The Coming Economic Collapse, Currency Induced Cost Push Inflation/Hyperinflation, Weimar Germany, Euro Collapse,
Zimbabwe Hyperinflation, Survival in Economic Collapse, World Economic Collapse, Dollar Collapse,
What Would Happen If the Economy Collapsed,The Coming Economic Depression.
Gold and Silver Will Protect Your Wealth.
Sunday, September 23, 2012
Greece Caught Underreporting Its Budget Deficit By Nearly 50%
There was a time about a year ago,
before the second Greek bailout was formalized and the haircut on its
domestic-law private sector bonds (first 50%, ultimately 80%, soon to
be 100%) was yet to be documented, when it was in Greece's interest to
misrepresent its economy as being worse than
it was in reality. Things got so bad that the former head of the Greek
Statistics Bureau Elstat, also a former IMF employee, faced life in prison if
convicted of doing precisely this. A year later, the tables have
turned, now that Germany is virtually convinced that Europe can pull a
Lehman and let Greece leave the Eurozone, and is merely looking for a
pretext to sever all ties with the country, whose only benefit for
Europe is to be a seller of islands at Blue Aegean water Special prices
to assorted Goldman bankers (at least until it renationalizes them back
in a few short years). So a year later we are back to a more normal
data fudging dynamic, one in which Greece, whose July unemployment
soared by one whole percentage point, will do everything in its power
to underrepresent its soaring budget deficit. Case in point, on Friday
the Finance Ministry proudly announced its budget deficit for the first
eight months was "just" €12.5 billion, versus a target of €15.2
billion, leading some to wonder how it was possible that a country that
has suffered terminal economic collapse, and in which the tax collectors have now joined everyone in striking and thus not collecting any tax revenue, could have a better than expected budget deficit. Turns out the answer was quite simple. According
to Spiegel, Greece was lying about everything all along, and instead
of a €12.5 billion deficit, the real revenue shortfall is nearly double
this, or €20 billion, a number which will hardly incentivize anyone in Germany to give Greece the benefit of another delay, let along a third bailout as is now speculated.
Following the riots at Apple's FoxConn Chengdu plant in June, engadget is reporting that FoxConn's Taiyuan plant - the scene of earlier strikes over salary disputes back in March - has suffered damage as workers riot.
Police are on site to control the crowd and while the motive is not
clear, it is apparently unrelated to the recent anti-Japan protests. It
appears - based on the clip and photos below - that much damage has
been done in the process.
We have discussed the CRIC cycle a number of times - especially with regards Europe - but it seems the never-ending story of Crisis-Response-Improvement-Complacency
has struck once again as Morgan Stanley notes when complacency becomes
pervasive, it usually gives way to a renewed crisis. Complacent
financial markets appear to be looking through the fact that the global economy remains stuck in a 'twilight zone' between expansion and recession.
Dismissing weak PMIs in China and EU, markets have feasted in
QEternity and OMT and this has, as expected, affected European
policy-makers (e.g. ongoing disagreements over the details of the
much-anticipated negative-feedback-loop-breaking banking union; and
Spain/Italy's 'belief' they can avoid an ESM 'austerity' program). This
feels eerily like the March/April period when post-LTRO improvements
induced euphoria in traders and governments/ECB to relax prematurely
and as Brevan Howard explains below - every major developed economy is facing significant downside risks - no matter how enthusiastic markets appear to be.
Imagine if the world found out that China’s growth and recovery post
2008 were largely based on fraudulent data and garbage development
projects fueled by easy money and rampant...
A Houston police officer shot and killed a one-armed, one-legged man
in a wheelchair Saturday inside a group home after police say the double
amputee threatened the officer and aggressively waved a metal object
that turned out to be a pen.
Police spokeswoman Jodi Silva said the man cornered the officer in
his wheelchair and was making threats while trying to stab the officer
with the pen. At the time, the officer did not know what the metal
object was that the man was waving, Silva said.
She said the man came “within inches to a foot” of the officer and did not follow instructions to calm down and remain still. “Fearing for his partner’s safety and his own safety, he discharged his weapon,” Silva told The Associated Press.
Police did not immediately release the name of the man who was
killed. They had been called to the home after a caretaker there called
and reported that the man in wheelchair was causing a disturbance. The
owner of the group home, John Garcia, told the Houston Chronicle that
the man had a history of mental illness and had been living at the house
about 18 months. Garcia said the man had told him that he lost a leg
above the knee and all of one arm when he was hit by a train. “He
sometimes would go off a bit, but you just ignore it,” Garcia told the
newspaper.
Silva identified the officer as Matthew Jacob Marin, a five-year
veteran of the department. He was immediately placed on three-day
administrative leave, which is standard in all shootings involving
officers.
by Damon Geller, Wholesale Direct Metals:
As any experienced gold investor will tell you, the price of gold is directly correlated to US debt
more than any other variable. In fact, based on current US debt, gold
is perfectly justified at $1750/ounce, although it overshoots and
undershoots based on emotion, CME manipulation and other variables. And
since the US will run a $1.5 trillion deficit for the foreseeable
future, you can bet the bank that gold is going much higher. The most
recent economic data indicates we will surge to $28 trillion in US debt
by 2018. Doing simple math based upon long-standing historical trends,
conservative estimates put gold at $3800 an ounce at that time. Yet
don’t be surprised if it’s much sooner than that, based upon other
emotional and supply/demand driven forces. Let’s look at why.
Gold Is Mathematical
Although you can always look at gold as an “investment,” I have always thought of gold as just a better savings
vehicle, especially when monetary policy is positioned to help the
volatility of money in any way it can. When the banker is paying zero
interest, you don’t give up much opportunity-cost by removing your money
from the bank and storing it in some other form. If the fed is
printing, QE-ing and monetizing, and the boys in the government are
“stimulating” and dragging us into further debt, it would seem to make
even less sense to sit green paper in a bank. Regardless of what you
think gold is, I’d like to make an argument for gold’s price-action
being somewhat predictable or, if you will, “mathematical.”
Spanish
banks may need a cash injection of more than €100bn (£80bn), the
results of an official stress test are expected to show this week,
placing more financial pressure on to an already explosive political
crisis in Madrid. by Louise Armitstead, The Telegraph:
A bank-by-bank test of financial stability due on Friday is expected
to conclude that Spain’s lenders are dangerously over-burdened with
toxic debts and need to be recapitalised, restructured or shut down.
The stress test is expected to show a dramatic deterioration since
the previous tests were carried out at the beginning of the summer which
suggested a €60bn cash injection would be the worst-case scenario.
Nomura Global Economics said in a note: “Our initial reaction to the
publication of those estimates has been negative. The announced figures
are well below the market expectations, which start at around €100bn,
and, in our view, not only fall short of bolstering market confidence
but may actually increase the risk of Spain losing market access.”
Last week, the Bank of Spain said bad debts at Spanish lenders had risen to record levels, with almost one in 10 loans in arrears. It is the highest bad-loan ratio since central bank records began in 1962. Read More @ Telegraph.co.uk
by Tess Pennington, SHTFPlan:
“If you can’t protect it, you don’t own it;” this popular prepping
phrase describes the mentality the unprepared have about you and your
preps. I’m not saying it’s fair that people could steal from you, but
it’s a reality, and a concern you should not take lightly. The fact is
that crime seems to escalate in the aftermath of a disaster; something
we have seen with many disasters, and as recently as Hurricane Isaac.
Over the last year, we have discussed how important it is for
security measures to be in place especially during and following a
wide-spread disaster. In an earlier newsletter written
on the subject of external security measures, I wrote, “a ‘bug in’
scenario may be our only choice after a disaster strikes and we must
prepare not only for our basic needs, but also for our safety. Since the
grid may be down following a disaster, each household should prepare
for crime.”
I realize there are some who believe a gun does not belong in the
home; and in all honesty, that is your God given choice; be that as it
may, if we are talking about protecting ourselves in a short-or
long-term disaster, then we have to assume that local emergency
responders will not be as readily available and crime could be a threat
to our livelihood and well-being. Read More @ SHTFPlan.com
Total Donations over the last 3 1/2 years. approx $165.00 (Thank You).
Donations will help defray the operational costs. Paypal, a leading provider of secure
online money transfers, will handle the donations. Thank you for your
contribution.
by Doug Noland, PrudentBear.com:
As you read my opening summary of the Fed’s latest quarterly Z.1 “flow
of funds” report, keep in mind the Fed’s recent decision to move to an
altogether more aggressive monetary policy stance.
For the second quarter, Total Non-financial Credit market debt
expanded at a 5.0% rate, the strongest expansion since Q4 2008 (14
quarters ago). Debt growth increased from Q1’s 4.4% rate and was almost
double Q2 2011’s 2.6%. Corporate Credit market borrowings expanded at a
6.9% pace, up from Q1’s 4.7%. Total Household debt expanded at a 1.2%
pace, the strongest growth since Q1 2008. Consumer Credit grew at a
robust 6.2% rate, the strongest in 19 quarters (Q3 ’07). Home mortgage
Credit contracted at a 2.1% pace, an improvement from Q1’s 3.3% pace of
decline. State & Local borrowings increased at a 0.8% pace,
compared to Q1’s 1.2% rate of contraction.
For the quarter, Total Non-Financial Credit expanded at a
seasonally-adjusted and annualized (SAAR) $1.946 TN. This was the
strongest debt expansion since Q4 2008’s SAAR $2.082 TN. And for
comparison, the current pace of debt growth compares to 2008’s total
growth of $1.906 TN, ‘09’s $1.063 TN, 2010’s $1.437 TN and 2011’s $1.326
TN. In the past, I’ve posited that our maladjusted Bubble economic
structured requires in the neighborhood of $2.0 TN annualized Credit
growth to retain reflationary momentum throughout the economy and asset
markets. Read More @ PrudentBear.com
by Dr. Paul Craig Roberts, PaulCraigRoberts.org:
Paul Craig Roberts was interviewed by Nilantha Ilangamuwa, editor of
Torture, a print and online magazine published by the Asian Human Rights
Commission based in Hong Kong and the Rehabilitation and Research
Centre for Torture Victims in Denmark. Torture: Asian and Global
Perspectives is a new initiative which focuses on torture and its
related issues globally. NI: You worked at the US treasury as Assistant Secretary
during the Reagan administration, when the world economy changed towards
neo-liberalism, and you are famous for being a co-founder of
Reaganomics. How did this happen? What was your contribution to changing
the model of world economy?
PCR: Reaganomics is a term the media attached to an innovation in
economic theory and policy known as supply-side economics. Supply-side
economics is not an ideology and it is not neo-liberalism.
I do not think that the Reagan administration changed the model of
the world economy or that the administration thought of itself as
neoliberal. What the Reagan administration did was to change the
macroeconomic policy that had prevailed in the post-war English speaking
world. That policy, known as Keynesian demand management, relied on
government fiscal policy and monetary policy in order to maintain full
employment and low inflation. If unemployment was the problem,
government would enact a budget deficit and the central bank would
expand money and credit. The monetary and fiscal stimulus would boost
aggregate demand, and the increased spending would raise the level of
employment. If inflation was the problem, the government would enact a
budget surplus and the central bank would reduce the growth rate of
money and credit. Read More @ PaulCraigRoberts.org
by Deepcaster, Gold Seek:
“Thirteen years ago, it took a bit more than 42 ounces of gold to buy
the DOW. In the year 2007, when the DOW made a brand new all time high
in nominal terms, it took half the amount of gold to buy that same Dow,
namely a bit more than 20 ounces. Today, as the DOW is once again
flirting with moving back towards the all time high in 2007, it takes an
astonishing LESS THAN 8 OUNCES of GOLD to buy that same DOW!
“Are you getting the point of all this? All that the elitist monetary
masters are creating in their alchemy laboratories is a RAMPANT case of
paper asset inflation of the stock market. Stocks are losing value
against gold and have been so doing since 1999. The more QE the Fed
wants to spit out, the further this ratio is going to collapse until at
some point it will probably end up with 3-4 ounces of gold being able to
purchase the DOW.
“Another way of stating this is: Do not be hoodwinked by the claptrap
coming from the mouth of the monetary elites at the FOMC that inflation
is tame and that expectations are subdued. We are witnessing one of the
single greatest instances of inflation in the stock market in our
domestic history!” Read More @ GoldSeek.com
by Adam Hamilton, Silver Seek:
Silver has certainly enjoyed an impressive run of late, catapulting
nearly a third higher since mid-summer. Because this surge looks nearly
vertical on short-term charts, some traders are getting nervous about
this rally’s staying power. While silver may indeed be temporarily
overbought, its recent strength actually looks like the vanguard of a
major new upleg. Silver’s advance is likely just getting started.
Skepticism of silver’s potential continues to run rampant among
speculators and investors. But this is par for the course after a major
correction. Back in the spring of 2011, silver rocketed parabolic in a
gargantuan upleg. But it became wildly overbought, hitting the most extreme greed levels of its entire secular bull. So over the subsequent 14 months, silver corrected dramatically by a staggering 45.5%!
Remember that the job of any correction is to rebalance sentiment, to
eradicate the greed and euphoria that necessitated that correction in
the first place. So the bigger the upleg leading into a major topping,
the bigger the subsequent correction will have to be. Thus it shouldn’t
be the least-bit surprising that silver’s biggest upleg by far of its
entire bull was followed by its biggest and longest correction. Read More @ SilverSeek.com
by Clarice Feldman, American Thinker: It
is increasingly obvious that Obama wants to get out of the White House,
not just to take vacations, visit Letterman, and go golfing, but to be
free of the responsibilities of the office of President itself, and
those horrid media types are doing everything in their power to make him
stay where he is. It’s time to free Barack.
This week for the very first time, Obama got free of the phalanx of
media guards — the gang Dorothy Rabinowitz of the Wall Street Journal,
calls ” Pack Journalism” and faced actual questioning on Univision,
instead of the yentas on The View, Entertainment
Tonight, “Pimp With the Limp” and such, and he made clear what I’ve
suspected for a long time: He wants out of the Presidency. Yes, you
heard me — he wants O.U.T. “The
most important lesson I’ve learned is that you can’t change Washington
from the inside.” So said the Man whose 2008 campaign theme was “Hope
and Change.” “You can only change it from the outside.” Read More @ AmericanThinker.com
by Ludwig von Mises, Mises:
In seeking to demonstrate the social function and necessity of private
ownership of the means of production and of the concomitant inequality
in the distribution of income and wealth, we are at the same time
providing proof of the moral justification for private property and for
the capitalist social order based upon it.
Morality consists in the regard for the necessary requirements of
social existence that must be demanded of each individual member of
society. A man living in isolation has no moral rules to follow. He need
have no qualms about doing anything he finds it to his advantage to do,
for he does not have to consider whether he is not thereby injuring
others. But as a member of society, a man must take into consideration,
in everything he does, not only his own immediate advantage, but also
the necessity, in every action, of affirming society as such. For the
life of the individual in society is possible only by virtue of social
cooperation, and every individual would be most seriously harmed if the
social organization of life and of production were to break down. In
requiring of the individual that he should take society into
consideration in all his actions, that he should forgo an action that,
while advantageous to him, would be detrimental to social life, society
does not demand that he sacrifice himself to the interests of others. Read More @ Mises.ca
by Bill Bonner, Daily Reckoning.com.au:
The downside for Nazi Germany began almost as soon as it started. The
regime shifted national resources towards armaments as soon as the
Enabling Law of March 1933 gave him the power to rule by decree.
More spending on the military left fewer resources for the consumer
economy. As more and more men, steel and coal went into military output,
non-military output declined, bringing down standards of living. The
real wealth of the German people began to fall, almost immediately. At
first, the decline was modest. Economists didn’t notice it.
They focused instead on rapid industrial growth, falling
unemployment, and belching smokestacks. But the typical German had less
to eat, less to spend and less to buy. In the final years of the Third
Reich, his standard of living was in free-fall.
Few people wake up in the morning and say to themselves: ‘what I
really want is a tank.’ Nor do they turn to their wives and say: ‘Honey,
we’re out of ammunition.’ Military spending is a state concern, not a
private matter. Very few individuals want to use their time or money on
weapons or defenses. Read More @ DailyReckoning.com.au
by Bruce Krasting, Bruce Krasting Blog:
Remember the big flap about the Supreme Court ruling on the Affordable
Healthcare Act (AKA – Obamacare – ACA)? The issue that made the
headlines was that the Supremes ruled that ACA was legal, provided that
the penalty for not having health insurance was collected as a tax.
This is a big deal as the penalty ($700 a year per person) was
supposed to be the discipline that forced people to go out and buy their
own insurance. One either acquires health insurance, or they pay a
price.
The CBO took a look at this last week (link). The results surprised
me. The reality is that few people will end up paying the penalties. So
the basic premises of ACA is actually a fraud.
CBO estimated that there will be 30Mn uninsured in 2016 when ACA goes
into effect. Of that 30Mn, the following groups will be excluded from
paying the penalty:
1) Undocumented workers.
Really? But that is 10Mn people; a third of the problem!
2) Religious Beliefs
Huh! What religion is that? If it gets you out of paying taxes, I want to join!
3) Native Americans
Okay, after all, it is their land. Read More @ BruceKrasting.blogspot.com
Total Donations over the last 3 1/2 years. approx $165.00 (Thank You).
Donations will help defray the operational costs. Paypal, a leading provider of secure
online money transfers, will handle the donations. Thank you for your
contribution.
Following the riots at Apple's FoxConn Chengdu plant in June, engadget is reporting that FoxConn's Taiyuan plant - the scene of earlier strikes over salary disputes back in March - has suffered damage as workers riot.
Police are on site to control the crowd and while the motive is not
clear, it is apparently unrelated to the recent anti-Japan protests. It
appears - based on the clip and photos below - that much damage has
been done in the process.
We have discussed the CRIC cycle a number of times - especially with regards Europe - but it seems the never-ending story of Crisis-Response-Improvement-Complacency
has struck once again as Morgan Stanley notes when complacency becomes
pervasive, it usually gives way to a renewed crisis. Complacent
financial markets appear to be looking through the fact that the global economy remains stuck in a 'twilight zone' between expansion and recession.
Dismissing weak PMIs in China and EU, markets have feasted in
QEternity and OMT and this has, as expected, affected European
policy-makers (e.g. ongoing disagreements over the details of the
much-anticipated negative-feedback-loop-breaking banking union; and
Spain/Italy's 'belief' they can avoid an ESM 'austerity' program). This
feels eerily like the March/April period when post-LTRO improvements
induced euphoria in traders and governments/ECB to relax prematurely
and as Brevan Howard explains below - every major developed economy is facing significant downside risks - no matter how enthusiastic markets appear to be.
A bank-by-bank test of financial stability due on Friday is expected
to conclude that Spain’s lenders are dangerously over-burdened with
toxic debts and need to be recapitalised, restructured or shut down.
“If you can’t protect it, you don’t own it;” this popular prepping
phrase describes the mentality the unprepared have about you and your
preps. I’m not saying it’s fair that people could steal from you, but
it’s a reality, and a concern you should not take lightly. The fact is
that crime seems to escalate in the aftermath of a disaster; something
we have seen with many disasters, and as recently as 
As you read my opening summary of the Fed’s latest quarterly Z.1 “flow
of funds” report, keep in mind the Fed’s recent decision to move to an
altogether more aggressive monetary policy stance. 
Paul Craig Roberts was interviewed by Nilantha Ilangamuwa, editor of
Torture, a print and online magazine published by the Asian Human Rights
Commission based in Hong Kong and the Rehabilitation and Research
Centre for Torture Victims in Denmark. Torture: Asian and Global
Perspectives is a new initiative which focuses on torture and its
related issues globally. 
“Thirteen years ago, it took a bit more than 42 ounces of gold to buy
the DOW. In the year 2007, when the DOW made a brand new all time high
in nominal terms, it took half the amount of gold to buy that same Dow,
namely a bit more than 20 ounces. Today, as the DOW is once again
flirting with moving back towards the all time high in 2007, it takes an
astonishing LESS THAN 8 OUNCES of GOLD to buy that same DOW!
Silver has certainly enjoyed an impressive run of late, catapulting
nearly a third higher since mid-summer. Because this surge looks nearly
vertical on short-term charts, some traders are getting nervous about
this rally’s staying power. While silver may indeed be temporarily
overbought, its recent strength actually looks like the vanguard of a
major new upleg. Silver’s advance is likely just getting started.
In seeking to demonstrate the social function and necessity of private
ownership of the means of production and of the concomitant inequality
in the distribution of income and wealth, we are at the same time
providing proof of the moral justification for private property and for
the capitalist social order based upon it.
The downside for Nazi Germany began almost as soon as it started. The
regime shifted national resources towards armaments as soon as the
Enabling Law of March 1933 gave him the power to rule by decree.
Remember the big flap about the Supreme Court ruling on the Affordable
Healthcare Act (AKA – Obamacare – ACA)? The issue that made the
headlines was that the Supremes ruled that ACA was legal, provided that
the penalty for not having health insurance was collected as a tax.
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