The gEUR.QQ: "The Only Winners Are Foreign Banks"

In a brief though detailed clip, Stratfor's VP Peter Zeihan discusses the risk of contagion from Greece and the 'creative' - if not self-centered - suggestions for a solution to these problems. Earlier in the week we described Deutsche's suggestion of a dual currency - the GEURO - and that is where Zeihan focuses, noting that "The Greek economy is as deliciously non-competitive as the German economy is hyper-competitive" - this mismatch is the core of the crisis. The GEURO (trading as gEUROQQ on the pink sheets) plan doesn't address this mismatch but extends it just a little longer while bailout funds will continue to funneled through Athens to the country's lenders (read European banks) but private capital would be unlikely to flow and without outside capital, they would be unlikely to stimulate the growth they need to regain any kind of solid footing. Greek debt levels to GDP would rise (not fall) under the plan as EUR debts would remain but GEURO incomes (devalued) would be the source of GDP - making a long-term recovery even less likely. The only winners - simple: foreign banks who have exposure to Greece. The Stratfor VP goes on to note that the vast bulk of Greek debt is held by the ECB, IMF, and the Greeks (Greek banks) adding that private losses would not be catastrophic in the event of another Greek default - though we point out that it is the contagion effects (as we have so critically established in the past) that makes the Greek imbroglio so important to watch.

Papademos, Grexit, and catastrophe blackmail

by Ambrose Evans-Pritchard, Telegraph.co.uk:
Greece’s ex-premier Lucas Papademos has put a figure on the post-drachma fallout.
“Some calculations I have seen suggest that inflation could accelerate to 30pc or even to 50pc, depending on the impact of such developments on inflation expectations and on the strength of the second-round effects of price increases on wages,” he told the Wall Street Journal.
It certainly could, but there is no reason why it should. That would be a policy error.
Iceland saw a 50pc crash in the exchange rate after the Viking bust in late 2008. Its inflation was 12pc in 2009, 5.4pc in 2010, and 4pc in 2011. (OECD data). It is ticking up now to 6pc as the economy recovers briskly but that is a different story.
Technically, Greece could match this – or could come close to doing so. It has first-rate economists. The EU Task Force has done wonders for structural reform. In some respects, Greece is (very belatedly) pulling ahead of Germany in supply-side labour rules.
Read More @ Telegraph.co.uk

The Facebook IPO: Shareholders Weren’t Invited to the Real Party

by Matt Taibbi, Rolling Stone:
A suit has been filed by Facebook shareholders against Mark Zuckerberg, Facebook, Morgan Stanley and others. It’s based on a very simple concept: when internal analysts learned that Facebook’s numbers were going to be worse than expected, the company and its bankers didn’t tell everyone, but just “selectively disclosed” information to a small group of “preferred investors.”
Henry Blodget, who unfortunately should know about these things, gave a good summary of it all on CBS This Morning:
I was on the phone last night with a former hedge fund CEO who was talking about this. “Facebook,” he said, “is a colossal example of a complete clusterfuck where everybody wins except the ordinary investor.”
His point was that virtually every week now we see stories like this that hint at a kind of two-tiered market system – in which most of the real action takes place inside an unregulated black-box network of connected insiders who don’t disclose their relationships or their interests, while everyone else, i.e. the regular suckers, live in the more tightly-policed world of prospectuses and quarterly reporting and so on.
Read More @ RollingStone.com

Europeans Betting Millions That Facebook Will Plunge Another 30% By December

While US banks have been busy refocusing their "creative financial products"-time over the past two months, instead defending against allegations of muppetism, or explaining how hedging is really betting it all on red, and then doubling down (just because the casino supposedly has the bank's back), Europe has been busy coming up with new and creative ways of betting on the demise of FaceBook. While official shorting of the most overhyped and overvalued company in history only became a reality for most investors today, Europe's banks have a head start courtesy of "innovated" structured products created by UBS, Commerzbank and Julius Baer. As Bloomberg explains, "the most actively traded structured products tied to Facebook since its IPO have been so-called put warrants, whose buyers profit if the shares drop below a pre-defined level, in some cases as low as $22, data compiled by Bloomberg show. UBS AG (UBSN), Commerzbank AG (CBK) and Julius Baer Group Ltd. (BAER) are among lenders that listed 1,504 warrants and certificates in Europe linked to shares of the social networking site that were offered at $38....“There has been strong demand on the put side, with the ratio between puts and calls at around 70/30” with “some people expressing deep downside views,” Heiko Geiger, the head of public distribution for Germany and Austria at Bank Vontobel AG in Frankfurt, said in an interview yesterday."

More On Facebook, Fiat Promises and JP Morgan

Dave in Denver at The Golden Truth - 3 seconds ago

*When any Governmental system rests on a monetary system which uses a paper derivative of the wealth created by that system - also known as a "fiat" monetary system - that paper derivative is only as valuable as the promise that stands behind the paper which is used to represent systemic wealth creation. At the end of the day, a fiat monetary system depends on the degree to which you trust the person or entity making the promise.* *- *Dave in Denver Most people have no clue what the word "fiat" means in reference to the U.S. dollar or any other paper currency. The word "fiat" i... more » 

Facebook Saves Face, But Did America?

by Bill Sardi, Lew Rockwell.com:
There was something bigger at stake last week when Facebook launched its initial public offering (IPO). Some commentators said the credibility of the markets were at risk. The Facebook IPO had been so overhyped around the world that Wall Street just couldn’t let this one fail. Its underwriter, investment bank Morgan Stanley, ended up propping Facebook’s stock at the end of its initial Friday trading day. Its starting price per share was $38.00, its initial buy was $42.00, and its final price was $38.23. Facebook saved face, at least for now.
But by the following Tuesday, its 3rd day of trading, it’s stock fell to $31. Some analysts think Facebook should be trading between the $15-to-$18 per share price. How could such a long anticipated IPO fizzle so fast? Facebook is a household name, not a wanna-be startup.
A blog posted at ZeroHedge.com said: “And to think there was a time when an IPO simply allowed a company to raise cash: sadly it has devolved to the point where a public offering is a policy statement in support of a broken capital market…”
Read More @ LewRockwell.com

45 Signs That China Is Colonizing America

from The American Dream:
Just because you were once the most powerful nation on earth does not mean that you will always be the most powerful nation on earth.  Every single year, hundreds of billions of dollars leaves the United States and goes to China.  This enormous transfer of wealth has had a dramatic effect on both countries.  In case you haven’t noticed, many of our formerly great manufacturing cities such as Detroit are rotting away while shining new factories and skyscrapers are going up all over China.  If you go into any major retail store today and start turning over products, you will find that hundreds of them have been made in China and that very few of them have been made in America.  As a nation, we buy far, far more from China than they buy from us.  As a result, China is absolutely swimming in cash and they have been looking for things to do with all that money.  One thing that China has done is loan the U.S. government over a trillion dollars and this has given the Chinese a tremendous amount of leverage over us.  China has also started to buy up businesses, real estate and natural resources all over America.
Read More @ EndOfTheAmericanDream.com

The Fallout for 2bn Losses at JP Morgan

by Bob Chapman, TheInternationalForecaster.com:
California Governor Jerry Brown took office last year on a promise to deploy political skills honed over three decades to break the most populous U.S. state out of its annual fiscal crisis.
After 16 months, the 74-year-old Democrat is having as little success as his Republican predecessor, Arnold Schwarzenegger, in governing the state with the world’s ninth- biggest economy as it slips into a $15.7 billion deficit, up 70% since January.
Read More @ TheInternationalForecaster.com

LISTEN NOW – Calls for $3,000 Gold for the First Time Ever, Miners, Int’l Markets and More – Sean Boyd

from KingWorldNews:
Sean Boyd: President, Chief Executive Officer and a director of Agnico-Eagle – Mr. Boyd has been with the 6.5 billion Agnico-Eagle since 1985. Prior to his appointment as Chief Executive Officer in 1998, Mr. Boyd served as Vice-President and Chief Financial Officer from 1996 to 1998, Treasurer and Chief Financial Officer from 1990 to 1996 and Comptroller from 1985 to 1990. Prior to joining Agnico-Eagle in 1985, he was a staff accountant with Clarkson Gordon (Ernst & Young). Mr. Boyd is a graduate of the University of Toronto (B.Comm.).
Listen Now @ KingWorldNews.com

Rome Didn’t Fall In A Day

by Chris Sullivan, Dollar Vigilante:
Back in the ’70s, I used to expect the government to suffer a financial collapse at which time it would have to quit doing most of the things it’s doing because it would run out of money. That isn’t what has happened. Instead of cutting spending it has printed more money and tried to increase taxes on various things.
Like many things historical, there’s a precedent for this. There’s a proverbial saying that “Rome wasn’t built in a day,” but it didn’t collapse in a day either. Probably most of the Romans who lived as the Empire was collapsing didn’t realize that was what was happening, but plenty of them realized they weren’t living in the good old days.
Read More @ DollarVigilante.com

ALERT: “5 Day Bank Holiday” To Prepare For Collapse of Euro

Even members of the financial elite are losing patience with the single currency
by Paul Joseph Watson, Prison Planet:
While the global elite are still clinging to the hope that the euro single currency can survive a Greek exit that now looks inevitable, some members of the financial aristocracy have already given up on the entire eurozone altogether.
In an article for the Financial Times entitled, We must break up the failing euro, former Bilderberg attendee Sir Martin Jacomb concedes that all efforts to rescue the euro have been in vain, calling for “all 17 members to decide at once to revert to national currencies.”

Jacomb attended the 1985 Bilderberg Group meeting in New York but has not been invited back to the elitist confab since. No wonder given the fact that he is obviously an ardent skeptic of the single currency that Bilderberg hatched as far back as 1955.

Jacomb, former chairman of Canary Wharf Group, argues that a “five day bank holiday” should be imposed to allow financial markets to absorb the shock of the collapse of the euro.

Read More @ PrisonPlanet.com

DOD Recruited Hollywood Director to Spin Bin Ladin Raid Fable, Gave Her Access to “Classified” Info – Judicial Watch Sues

Judicial Watch Obtains DOD and CIA Records Detailing Meetings with bin Laden Raid Filmmakers
from Judicial Watch:
DOD Officials Disclosed to Filmmakers Identity of SEAL Team Six Operator and Commander; Ask Film Director to Withhold Operator’s Name, ‘because he shouldn’t be talking out of school.’
Judicial Watch, the organization that investigates and fights government corruption, announced today that it has obtained records from the U.S. Department of Defense (DOD) and the Central Intelligence Agency (CIA) regarding meetings and communications between government agencies and Kathryn Bigelow, Academy Award-winning director of The Hurt Locker, and screenwriter Mark Boal. According to the records, the Obama Defense Department granted Bigelow and Boal access to a “planner, Operator and Commander of SEAL Team Six,” which was responsible for the capture and killing of Osama bin Laden, to assist Bigelow prepare her upcoming feature film.
The records, obtained pursuant to court order in a Freedom of Information Act lawsuit filed on January 21, 2012, include 153 pages of records from the DOD and 113 pages of records from the CIA (Judicial Watch v. U.S. Department of Defense (No. 1:12-cv-00049)). The documents were delivered to Judicial Watch late last Friday (May 18). The following are the highlights from the records, which include internal Defense Department email correspondence as well as a transcript from a key July 14, 2011, meeting between DOD officials, Bigelow and Boal:
Read More @ JudicialWatch.org

Richard Russell: We Are Entering Second Half of the Bear Market

from KingWorldNews:
With tremendous volatility in global markets, the Godfather of newsletter writers, Richard Russell, warned his readers that “something BIG is heading our way,” and “I wonder how much longer the decline will continue to be orderly.” Here is what Russell had to say: “As of today’s closing, Dow down 14 out of 16 sessions! This is one you can tell your kids about. And still no collapse in breadth, and still no crash. The only thing I can make out of it is that a lot of people are standing their ground.”
Richard Russell continues @ KingWorldNews.com

ARMING OF DRONES IN AMERICA

from CBSNews.com:
With the use of domestic drones increasing, concern has not just come up over privacy issues, but also over the potential use of lethal force by the unmanned aircraft.
Drones have been used overseas to target and kill high-level terror leaders and are also being used along the U.S.-Mexico border in the battle against illegal immigration. But now, these drones are starting to be used domestically at an increasing rate.
The Federal Aviation Administration has allowed several police departments to use drones across the U.S. They are controlled from a remote location and use infrared sensors and high-resolution cameras.
Chief Deputy Randy McDaniel of the Montgomery County Sheriff’s Office in Texas told The Daily that his department is considering using rubber bullets and tear gas on its drone.
“Those are things that law enforcement utilizes day in and day out and in certain situations it might be advantageous to have this type of system on the UAV (unmanned aerial vehicle),” McDaniel told The Daily.
Read More @ CBSNews.com

Weaponized Drones to Attack Americans

from TheAlexJonesChannel:

Printing money is the only thing keeping the UK and US afloat

by Merryn Somerset Webb, Money Week:
I’ve been reading up on Scottish history in advance of the independence debate heating up. The must-have book on the events in advance of the Act of Union that brought Scotland and England together in 1707 is Douglas Watt’s The Price of Scotland.
It’s a fantastic run-through of the “catastrophic failure” of the Darien scheme – the creation of the Company of Scotland to establish a Central American colony. This failure (a result of horrible financial mismanagement and shockingly bad strategy) and the huge financial losses that came with it, made Darien what Watt calls a “central ingredient” in the eventual marriage of convenience between the two countries. “The Price of Scotland” refers to the huge sum of money transferred from England to Scotland on union, the majority of which went to pay back the losses of the original investors in the Company of Scotland. I suspect we’ll be returning to this one here another day.
Not only is it a good lead-in to everything from joint stock mania to the periodically discovered evils of financial innovation, but there has been a good row going on in Scotland for 300 years about whether it was all the fault of the English or not.
Read More @ MoneyWeek.com

The Beautiful De-Leveraging

by Bill Bonner, DailyReckoning.com.au:

Ray Dalio calls it a “beautiful de-leveraging.” We don’t see the beauty in it. But we admire it for what it is – a natural and necessary response to the grotesque debt build-up of the last half century. It may not be beautiful, but it is doing its work as best it can under the circumstances.
US Households are lowering their debt levels. Businesses are hoarding cash. The private sector, generally, is getting itself into better shape. All very natural…and all things in nature have a beauty, of sorts.
It doesn’t hurt that interest rates are so low. Even the price of gasoline is going down. In this sense, the Great Correction itself is helping…beautifully. The whole world economy is slowing down, lowering prices for energy and housing – two of the biggest items in the household budget.
The way to cut debt is to first cut expenses. Then, you have more money available to pay off your loans. And it’s fairly easy to cut expenses when interest rates are so low.
Read More @ DailyReckoning.com.au




How Long have I been telling you to BTFD...

Central Banks Still Significant Buyers On Gold Dip

from Gold Core:
Central banks internationally continue to diversify their foreign exchange reserves into gold bullion due to concerns about fiat currencies – including the dollar and especially the euro.
IMF data shows that central banks were again net buyers in April with Turkey and Philippines being the largest buyers of gold.
The Philippines increased their gold holdings significantly by 32.13 tonnes to 194.241 tonnes in March – a 17% increase in their gold reserves in the month.
It was the single largest addition Philippines has made since September 2008. They have been pretty consistent buyers of gold over the last few years, but the 17% increase in April was another big rise.
Turkey expanded its gold reserves by 29.7 metric tons in April. Turkey’s bullion reserves climbed to 239.3 tons last month meaning that Turkey increased their gold reserves by 14% in April.
Read More @ GoldCore.com

In Defense of Bank Runs

by Detlev Schlichter, SilverBearCafe.com:
One with a populist view might ask:
Is it really true that we have too-much state involvement in finance? Do we really have some form of monetary central planning? Does this view not completely underestimate the power of the big private banks?
When one looks at the gigantic positions these private banks have on their balance sheets (and the even bigger positions they have ‘off balance sheet’), and when one looks at the outsized bonuses the bankers pay themselves, and when one furthermore considers that most money-creation is done by the private banks, then it appears as if ‘central planning’ or ‘the power of the bureaucracy’ appear inaccurate descriptions of the present system.
After all, J.P. Morgan just admitted to losing $2 billion and counting on complicated derivative positions. How can that be the fault of central bankers or imaginary monetary ‘central planners’? Isn’t this the opposite of central planning? Is this not capitalism running amok?
Read More @ SilverBearCafe.com






Today’s Items:

First…
Flowcharting The Eurocalypse
http://www.zerohedge.com
http://www.zerohedge.com  (Flow Chart Image)

Please take a look at the flowchart showing what happens if a country, like perhaps Greece, decides to give the rest of their euro comrades the proverbial finger. Just follow along the possible, and thrilling, adventure as a country goes from a possible default to the total collapse of the euro.

Next…
Fitch Downgrades Japan’s Sovereign Rating
http://www.nytimes.com

Fitch has lowered its assessment of Japan’s sovereign credit to A+, which is just above Spain and Italy. Meaning that Japan is not only heading into the Pacific, but into junk as well.  Japan’s public debt will hit almost 240 percent of its gross domestic product by the end of the year. But, don’t worry, they will not be alone because we in the U.S. are turning Japanese.

Next…
Agnico CEO Calls for $3,000+ Gold for the First Time Ever
http://kingworldnews.com
http://kingworldnews.com

The Euro calamity is front page news now and the U.S. dollar calamity is on page 3 or 4; however, with the debt ceiling looming, it will soon be a front page story. This is one of the main reasons that Sean Boyd, CEO of the $6.5 billion Agnico Eagle, believes gold will be going to over $3,000 within 24 months. Hell, with allocated gold being loaned out by banks and Central Banks accelerating their printing, it may even be higher. In short, after preparing, keep stacking physical.

Next…
500 MILLION Ounces of Paper Silver
http://www.silverdoctors.com
http://www.youtube.com

105,231 contracts, or 500 million ounces, of paper silver were dumped onto the markets in one hour. Just to give you an idea, this represents two-thirds of the world’s silver production in one year. Needless to say, do not hold your breath on the paid-off CFTC members taking action; however, when the rush out of paper happens, I would not want be in their shoes if they are ever found.    Now onto the king of silver manipulators…

Next…
The End of JP Morgan?
http://silvervigilante.com
http://www.bullionbullscanada.com

The $4-7 billion loss, by JP Morgan, being spoken about by the human dildos in the Main Stream Media may be trivial. In fact, the trading loss may be much, much larger than what is being admitted. In addition, JP Morgan will be forced to return $168 million to the estate of MF’s Global broker-dealer.  JP Morgan employees, who have seen their retirements impacted, are suing JP Morgan and those responsible. In short, JP Morgan is vulnerable because of its failing bluffs in the derivatives market and people are catching on.

Next…
Wall Street Banks Are Secretly Building A Mega Private Army
http://thetruthisnow.com

Like OCP from the fictional movie Robocop, Wall Street banks have secretly taken over US firearms, ammunition manufacturers and the world’s largest mercenary firms in a stealth build up of a private military force. Needless to say, they will not abide by any rules of war.  At the same time the Department of Homeland Security is planning for Civil war with mass military detention centers are being prepared inside the US.  The excrement is about to hit the rotary oscillator.

Finally, Please prepare now for the escalating economic and social unrest. Good Day

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