Steve Keen On Why Debt Matters "All The Time" And The Need For "Quantitative Easing For The Public"
Following his somewhat epic blog debate with Paul Krugman, Steve Keen appears on Capital Account with Lauren Lyster to debunk more Keynesian propaganda and the kleptocratic status quo 'debt doesn't matter' arguments. Poking holes in the stable/exogenous shock equilibrium 'model' versus the real-world's dynamic systems, the Aussie economist warms up with the zero-interest rate conundrum and liquidity trap; moves on to the empirical falseness of the debt-to-unemployment relationship - implying 'debt matters all the time' as Keen explains common-sensibly (but not Neoclassically) that the 'change in debt adds to demand' and that involves banks which breaks modern economic theory (since lending is credit creation not savings transfer). Echoing the deleveraging from the Great Depression, it could take 15 years of unwinding this epic debt bubble before its all over - but not if the status quo of deficit spending is maintained - as Keen somewhat controversially concludes: "you can't just cure this with deficit spending [since debt is already beyond the black-hole's 'event horizon'], you have to abolish the private debt as well" by "quantitative easing for the public".
On The Unintended Consequences Of Europe's 'Naked CDS' Ban
We
have long warned that the effects of a ban on 'free-market' hedging
instruments could well have a negative impact on the underlying market
that political leaders are 'trying' to protect (consider the fall in
equity prices after the short-sale-bans) and this week brought some
clarity with regard Europe's Short-Selling-Regulation (SSR) on CDS. As Citi's Matt King notes: "the technical standards underlying its short selling ban reinforce the view we held previously: the ban seems likely to add to selling pressure on cash bond spreads in peripherals,
even if it brings down CDS and tightens the basis." The SSR defines
'naked' as CDS that are 'highly correlated' with long bond positions,
but bonds have only tended to be quite correlated to their own CDS at periods of low volatility,
and this correlation breaks down over sell-offs, which is precisely
when hedging is needed most. This will leave portfolio managers unlikely
to want to rely on sovereign CDS hedges (which they may now be forced
to unwind at any moment) and presumably means they will be
reluctant to take out initial long positions in both peripheral
sovereigns and corporates in the first place - reducing demand for cash bonds. Once again - regulators and politicians should be careful what they wish for.Steve Forbes: How To Bring Back America
Steve
Forbes has a message for a nation dominated by increasingly short-term
decisions made on Wall Street and in Washington D.C., and by ever
greater economic, financial and currency instability. As long
as America continues moving away from sound money; away from sound
financial and economic policies; and, ultimately, away from freedom, its
future grows more dim. The dot-com and housing bubbles
followed by the 2008 financial crisis and the most severe economic
decline since the Great Depression serve as powerful lessons. A future
of bigger government, higher taxes, more burdensome regulations, less
consumer choice and more unrealistic government promises requires more and more Federal Reserve play money. Steve
Forbes has a quintessentially American policy prescription rooted in
American history. The answer to America’s economic problems is—and has
always been—new wealth creation. New wealth creation doesn’t come
from the government or from the Federal Reserve’s printing press. New wealth creation is what happens naturally with stable money based on the gold standard, lower taxes on individuals, a simplified tax code, reduced bureaucracy and free markets.Weekend Viewing: Inside Job by Charles Ferguson
An "Economic Quality" Scorecard Of The Obama Administration
With the US presidential election just 4 months away, focus on tier 1 economic data will become acute, as will headlines blasting top-line data without much, if any, underlying "between the lines" analysis.
Which is why we have decided to put together a template of key data
series that in our opinion best capture the dramatic shift in the labor
composition of the US welfare state under the Obama administration,
starting with January 2009. Here are the facts...
Paul Brodsky: Central Banks Are Nearing The 'Inflate Or Die' Stage
"It's impossible to have a political solution to a balance sheet
problem" says Paul Brodsky, bond market expert and co-founder of QB
Asset Management. The world has simply gotten itself into too much debt.
There are creditors that expect to be paid, and debtors that are
having an increasingly difficult time making their coupon payments. No
amount of political or policy intervention is going to change that
reality. (Unless a global "debt jubilee" transpires, which Paul thinks
is unlikely). Looking at the global monetary base, Paul sees it dwarfed
by the staggering amount of debts that need to be repaid or serviced.
The reckless use of leverage has resulted in a chasm between total
credit and the money that can service it. So how will this debt
overhang be resolved?
Central bank money printing -- and lots of it -- thinks Paul.
from laroucheyouth:
In the midst of a renewed trans-Atlantic drive for the reinstatement of the Glass-Steagall standard, including from Britain itself, Helga Zepp-LaRouche and Jacques Cheminade will be holding an international webcast Sunday, July 8th at 11am Eastern.
from Silver Doctors:
The IT ‘glitch’ that has entirely shut down RBS’ NatWest Bank and halted ATM transactions at Russia’s largest bank Sberbank, has now spread to Germany’s largest bank, Deutsche Postbank.Deutsche Postbank Friday reported its own IT glitch that has completely paralyzed its ATM’s nationwide.
While this entire string of 21st Century Bank Holidays has received zero MSM coverage, it is appearing more and more likely that the derivatives domino chain known as insolvency has been triggered.
Read More @ SilverDoctors.com
by Susanne Posel, Occupy Corporatism:
Agenda 21 wants to, among other things, bring the American lands back to rewilding.
The non-governmental organization (NGO) The Wildlands Project
(WP) is a focusing of the American landscape in preservation for
“future generations to inherit a continent rich in wildlife, with plenty
of room for all species to roam.”
This does not necessarily mean that there will be room for humans as
we are seeing massive areas of land being placed under restrictions
called “conservation easements”, “scenic byways”, “protected areas”,
“biosphere reserves”, “wildlife refuges”, etc. The names are varied and
plentiful, but the result is always the same: More government control;
less human freedom.
Read More @ OccupyCorporatism.com
We The Sheeplez... is intended to reflect
excellence in effort and content. Donations will help maintain this goal
and defray the operational costs. Paypal, a leading provider of secure
online money transfers, will handle the donations. Thank you for your
contribution.
I'm PayPal Verified
[Ed. Note:
CAFR stands for 'Comprehensive Annual Financial Report'. A CAFR is
essentially a second set of books which hides the vast wealth and hard
assets acquired over decades and held by cities and states from coast to
coast.]
from Washington’s Blog:
La Canada Valley Sun
editors Carol Cormaci and Bill Kisliuk met with me at their request to
see and understand California’s Comprehensive Annual Financial Report
(CAFR) data for themselves. They supported this published letter.
Our other local paper, The Outlook, previously published
two letters to inform and request our California legislators, Senator
Carol Liu and Assemblymember Anthony Portantino, to affirm the state’s
$600 billion in surplus taxpayer assets and make recommendations in
light of a $16 billion budget deficit “forcing” austerity.
Now in the 5th week of receiving CAFR data:
- Portantino’s Chief of Staff promised at least preliminary public response by July 10;
- since I discovered Liu’s consultant passed this issue to a college intern
that he’s since claimed has been ill and out of the office, I’ve given
him until July 13 to have at least a preliminary statement. Failure to
do so will result in my writing our local papers and asking community
members to join me in requesting Senator Liu’s official response.
Read More @ WashingtonsBlog.com
from Jesse’s Café Américain:
Although this is nothing new, as I and several others have
reported this several times in the past, with a very nice documentary on
it having been done by Max Keiser, this is still a very important
article for two reasons.
First, it lays out rather nicely the gold panic of 1999 and Brown’s
Bottom, which is the low in the price of gold achieved by the dumping of
400 tons of gold into the world market at an artificially low price by
the British government.
This was done apparently to bail out a bullion bank or two who were
enormously and irretrievably caught short of gold by the carry trade.
Second, it provides a good description of the gold carry trade. When
gold is leased out by a central bank, the bullion bank takes possession
of it and sells it into the market, and invests the proceeds. At the end
of the lease period, the bullion bank buys the gold bank in the open
market and returns it to the central bank.
Read More @ Jesse’s Café Américain:
from RTAmerica:
Since May of this year, the Obama administration has been pushing to
have a terrorist organization removed from the terrorist watch list. The
Mujahadeen- e-Khalq of Iran is allegedly responsible for assassinating
US citizens and even worked together with Saddam Hussein. The group has
been on the watch list for approximately 15 years, so why is there this
push to remove the MEK as terrorists?
by Susanne Posel, Occupy Corporatism:
Agenda 21 wants to, among other things, bring the American lands back to rewilding.
The non-governmental organization (NGO) The Wildlands Project (WP) is a focusing of the American landscape in preservation for “future generations to inherit a continent rich in wildlife, with plenty of room for all species to roam.”
This does not necessarily mean that there will be room for humans as we are seeing massive areas of land being placed under restrictions called “conservation easements”, “scenic byways”, “protected areas”, “biosphere reserves”, “wildlife refuges”, etc. The names are varied and plentiful, but the result is always the same: More government control; less human freedom.
Read More @ OccupyCorporatism.com
I'm PayPal Verified
Agenda 21 wants to, among other things, bring the American lands back to rewilding.The non-governmental organization (NGO) The Wildlands Project (WP) is a focusing of the American landscape in preservation for “future generations to inherit a continent rich in wildlife, with plenty of room for all species to roam.”
This does not necessarily mean that there will be room for humans as we are seeing massive areas of land being placed under restrictions called “conservation easements”, “scenic byways”, “protected areas”, “biosphere reserves”, “wildlife refuges”, etc. The names are varied and plentiful, but the result is always the same: More government control; less human freedom.
Read More @ OccupyCorporatism.com
We The Sheeplez... is intended to reflect
excellence in effort and content. Donations will help maintain this goal
and defray the operational costs. Paypal, a leading provider of secure
online money transfers, will handle the donations. Thank you for your
contribution.
I'm PayPal Verified
[Ed. Note:
CAFR stands for 'Comprehensive Annual Financial Report'. A CAFR is
essentially a second set of books which hides the vast wealth and hard
assets acquired over decades and held by cities and states from coast to
coast.]
from Washington’s Blog:
La Canada Valley Sun
editors Carol Cormaci and Bill Kisliuk met with me at their request to
see and understand California’s Comprehensive Annual Financial Report
(CAFR) data for themselves. They supported this published letter.
Our other local paper, The Outlook, previously published two letters to inform and request our California legislators, Senator Carol Liu and Assemblymember Anthony Portantino, to affirm the state’s $600 billion in surplus taxpayer assets and make recommendations in light of a $16 billion budget deficit “forcing” austerity.
Now in the 5th week of receiving CAFR data:
from Washington’s Blog:
La Canada Valley Sun
editors Carol Cormaci and Bill Kisliuk met with me at their request to
see and understand California’s Comprehensive Annual Financial Report
(CAFR) data for themselves. They supported this published letter.Our other local paper, The Outlook, previously published two letters to inform and request our California legislators, Senator Carol Liu and Assemblymember Anthony Portantino, to affirm the state’s $600 billion in surplus taxpayer assets and make recommendations in light of a $16 billion budget deficit “forcing” austerity.
Now in the 5th week of receiving CAFR data:
- Portantino’s Chief of Staff promised at least preliminary public response by July 10;
- since I discovered Liu’s consultant passed this issue to a college intern that he’s since claimed has been ill and out of the office, I’ve given him until July 13 to have at least a preliminary statement. Failure to do so will result in my writing our local papers and asking community members to join me in requesting Senator Liu’s official response. Read More @ WashingtonsBlog.com
from Jesse’s Café Américain:
Although this is nothing new, as I and several others have
reported this several times in the past, with a very nice documentary on
it having been done by Max Keiser, this is still a very important
article for two reasons.
First, it lays out rather nicely the gold panic of 1999 and Brown’s Bottom, which is the low in the price of gold achieved by the dumping of 400 tons of gold into the world market at an artificially low price by the British government.
This was done apparently to bail out a bullion bank or two who were enormously and irretrievably caught short of gold by the carry trade.
Second, it provides a good description of the gold carry trade. When gold is leased out by a central bank, the bullion bank takes possession of it and sells it into the market, and invests the proceeds. At the end of the lease period, the bullion bank buys the gold bank in the open market and returns it to the central bank.
Read More @ Jesse’s Café Américain:
Although this is nothing new, as I and several others have
reported this several times in the past, with a very nice documentary on
it having been done by Max Keiser, this is still a very important
article for two reasons.First, it lays out rather nicely the gold panic of 1999 and Brown’s Bottom, which is the low in the price of gold achieved by the dumping of 400 tons of gold into the world market at an artificially low price by the British government.
This was done apparently to bail out a bullion bank or two who were enormously and irretrievably caught short of gold by the carry trade.
Second, it provides a good description of the gold carry trade. When gold is leased out by a central bank, the bullion bank takes possession of it and sells it into the market, and invests the proceeds. At the end of the lease period, the bullion bank buys the gold bank in the open market and returns it to the central bank.
Read More @ Jesse’s Café Américain:
from RTAmerica:
Since May of this year, the Obama administration has been pushing to have a terrorist organization removed from the terrorist watch list. The Mujahadeen- e-Khalq of Iran is allegedly responsible for assassinating US citizens and even worked together with Saddam Hussein. The group has been on the watch list for approximately 15 years, so why is there this push to remove the MEK as terrorists?
Since May of this year, the Obama administration has been pushing to have a terrorist organization removed from the terrorist watch list. The Mujahadeen- e-Khalq of Iran is allegedly responsible for assassinating US citizens and even worked together with Saddam Hussein. The group has been on the watch list for approximately 15 years, so why is there this push to remove the MEK as terrorists?
from The Economic Collapse Blog:
Well, we just had another bad jobs report. The U.S. economy created
just 80,000 new jobs during the month of June. Normally, about 125,000
new jobs need to be created every month just to keep up with population
growth. So it is a bit odd that the official unemployment rate did not
rise above 8.2%. What is even more alarming is that the Social Security
Administration is telling us that 85,000 U.S. workers “left the
workforce” and enrolled in the Social Security Disability Insurance
program during the month of June. That means that the number of
Americans enrolling in Social Security Disability actually exceeded the
number of new jobs that was created. That is definitely not a sign of
recovery. Unfortunately, this is about as good as things are going to
get. Right now corporate profits are at an all-time high and usually
after a recession has ended the percentage of working age Americans that
have jobs bounces back very strongly. But that has not happened this
time, and when the next economic crisis hits things are going to get a
lot worse.
The headline to this article states that there will never be enough jobs in America again.
How could that possibly be true?
Well, the sad truth is that it is very hard to make a profit on an employee in the United States today.
Read More @ TheEconomicCollapseBlog.com
Jim Sinclair’s Commentary
Jim Sinclair’s Commentary
Basel Group Seeks Tougher Rules for Non-Centrally Cleared Swaps
Banks may have to meet minimum collateral rules for over-the-counter derivatives trades that aren’t centrally cleared as part of a push by global regulators to make the market safer.
The Basel Committee on Banking Supervision yesterday published a draft of the standards, which it said would prevent companies from exploiting rule differences between nations. The paper sets out a partial list of assets that can count as collateral, including gold and some equities.
“International consistency with regard to margin requirements and their implementation is crucial,” the Basel group said in an e-mailed statement. The measures, which are being published for public comment, would apply to trades involving financial-services companies and large businesses in other industries that trade these securities.
European Union and U.S. regulators are struggling to align rules for the $648 trillion market for OTC derivatives, which became a target for tougher oversight after the 2008 collapse of Lehman Brothers Holdings Inc. The Basel committee has already issued rules that would more than triple the capital banks must hold to protect against losses.
The draft document’s approach to margin standards “would lower the risk of financial entities, promote clearing and help avoid regulatory arbitrage,” Gary Gensler, chairman of the U.S. Commodity Futures Trading Commission, said in a separate statement yesterday.
More…
Jim Sinclair’s Commentary
Paul Brodsky: Central Banks are Nearing the ‘Inflate or Die’ Stage
So hold tightly to your gold by Adam Taggart
Friday, July 6, 2012, 6:46 PM
"It’s impossible to have a political solution to a balance sheet problem" says Paul Brodsky, bond market expert and co-founder of QB Asset Management.
The world has simply gotten itself into too much debt. There are creditors that expect to be paid, and debtors that are having an increasingly difficult time making their coupon payments. No amount of political or policy intervention is going to change that reality. (Unless a global "debt jubilee" transpires, which Paul thinks is unlikely).
Looking at the global monetary base, Paul sees it dwarfed by the staggering amount of debts that need to be repaid or serviced. The reckless use of leverage has resulted in a chasm between total credit and the money that can service it.
So how will this debt overhang be resolved?
Central bank money printing — and lots of it — thinks Paul.
At this point, the danger posed by the instability of our monetary and fiscal house of cards is so great that trying to time an investment program to when this avalanche of printing will occur is too risky, in Paul’s opinion. It’s time to shift your remaining capital into hard assets and sit on the sidelines to watch the carnage play out.
On The Imbalance Between Debts and Money Supply
We are seeing — not only in the US but in Europe and in Asia, as well — separating bank assets and base money. Base money is comprised of currency in circulation plus bank reserves that are held at central banks — at the Fed or that is at the ECB, the Bank of Japan, so on and so forth. This is how the global economy rolls, as they say.
More…
Jim Sinclair’s Commentary
Australia seeks to expand Australian dollar-yuan trading
Australia is seeking to deepen trading between the local dollar and the yuan as demand for commodities drives exports to China to record highs.
The yuan’s internationalization “is clearly in the interests of Australian businesses and the broader Australian economy,” Treasurer Wayne Swan, who will co-host a forum on the matter in Hong Kong next week, said today in a statement. “Both governments are very keen to see us deepen and broaden this important market.”
China remained Australia’s top trading partner in May, with transactions climbing to $11.1 billion, the most since October, according to figures released today by the Canberra-based statistics bureau. Japan last month started to use its currency in direct trading with China.
More…
Jim,
What are they going to do now that Switzerland is no longer the money center it was? Ban chocolates? It is doubtful the US will exclude Switzerland from the SWIFT system. As of late it appears the US has realized how negative that scenario was.
CIGA Brian
Switzerland defies US, EU ban on Iran oil
Switzerland will continue to purchase Iranian oil in defiance of the European Union sanctions on the Islamic Republic that came into effect on July 1.
The Swiss Federal Department of Economic Affairs stated that Switzerland will not join the oil embargo against Iran, despite pressure from the United States and the EU, IRNA reported on Friday.
Switzerland says that any decision on the import, sale, and transport of Iranian crude oil and petrochemical products and their insurance coverage should be made by the parties to the trade themselves.
In response to a question by the Swiss news agency SDA/ATS, a Swiss Foreign Ministry spokesman said that Switzerland wants to maintain good relations with Iran.
More…
Austerity From Glass Houses Doesn’t Work CIGA Eric
It is a myth that governments are ready to face the economic, social and political fallout standing austere as their economies implode, which they will. Jim Sinclair
Source: jsmineset.com
Jim’s absolutely correct. Anyone giving him heat about this position has not studied history. Any serious student knows that nothing opens a can of whoop ass on the status quo faster than edicts of public austerity from audacious glass houses.
The economic recovery in the US is an illusion based on liquidity and rising asset prices. The real world is struggling because the working class, unlike global capital and speculators, cannot profit from liquidity-driven fluctuations in value. All they have is their labor and skills which cannot be hoarded during times of financial and economic turmoil. So, while the world depreciates their currencies to fend off a debt collapse, prices rise, and economic growth stagnates, the wage-earner that lacks flexibility of profit suffers the most. While the certain interests in the world extol the benefits of austerity, they would be wise to recognize the consequences of rising unemployment and deteriorating confidence (chart 1 and chart 2) on the status quo. Nothing is more certain than social and political change during times of economic turmoil.
Chart 1: University of Michigan Consumer Expectations (CE) and Gold: A Correlation Study
Chart 2: Civilian Unemployment Rate
Supplemental Source: shadowstats.com
More…
Jim,
The sign on the wall gets clearer every day, and it’s in plain sight, not like the golden olden times. One doesn’t need the Daniel of biblical times to interpret.
Have a great weekend,
CIGA "THE GORDON"
Argentina bans buying dollars as a way to save Fri Jul 6, 2012 6:46am IST
BUENOS AIRES, July 5 (Reuters) – Argentina’s central bank on Thursday formally banned people from buying dollars for the purpose of saving them, confirming the government’s de facto policy aimed at safeguarding foreign reserves.
Argentines tend to convert their pesos into greenbacks as a hedge against high inflation and to protect against potential currency devaluations, which they have endured through decades of boom and bust economic cycles.
President Cristina Fernandez slapped new controls on foreign currency purchases just after winning re-election in October, requiring the tax agency approve each individual transaction.
But starting in May, the government sharply limited those approvals, permitting people to buy foreign currency only if they could show they would be traveling abroad.
This sent the black-market rate for dollars soaring. Argentines now pay about 5.95 pesos per dollar on the black market while the official rate is 4.53.
More…
I'm PayPal Verified
Well, we just had another bad jobs report. The U.S. economy created
just 80,000 new jobs during the month of June. Normally, about 125,000
new jobs need to be created every month just to keep up with population
growth. So it is a bit odd that the official unemployment rate did not
rise above 8.2%. What is even more alarming is that the Social Security
Administration is telling us that 85,000 U.S. workers “left the
workforce” and enrolled in the Social Security Disability Insurance
program during the month of June. That means that the number of
Americans enrolling in Social Security Disability actually exceeded the
number of new jobs that was created. That is definitely not a sign of
recovery. Unfortunately, this is about as good as things are going to
get. Right now corporate profits are at an all-time high and usually
after a recession has ended the percentage of working age Americans that
have jobs bounces back very strongly. But that has not happened this
time, and when the next economic crisis hits things are going to get a
lot worse.The headline to this article states that there will never be enough jobs in America again.
How could that possibly be true?
Well, the sad truth is that it is very hard to make a profit on an employee in the United States today.
Read More @ TheEconomicCollapseBlog.com
Jim Sinclair’s Commentary
This is exactly what it feels like to be a bull on gold today.
It was long odds but this crew actually dog fought with 17 Japanese
zero fighters and lived to tell about it. They actually resurrected a
busted out B17 and mounted an extra 50 caliber machine gun operated by
the pilot.
We may have long odds with an enemy behind every tree, but $3500 will be ours just as sure as $1650 was.
Jim Sinclair’s Commentary
An attempt to close the door after the horse is out is impractical and unworkable.
Basel Group Seeks Tougher Rules for Non-Centrally Cleared Swaps
Banks may have to meet minimum collateral rules for over-the-counter derivatives trades that aren’t centrally cleared as part of a push by global regulators to make the market safer.
The Basel Committee on Banking Supervision yesterday published a draft of the standards, which it said would prevent companies from exploiting rule differences between nations. The paper sets out a partial list of assets that can count as collateral, including gold and some equities.
“International consistency with regard to margin requirements and their implementation is crucial,” the Basel group said in an e-mailed statement. The measures, which are being published for public comment, would apply to trades involving financial-services companies and large businesses in other industries that trade these securities.
European Union and U.S. regulators are struggling to align rules for the $648 trillion market for OTC derivatives, which became a target for tougher oversight after the 2008 collapse of Lehman Brothers Holdings Inc. The Basel committee has already issued rules that would more than triple the capital banks must hold to protect against losses.
The draft document’s approach to margin standards “would lower the risk of financial entities, promote clearing and help avoid regulatory arbitrage,” Gary Gensler, chairman of the U.S. Commodity Futures Trading Commission, said in a separate statement yesterday.
More…
Jim Sinclair’s Commentary
The end is not near, but here. That is why all stops have been pulled out to try and hide the reality from the public.
Paul Brodsky: Central Banks are Nearing the ‘Inflate or Die’ Stage
So hold tightly to your gold by Adam Taggart
Friday, July 6, 2012, 6:46 PM
"It’s impossible to have a political solution to a balance sheet problem" says Paul Brodsky, bond market expert and co-founder of QB Asset Management.
The world has simply gotten itself into too much debt. There are creditors that expect to be paid, and debtors that are having an increasingly difficult time making their coupon payments. No amount of political or policy intervention is going to change that reality. (Unless a global "debt jubilee" transpires, which Paul thinks is unlikely).
Looking at the global monetary base, Paul sees it dwarfed by the staggering amount of debts that need to be repaid or serviced. The reckless use of leverage has resulted in a chasm between total credit and the money that can service it.
So how will this debt overhang be resolved?
Central bank money printing — and lots of it — thinks Paul.
At this point, the danger posed by the instability of our monetary and fiscal house of cards is so great that trying to time an investment program to when this avalanche of printing will occur is too risky, in Paul’s opinion. It’s time to shift your remaining capital into hard assets and sit on the sidelines to watch the carnage play out.
On The Imbalance Between Debts and Money Supply
We are seeing — not only in the US but in Europe and in Asia, as well — separating bank assets and base money. Base money is comprised of currency in circulation plus bank reserves that are held at central banks — at the Fed or that is at the ECB, the Bank of Japan, so on and so forth. This is how the global economy rolls, as they say.
More…
Jim Sinclair’s Commentary
The trend of alternatives to US dollar international contract settlements continues almost daily.
Australia seeks to expand Australian dollar-yuan trading
Australia is seeking to deepen trading between the local dollar and the yuan as demand for commodities drives exports to China to record highs.
The yuan’s internationalization “is clearly in the interests of Australian businesses and the broader Australian economy,” Treasurer Wayne Swan, who will co-host a forum on the matter in Hong Kong next week, said today in a statement. “Both governments are very keen to see us deepen and broaden this important market.”
China remained Australia’s top trading partner in May, with transactions climbing to $11.1 billion, the most since October, according to figures released today by the Canberra-based statistics bureau. Japan last month started to use its currency in direct trading with China.
More…
Jim,
What are they going to do now that Switzerland is no longer the money center it was? Ban chocolates? It is doubtful the US will exclude Switzerland from the SWIFT system. As of late it appears the US has realized how negative that scenario was.
CIGA Brian
Switzerland defies US, EU ban on Iran oil
Switzerland will continue to purchase Iranian oil in defiance of the European Union sanctions on the Islamic Republic that came into effect on July 1.
The Swiss Federal Department of Economic Affairs stated that Switzerland will not join the oil embargo against Iran, despite pressure from the United States and the EU, IRNA reported on Friday.
Switzerland says that any decision on the import, sale, and transport of Iranian crude oil and petrochemical products and their insurance coverage should be made by the parties to the trade themselves.
In response to a question by the Swiss news agency SDA/ATS, a Swiss Foreign Ministry spokesman said that Switzerland wants to maintain good relations with Iran.
More…
Austerity From Glass Houses Doesn’t Work CIGA Eric
It is a myth that governments are ready to face the economic, social and political fallout standing austere as their economies implode, which they will. Jim Sinclair
Source: jsmineset.com
Jim’s absolutely correct. Anyone giving him heat about this position has not studied history. Any serious student knows that nothing opens a can of whoop ass on the status quo faster than edicts of public austerity from audacious glass houses.
The economic recovery in the US is an illusion based on liquidity and rising asset prices. The real world is struggling because the working class, unlike global capital and speculators, cannot profit from liquidity-driven fluctuations in value. All they have is their labor and skills which cannot be hoarded during times of financial and economic turmoil. So, while the world depreciates their currencies to fend off a debt collapse, prices rise, and economic growth stagnates, the wage-earner that lacks flexibility of profit suffers the most. While the certain interests in the world extol the benefits of austerity, they would be wise to recognize the consequences of rising unemployment and deteriorating confidence (chart 1 and chart 2) on the status quo. Nothing is more certain than social and political change during times of economic turmoil.
Chart 1: University of Michigan Consumer Expectations (CE) and Gold: A Correlation Study
Chart 2: Civilian Unemployment Rate
Supplemental Source: shadowstats.com
More…
Jim,
The sign on the wall gets clearer every day, and it’s in plain sight, not like the golden olden times. One doesn’t need the Daniel of biblical times to interpret.
Have a great weekend,
CIGA "THE GORDON"
Argentina bans buying dollars as a way to save Fri Jul 6, 2012 6:46am IST
BUENOS AIRES, July 5 (Reuters) – Argentina’s central bank on Thursday formally banned people from buying dollars for the purpose of saving them, confirming the government’s de facto policy aimed at safeguarding foreign reserves.
Argentines tend to convert their pesos into greenbacks as a hedge against high inflation and to protect against potential currency devaluations, which they have endured through decades of boom and bust economic cycles.
President Cristina Fernandez slapped new controls on foreign currency purchases just after winning re-election in October, requiring the tax agency approve each individual transaction.
But starting in May, the government sharply limited those approvals, permitting people to buy foreign currency only if they could show they would be traveling abroad.
This sent the black-market rate for dollars soaring. Argentines now pay about 5.95 pesos per dollar on the black market while the official rate is 4.53.
More…
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