As the eurozone debt crisis has steadily widened the divide between Europe’s stronger northern economies and the weaker, more debt-laden economies in the south (with France a kind of no man’s land economy in between), one question is on everyone’s mind: Can Europe’s monetary union – indeed, the European Union itself – survive? Fiscal and financial measures aimed at strengthening eurozone governance have been inadequate to restore confidence in the euro. And Europe’s troubled economies have been slow to undertake structural reforms and by maintaining large trade surpluses, Germany is exporting unemployment and recession to its weaker neighbors. But how will Germany react when the north-south divide becomes large enough to threaten the euro’s survival? Two outcomes now seem possible. Europe’s north-south divide has become a time bomb lying at the foundations of the currency union.
Below some leading economists and financial commentators give their perspective regarding the risks of bail-ins or deposit confiscation. If you manage money in any way, your own or others,it will be prudent to heed their warnings.
It is important that one owns physical gold and not paper or electronic gold which could be subject to bail-ins. Owning a form of paper gold and derivative gold such as an exchange traded fund (ETF) in which one is an unsecured creditor of a large number of custodians, who are banks which potential could be bailed in, defeats the purpose of owning gold.
Physical Gold, held in secure conferring outright legal ownership through bailment remains the safest way to own gold.
Led by Italy and France (with Portugal and Greece relatively outperforming), European stocks extended yesterday's losses with the worst day in broad equities in over 10 weeks. EUR's weakness from yesterday was entirely dismissed as EURUSD surged back from the open in Europe this morning back up to 1.3600. EURJPY's swings are the big driver of equity weakness around the world but sovereign bonds remains relatively flat. Europe's VIX topped 17% for the first time in 3 weeks with its biggest jump in 2 months.
As might be expected as political and economic policy failures pile up and citizens become increasingly mad, the status quo is becoming increasingly authoritarian. In the latest disturbing news from a desperate power structure, the conservative government in Spain has passed an Orwellian bill titled the Citizens’ Security Law, which allows for fines of up to 600,000 euros ($816,000) for “unauthorized” street protests, and a 30,000 fine for merely having signs with “offensive” slogans against Spain or for wearing a mask. This law is a perfect example of the increasing neo-feudalism being implemented across the globe by a corrupt, decadent and depraved status quo.
If the unfortunate, yet hilarious, sinking of the Costa Concordia cruise liner in January 2012 off the Tuscan coast was the best symbol of the foundering Eurozone, then we are unsure just what the symbolic value is of the fire that raged over the weekend on the Majestic International’s Ocean Countess cruise ship while laid up at a shipyard in Greece.
Overview of the week's economic and poltiical calendar in the context of the investment climate.
Despite a ratings 'upgrade' Spain's youth unemployment rate has re-surged to a record 57.4% (just below that of Greece which still tops the scary chart list at 58%). Italy and Portugal also saw notable rises (despite the former's record low short-dated bond yields) at 41.2% and 36.5% respectively. Ireland and France saw modest improvements but overall the Euro-zone's youth unemployment just keeps rising. In spite of all the rhetoric from Merkel, Van Rompuy, and Barroso, 24.4% of Europe's under-25 population is unemployed...
European Unemployment Declines From All Time High, Youth Unemployment Hits Fresh Record - Full BreakdownSubmitted by Tyler Durden on 11/29/2013 08:03 -0500
An important question is what exactly is Goldman's motivation for the peculiar gold deal? Does it wish to have access to Venezuela's gold reserves? There area many other innovative ways that Goldman could help Venezuela with its current economic travails that do not involve gold. Were Venezuela to default on the bonds would Goldman become the beneficial owner of Venezuela's gold reserves?
Recently, newspaper headlines declared that Greece would have a balanced budget for 2013 as a whole. The news came as quite a shock: Recall that when Greek officials came clean about the true state of their country’s public finances in 2010, the budget deficit was more than 10% of GDP – a moment of statistical honesty that triggered the eurozone debt crisis. It seemed too good to be true that the Greek deficit would be completely eliminated in just three years. In fact, it is too good to be true.
- Winter storm lashes eastern U.S., threatens Thanksgiving travel (Reuters)
- Fed Reveals New Concerns About Long-Term U.S. Slowdown (BBG)
- Private equity keeps $789bn of powder dry (FT) - because they are "selling everything that is not nailed down"
- Merkel and SPD clinch coalition deal two months after vote (Reuters)
- Japan approves new state secrecy bill to combat leaks (BBC)
- CLOs are the new black: Volatile Loan Securities Are Luring Fund Managers Again (WSJ)
- Health website deadline nears (WSJ)
- Norway Debates $800 Billion Wealth Fund’s Investment Options (BBG)
- Set of global trade deals stalls (WSJ)
- Berlusconi To Learn Fate In Senate (Sky)
- Silvio Berlusconi withdraws support from Italy’s government (FT)
Are you deeply concerned about the future of America? Is something in your gut telling you that our system is fundamentally broken and that the mainstream media is not telling you the truth about what is happening? If so, you are definitely not alone. Right now, there are millions upon millions of Americans that are absolutely horrified as they watch this nation deteriorate. In fact, according to an analysis of recent polling data conducted by Real Clear Politics, approximately 68 percent of all Americans believe that the country is on the wrong track and only 23.5 percent of all Americans believe that the country is on the right track.
The Greek stock market - seemingly unbreakable in its animal spirits that recovery is right around the corner for the increasingly depressed nation - has collapsed over 4% today, its largest plunge in 5 months. Being relatively illiquid, it is not clear what the catalyst is (one hedge fund exiting?) but the tensions growing in the fragile Greek coalition (over Venezuela-style controls on medicine prices) perhaps raise the specter of the worst possible scenario - political uncertainty. Also, quietly and behind the scenes, the extremely illiquid Greek bond market has seen prices drop to 6-week lows (yields 90bps higher in the last 3 weeks).
"Suicides rose by 17% between 2007 and 2009 and to 25% in 2010, according to unofficial 2010 data (398). The Minister of Health reported a further 40% rise in the first half of 2011 compared with the same period in 2010. Suicide attempts have also increased, particularly among people reporting economic distress (610). Homicide and theft rates have doubled. HIV rates and heroin use have risen significantly, with about half of new HIV infections being self-inflicted to enable people to receive benefits of €700 per month and faster admission on to drug-substitution programmes. Prostitution has also risen, probably as a response to economic hardship. Health care access has declined as hospital budgets have been cut by about 40% (398) and it is estimated that 26 000 public health workers (9100 doctors) will lose their jobs (611). Further cuts are expected as a result of recent negotiations with the IMF and European Central Bank."