Gary North, LewRockwell.com:

It happened again on Wednesday, January 25. Gold shot up by $50.
Across the nation, a band of perpetual procrastinators thought to themselves: “I knew! I knew! Why didn’t I buy?”
This is the never-ending cry of the perpetual gold procrastinator, year after year. “I knew! I knew!”
It is immediately followed with: “I’ve learned my lesson this time! The next time gold’s price falls, I’ll buy.”
No, he won’t.
Why not? Because, when gold falls, he’ll say this: “The decline is just getting started. It will fall even more. I’ll wait.”
He will wait patiently until gold’s fall reverses. He will then say to himself: “This is temporary. It will fall back.” Then comes the explosive move upward. Then he will say: “I knew! I knew! The next time gold’s price falls, I will buy. I mean it this time. I really mean it.”
Year after year after year, this is the pattern.
Read More @ LewRockwell.com

The Last Gasp

I am speaking of the intermediate term move in paper assets versus hard assets, affectionately referred to as “Gold versus paper” around here. Paperbugs had their moment in the sun these past few months and I hope they enjoyed it. The reversal in fortunes has begun.This reversal of fortunes is on a relative basis of course, as the sea of electronic money created out of thin air in the last few months is enough to make Rudolf von Havenstein blush. When the currency units around the globe are dissolving in front of our collective (and dismayed) eyes, relative wealth becomes a more meaningful concept than to contemplate what a quadrillion means.
Bernanke decided to help the US Dollar along last week by extending a monetary policy of insanity, approved by Keynesian clowns everywhere, namely that of further destroying the value of savings and the average person’s ability to keep up with the costs of living. In the absence of reason or checks on the power of centralized monetary authorities, debasement of currency can always be achieved in a paper monetary system. And a Gold standard simply means that the Gold standard can be suspended in times of trouble. Easy money, baby. It’s almost as old as the concept of money itself.
Read More @ GoldSeek.com