What Greece’s Alleged ‘Collapse’ Is, and Is Not

Posted on July 8th, 2015

Greece last proposalBy John Tamny

With Greece expected to default on its government debt, markets are to varying degrees convulsing. The obvious question is whether or not the panic is rooted in something real to worry about. Not really. As is always the case, market fears are a creation of government error, not worries about a very minor economic entity.

To see why, it needs to first be remembered that a Greek default would be nothing new. As Carmen Reinhart and Kenneth Rogoff noted in their much talked about 2009 book This Time Is Different, Greece has been in default mode roughly half of its modern existence. That its creditors might suffer a “haircut” on what is owed them is far from novel.

The only reason a default constitutes news has to do with who holds some of the country’s debt. As evidenced by how the shares of German and French banks have rallied over the years each time a potential debt workout was reached, the story behind the non-story that is a Greek default involves banks that do not have an Athens address. In short, Greece’s debt troubles have little to do with an historically profligate country, and everything to do with banks that are wrongly seen as too important to be allowed to suffer their mistakes.

Importantly, if banks were properly allowed to fail much like other private business are allowed to with great regularity, bank exposure to Greece would be a non-story. Better yet, banks likely wouldn’t have exposure to Greece in the first place given its lousy track record. In short, government involvement in what should be the private doings of the private economy has created a “crisis” that would not exist absent the desire of politicians to insert themselves into a global economy that would be much healthier without political meddling. Read More..

Amusing Musings On The Political Condition Of The Country

Posted on July 7th, 2015

Albert Einstein, quote, difference between stupidity and geniusBy Monty Pelerin and Donald R. Schuman, Jr.

The deterioration of American politics is discussed in this guest post by Donald Schuman. He entitled it Amusing Musings. Sadly, there is nothing amusing about what is happening and where it goes.

The stupification (word?) of voters, the lack of individual responsibility and the corruption of the media are coming together to destroy what used to be the most respected and admired country in the world. With the media and school systems paving the Orwellian road, most of the current generation has been lost. It is difficult to see how this ignorance can be reversed and how our spiral toward irrelevancy can be reversed. Read More..

The Charade That Is Greece

Posted on June 30th, 2015

Greece RiotsBy Monty Pelerin

The charade that is Greece and the European Union has been going on now for more than five years. Greece’s financial condition could not be repaired years ago. It is only worse now. It must end badly. The fact that it hasn’t is a sign of the desperation of European socialists and one-world government types.

Does Greece die tomorrow? I don’t know. It depends on how much more money the Eurocrats want to throw into this bottomless abyss. Greece’s fate was sealed several resurrections ago. Nothing has changed except for each talk at a solution being more incredible.

What will Greece’s failure do to world markets? It won’t help, obviously. However, if it hurts them it will show the insanity that rules today’s financial markets. This outcome was inevitable. Only the timing was unknown. Despite this inevitability financial assets continued precariously levitating well beyond reasonable levels. Does that suggest markets are rational? Or, they are being manipulated by central banks? Or that people are stupid for remaining in them? Pick your explanation. Read More..

And So It Begins – Greek Banks Get Shut Down For A Week And A ‘Grexit’ Is Now Probable

Posted on June 29th, 2015

Image of Greeks lined up at banks and ATMsEDITOR’S COMMENT: This is a MUST READ in its entirety given the huge potential impact that a Greek default could have upon Europe, the Eurozone, the euro and possibly even the rest of the developed economies.

By Michael Snyder

Is this the beginning of the end for the eurozone?  For years, European officials have been trying to “fix Greece”, but nothing has worked.  Now a worst case scenario is rapidly unfolding, and a “Grexit” has become more likely than not On Sunday, the European Central Bank announced that it was not going to provide any more emergency support for Greek banks.  But that was the only thing keeping them alive.  In order to prevent total chaos, Greek banks have been shut down for at least a week.  ATMs are still open, but it is being reported that daily withdrawals will be limited to 60 euros.  Of course nobody knows for sure if or when the banks will reopen after this “bank holiday” is over, so needless to say average Greek citizens are pretty freaked out right about now.  In addition, the stock market in Greece is not going to open on Monday either.  This is what a national financial meltdown looks like, and the nightmare that has been unleashed in Greece will soon start spreading to much of the rest of Europe.

This reminds me so much of what happened in Cyprus.  Up until the very last minute, politicians were promising everyone that their money was perfectly safe, and then the hammer was brought down. Read More..

Former Obama Aides Blast Emerging Iran Nuclear Deal

Posted on June 26th, 2015

Fateh 110 NewBy Newsmax

A group of prominent American security advisers, including five with ties to President Barack Obama’s first term, warned on Wednesday that a deal on curbing Iran’s nuclear program was at risk of failing to provide adequate safeguards.

In an open letter, the group of former U.S. officials and foreign policy experts cautioned that an Iran nuclear deal would “fall short of meeting the administration’s own standard of a ‘good’ agreement” unless it included a tougher line on United Nations nuclear inspections and conditions for sanctions relief. Read More..

American Gestapo

Posted on June 23rd, 2015

Man Riding Train CarBy Philipe Gastonne

It was a lifetime ambition for 22-year-old Joseph Rivers to arrive in Los Angeles and become a big name in the music business.

And he nearly made it…until a team of DEA agents put a stop to everything by snatching his life savings without even charging him with a crime.

The aspiring businessman from the outskirts of Detroit had managed to scrape together $16,000 and was finally on the train to Los Angeles when the justice department stepped in, reported the Albuquerque Journal.

Officers found Joseph’s thousands of dollars stashed in a bank envelope and questioned him about the origins of the cash.

Despite the fact the officers found no drugs or guns in Joseph’s luggage – and failed to charge him with any crime – they took his cash away from him under the civil asset forfeiture program.Daily Mail Read More..

Greenspan: U.S. ‘Way Underestimating’ the National Debt

Posted on June 11th, 2015

Social Security SystemBy Newsmax

Alan Greenspan, former chairman of the Federal Reserve, said a Social Security Trust Fund does not exist and that the U.S. is “way underestimating” the size of its national debt.

The notion that we have a trust fund is nonsense – that trust fund has no meaning whatsoever except for the fact as an all private fund to benefit programs, if it runs out of money, you can only pay out in cash flows that come in but the probability that will happen is not particularly high,” Greenspan recently told the Fiscal Summit held by the Peter G. Peterson Foundation, PJ Media reported.

The trust fund that supports Social Security’s disability program is projected to run out of money late next year, triggering automatic benefit cuts, unless Congress acts. Read More..

Here’s What the Next Gold Bull Market Will Look Like

Posted on June 5th, 2015

UBS gold bars with mirrorsBy Jeff Clark, Senior Precious Metals Analyst

We measured every bull cycle of gold stocks and found there have been eight distinct upcycles since 1975.

We also discovered something exciting: Only one was less than a double. (A second was 99.9%.)

Even more enticing is that the biggest one—a 601.5% advance in the early 2000s—occurred just after a prolonged bear market.

And our current bear market is longer than that one. Read More..

A Recession Within A Recession

Posted on June 1st, 2015

Recession PublicBy Michael Snyder

On Friday, the federal government announced that the U.S. economy contracted at a 0.7 percent annual rate during the first quarter of 2015.  This unexpected shrinking of the economy is being primarily blamed on “harsh” weather during the first three months of this year and on the strengthening of the U.S. dollar.  Most economists are confident that U.S. GDP will rebound back into positive territory when the numbers for the second quarter come out, but if that does not happen we will officially meet the government’s criteria for being in another “recession”.  To make sure that the numbers for Q2 will look “acceptable”, the Bureau of Economic Analysis is about to change the way that it calculates GDP again.  They are just going to keep “seasonally adjusting” the numbers until they get what they want.  At this point, the government numbers are so full of “assumptions” and “estimates” that they don’t really bear much resemblance to reality anyway.

In fact, John Williams of shadowstats.com has calculated that if the government was actually using honest numbers that they would show that we have continually been in a recession since 2005.  That is why I am referring to this as a “recession within a recession”.  Most people can look around and see that economic conditions for most Americans are not good, and now they are about to get even worse. Read More..

Unsound Banking: Why Most of the World’s Banks Are Headed for Collapse

Posted on May 20th, 2015

Bank bad bankBy Doug Casey, Casey Research

You’re likely thinking that a discussion of “sound banking” will be a bit boring. Well, banking should be boring. And we’re sure officials at central banks all over the world today—many of whom have trouble sleeping—wish it were.

This brief article will explain why the world’s banking system is unsound, and what differentiates a sound from an unsound bank. I suspect not one person in 1,000 actually understands the difference. As a result, the world’s economy is now based upon unsound banks dealing in unsound currencies. Both have degenerated considerably from their origins.

Modern banking emerged from the goldsmithing trade of the Middle Ages. Being a goldsmith required a working inventory of precious metal, and managing that inventory profitably required expertise in buying and selling metal and storing it securely. Those capacities segued easily into the business of lending and borrowing gold, which is to say the business of lending and borrowing money. Read More..

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