The chart below, from the Economist, takes a look at how long it would take an individual from any given country to become a millionaire based on "how much the main breadwinner in an average household makes each year (before tax)." No major surprises here: the fastest spawning place for a budding millionaire, a term that has long ago lost its one-time cachet thanks to the world's central banks who have pumped some $14 trillion into the market, is the US, while those hoping to hit the vaunted seven figures in Bulgaria, Mexico and Romania would need to wait about 2-3 average lifetimes before they hit their monetary goal.
That precious metals are not the best friends of central banks, whose sole provenance is in creating, and lately massively diluting, faith-based fiat currency is no secret, especially not after the recent snafu involving the Bundesbank and its shocking gold repatriation announcement which came in direct refutation of its public statements just 2 months earlier about faith in the NY Fed this, and bashing of a "phantom debate" on the safety of gold reserves that. Yet it was not gold gold, silver or even tungsten that was the object of derision in an amusing paper released by the ECB in early November titled "Virtual Currency Schemes", which we profiled at the time, but rather the decentralized electronic currency BitCoin, which was supposed to highlight what, in the eyes of the Draghi-led Frankfurt institutions, is nothing but a Ponzi scheme. Why the ECB suddenly felt threatened so much by Bitcoin, it felt an imperative to issue a 55 page paper decrying such electronic currencies we will never know. What we do know, however, courtesy of a reminder by Bloomberg's Max Raskin, is that since the publication of said paper, the value of Bitcoin as tracked by the Mtgox exchange, has soared some 40% in just under three months, from a "fiat equivalent value" of $13 to a most recent closing price of $18.50, and has doubled in the past 12 months alone.
Just because it has been a while since the ponytailed Swiss pundit's cheerfulness graced these pages, here is a reminder that things can always be worse:
- FABER: `I'M HYPER BEARISH, SOMETIMES WANT TO JUMP OUT WINDOW'
- FABER: `PLACE FOR KEYNESIANS IS NORTH KOREA'
Dr. Gloom, Boom and Doom: consistent to the very end.
The economic implosion of Europe is accelerating. Even while the mainstream media continues to proclaim that the financial crisis in Europe has been “averted”, the economic statistics that are coming out of Europe just continue to get worse. Meanwhile, those of us living in the United States smugly look down our noses at Europe because we are still living in a false bubble of debt-fueled prosperity. But eventually we will feel the sting of austerity as well. The recent fiscal cliff deal was an indication of that. Taxes are going up and government spending is at least going to slow down. It won’t be too long before the effects of that are felt in the economy. And of course the reality of the situation is that the U.S. economy really did not perform very well at all during 2012 when you take a look at the numbers. The cold, hard truth is that the U.S. economy has been declining for a very long time, and there are a whole bunch of reasons to expect that our decline will accelerate even further in 2013. So if you are an American, don’t laugh at what is happening over in Europe at the moment. We are headed down the exact same path that they have gone, and we are going to experience the same kind of suffering that they are going through right now. Use these last few “bubble months” to prepare for what is ahead.
In the spirit of the holidays and hope for a more prosperous 2013, we thought readers might appreciate a little humor to partially offset the relentless 'cliff' doom and gloom. So please, don’t take this too seriously. But if you happen to stumble across a ‘paperbug’ or two over the holidays, perhaps you could share some of the points made here. Humor sometimes helps people realize just how hopelessly misguided they are... Quantitative easing changes nothing. Remember, the PhDs are in charge of our economies and they know exactly how much our money should be worth. Those of us concerned that our money might lose purchasing power are just being paranoid. Choice is dangerous. Think Adam and Eve and you’ll get my point. Those arguing in favour of monetary freedom, of choice in money, of repealing legal tender laws, they’re just like that nasty snake Lillith in the Garden of Eden, the source of all trouble I tell you. ‘Tis the season to borrow and spend folks, as indeed it has been since 1971.
We know it is sometimes difficult. Europe puts out the numbers which many assume are real. Then they talk about the data as if it was real. Then they point to the numbers time and time again as if they were real and finally people make decisions and act upon the figures thinking they are real and then the train begins to go bump in the night and derailment is possible on the next track and people wonder how it happened. We are at that point where “bump” is about to happen because there is nothing left that can happen. The dream is about over. Soon everyone will be waking up. It will not be a good morning.
Gazprom has Europe’s natural gas market in a stranglehold and Europe is attempting to fight back, first with a raid last year on the Russian giant’s offices and then with a probe launched earlier this week against its allegedly illicit efforts to control the EU’s natural gas supplies. The bottom line is that the same natural gas revolution in the US, which was enabled by hydraulic fracturing (fracking), is now threatening to loosen Gazprom’s noose on the EU, and Gazprom simply won’t have it. Let’s not pretend that energy companies are clean and that governments aren’t using them to forward nefarious geopolitical objectives (US multinationals in Northern Iraq, for instance). The point is not to paint Gazprom as the ultimate evil in energy. This is about Europe, and the EU’s “Mommy Dearest” struggle with Gazprom, which is undoubtedly playing an underhanded energy-politics game worthy of the most sinister of accolades.
If one needs a shining example of why the days of Europe's artificial currency are numbered, look no further than the EU's poorest country which moments ago said "Ne Mersi" to the Eurozone and the European currency. From the WSJ: "Bulgaria, the European Union's poorest member state and a rare fiscal bright spot for the bloc, has indefinitely frozen long-held plans to adopt the single currency, marking the latest fiscally prudent country to cool its enthusiasm for the embattled currency. Speaking in interviews in Sofia, Prime Minister Boyko Borisov and Finance Minister Simeon Djankov said that the decision to shelve plans to join the currency area, a longtime strategic aim of successive governments in the former communist state, came in response to deteriorating economic conditions and rising uncertainty over the prospects of the bloc, alongside a decisive shift of public opinion in Bulgaria, which is entering its third year of an austerity program. "The momentum has shifted in our thinking and among the public…Right now, I don't see any benefits of entering the euro zone, only costs," Mr. Djankov said. "The public rightly wants to know who would we have to bailout when we join? It's too risky for us and it's also not certain what the rules are and what are they likely to be in one year or two."
Sometimes, some things are best left unsaid...
Bulgaria speaks up in the euro fiasco. A balanced budget, growth, and an income tax rate of 10%?
It has been a tempestuous week where good is bad, worse is better, but European news is to be sold. Here is your one stop summary of all the notable bullish and bearish events in the past seven days.
To understand modern Greece one must understand it’s ancient history and it’s Geography. The Golden era of ancient Greece was rarely Pan Hellenic, with the legendary exception of King Menelaus’ expedition and siege of Troy, the brief cooperation during the war against King Xerxes of Persia, and perhaps Alexander the Great’s domination of what is now Greece, it has predominantly been the glorious histories of city states. And it’s geography is crucial, it has always been thought to stand as the boundary between East and West, whether you consider the ‘East’ to be Persia, the Ottoman Empire, or Communist eastern Europe it is best to understand that Greece’s eastern frontiers have never been an impassable barrier, infact Greece’s porous frontiers have ebbed and flowed with fickle fate and capricious fortune. As a consequence Greece is one of the most polarised nations on the planet.
The first on-the-record comments, regarding the bombing in Bulgaria, from Israel's Netanyahu are not the most politically correct. His ire with the world's ignorance of Iran's terrorist-fostering position is very clear as are his threats and promises for retribution. Not good. And sure enough, WTI crude is spiking on this news to $91.75 (18% higher than its EU-Summit lows) back to 2-mointh highs. Via Bloomberg,
- *NETANYAHU THANKS BULGARIA FOR AID TO VICTIMS OF TERROR ATTACK
- *ISRAEL'S NETANYAHU SAYS IRAN, HEZBOLLAH CARRY OUT GLOBAL TERROR
- *NETANYAHU SAYS ATTACKS WERE PLANNED IN INDIA, THAILAND
- *NETANYAHU SAYS HEZBOLLAH ACTED AT BEHEST OF IRAN
- *NETANYAHU SAYS TOO DANGEROUS TO LET IRAN HAVE NUCLEAR ARMS
- *NETANYAHU SAYS ISRAEL WILL PURSUE, PUNISH TERRORISTS WITH FORCE
- *NETANYAHU SAYS WORLD MUST RECOGNIZE IRAN AS TERROR THREAT
Meanwhile, as a reminder, a 4th carrier group is on its way to the Gulf...
The smoke from the exploded bus carrying Israeli tourists was still billowing and yet Israeli PM Netanyahu had already declared that "Iran is responsible for the terror attack in Bulgaria, we will have a strong response against Iranian terror." Perhaps that statement was a little premature: as footage released by Bulgarian police indicates, the suspected suicide bomber is Caucasian, and was in possession of a Michigan driver's license, supposedly a fake one, but why anyone in Bulgaria would be carrying a fake Michigan ID is just a little confusing.
The number of casualties in the Bulgarian bus explosion (reported earlier) is not even known yet, but Israel already knows just who is behind it:
- ISRAELI PRIME MINISTER SAYS SIGNS THAT IRAN BEHIND BURGAS BOMBING -RTRS
- Prime Minister Benjamin Netanyahu: "Iran is responsible for the terror attack in Bulgaria, we will have a strong response against Iranian terror." - Haaretz
- CARNEY SAYS OBAMA BRIEFED ON BULGARIA BLAST THAT HIT ISRAELIS
- CARNEY SAYS US NOT IN POSITION TO SAY WHO IS RESPONSIBLE FOR THE BUS ATTACK
And here we were wondering why crude spiked above $90 for the first time in months earlier today.