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EURUSD Breaks Down, Hits 1.2572
And so the EURUSD plunges to new lows. Yesterday, we expected the euro would hit a 1.25 handle by the end of the day. Alas, we were off by 4 hours. US banks are now rumored to be joining European banks in taking on the ECB directly and shorting the living daylights out of the doomed currency expecting another several hundred billion in bank bailout funds to be added shortly. Last time we were here a week ago in the EURUSD, the Dow was crashing in the four digit range. Now, we know that the machines have decoupled from the EURUSD and EURJPY signals, as the EUR is no longer a part of any correlation trade, As such we expect the euro to hit parity at about the time the S&P hits 1,500, on yet another no volume melt up, just in time for Gold to hit a 3x multiple of the S&P. Although, that won't be today: gold is currently being pushed down the LBMA. JPMorgan can not imagine a world where gold is $1,250 or higher. Alas, we give this last ditch attempt at most 24 hours. In other news, the EURUSD has buyer support in the 1.2550 area. As for stocks: look at volume. If it abysmal as it tends to be whent he Primary Dealers, the Fed and the quant community collude to push it up double digit handles, we expect S&P 1,200 today. If volume picks up the market will tank. Guaranteed.
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Its quite amazing actually! The melt-up is right on time--How do they really do it...? I surrender..Only the machines live.
Swap away, Ben. Swap away.
so SkyNet is fully self aware at this point?
Someone is playing dirty. It was trading above 1.27 just couple of hours ago. This is fucking bullshit and i hope those fucking bankers end up on the gallows with their liver, heart and brain eaten by those who they damaged most; that is ... the rest of the goddamn World.
come on, tell us how you really feel cb..
Nice name
Over at forexlive one commentor tried to name the (US) bank that took it down most recently but the poster blocked out the name, too afraid of repercussions.
http://www.forexlive.com/106337/all/hearing-2
12 letters, then 4 - the last word coulda been 'Bank'. :-)
It is there rumoured to be a large German bank that started the slide, a couple of hours ago.
Me, I feel great about this - regard the euro as an attempt by an unelected, unaccountable banking cartel to corral the economies of all the sovereign nations of Europe. The sooner it goes the sooner each economy will be free to make its own decisions, sink or swim by virtue of its own sovereignty. (At least the people can thow out or overthrow pig governments, or put up with them - their choice.)
The enemy of my enemy....
Bank of New York Mellon
Aren't the formally preferred bank of the Russian mafia??
Damon Vrabel's take on what we already know...Short interview 13:56 minutes into segment.
http://www.youtube.com/watch?v=dOhXUSBR3hs&feature=player_embedded#at=875
Its called taking one for the team... The usd is a much, much more important instrument of control for the PTB scums.
It wil probably slice through 1.2550 "support" like a hot knife through butter. Only surprising thing is why is the Euro 30% HIGHER than it was 10 years ago. It aint right - umm umm - just aint right.
http://worlddarkestdays.blogspot.com/2010/05/bazooka-shot-dud.html
Dud bazooka.
You have to love seeing people think they are going to get out of this.
"There is no out, there is only in"
http://www.armfa.com/blog_images/debt_1952_segment.JPG
The contagion started when the US consumer peaked in 2007, and credit creation started to collapse in 2008, and then went negative in 2009.
It isn't called a death spiral for nothing folks, it's over, it's not over because of too much debt, it's over because the system was always unsustainable. You either grow exponentially or you DIE in the system you live in.
Mike Ruppert,
Do you have collapsenet up and running yet?
Why do people always think I am someone other than myself?
I guess we can add this guy to my list.
http://mikeruppert.blogspot.com/2010/05/collapsenet-launch-delayed-collapse.html
What does that have to do with me?
I certainly don't want your money for a website.
If Mako don't want it, I'll take your money.
To start a website. :-D
Baxter? Is that you?
Bark twice if you're in Milwaukee...
I am surprised people don't think I am Obama. The list is getting pretty long. I haven't been mistaken for being called Peter Schiff yet, probably because people don't usually call themselves idiots.
Obama, eh...Well, maybe if you say something inspirational about the 'profit/earnings ratio'...
Maybe if I talked about "change", like the "change" in your pocket. :)
Ok, 20 questions time: Are you Warren Buffett?
MsCreant, you're next...
James Howard Kunstler.
Cut to Steve Buscemi's Billy Madison list of people to kill scene.
Well the "bazooka" was not intended to push the Euro higher. Why would they voluntarily raise the value of their overvalued currency? No the bazooka was intended to get bond yields for the PIGS down - which it has succeeded in doing.
Confronted with the greatest currency debaser the world has ever known in the form of Bennie Mae, other countries have to take advantage of any opportunity they get - to depreciate their own currencies. Otherwise Bennie Mae will be the only one having fun - and that aint fair.
The bazooka was to stabilize the euro and reduce bond yields. Basically a freefall in a currency helps no one even for a short period of time.
Within time those yields will start to widen out again. Several countries are already seeing it.
The bazooka is a dud because the Euro will be no more within due time. I assure you the purpose of the bazooka was not to save Greece, it was to save the Euro ultimately.
You will see the Euro appreciate vs. USD when they start using the swap lines to keep this charade going. Swap Euro for dollars, sell dollars, buy eurozone debt. Kill dollar, strengthen Euro, get a bid under PIIGS debt, everyone's happy. Even I'd be happy. Gold will run to $1500 on its way to $2000. The bad news is that oil will hit $100/barrel and then specs will ramp it back to $140 in short order, and this time it's not coming down until the ECB swaps are retired. This is basically a nightmare scenario for consumer spending. The central bankers are hoping everything will be peachy keen with Europe by the time they absolutely have no choice but to retire the swaps. If not, everyone, and I mean everyone, is screwed, and Treasuries will be the only place to hide.
Really, the only question in my mind is whether Bernanke will have the sense, when the time comes, to let Europe implode in order to save the US.
Hmm - lets think this through slowly. ECB buying debt - this is putting more freshly printed Euros into the market. This will weaken the Euro. The FX swap line with the Fed could be used to temporarily support the Euro I guess - but this would running at cross currents to what they are trying to accomplish - looser financial conditions. No doubt the Fed is encouraging them to support the Euro - but if they have an ounce of self respect - they would let the Euro get to parity or below to save themselves .
the FX swap lines were needed in 2008 because the crux of the issue was european banks with dollar denominated toxic paper. Now the issue is different - it is Euro denominated sovereign paper that needs support. I doubt the swap lines will be used much.
The weaker the Euro, the higher the borrowing costs for eurozone sovereigns. Nobody will want to own eurozone bonds if the euro is headed toward parity. This is the immediate problem and currency swaps can fix it temporarily by keeping a bid under the euro. Remember, they don't want to have to actually give out the $1 trillion they promised. It's considerably more preferable to have borrowing costs come down as a result of open-market operations funded with dollar swaps than to kill the currency base of the bonds you're trying to bid up. Or so it seems to me. YMMV.
TechTicker video
http://finance.yahoo.com/tech-ticker/backdoor-bank-bailout-fannie-and-fr...
I posted this on Cheeky's thread - kind of old news but I think it is a propos here, so just in case anyone missed the story:
http://www.telegraph.co.uk/finance/financetopics/financialcrisis/7716530/EU-imposes-wage-cuts-on-Spanish-Protectorate-calls-for-budget-primacy-over-sovereign-parliaments.html
Spain imposing '1930s-era wage cuts' to the cheers of banksters everywhere. I'm sure the Spanish won't mind giving up a little thing like their economic sovereignty. It's not like they have any money left anyhow.
I expect the Spanish citizens now to show Greece how it's done. Sovereignty, shmovereignty.
Here are the fun bits:
"Spain has followed Ireland and Greece in imposing 1930s-era wage cuts to slash the budget deficit, complying with EU demands for further austerity...
Premier Jose Luis Zapatero told a stunned nation that public sector pay will be reduced by 5pc this year and frozen in 2011. "We must make an extraordinary effort," he said.
Pension rises will be shelved. The country’s €2,500 baby bonus will be cancelled. Aid to the regions will be slashed and infrastructure projects will be put on ice. Mr Zapatero’s own monthly pay will fall 15pc to €6,515...
Commission president Jose Barroso unveiled plans for EU control over national budgets, including an incendiary demand that Brussels should vet budgets before their first reading in Westminster, the Bundestag, and other parliaments. Current account deficits and credit growth will be monitored. Brussels can imposing sanctions on states that let booms run out of control. "We must get to the root of the problems," he said.
Such a plan would greatly improve the working of the EMU system, but it would also entail a drastic erosion of sovereignty. The intrusive surveillance is a wake-up call for states that have tended to view the euro as a free lunch.
Mr Zapatero - who long prided himself on being an "anthropological optimist" - plans to cut the deficit from 11.2pc to 6pc of GDP this year, with further cuts next year. The fresh move is to placate bond vigilantes and to calm German fears that eurozone discipline is breaking. He has already raised income taxes and lifted VAT from 16pc to 18pc.
US President Barack Obama played a key role behind the scenes...
"Just months ago the government said it would never cut wages, so this is a very humiliating U-turn. There will be protests, but we don’t know yet whether there will be a general strike," he said.
Spain’s UGT union federation warned of "social conflict" and vowed to inflict "maximum punishment" on the government. However, the nation as a whole has so far handled a property slump and a rise in unemployment to 20pc with stoicism, befitting the tradition of the Spanish-born Stoic philosopher Seneca.
(emphasis mine)
These are joined by austerity measures in Portugal, as follow:
http://www.forexlive.com/106350/all/portugal-mp-opposition-leader-agree-new-measures-to-cut-2010-budget-gap-by-about-2-bln-euros-source
The more austerity that is impose i euroland - the lower the Euro will go.
"I expect the Spanish citizens now to show Greece how it's done."
indeed...spaniards take dissent to a whole 'nother level....just in time for the bilderberg boys.
I imagine if the Euro got back to 2002 levels around 0.85 the Eurozone will do a lot better - like removing a ball and chain.
I don't understand why there even needs to BE a 'euro'. (Stupid name too, sounds like something L Ron Hubbard would have come up with.)
What was wrong with the old system, where each nation was completely in charge of its OWN money? And the people could push back against any leaders they perceived as mishandling said money.
I don't see any purpose to the euro other than advancing the New World Order. Have no idea why there's so much handwringing over saving it...???
Sovereignty is evil.. don't you get it? /end sarcasm.
Bingo. Game theory suggests the Euro can never work (it's all fraud, and will break down like has OPEC).
Of course, the goals "for" the Euro are (1) perceived efficiencies since everything is denominated in a single unit (no worry about exchange rates), and (2) centralized control (ego and power).
In reality, the "efficiencies" gained in (1) merely resulted in hidden risk and inefficient capital allocation. That's why there is no bailout scenario -- it's all bad money after bad, and can't be turned around, since the capital is fundamentally allocated badly.
Under such a scenario, it guarantees all of society suffers, with the few elites skimming the "best" crumbs of bread.
Thank you for the explanation. The whole thing has never passed the 'smell test' with me and both logically and by my 'gut' I have mistrusted it. But having no education in game theory, and having begun my financial 'education' but recently, it's much better for me to hear it explained, how and why.
i ain't buyin it, so i hope you ain't sellin it..... my gut tells me this is all planned and manufactured. there is a move to bring all major currencies to parity with each other (so reasons for this currency moves are manufactured). euro/pound/dollar/cdn dollar are all moving to parity with each other. when the dust settles - presto - a single new world sdr/currency.
Shit, that's scary. Now I gonna need a glass of warm milk and leave the nightlight on at bedtime.
(As a New World Order hater, I am serious that it's a scary thought. All we need is that bankster filth *officially* running our economies for us.)
Well I ain't buying the one-world currency conspiracy theory. We're seeing right now in Europe what would happen under one-world currency. Some countries (Germany) would work hard. Some countries (Greece) would slack off. Hard-workers get pissed at slackers. Slackers resent hard-workers. How long do you think that system would hold together? (answer: not very long).
According to one strategist euro will tumble to $1.18 by next month, then recover to $1.35 by year and and then sky-rocket to $3 per euro on US fiscal woes.
http://www.bloomberg.com/apps/news?pid=20601085&sid=a5UNb52sH0j8
It couldn't happen to a more ridiculous currency.
I love the fact that Europeans are scrambling for gold amidst their currency "collapse", when less than a decade ago we had parity.
Yep, those "europeons" better hurry up and buy more gold and silver before their currency disappears.
Oh wait, they don't have anymore to buy.
And yes, those "ameripeons" will be buying more gold in another 6 months or so when it's the united states turn to bailout again.
April's deficit was so large, yet no one cares?
Why? Just create more debt on behalf of your citizens, it always works...
A decade ago their Euros bought 4 times as much gold.
See a reason for the scramble now?
Which means gold id overpriced.
What exactly do you believe is the motivation for underhanded play?
From a non-trader perspective, like the ignorant one I have, the Euro seems doomed. Too many interests pulling in multiple directions. Wouldn't one expect a movement down?
Is it the magnitute/rate of change that triggers your belief?
From a non-trader perspective, like the ignorant one I have,
Ignorance is bliss when the machines have taken over.
If you have ever been to London or PAris and eaten lunch at a macdonalds type place and had to pay $15/per person - you know that both these currencies are ridiculously ovrvalued.
That'll teach you to go Supersized. :-)
having these types of ridiculously overvalued currencies is fine if you are trying to run a boutique for rich Arabs. But if you want a real country - prices need to come way way down.
BIS buying EUR this morning, after German banks sold it down earlier.
<EDIT>
To be clear, BIS buys Euros in the market to reduce volatility, pays USD it has borrowed from the Fed.
Of course they pump it back over 1.26 but it won't hold, we will see 1.20 soon, much sooner if riots erupt again in Europe, which I expect.
I totally agree with doggis. There is a strategy called the 'straw man', I'm sure most on this blog knows about. If not, a 'straw man' is created, in order to knock down. In order to move to another setting. The euro is a straw man. Major currencies ARE moving towards parity. You can include AUD on that list too, and look at NZD's moves in the past 6 weeks. However, there is one historical cycle to note. After every fiat regime comes to an end, what replaces it is rarely another fiat regime. It is usually a hard money regime. And after the hard money regime comes to an end, what usually replaces that is a fiat regime, and vice versa. One world currency with a component backed by gold perhaps? The bankers don't have much silver, so they won't be voting for that, if they choose to back the new currency with any hard money component.
"component backed by gold"
You ran out of gold to support the system long ago... this is ancient history. The last run on gold was 1971 by the French, the run on gold before that was 1930.
As long as you continue to borrow and lend with compounding interest you will never have enough gold to support that system long-term.
That is incorrect. You could always have enough gold (or whatever benchmark you pick).
The valuation of it would just change.
Not when you are compounding it by lending and borrowing.
You put 10oz in the bank at say 10% compounded annualized, they lend it out, you collect interest on the gold for doing nothing, get 7 billion people lending and borrowing... eventually the interest owed will be more than the available supply. In this example, if the system is unable to grow the supply exponentially... the system collaspse... run on the banks... not enough in the banks... game over... people die... end of story.
Right now you can get 60-80 years out of the system generally. All the gold and silver systems collapsed. Let me see, you think the Roman empire is still standing? No, their silver mines got depleted and they were no longer able to produce silver at the exponential rate needed... Rome collapsed for failure to understand a simple Math equation.
Valuation has nothing to do with it, there is no valuation.
Once you build a system on the fraud, it's over. Let me see you think they had enough gold to cover the run last time? NO!
Well it has been kept going for a century or more. I see your point of view - but what happens is that periodically you get a "financial crisis" that wipes out a bunch of debt . Then you have inflation - which is always the underlying reality. The exponential growth in money ( with periodic wipeouts to reset the system at a lower level ) is met by exponentially rising prices for everything.
You have it backwards.
The equation is why you have the financial crisis because you can't feed the equation the needed inflation... growth.
Run on banks because you can't pay back with what doesn't exist.
"Then you have inflation"
YOu have have inflation that supplies the equation what it needs, when you are unable to supply the amount of growth(inflation of credit) then the system collapses and you then have your financial crisis.
Using the equation Man can supply the needed demand(inflation) for about 60-80 years then he is unable to expand exponentially due to simple Math.
See History of Man.
http://www.armfa.com/blog_images/debt_1952_segment.JPG
If you go back to the 1929 the graph will look very similar to this, as it will look like for every financial system in history.... 60-80years then it topples over due to simple Math. There is no running from it.
"due to Math". No, Math isnt the cause, its the description. Your cause is complicated, your maths is simple. I'm not disagreeing with you. I can't. Because I don't quite understand you.
But if you are saying that every 60-80 years the financial system collapses under its own weight then thats interesting, and I'm sure many here agree with you in principle.
My question to you is what do we do with this theory?
I suspect the answer is to hold fiat money for the first 30 years of the cycle, leverage yourself massively in the second 30 and form a large bank, get bailed out of the financial crisis when it hits, and convert all your bailout money to Gold as fiat currencies disappear and reappear in a new, devalued form - at which point sell gold back into cash again.
Sounds a bit like the career of JP Morgan.
Every post of yours here is almost identical. Your commitment to 1 idea is impressive. You are either a prophet or a fool, and I have no idea which. We should hold a poll.
"Once you build a system on the fraud, it's over." How true.
As opposed to the good old days when the system was not fraudulent? Like when ? I mean the system ultimately reflects human beings - advanced chimpanzees - venal, vindictive, violent and power hungry. When has it been better? Ican think of lots of times in history things have been dramatically worse.
Doesn't your arguement imply that the problem is with the banking rules, rather than the wealth storage medium?
The medium of exchange is irrelevant. You can use gold, silver, dirt, mud, quarter pounders with cheese, chicken wire, federal reserve notes, etc for your medium of exchange. If people lend and borrow with interest it will expand, fail to expand, peak, collapse and then liquidate.
Last time 100+ million were liquidated.
Malthusian theory of money?!! Actually no - what actually happens is the interest is paid with newly printed money - causing inflation - so the system can go on for a very long time. You can envision a system with exponential growth in money ( due to interest) and exponential growth in prices ( inflation). It does'nt have to necessarily collapse - although it might be nice!!
Mako, tell me how one earns interest on gold? I missed the mechanics of how that works.
Thanks.
Hasn't gold been manipulated throughout history as well?
On a long enough timeline, yes -- but it's harder, and more obvious.
Say you start with a gold coin that's 99% pure. Dilute it to the point where it's only 10% pure (like you can easily through fiat printing) and it's going to be pretty obvious.
I can't imagine us going back to system where gold is the actual medium of exchange. We would need mircoscales to 1/100000000000000 of oz to buy a gallon of milk.
If you go the next step, require currency to backed by gold, then how do you truely count the gold behind the currency. I could see bean counters going from one location to another meanwhile the govt is just trucking their gold from point A to point B to be counted again. Or, load it up with tungsten.
What is needed is Honesty.
Here is a snippet on colonial script,
"The English officials asked how it was the Colonies managed to collect enough taxes to build poor houses, and how they were able to handle the great burden of caring for the poor. Franklin's reply was most revealing: "We have no poor houses in the Colonies, and if we had, we would have no one to put in them, as in the Colonies there is not a single unemployed man, no poor and no vagabonds." Think long and hard about this. In the American colonies before the American Revolution, there was "not a single unemployed man, no poor and no vagabonds". -- no one on Welfare, no one on Social Security, no homeless, no income tax, no alphabet agencies, No IRS, BATF, FBI, DEA, CIA, HEW, OSHA, SBA, and on and on and on to provide for the "general welfare" of our villages, towns, cities and states. How did Benjamin Franklin explain this to the British officials of his day?How would he explain it to today's lawyers, judges, politicians and other government officials? "It is because, in the Colonies, we issue our own paper money. We call it Colonial Script, and we issue only enough to move all goods freely from the producers to the Consumers; and as we create our money, we control the purchasing power of money, and have no interest to pay."
-Benjamin Franklin"From http://www.kamron.com/Liberty/colonial_script.htm
Good link, thanks. It's not a popular position right now but in trying to think about solutions I keep coming back to the efficacy and promise of fiat paper. That is, fiat without the debt element. The one big problem is as you pointed out honesty. How to keep a fiat system honest. How to manage its issuance into the economy and also its balance? Is it possible to create a system where data can be used to determine the correct amount of money within the system and keep it within a fairly narrow band? How to prevent politicians from over issuing in times of war or crisis? How to manage excess liquidity when it does occur... Perhaps a variable rate sales tax? What about fractional reserve, should it be allowed to be practiced by banks and presumably regulated by competition based on percieved soundness? I wonder if perhaps the currency could be issued on a state or regional basis. What would it look like if we had fifty or so competing currencies? Could that keep them honest? What if some regions like Idaho/Montana/Utah forinstance chose to issue partially or wholly backed by PM while more industrialised regions went strict fiat? At times, like everyone here no doubt, I truly despair when I think about how frighteningly complete the social and economic, political, conceptual and even spiritual capture of our nascent republic has been. It helps me to think about solutions even as I despair for the possibility of their ever being implemented. I know only one thing for certain though and that is that tyranny will never be the path that leads human beings out of our childhood to claim our potential. Anyway, I do feel that fiat is sometimes given short shrift due partly to the confusion between pure fiat as it has been practiced in the past and central bank debt fiat which we suffer under now. It has major drawbacks for certain but I, for one keep coming back to it as I try to imagine the path forward. If we can't somehow create a functional economy somewhat vaccinated against corruption then we truly cannot move forward to claim the stars :-)
Folks, we are clearly in a bailout bubble!
Taleb was just on Bloomberg - seems to be getting even more pissed off with each passing day.
Yeah he seems to going off the deep end a bit. I have read and assimililated everything he has ever written and he's definitely brilliant. But he is a utopian and "autistic" in a sense. He is pissed because debt is evil - I guess he yearns fo the good old days like 3rd century AD.
Yeah and around every corner could be a world ending black swan - and there is no way to prepare for this. So best to sit in a corner in a foetal position sucking one's thumb. I mean - at any moment a meteor could end everything - right?
I am with his thesis almost 100% - his core criticism of creating a artificial stability and sowing the seed for future instability is obvious to me and perhaps the majority of the readers of this page.
In a stagnant pond the scum always rises to the top , blocs the light and kills the rest of the ecosystem.
he was spot on as usually.
and why does host always
talk more than their guests
then cut them off abrubtly.
Gee, stfu, and let your guest
do the talking.
"Use the stock market for entertainment and no more"
Any comments on the wild speculation of the imminent reversion of Germany to a new Deutch Mark?
I have read a couple articles claiming that one has been printed, none of them credible, but interesting none the less.
you're right most of the articles
are just bs'ing.
watch the politics in germany.
once they realize that little man
Sarkozy just saved french banks asses
then we'd see w/a little bit more clarity
where the German public may push the
politics.
I wonder if the ECB has realized that the only way to "support" the euro is to let it drop, thereby inflating away at least part of the euro-denominated European debt load. A policy of incremental, stealth devaluation.
with the advent of QE in the EU the market relationships should falter as perhaps the euro becomes the carry trade of choice. hence this relationship needs to be reconsidered. also look for the market bounce when europe closes theis has been fairly regular
Dax will go up...green shoot..no ;-)
Dax is going up as people run from EUR cash to anything else. I think bids are coming from southern europe getting out of their own countries, and Germans scared of inflation. Nobody does fear of inflation quite like the Germans.
But yes, I cant see stocks holding their value. Buying from fear, I think, doesnt work for long.
I fail to see the break down yet. What charts is ZH looking at? Let's see a close below 1.25 then we'll be talking.
Cheeky, you bastard.
Beat me to it.
This is supposed to be a headline worthy breakdown? Are we back to celebrating 50 pip moves?
Forex charts. I've been watching the EURUSD candles. On the hour chart, it's selling now at 1.25866...three hours ago it hit 1.25625. (The daily low so far.)
Just hit 1.2552 not long ago.
However, there was a low at 1.2518 on May 6th and until that is taken out I don't see how it's breaking down. Will probably bounce off support here at 1.2550 area for a while and then head lower.
Agree LG...as you say that won't be the low. Having slipped past the 1.255 'magic number', I would not be surprised to see it take a token stab past the psychological 1.25 point late this session either...
I think for some reason there's a tendency not to want to count those sudden long candle tails, like that one to 1.2518 on 6th May. It's become one of those 'outliers' that people don't seem to talk about afterward...sort of a respect for the 'dead' of the 1000-point Crash Day.
For some reason people on FX blogs are talking about today as if this is the low, not that day. Maybe b/c the journey down has been much more gradual, and so it feels safer or something. Funny how much psychology is involved in markets, despite all the 'math majors' calling the shots. But there I go theorising again. What happens when I'm up past midnight. :-)
PS: The move to 1.255 is in line with yesterday's high-to-low range, which was less than the day before that and the day before that. So this point isn't really that radical, and it would have to go lower than that to really 'send a message' so to speak.
"Taleb was just on Bloomberg - seems to be getting even more pissed off with each passing day."
Maybe Taleb needs to take his own advice and retreat for a bit?
"You ran out of gold to support the system long ago... this is ancient history. The last run on gold was 1971 by the French, the run on gold before that was 1930.
As long as you continue to borrow and lend with compounding interest you will never have enough gold to support that system long-term. "
What about the run on gold during the Rubin-Clinton years in the '90s?
All my point was trying to convey was that after a fiat regime ends (and history shows they have always ended), what follows is NOT usually another fiat regime, but a hard money one and so on & so forth...
Compound interest? Usury has been around a while, so please define 'long term'? And saying that there's not enough gold to support a system with credit & compound interest may be correct up to a point, but prior to 1914 all the way back to 1815, there existed credit & compound interest, under a gold coin standard (note I said 'gold coin standard' and not 'gold standard'), with time limited real bills maturing into metal facilitating quite succesful world trade.
So, why the nihilistic tone?
I am beginning to understand Rodgers and co. resistance towards a fixed gold standard.
They simply could not make money from stable exchange rates and extract a surplus from the rest of us , at least in the first few decades of its operation.
The stability of this system over time (many decades) begins to create instability as the various actors begin to exploit the many fixed responses to apparently natural inflows and outflows when in fact this is also a human construct like all others before it.
On balance I would prefer to see a fixed gold standard now as I am sick to my teeth of insiders making money at productive peoples expense.
The best solution of all maybe free gold but I will not hold my breath.
Getting back to Rodgers I feel he is exploiting a American weakness by projecting a image of a simple rural boy trying to make a honest buck not unlike the sage of Omaha.
These guys are speculators not investors - however they are perhaps a product of their ecosystem and are merely surviving in a parched Savannah.
Both hands up agreeing re: Rogers & Buffett.
Although I still like Rogers OK b/c he has been so outspoken re: gold and criticising the US Powerz.
But even so. It is pretty damn obvious that they are both playing 'characters' for the press, and it leaves a bad taste with me too. They're so much like pollies that way, that it makes me wonder what they are lying about and why.
I wish these tycoons would go quietly back to counting their money. Every time the media gives them the air I have to get suspicious that I should do the opposite of whatever they're saying. They didn't get rich by sharing their plans with the world, and they didn't get rich by being the one honest guy in a rigged system.
Rodgers concentration on the fiscal rather then the monetary imbalances made my mind up regarding his allegiances.
Obvious echoes of the last days of Hitler from the EU's Barroso: "Es musste gehandelt werden ohne Rücksicht auf Verluste".
The transparent desperation of economic warfare to the last bullet and the last central banker standing
I always like to imagine Barroso as a modern day Roman Cardinal dressed in appropriate attire.
I just wonder whose Papal Ring he kisses.
There are still countries willing to join the EURO zone: Estonia
http://euobserver.com/9/30068/?rk=1
In terms of procedure, the commission's recommendation must now be accepted by EU leaders at a summit in June. EU finance ministers meeting in July must then give the final go-ahead before Estonia can join on 1 January 2011.
"There are still countries willing to join the EURO zone: Estonia"
Fresh blood needed to feed the Ponzi?
FURY OF THE FX PAGANS:
http://williambanzai7.blogspot.com/2010/05/fury-of-fx-pagans.html
Perhaps the US Markets were positioned up yesterday so they could take the EURUSD down through 1.25 today?
Kohn talking hawkish. maybe just trying to help the Euro that has waddled over to the edge - over the edge. Just a little push - should do it.
Gold & Oil prepare for EURUSD meltdown through 1.25
Interesting atricle posted by Yves Smith over at Naked Capitalism. Shows the Fed is an extension of the Executive Branch.
http://www.independent.co.uk/news/world/europe/was-the-euro-saved-by-a-c...