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Jim Rogers: Greek bailout may be prelude to EU zone collapse
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Economy
Jim Rogers: Greek bailout may be prelude to EU zone collapse
U.S. employment climbed in October at the slowest pace in four months, illustrating the “frustratingly slow” progress cited by Federal Reserve Chairman Ben S. Bernanke this week.
The 80,000 increase in payrolls was less than forecast and followed gains in the prior two months that were revised up by 102,000, Labor Department figures showed today in Washington. The unemployment rate fell to a six-month low of 9 percent from 9.1 percent even as the labor force expanded. http://www.bloomberg.com/news/2011-11-04/u-s-payrolls-increased-by-80-000-in-october-as-jobless-rate-falls-to-9-.html
World leaders expressed impatience and irritation with Europe’s inability to defeat its two-year financial crisis as they urged swift resolution for the sake of the global economy.
With Greece’s debt-ridden government at risk of collapsing as soon as today, Group of 20 chiefs meeting in Cannes, France, yesterday pushed European authorities to flesh out and enact a week-old rescue plan that has already shown signs of unraveling.
“We are grappling with a lack of confidence in markets that leaders will act,” Australian Prime Minister Julia Gillard said in the French seaside resort. “It is therefore very important for leaders to act.”
Such calls -- echoed by the U.S., Britain, China and Russia -- highlight international disappointment that Europe missed the G-20’s deadline of this week to deliver a fix for its fiscal woes. German Chancellor Angela Merkel and French President Nicolas Sarkozy sought to regain the initiative by keeping aid for Greece on ice and demanding Italy accelerate austerity. http://www.bloomberg.com/news/2011-11-03/g-20-leaders-urge-europe-to-quell-debt-crisis-as-greece-government-teeters.html
Greece has dropped its plans to hold a controversial referendum on the country's euro zone membership, which had threatened to plunge the bloc into a crisis, the country's finance ministry said on Friday.
Finance Minister Evangelos Venizelos made the pledge in telephone calls made to Eurogroup Chairman Jean-Claude Juncker, European Commission's Economy and Monetary Affairs chief Olli Rehn and German Finance Minister Wolfgang Schaeuble, the Greek finance ministry said in a statement.
"Venizelos informed his interlocutors about the decision to not hold a referendum," the statement said. http://www.reuters.com/article/2011/11/04/us-greece-referendum-idUSTRE79U5PQ20111104
Indexes
European stocks pared their gains after Germany’s September manufacturing orders unexpectedly fell, sparking concern that the region’s economic growth is faltering.
The Stoxx Europe 600 Index rose 0.2 percent to 242.61 at 11:14 a.m. in London, after earlier rising as much as 0.6 percent on Greece’s cancellation of a referendum on euro-area’s bailout package. The gauge has retreated 2.6 percent so far this week as the referendum call stunned investors. The MSCI Asia Pacific Index jumped 2.5 percent. Standard & Poor’s 500 Index futures dropped 0.2 percent before a U.S. jobs report.
German factory orders unexpectedly plunged in September as demand from the euro region slumped, adding to signs the region’s debt crisis is damping growth in Europe’s largest economy. http://www.bloomberg.com/news/2011-11-04/stock-index-futures-in-europe-advance-hermes-commerzbank-may-be-active.html
Asian stocks rose for the first time in five days as Greece scrapped a plan to hold a referendum on a bailout package and the European Central Bank cut interest rates, reducing concern the debt crisis will spur a credit crunch.
HSBC Holdings Plc (HSBA), Europe’s No.1 lender by market value, climbed 3.2 percent in Hong Kong. Komatsu Ltd. (6301), Asia’s largest maker of construction equipment by market value, surged 6.9 percent after a report showed orders at American factories increased in September. China Petroleum & Chemical Corp, China’s biggest oil refining company by sales, led the nation’s energy companies higher on speculation the government may allow the mainland’s fuel producers to adjust prices on their own.http://www.bloomberg.com/news/2011-11-04/asian-stocks-climb-for-first-time-in-five-days-on-europe-rate-cut-greece.html
Currencies
Japan’s slide back toward deflation means bond investors are getting some of the highest returns among developed nations even with the world’s lowest yields.
Annual inflation slowed to zero in September, meaning investors in the nation’s benchmark 10-year securities receive the full 0.99 percent yield. That’s the highest so-called real yield for any Group of Seven nation except Italy’s 2.79 percent.
The Bank of Japan cut its inflation forecast last week and said it would buy more government bonds to underpin an economic recovery being threatened by the yen’s surge to a postwar record. The government intervened on Oct. 31 to weaken the currency for the third time this year. With the Federal Reserve discussing more steps to spur its economy and Treasuries yielding less than U.S. inflation, Japan’s efforts may not curb the yen’s strength. http://www.bloomberg.com/news/2011-11-03/deflation-driving-up-real-yield-hampers-effort-to-weaken-yen-japan-credit.html
Canada’s dollar dropped for the first time in three days after a government report showed the jobless rate unexpectedly increased in October as the nation’s employers eliminated positions.
The Canadian currency, nicknamed the loonie for the image of the aquatic bird on the C$1 coin, extended its weekly decline on increased speculation that the Bank of Canada will lower borrowing costs.
“It’s a miss in a very meaningful way,” said Jack Spitz, managing director of foreign exchange at National Bank of Canada in Toronto, in a telephone interview. “This is likely to contribute to some Canada lagging.” http://www.bloomberg.com/news/2011-11-04/canadian-dollar-drops-as-employers-unexpectedly-eliminated-jobs-in-october.html
Commodities
Wheat is heading for the biggest slump in three years as the second-largest harvest on record swells stockpiles, easing shortages that drove global food costs to an all-time high.
Prices that plunged 20 percent to $6.375 a bushel this year in Chicago will probably drop as low as $5.90 before the end of December, according to the median estimate of nine analysts and traders surveyed by Bloomberg. Supply in the 12 months ending June 30 will expand 5 percent to 684 million metric tons, boosting inventories to the highest in a decade, the London- based International Grains Council estimates.
Production is expanding after last year’s 47 percent price rise led farmers to plant more grain, while Russia and Ukraine recovered from drought that ruined crops. Cheaper wheat will reduce strains caused by rising corn and rice prices and add to pressure on United Nations-monitored food costs that have declined 9 percent from a record in February.http://www.bloomberg.com/news/2011-11-03/wheat-plunging-as-decade-high-stockpiles-ease-world-shortages-commodities.html
Gold prices in euros will rise to a record as Europe’s sovereign-debt crisis erodes the appeal of the 17-nation currency and boosts demand for the precious metal as an alternative asset, according to economist Dennis Gartman.
Gold has had an inverse relationship to the euro during the past week, as the metal jumped 3.8 percent and the currency slid 2.6 percent. The euro, which has declined in three of the last four months, may fall below $1.30 from about $1.38 yesterday, Gartman said.
“The driving force in the gold market is the problems in the euro,” Gartman said in a telephone interview from Suffolk, Virginia, where he publishes his Gartman Letter. “Central banks in Europe and individuals will want to lower their euro holdings and buy gold since no one knows what is happening to the euro. The euro is heading towards parity once again.” http://www.bloomberg.com/news/2011-11-03/gartman-sees-gold-in-euros-at-record-as-currency-slides-chart-of-the-day.html
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Dear Jim,
Any time I see anything written by Gartman I go lie down until the feeling of unease goes away. He's the last guy you want in on your position.
http://vegasxau.blogspot.com
Green Shoots. LMFAO!
The Bad Guy..
Add Cramer, Bove and Terranova to that list....
Thank you captain. The creation of the EU was a prelude to the EU collapse. Bretton Woods is a prelude to fiat collapse. The Federal Reserve is a prelude to the dollar collapse. Coming off of the gold standard in 1971 is a prelude to the dollar collapse. TBTF is a prelude to the dollar collapse. The federal government borrowing 40% of what it spends is a prelude to the dollar collapse. Government backing of real estate and the banking system is a prelude to the dollar collapse.
Life may also be a prelude to death.
Can anyone around here write about what might be a prelude to a better tomorrow? I guess an article of that nature wouldn't attract very many eyeballs.
Prelude to a better tomorrow? Uh, yeah. Youll find that in the fiction section.
Actually the collapse IS a prelude to a better tomorrow.
Under consuming.
Under consuming.
How do we define underconsuming? Hold production constant, and consume less? But we can hold consumption constant and then overproduce. That would also lead to measurable underconsumption.
You did hit the nail on the head, tho. Encouraging realistic consumption levels, and then defining production targets, has to be one of the precursors to a happy tomorrow when we live in a world of finite resources. But everyone will cheat, so that is not a realistic view of how things will play out. Happy tomorrows for the cheaters and misery for the rest. Probably should go long Vandals and Visigoths
"What's frightening" is that "the whole system will collapse and NO government(s) will be able to hold the system in place."
When NO governments are ever able to "hold the system in place" again is when we'll have free markets.
oops...supposed to be a reply to web bot
World leaders expressed impatience and irritation with Europe’s inability to defeat its two-year financial crisis as they urged swift resolution for the sake of the global economy.
bull! the intent of these soon to be hell bound, so called elite bastards, is to impovrish all, cull the population. mr. rogers is in the wrong neighbourhood!!!
If Germany's manufacturing sector sinks further who is going to prop up the EU?
The only thing propping up this charade is the simple fact that economies were only mildly damaged by the 2008 plunge. Countries have been slowly rotting economically since then though, meaning the game is nearly over. Assets are backed by debt, not real poduction. Debt, money printing it matters not. The end is near.
If Germany's manufacturing sector sinks further who is going to prop up the EU?
Still believe in infinite growth on a world with finite resources do ya? Good luck with that. If ALL the customers are BROKE, who is going to BUY anyone's manufactered crap?
What's frightening about what Jim Rogers is saying is that if these countries don't go bankrupt and the can is kicked further down the road with more debt, when they do go bust, the whole system will collapse and NO government(s) will be able to hold the system in place.
Note that he's also bounding his comments with "3 years time". Regardless of whether it's 3 year or 1 year or 5 years, what we're talking about is months... not decades. There are a lot of worried people out there right now who are in the know... and all of them are purchasing PMs, other commodities and land.
i'll be movin' to North Dakota soon,
gonna grow me some WD-40,
slick
Personally, I was thinking Montana and crops of dental floss.
why would you want to mount anna? she's hairy!
Going to montanna soon, gonna' be a dental floss tycoon.
Ha! Another Zappa fan, nice.
just remember not to eat that yellow snow
I'd love to see the whole system blow up...is life really that great right now? I find it dull!
Damn straight they are. I will only thank them for keeping the prices of PMs suppressed.