• Sprott Money
    03/01/2015 - 23:51
    Clearly if Western governments were ‘merely’ drowning in debt-to-GDP ratios of roughly 100%, then theycould still argue that attempting to manage these debt-loads was legitimate rather than...

Netherlands

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From Cascading Complexity To Systemic Collapse: A Walk Thru "Society's Equivalent Of A Heart Attack"





"The commonalities of global integration mean that diverse hazards may lead to common shock consequences. The systems that transmit shocks are also the systems we depend upon for our welfare and the operation of businesses, institutions and society... One of the primary consequences of a generic shock is an interruption in the flow of goods and services in the economy. This has diverse and profound implications - including food security crises’, business shut-downs, critical infrastructure risks and social crises... More generally it can entail multi-network and delocalised cascading failure leading to a collapse in societal complexity.... This is a complex society’s equivalent of a heart attack. When a person has a heart attack, there is a brief period during which CPR can revive the person. But beyond a certain point when there has been cascading failure in co-dependent life support systems, the person cannot be revived. The extent of our contemporary complex global system dependencies, and our habituation to a long period of broadly stable economic and complexity growth means a systemic collapse would present profound and existential challenges."

 
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Sunday Humor? The NSA Tapes Infomercial





Upcoming Late Night TV Infomercial Script

(A middle-aged man in an military uniform, loaded with medals, four stars on his epaulets, is sitting in a futuristic office setting on a chair occupying a command position.  He puts down a folder he is reading and looks up at the camera.)

Do you know me?  Well, I know you.  (He wags his finger as if counting)

Each and every one of you. I know everything there is to know about you.  But enough about that.  I’m here today to tell you about a special offer, a first time offer never before available to the general public. (Man assumes a more relaxed mien, stands and walks slowly toward camera)

Hi, I’m General Keith Alexander, coming to you from the flight deck of the starship...

 
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63 High Government Debt Episodes And What They Tell Us About Our Options Today





Do you wonder what to make of America’s soaring government debt and what it means for the future? Or, if you already have it figured out, are you interested in research that might challenge your position? Either way, you might like to see the results of this exercise:

1... Take each historic instance of government borrowing rising above America’s current debt of 105% of GDP.
2... Eliminate those instances in which creditors received a lower return than originally promised, due to defaults, bond conversions, service moratoriums and/or debt cancellations.
3... Of the remaining instances, consider whether and how the debt-to-GDP ratio was reduced.

In other words, let’s see what history tells us about today’s debt levels and what comes next. You may find the answer surprising.

 
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Tale of Two Countries: the Two Koreas





There are dates that go down in history and some will be remembered as landmark signals of changing times. Russia has the upper hand in Syria.

 
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Frontrunning: September 16





  • Summers Quit Fed Quest After Democrats Spurned Obama Favorite (BBG)
  • Geithner Still Not Interested in Fed Chair Slot (WSJ)
  • Gross’s Trade Sours as Bonds Lose Faith in Fed Guidance (BBG)
  • Bob Diamond calls for bank rules shake-up (FT)
  • Russia says may be time to force Assad's foes to talk peace (Reuters)
  • Iran Dials Up Syria Presence (WSJ)
  • Kerry Seeks to Sell Syria Deal (WSJ)
  • Shutdown of Japan’s Last Nuclear Reactor Raises Power Concerns (BBG)
  • Emerging Stocks Rise to 3-Month High as Bonds Gain on Fed (BBG)
  • Bernanke’s Maradona swerve hits bonds (FT)
 
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On A Taper "Relief-Rally", Moar "Boots On The Ground", And "European Instability"





An increasing cacophony of prognosticators are of the status-quo sustaining belief that stock and bond prices will rally next week when the Fed announces the taper. As Scotiabank's Guy Haselmann notes, the thinking goes that alleviation of the uncertainty will cause a "relief rally." However, as Haselmann notes, since the Fed has provided 5 years’ worth of massive stimulus that has launched asset prices to record highs, the commencement of the withdrawal process is significant... and any relief rally that ensues next Wednesday should be sold. His thoughts extend from Indonesian central bank's dilemma to European political instability, and the next stage of the Syrian crisis...

 
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North Korea: Outsourcing Giant





If there’s one country in the world that you might not think would be at the top of the outsourcing list and the place to send orders to be fulfilled from the West, it would probably have to be North Korea. The world’s most closed economy, that Communist dictatorship.

 
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Guest Post: Why Europe (Not The Fed) Is Crushing Emerging Market Economies





Emerging markets’ currencies are crashing, and their central banks are busy tightening policy, trying to stabilize their countries’ financial markets. Who is to blame for this state of affairs? The cause of this state of affairs, in one word, is austerity. Weak demand in Europe is the real reason why emerging markets’ current accounts deteriorated (and, with the exception of China, swung into deficit). Thus, if anything, emerging-market leaders should have complained about European austerity, not about US quantitative easing. Fed Chairman Ben Bernanke’s talk of “tapering” quantitative easing might have triggered the current bout of instability; but emerging markets’ underlying vulnerability was made in Europe.

 
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US Marine Ship Approaches Syria; Russia Blasts Any "Acts Of Aggression" - Full Syrian Update





WWhile there may have been a verbal attempt by the Obama administration to diffuse Syrian tensions in the aftermath of Thursday's shocker out of the House of Commons, the action on the ground so far is hardly conciliatory. Or rather water, because a sixth US warship has now anchored in proximity to Syria, joining the recently arrived fifth destroyer USS Stout, which joined the warships already "breathing down Assad's neck." From AP: "Five U.S. Navy destroyers - the USS Gravely, USS Mahan, USS Barry, the USS Stout and USS Ramage - are in the eastern Mediterranean Sea waiting for the order to launch. And the USS San Antonio, an amphibious assault ship has now joined them. The USS San Antonio, which is carrying helicopters and can carry up to 800 Marines, has no cruise missiles, so it is not expected to participate in the attack. Instead, the ship's long-planned transit across the Mediterranean was interrupted so that it could remain in the area to help if needed." So in addition to a cruise missile based force, the US is now bringing in the marines? The justification that they are there "just in case" seems a little shallow in context.

 
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European Unemployment Remains At All Time High: Ranges From 4.8% To 27.6%





Europe may be a union, but when it comes to the distribution of unemployment rates across its 27 member nations (and as of July 1 with the addition of Croatia, 28), it is anything but.

 
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Burger Prices Soaring? Here Comes A Cheap "Test Tube" Alternative





Between fast-food staff demanding higher wages, weather-related excuses, central-bank-impacted energy/feed costs, and protectionist policies, consumers (rich and poor) of beef in the US could soon face dramatically higher prices. As Bloomberg reports, US beef production is expected to plunge to 21-year lows (falling for the fourth year in a row) and the 'herd' on July 1st was the smallest for that date since at least 1973. Wholesale beef buyers from McDonalds (facing their own wage-cost demand pressures) to Ruth Chris are facing input prices rising at the fastest rate in almost 2 years even as agricultural commodities have dropped 18% this year. While the situation is not about to get better anytime soon, scientists in Holland are about to grill the world's first laboratory-grown in-vitro burger - forget Sirloin; Soylent Orange anyone?

 
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EU Recession Over? Believe it or not?





When French President François Hollande (aka Mr. Flabby in the French press) announced just a few months ago while on a state visit to Japan that the EU recession was well and truly over

 
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Eric Sprott On Central Banks, Bullion Banks and the Physical Gold Market Conundrum





The recent decline in gold prices and the drain from physical ETFs have been interpreted by the media as signaling the end of the gold bull market. However, our analysis of the supply and demand dynamics underlying the gold market does not support this thesis. In our view, the bullion banks’ fractional gold deposit system is testing its limits. Too much paper gold exists for the amount of physical gold available. Demand from emerging markets, who do not settle for paper gold, has perturbed the status quo. Thus, our recommendation to investors is the following: empty unallocated gold accounts and redeem your gold in physical form (while you still can).

 
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EFSF Downgraded To AA+, Or French Fitch Flunks EFSF Following France Flub





Prompted by their FrAAAnce downgrade to AA+, French-owned Fitch has downgraded Europe's last best promise/hope - the EFSF - from AAA to AA+... but the crisis is still behind us - we are assure by such truth-sayers as Juncker, Barroso, and Merkel (pre-elections). The key sentence is "Following the downgrade of France's IDR, the EFSF's long-term debt issues are not fully covered by 'AAA' guarantees and over-guarantees and, for debt issued before October 2011, by the cash reserve." So that's good then... Don't worry though since "Fitch assumes there will be progress in deepening fiscal and financial integration at the eurozone level in line with commitments by euro area policy makers"

 
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