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Krugman Warns Of “Gigantic Bank Run”, “Emergency Bank Closing” And “New Lira”

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From GoldCore

Krugman Warns of “Gigantic Bank Run”, “Emergency Bank Closing” and “New Lira”

Gold is trading at USD 1,727.10, EUR 1,254, GBP 1,080, JPY 134,790,  AUD 1,669.20 and CNY 10,978 per ounce.
Gold’s London AM fix this morning was USD 1,731.00, GBP 1,081.27 and EUR 1,257.35 per ounce.
Yesterday's AM fix was USD 1,702.00, GBP 1,067.69 and EUR 1,243.06 per ounce.

Cross Currency Table

Gold is higher in most major currencies but especially the US dollar this morning. Although gold has lost some of its early gains in Europe as the euro and equity indices have stabilized.

The shock and uncertainty regarding Prime Minister George Papandreou call for a referendum on a European Union bailout deal continues to reverberate in international markets leading to a renewed safe haven bid.
Greece's cabinet decided early on Wednesday to back Papandreou's proposal for a referendum on the EU deal – according to government spokesman. Papandreou is sticking to plans to hold the vote despite signs his government may collapse.

Greek Referendum To Lead to Return of The Drachma?

The possibility of a return to the drachma has raised its head after Papandreou said a referendum on Europe’s rescue package will confirm Greece’s membership of the euro.

There are increasing calls in Greece for a return to the drachma – polls show 33% in favour of a return to the Greek drachma at this time.

The fact that it is impossible for Greece to regain competitiveness while clinging to the euro is becoming increasingly evident. Prominent economists such as Nouriel Roubini, as well as investor George Soros have said as much and influential voices in Greece are now questioning the wisdom of clinging to the euro.


 
Krugman Warns of “Gigantic Bank Run”, “Emergency Bank Closing” and “New Lira”

Paul Krugman’s latest post is extremely bearish and he warns that “things are falling apart in Europe; the center is not holding”
Krugman warns that this could lead to a “gigantic bank run” and “emergency bank closing”. 

Not only does Krugman warn of a massive bank run and emergency bank holidays but he warns of the euro breaking up and Italy returning to the Italian lira and even warns of similar problems confronting France.

“The question I’m trying to answer right now is how the final act will be played. At this point I’d guess soaring rates on Italian debt leading to a gigantic bank run, both because of solvency fears about Italian banks given a default and because of fear that Italy will end up leaving the euro. This then leads to emergency bank closing, and once that happens, a decision to drop the euro and install the new lira.”

“Next stop, France.”

Uber Keynesian Krugman, has been one of the most vocal gold bears in recent years and his opinion on gold has been biased and uninformed.

It will be interesting to see if his attitude towards gold has changed given the appalling vista he is now warning of.

An important question we have posed for some time – is what price gold in drachma, lira, pesetas, escudos and punts?

What should the ordinary people in European countries do to protect themselves from currency debasement and devaluations?

Unfortunately, we may find out the answer to these questions in the coming months.

Gold Prices, Gold Rates, Gold Fixes

Gold’s Safe Haven Status Being Shown

Gold’s safe haven status has again been clearly shown in recent days despite continuing skepticism from the sadly misinformed.

Gold’s recent sell off led to renewed doubt and a new bout of questioning with regard to gold as a safe haven. While gold was 0.9% lower yesterday in US dollar terms, it was higher in the majority other fiat currencies.

Its 0.9% fall in dollar terms was an impressive performance given the scale of the losses seen in equity and commodity markets.

In euro terms, gold has risen from €1,215/oz on Monday to €1,256/oz or a rise of some 3%. European equity indices have fallen sharply since Monday showing gold’s proven status as a hedging instrument and a safe haven.

October Market Review

Despite the dramatic new flow of recent days it is as always crucial to keep an eye on the long term performance of major assets.

In October, currency markets saw the US dollar fall against major currencies except for the Japanese Yen.

The Euro climbed 3.3% in October against the dollar. GBP was up 3.0%, CAD up 4.91%, and CHF up 3.33%. Hong Kong dollar was 0.23% higher against US dollar, and Chinese Yuan was 0.51% higher. The Japanese Yen lost 1.5%.

Bonds markets had varied performance. US Treasuries ended 1.4% lower in October, the biggest loss since December 2010. German bunds have fallen 1.5%. However, the risky bonds flourished as equities did. The Barclays Capital US high yield index gained 6.2%, while US investment grade bonds climbed 1.1%.

There was a huge rally in global major stock indices in October, making it the best month for equities since 2009.

The benchmark S&P 500 was up 10.77% while the Dow Jones Industrial Average ended the month 9.54% higher.

In Europe, the FTSE 100 ended 8.11% higher, Germany’s Dax up 11.26%, the CAC rose 8.75% and Ireland’s ISEQ was 8.85% higher.

In Asia, the Hang Seng Index was up 12.92%, while NIKKEI 225 had a relatively weaker performance, ending 3.31% higher.

Oil ended the month 17.5% higher.

Precious metals also had strong performance. Gold finished at around 5.7% higher, while silver surged 15.1%. The strong gains suggest that gold and silver’s recent sharp correction and period of consolidation may be coming to a close. 

Platinum and palladium gained 6.2% and 5.4%, respectively.
Liquidity continues to slosh around global markets which is supportive of risk assets and saw risk appetite return in October  - in what had the hallmarks of an inflationary “crack up boom”.

The shock Greek and MF Global news since Halloween and brutal start to November is already challenging risk appetite and November looks set to be a volatile month.

For the latest news and commentary on financial markets and gold please follow us on Twitter

NEWS

(Reuters) -- Gold Firms as Greek Debt Fear Returns
http://af.reuters.com/article/investingNews/idAFJOE7A104Z20111102

(Reuters) -- PRECIOUS-Gold steady below $1,720; Greek debt worries return
http://www.reuters.com/article/2011/11/02/markets-precious-idUSL4E7M201F...

(Business Week) -- Top Gold Forecasters See Rally to Record by March
http://www.businessweek.com/news/2011-11-02/top-gold-forecasters-see-ral...

COMMENTARY

(The Telegraph) – Evans-Pritchard: Revenge of the Sovereign Nation
http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/100012986/re...

(Zero Hedge) -- Morgan Stanley On What Happens Next In Greece, And Why It Is All Very Euro Negative
http://www.zerohedge.com/news/morgan-stanley-what-happens-next-greece-an...

(Zero Hedge) -- "When Money Dies"  Fergusson And Turk Discuss (Hyper)Inflation In Past, Present And Future
http://www.zerohedge.com/news/when-money-dies-author-adam-fergusson-and-...

(24H Gold) – Alasdair MacLeod: Inflation and German Sensibilities
http://www.24hgold.com/english/news-gold-silver-inflation-and-german-sen...
(Globe and Mail) -- Happy thoughts from Paul Krugman
http://www.theglobeandmail.com/globe-investor/markets/markets-blog/happy...

(New York Times) -- Whispers of Return to Drachma Grow Louder in Greek Crisis
http://www.nytimes.com/2011/11/02/business/global/plan-to-leave-euro-for...

 

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Wed, 11/02/2011 - 08:09 | 1836121 DonutBoy
DonutBoy's picture

Few things have made me happier about my AU stockpile than hearing that Paul Krugman was a gold bear.  By their enemies...

Wed, 11/02/2011 - 08:16 | 1836137 MillionDollarBonus_
MillionDollarBonus_'s picture

Dr Paul Krugman has been warning about a double dip recession for over a YEAR now. This economic crisis is going to get a lot worse due to indecisive fiscal policy from governments around the world.

Wed, 11/02/2011 - 08:25 | 1836156 Snidley Whipsnae
Snidley Whipsnae's picture

MDBonus... "This economic crisis is going to get a lot worse due to indecisive fiscal policy from governments around the world."

..........................

I take it you believe central bank monetary policy has nothing to do with the slow motion train wreck the world economy is now involved in?

Dr Krugman? Maybe a Quack but not a doctor.

Wed, 11/02/2011 - 08:33 | 1836170 MillionDollarBonus_
MillionDollarBonus_'s picture

"Maybe a Quack but not a doctor."

You know, I really don't appreciate this kind of childish discourse. America is facing some serious economic issues, and its time to grow up and discuss realistic solutions to our problems. The Occupy Wall street movement has identified some key policy initiatives that could really get this economy moving again:

1. Force greedy corporations to hire more workers and lower prices instead of keeping all the money for themselves
2. Force banks to lend instead of hoarding capital
3. BAN all speculation in the markets by traders and hedge funds which is causing tremendous price volatility
4. Ban credit default swaps and prosecute rating agencies for giving bad ratings

A few common sense policy initiatives like this coupled with further fiscal and monetary stimulus will sort out this economy once and for all.

Wed, 11/02/2011 - 08:42 | 1836196 Mercury
Mercury's picture

ZH's very own cyber-socialist Colbert.

Someone give this guy a show already.

Wed, 11/02/2011 - 08:44 | 1836205 Smiddywesson
Smiddywesson's picture

MDB,

Sorry to be "childish" and dare to disagree with one so wise as Krugman, but price controls, market holidays, and forced hirings have been tried before and failed miserably.  Another aspect of childishness is simple innocent ignorance.  More stimulus isn't going to fix this, and there haven't been ANY common sense policy initiatives because of the birds and the bees of how our society works, nor will there be any until this abomination of a society collapses.  Sorry kid, that's it.  We are lemmings, and we chase momo until our financial system becomes a Sargasso Sea of tangled paper.  We ARE jumping off the cliff together because it is our nature.

Better bring your life ring (gold).

Wed, 11/02/2011 - 08:54 | 1836236 Jeff Lebowski
Jeff Lebowski's picture

Walter, I love you, but sooner or later, you're going to have to face the fact you're a goddamn moron.

Wed, 11/02/2011 - 08:55 | 1836248 Snidley Whipsnae
Snidley Whipsnae's picture

I really don't appreciate your apprasial of the Quack Krugman! He has been publishing bs articles in a leading US paper for years... and, unfortunately, some people took him seriously...and it cost them dearly in dollars.

Meanwhile, you come off like some policy wonk defending this quack!

Whether OWS will have any beneficial impact will be determined in time but right now I would say they are succeeding in getting themselves, individually, on every fucking shit list that our government is compiling plus beat up by thug cops hired by Wall St, et al. I wish OWS luck.

As for your '4' points above... childish. You cannot 'force' banks to lend nor can you force consumers to 'borrow'. Period.

Forcing capitalist corporations to 'hire'? This is a reccommendation for more centralized planning... exactly why we are where we are now. Another childish suggestion.

'ban all specs in mkts'... You are suggesting that we do away entirely with free markets? The specs ARE the market! Without specs there is NO price discovery... another childish suggestion on your part.

I will agree to your point '4'.

Plus, reimposition of Glass Steagle act.

" A few common sense policy initiatives like this coupled with further fiscal and monetary stimulus will sort out this economy once and for all."

Depends on your definition of 'sort out this economy'... Your first 3 suggestions would have it further into the shitter than it already is... which is saying a lot. Getting rid of the Fed in 1914 would have helped the US economy tremendously.

 

 

 

Wed, 11/02/2011 - 09:30 | 1836297 TruthInSunshine
TruthInSunshine's picture

The following is the hypothetical 'what if Krugman wrote this' post that would cause me to re-assess my opinion of Krugman, and upgrade his opinion(s) on anything economi from DDD- to investment grade, as it would mean that he's admitted that his vocation endorses a massive fraud intended to keep the status quo in place:

 

"Hi, I am Paul Krugman, and I'd like to share with my readers precisely how they are all being conned by what is nothing less than a global, coordinated fiat-based Ponzi scheme, based on a ruse known as fractional reserve banking.

Here's how it works:

1)  Create fiat using nothing more than an computer/ledger entry, backed by nothing of inherent value, that has legal recognition.

2)  Circulate such fiat via loaning it out, charging interest upon it

3) Successfully get nations, business entities and individuals to borrow said worthless fiat that was conjured from thin air, and pay interest, pledging their real, inherently valuable assets in exchange for said worthless fiat (i.e. meaning that their real, inherently valuable assets can be taken if the conditions that make it impossible for them to repay the worthless fiat are [intentionally] induced).

4) Set the rate of interest payable on the loans of fiat that was conjured from thin air, solely at their discretion.

5) Supply more of such fiat, or withdraw fiat, to/from the system, at their discretion, bringing about inflation or deflation.

6) During times of large scale loan defaults, on the repayment of the fiat that they conjured from thin air, backed by nothing of inherent value, seize the most valuable assets that exist on the planet, many of which mankind depends on for its very survival."

 

 

Wed, 11/02/2011 - 11:16 | 1836848 Doubleguns
Doubleguns's picture

He might give up but he would never make a statement like that. His ego is just to big.

http://www.americanthinker.com/2010/08/paul_krugman_gives_up_1.html

Wed, 11/02/2011 - 09:10 | 1836307 Iam_Silverman
Iam_Silverman's picture

"As for your '4' points above... childish. You cannot 'force' banks to lend nor can you force consumers to 'borrow'. Period."

Yeah, he had me scratching my head over those points too.

But, if we force small businesses to hire people they don't need, then they will have to borrow to stay afloat - at least for a little while.

Glass-Steagall?  You betcha!  I am on the fence about limiting speculation in commodities to only those who take delivery.  While I understand the need for some to hedge by forward-contracting, it really pisses me off sometimes that the price I get for my calves at the sale barn may be influenced by live cattle futures held by investors that never plan to take possession of the contracted goods.

Wed, 11/02/2011 - 09:15 | 1836324 MillionDollarBonus_
MillionDollarBonus_'s picture

"Without specs there is NO price discovery..."

You fail to realise that price discovery by general market participants is inaccurate, uninformed and subjective. Just look at the price volatility we are seeing in the markets today - this is because market participants are uneducated and hysterical. The mathematical models of economics professors are a far more objective means of setting prices.

Wed, 11/02/2011 - 09:28 | 1836355 RSDallas
RSDallas's picture

Heil Hitler!  You must have grown up in a very controlling environment.  The mathematical models of the Krugman clan is inherently flawed with he thought that central government planning is the answer to all that ails.

Wed, 11/02/2011 - 09:36 | 1836397 Snidley Whipsnae
Snidley Whipsnae's picture

"You fail to realise that price discovery by general market participants is inaccurate, uninformed and subjective."

Yes...and to a great degree 'market participants' are being misled by markets that are warped by central bank manipulation/intervention in all asset classes. The 'hysteria' you are witness to is most probably HSTs front running every trade for a few pennies gain. In addition markets are warped by QE, interest rate fixing/intervention, and all manner of other manipulations by central bankers. In summation, we don't have any fucking market price discovery anymore. We might as well be living in the fucking CCCP in 1960 because what they had we now have. Any individual that attempts to 'invest' in these markets is deluded for they are in reality in a situation worse than casino gaming. At least in casino gaming the rules are not changed while the dice are in the air.

And, the math models of anyone are bs when central banks are running a command economy.

Wed, 11/02/2011 - 19:19 | 1839124 deebee
deebee's picture

Agree.  I think the focus of these problems is government & CB policy.

There would be no 'market hysteria' if government policy stopped ecouraging heavy risk taking and punishing saving. You can't blame capitalists for trying to chase profits. This is what leads to innovation but govt. needs to also set limits. Set limits too high & red tape discourages business investment (or moves it offshore).

Government is there to provide a framework, regulate, offer various services in return for the taxes we pay. What are the current policies doing for tax payers?

Wed, 11/02/2011 - 09:37 | 1836402 Hedgetard55
Hedgetard55's picture

Agree. This system worked well in the Soviet Union for seventy years until the CIA undermined Gorbachev and brought ruin, out of fear of competition. It also works very effectively in North Korea, Cuba and Venezuela.

Wed, 11/02/2011 - 10:18 | 1836531 Marley
Marley's picture

Good try MDB.  Krugman was right, there was a coup by the right under Bush.  "Corporations will be persons when one gets executed in Texas." 

Wed, 11/02/2011 - 10:33 | 1836587 sschu
sschu's picture

MDB, save all these quotes and write a book.  Larry Summers or Christina Romer might hire you as a spoke-person or research assistant.  :-)

It would not be so funny if not so true.

sschu

Wed, 11/02/2011 - 09:01 | 1836270 AE911Truth
AE911Truth's picture

0. Stop using debt as money. Stop working to pay interest to bankers on money they create out of thin air. This is the worlds greatest scam. Stop already.

Use debt free interest free money issued by the state for transactions and as a unit of account, and payment of debt. Use precious metals to preserve wealth.

http://tiny.cc/1mr5v

http://s6.zetaboards.com/Bill_Still_Reforum/forum/56153/

 

Wed, 11/02/2011 - 17:20 | 1838703 doggings
Wed, 11/02/2011 - 09:23 | 1836340 RSDallas
RSDallas's picture

Million,

The problem with your suggestions lie in the definition of "force".

Wed, 11/02/2011 - 11:20 | 1836863 Bagbalm
Bagbalm's picture

" ~sort out this economy once and for all."

Yes that will just end all cyclic economic variation. (sarcasm) You sir, are a fool. I am simply a high school graduate, a machinist and a plumber, and even I can tell you are a fool who knows nothing of history or human nature.

I'm surprised you didn't demand wage and price controls and interest rates set by decree. I can only HOPE you are a paid shill and don't really believe this crap.

Wed, 11/02/2011 - 11:27 | 1836915 theMAXILOPEZpsycho
theMAXILOPEZpsycho's picture

whats scary is take this out of zero hedge world and a lot of people wouldn't see any irony in the post an would, indeed, be nodding their head quite seriously...

Wed, 11/02/2011 - 11:51 | 1837073 Spigot
Spigot's picture

Yeah, no shit. The world is lead by idiots, and the sheeple are idiots. Queue "Maximum Pain" on deck. You get what you buy into, and the buyin has been huge.

Wed, 11/02/2011 - 11:38 | 1836997 Spigot
Spigot's picture

Sorry, but your call for 'rational discussion' to 'arrive at solutions' is on its face (within the context of real markets) an acadmeic exercise with no value.

The reality is that the "Market" is already forcing real solutions to real problems, so watch and learn grasshopper. Reality is going to bite the world wide ass and take a very sizable chunk of butt flesh.

Discuss all you want. Krugman is a side show. But the fact that even now HE is talking doom in real time tells you something, doesn't it?

Talk of a "double dip recession" is like talking about "getting a little wet" when standing on the listing desk of the Titanic. Now he's talking about the potential of "massive bank runs"... hahaha! Dooooooommm!

Welcome to the Doom Club, Paul. When you start telling your fans about gold as a worthwhile investment I will be there for them, to sell at $5000 per ounce! (LOL)

 

Wed, 11/02/2011 - 12:40 | 1837321 cranky-old-geezer
cranky-old-geezer's picture

 

 

You won't be getting any million dollar bonuses with those views.

Wed, 11/02/2011 - 12:53 | 1837402 Shvanztanz
Shvanztanz's picture

5. Ban profits of all kinds. If you made a profit, you are greedy, so there will be no profits.

6. All proceeds from all sales will be turned over directly to the government, so it will have the funds necessary to give everyone health care, protection from terrorists and perfect complacency.

7. Ban the existence of droughts, floods, earth quakes, disease and discontentment and anything which will interfere with GDP.

8. Paychecks will be delivered prior to work, invoices will be received prior to receipt of goods or services, work pace will be determined by the workers. 

9. Holders of notional college degrees like 18th Century French Poetry, the History of East Germany, Pop Music Culture, etc. will no longer be discriminated against for technical jobs like doctors, dentists, engineers, pilots, etc. All people will have guaranteed jobs of their choice, with infinite salaries (%101 payable in tax to govt.) and no minimum performance standards.

10. Goatees will be mandatory for all men, with unkempt beards preferred, females will have braids and non-shape-fitting clothes. 

11. Hygiene will be optional, though discouraged.

12. The government will prohibit pipes from clogging, machines from wearing out, electricity from going out and mud from accumulating after periods of rain.

13. One corporation will be sacrificed on the White House Lawn, Apocalypto style, on live TV, each week before Monday night football.

14. Professional sports will no longer be restricted to the best athletes, and will select players on a lottery basis. 

15. All inequities of any kind will be banned. A committee will convene to determine the best ways to eliminate inequities. and eliminate the differences between the best ways and the worst ways.

16. Every tuesday the sun will dim just enough for a happy face to be projected on it by an anti-matter projection-mabob, which will need to be created by a corporation at their own expense.

Wed, 11/02/2011 - 13:14 | 1837501 24KGOLD FOIL HAT
24KGOLD FOIL HAT's picture

You are very ingenius with social justice planning.  I hope Occupied [marxist chumps] dont see this list.  Then they might have some focus other than "no budget cuts."

Occupied's plans are for a constitutional convention in july 2012.  When I asked em what changes they will plan, they said no changes; just an entirely new constitution.

Occupy is sincere at the ground level but tea party is realistic.

Wed, 11/02/2011 - 18:54 | 1839024 deebee
deebee's picture

The seriousness of America's problems is only amplified when Nobel Prize winning 'economists' fail to see the most obvious or 'common sense' issues: the biggest credit-fuelled bubble in history.

And rather than offer a sensible solution, Krugman believes the cause of the problem is that government doesn't spend/stimulate enough(!) despite his depth of crisis studies and the blatant failure of the Japanese QE program.

I suggest people read his book, The Return of Depression Economics [don't worry, it won't take long] if you haven't already & pay particular attention to his pathetic conclusion*. This is all he has to offer.

Also, Krugman's been very bearish for years before the crisis but for the wrong reasons.

* Then read something sensible like Peter Schiff, Jim Rogers, Steve Keen, Bud Conrad, Harry Potter...

Wed, 11/02/2011 - 20:50 | 1839419 tmftdoyle
tmftdoyle's picture

hey million dollar bonus;

 

tired of the childish discourse! well here is some adult advice. wake the f-ck up you moron.

Wed, 11/02/2011 - 10:56 | 1836716 mtomato2
mtomato2's picture

Is it me, or does ZH sort of cherry-pick the Krugman they like from the Krugman they don't like?

Wed, 11/02/2011 - 22:00 | 1839602 mtomato2
mtomato2's picture

...How this comment earned me two thumbs down is completely beyond me.

Wed, 11/02/2011 - 08:36 | 1836182 Smiddywesson
Smiddywesson's picture

Indecisive????

Central banks, all over the world, all at the same time, are bailing out their cronnies and stalling while they buy gold for the first time in decades.  I don't call that indecisive. 

Some people still think that the system can be saved with stimulus.  Possibly you are one of them, eh?

Wed, 11/02/2011 - 08:44 | 1836201 Popo
Popo's picture

"Doctor" Paul Krugman is also a Keynesian who advocates bank bailouts and infinite rounds of stimulus.  

He is aggressively attempting to curry favor with his Princeton comrade, Ben Bernanke, because it's clear to everyone in the business that he wants an appointment at the Fed.

Krugman is a hack.   You should have seen the criticisms within economics academia when he won the Nobel.   (He won it for hating Bush, not for anything remotely remarkable in his economics writing.   Like Obama's Nobel Prize, Krugman's was given purely for political reasons -- and marks yet another embarrassment for the Nobel committee).

 

 

Wed, 11/02/2011 - 08:47 | 1836213 Smiddywesson
Smiddywesson's picture

Absolutely friggin spot on.  The Nobel Committee is no longer relevant.  They have squandered all of their legitimacy.

Wed, 11/02/2011 - 08:57 | 1836257 Kat
Kat's picture

Just because our very own Nobel Peace Prize winning president went to war in Libya and killed bin Laden and QaDaffy in the space of less than a year does NOT mean....oh...I see what you mean.

 

Actually, Krugman won his nobel prize for some good economic work on free trade.  But, that was back when he was an economist and not a political hack.

Wed, 11/02/2011 - 09:05 | 1836286 MillionDollarBonus_
MillionDollarBonus_'s picture

You are only saying that because you are jealous that virtually no Austrian economists have won the prestigious Nobel prize. Take a look at REPEC's 50 BEST economists in the world:

http://ideas.repec.org/top/top.person.all.html

How many Austrian economists do you see on that lists? How many Keynesian economists do you see? I rest my case.

Wed, 11/02/2011 - 09:13 | 1836318 Iam_Silverman
Iam_Silverman's picture

"How many Austrian economists do you see on that lists?"

As you say - virtually none.  But that is just self-preservation on their part.  Those Austrians would argue that the money spent to sustain those clowns (Nobel board of high-fallutin' knowitalls) may be better spent in the open market - perhaps in building a base of PM's to bolster the value of fiat money?

Wed, 11/02/2011 - 09:28 | 1836357 Sean7k
Sean7k's picture

I realize you are just being sarcastic, but the list requires that you register for it. Austrian economists would never bother. They realize that economics is not a popularity contest. Funny though...

Wed, 11/02/2011 - 09:38 | 1836408 sdmjake
sdmjake's picture

MDB isn't being sarcastic. Worst troll since Harry/HamyWanger with none of the laughs. Makes Robo look like a genius. Put him on your silly list...

Wed, 11/02/2011 - 10:03 | 1836481 boiltherich
boiltherich's picture

I would think that the Nobel economics committee as well as Krugman himself would simply open their eyes and for one day try to be objective rather than reactionary and look at the total mess Keynesian economics has created in this world.  But they cannot do that because if they did they would see that dislocations caused by their brand of voodoo economics is killing people on the poorer fringes of the worlds populations, as well as wiping out wealth and security for virtually the rest, and setting the stage for yet another and perhaps the last great war over resources.  Because of this they will defend their agenda to the very last moment and never admit they had any part in the genocide of the less wealthy. 

I used to think a lot like MDB in defending Krugman some 12 years ago or so, it was easier when Clinton was in office and we had surplus budgets, even if they were surplus only by the taking of the SS trust fund, at least we were on the road to real surplus and we had full employment, as well as the peak of our standards of living.  Any theory be it Keynesian, Austrian, communist manifesto, or other can deliver general well being and prosperity IN THEORY, I mean who would back a theory that promised shortages, inequality, war, and misery?  But the problem is that theory meet real world, real world meet theory. 

None will work unless you can take out the effects of the greed of the worst among us, fiat is the perfect vehicle for theft, debasement, manipulation, inequality, and every other problem we now have.  It is a system that can't be fixed, it is inherently unjust. 

If Dr. K and the Nobel judges were all driving cars way too fast on a slippery road and all smashed into each other and crunched up the vehicles and were all wounded, upon surveying the carnage they would all say it was someone else's fault, the road engineer should have made the crown higher, the guard rails were defective, and most loudly they would all agree that the government should have spent more on paving materials.  But they will never admit that it might have had something to do with their lack of piloting skills. 

Wed, 11/02/2011 - 10:05 | 1836492 TruthInSunshine
TruthInSunshine's picture

If Mr. K and the Nobel judges were all driving cars way too fast on a slippery road and all smashed into each other and crunched up the vehicles and were all wounded, upon surveying the carnage they would all say it was someone else's fault, the road engineer should have made the crown higher, the guard rails were defective, and most loudly they would all agree that the government should have spent more on paving materials.  But they will never admit that it might have had something to do with their lack of piloting skills.

They would most likely call this an externality that could have been prevented via the use of a multiple-level tax on road [civil] engineers, the manufacturer of the guard rails & the manufacturer and installer of the paving materials.

Wed, 11/02/2011 - 11:04 | 1836758 mojine
mojine's picture

Barack O-fuckin'-Bama "won" one of those prizes, too. I rest my case! Half-wit!

Wed, 11/02/2011 - 08:54 | 1836237 Catch-22
Catch-22's picture

100% accuracy once again Popo... quite the marksman!  

Wed, 11/02/2011 - 09:32 | 1836382 DavosSherman
DavosSherman's picture

"Dr. Paul Krugman" FUCK YOU!  The guy is a fucking moron!

Wed, 11/02/2011 - 08:17 | 1836140 ratso
ratso's picture

Paul Krugman is just refining his version of "I can predict a worse world disaster scenario than you can" for this competition that is open to leading economists.  He's way behind.

Wed, 11/02/2011 - 09:10 | 1836308 bernorange
bernorange's picture

He is preparing the stage for (political support for) massive central bank intervention to "rescue" the world.  He is a tool in the literal sense of the word.  Caveat emptor.

www.pmbug.com

Wed, 11/02/2011 - 10:29 | 1836569 GeezerGeek
GeezerGeek's picture

Perhaps Krugman is trying to show that he learned something in an English Lit class. He certainly learned nothing of value in any of his Econ classes.

What I am referring to, of course, is his quote "things are falling apart in Europe; the center is not holding." Is he channeling the poem by William Butler Yeats titled "The Second Coming"? http://www.potw.org/archive/potw351.html. The proper quote from this poem would be "the center cannot hold". A more complete segment of the poem is this: "Things fall apart, the center cannot hold, Mere anarchy is loosed upon the world,"

Yeats was writing about the great upheavals sweeping Europe at about the time of World War I. Certainly the line sounds applicable to the financial situation today, with the financial institutions perhaps going the way of the European monarchies nearly a century ago. Perhaps Krugman sees the central banks as representing the "center" and those opposing the CBs as the revolutionaries. Changing the text a bit, if that is what he did, would have allowed Krugman to avoid having to attribute the text/thought to someone else. Sort of like "spreading the literary credit around".

Another alternative is that he saw the book by Elyn Saks titled "The Center Cannot Hold: My Journey Through Madness" and took the title's theme as his own, the specific madness being Keynesianism.

Or maybe he just came up with the phrase on his own.

Wed, 11/02/2011 - 08:20 | 1836148 johngaltfla
johngaltfla's picture

If Krugman were to replace "Lira" with "new dollar" he would describe the coming situation in the U.S. to perfection.

That is why gold is the only safe play along with lead, food, farmland, and if you can swing it, a Bradley isn't a bad addition to the driveway.

Wed, 11/02/2011 - 09:39 | 1836411 WALLST8MY8BALL
WALLST8MY8BALL's picture

ManBernKrug - Half man - Half Psychotic Bearded Keneysian Fool!

Wed, 11/02/2011 - 11:26 | 1836894 The Big Ching-aso
The Big Ching-aso's picture

'Send in the Krugmans'

A great song especially with nuances by the great Frank S.

Wed, 11/02/2011 - 13:23 | 1837543 24KGOLD FOIL HAT
24KGOLD FOIL HAT's picture

That word/song picture is the best!  I needed a chuckle.

Wed, 11/02/2011 - 08:10 | 1836124 Kokulakai
Kokulakai's picture

Half of all prime money-fund assets are invested in european banks.

 

Wed, 11/02/2011 - 08:22 | 1836153 paarsons
paarsons's picture

Oh, fuck Paul Krugman.

When's the last time he's been right?  Cocksucker.

Fuck him right in his Ivy League asshole.

In fact, fuck all the Princeton motherfuckers.

http://fucklloydblankfein.blogspot.com

Wed, 11/02/2011 - 08:26 | 1836159 junkyardjack
junkyardjack's picture

And I doubt MF is the only one mixing client funds, they just got caught with their pants down.

Wed, 11/02/2011 - 08:35 | 1836174 Snidley Whipsnae
Snidley Whipsnae's picture

"And I doubt MF is the only one mixing client funds..."

........................

Almost a lead pipe cinch! Corzine was head of GS for a while... What do we suppose he learned while at Goldman?

When large institutions; ie, pension funds, endowments, insurance companies, etc, figure out that they are going to take 'haircuts' on their investments held by scammers like MF Global because of outright theft, will they leave their funds there?

Wed, 11/02/2011 - 08:50 | 1836221 Smiddywesson
Smiddywesson's picture

There's an avalanch building?  Yes, I would have to agree with that.  Inasmuch as there is nowhere else to go, I would say the MF revelation is going to push a lot of managers into gold.

Wed, 11/02/2011 - 08:10 | 1836125 Cassandra Syndrome
Cassandra Syndrome's picture

So what do think of the consequences from your burning desire for artificial low interest rates 10 years ago, now Mr Krugman?

Wed, 11/02/2011 - 08:11 | 1836126 PaperBear
PaperBear's picture

I am sure that the Uber Keynesian Krugman has secretly been stocking up on physical gold/silver.

Wed, 11/02/2011 - 08:12 | 1836129 youngman
youngman's picture

I think gold and silver have been left out of this crash for some reason...they have not done anything for weeks...I would have expected the PM´s to jump 20-30% from the fear facter...nothing so far...

Wed, 11/02/2011 - 08:35 | 1836178 disabledvet
disabledvet's picture

Once Greece, Italy and Spain all leave the Union (and they will all do so before the year is out...perhaps even the week) gold in their respective currencies will not be had in any of their respective currencies. Period. Herr Hitler gave Germany "the Destruction of Army Group Center"--courtesy of the Red Army--it is the greatest destruction of single armed force in human history. Period. They may find what's going on "on the periphery" amusing...but the Prime Minister of Greece is about to exact his revenge. "When you're dead already" as they say...Let's just say "the repercussions are profound."

Wed, 11/02/2011 - 09:00 | 1836256 Smiddywesson
Smiddywesson's picture

I think gold and silver have been left out of this crash for some reason...they have not done anything for weeks...I would have expected the PM´s to jump 20-30% from the fear facter...nothing so far...

Look to the article above Youngman.  Gold lagged in USD on Monday while its price in other currencies soared.  Today, that pressure was released.  Price suppression just creates more pressure.  I agree with your observations, so I wouldn't be surprised if gold blows right back up to $2000 within the span of a few days.  In fact, I wouldn't be surprised to see it do so this week (but I'm not holding my breath).

The Fed and the ECB are going to have to pull the plug on the gold suppression scheme and announce a new monetary standard if the pressure keeps building.  Already there's rumors floating the idea of a pre-1914 standard from people like Greenspan.  There's a G-20 this week (Thurs and Fri) and it looks like GLD is ready to begin screwing its shareholders (D-Day is 11/11/11).  Maybe they make their move soon, maybe not.  We'll see.

Wed, 11/02/2011 - 11:51 | 1836949 The Big Ching-aso
The Big Ching-aso's picture

The price of PMs doesn't always go up just because of external geo-political factors.   The price of PMs only goes up (just like the stock market) when those inside controlling the system of fiat allow it to go up, or just as importantly (again, think the fiat world) to go down.    The insider game of short and long as it were.   In the meantime they are accumulating PMs on the side for The Grand Reset (TGR).       After TGR those that have most of it will be the new winners.   Everyone else will be the new losers.    And thus a new game will begin, to then be replaced by another game, etc.   You and us OTOH if not insiders in any such game will always be guessing.

The trick is to hedge the guesses.

 

 

Wed, 11/02/2011 - 08:12 | 1836130 three chord sloth
three chord sloth's picture

Heh. Krugman's opinions are comedy gold... that's as close as he ever comes to the precious yellow stuff.

Wed, 11/02/2011 - 08:12 | 1836131 FL_Conservative
FL_Conservative's picture

I'm afraid that the apocolypse is coming if I can find something that Krugman and I can agree on.  Be afraid.  Be VERY afraid.

Wed, 11/02/2011 - 08:18 | 1836142 1835jackson
1835jackson's picture

Agreed. When guys like him start singing from the same music sheet we have...well hold onto your arse!

Wed, 11/02/2011 - 08:13 | 1836133 ziggy59
ziggy59's picture

Sheit... If this came from anyone else but Krugman, I would be more apt to believe it.

When do we have a yard sale for fake peace medals? I know 2 that need to go!

Wed, 11/02/2011 - 08:18 | 1836141 sabra1
sabra1's picture

only when reggie middleton says there will be a bank run, there will be a bank run!

http://www.zerohedge.com/contributed/greco-franco-bank-run-has-skipped-pond-landed-nychicago-and-nobody-noticed-exactly-i-pre

Wed, 11/02/2011 - 08:19 | 1836143 apberusdisvet
apberusdisvet's picture

 

Krazy Korporatist Keynesian Krugman Keeps Kinky Kleptocrats Klarity Konstrained and Konfined.

Kongratulations!

Wed, 11/02/2011 - 08:19 | 1836145 Snidley Whipsnae
Snidley Whipsnae's picture

"Its 0.9% fall in dollar terms was an impressive performance given the scale of the losses seen in equity and commodity markets."

..............................

Gold was very impressive yesterday! Got PMs Paul?

Wed, 11/02/2011 - 08:21 | 1836151 msmith
msmith's picture

A bit more "risk off" expected today.  Here is a look at the SPX, DX, and TNX.   http://bit.ly/rTM48H

Wed, 11/02/2011 - 08:27 | 1836164 junkyardjack
junkyardjack's picture

Futures don't agree

Wed, 11/02/2011 - 08:27 | 1836162 Catullus
Catullus's picture

I wouldn't worry about krugman. Thats just political panic macro going off.

Wed, 11/02/2011 - 08:38 | 1836167 Mercury
Mercury's picture

Paul Krugman’s latest post is extremely bearish and he warns that “things are falling apart in Europe; the center is not holding” Krugman warns that this could lead to a “gigantic bank run” and “emergency bank closing”.

Thanks mainly to central planning fucktards like yourself Paul.  If you read ZH this wouldn't be such a revelation.

Wed, 11/02/2011 - 08:42 | 1836193 Tsunami Effect
Tsunami Effect's picture

The QE Zombies are out in full force today for the Fed announcement.

Wed, 11/02/2011 - 08:53 | 1836231 Kat
Kat's picture

Excellent.  Nearly two years later, Krugman finally cottons on.

Did he blame all this on the stimulus not being big enough? 

Wed, 11/02/2011 - 08:54 | 1836238 onetimepost
onetimepost's picture

Sorry to hi-jack this thread, please do not junk it without allowing for a few replies.  

My wife is planning to leave me for "irreconcilable differences".  I don't want her to go and I do not think it is wise, as we also have a teenage son.

She has a professional background and experience working as a: loan officer, account receivable rep, and a finance manager for a "non-auto" dealership.

She has less than 1 month of cash reserves, will have no insurance, and will be living paycheck to paycheck.

Besides the many conversations we've had about the personal reasons why she should not move forward, I have explained to her that there's really only two ways the global economy will shake out:  Implosion, or hyper-inflation followed by implosion.

Personally, I think with the planned build up of troops in the mid-east, and Isreal gearing up to respond to missiles in Gaza,  chaos will ensue in <1yr.

Either way, living paycheck to paycheck will become very difficult for her.  I would appreciate your comments which describe the conditions she may be facing shortly. Do try to keep it from becoming personal.

Wed, 11/02/2011 - 09:08 | 1836298 Chump
Chump's picture

She'll be whoring herself out for food within 6 months after the shit hits the fan.  Try to find a nicer way to say that to her, though.

I'm sorry for your troubles.

Wed, 11/02/2011 - 09:37 | 1836401 roccman
roccman's picture

very few will avoid this ^^^^^^^

 

the kill off is not going to be kind

Wed, 11/02/2011 - 09:15 | 1836321 Smiddywesson
Smiddywesson's picture

What's this, Dear Abby?  Most of the people here are geniuses with absolutely no social life, so why ask us?  You asked, so my 2 cents:

It looks like she doesn't have the financial resources to live on her own, but she's miserably enough with you to chance it and risk making her son miserable too.  So find some way to make her less miserable.  

Your only solution is to somehow induce her to stay so that you can provide for them.  That probably means you moving out, or at least moving to your own room, preferably with your own exit/bath.  This proves you love them and shows you will put their best interests first. 

If that's not good enough, and she wants to start dating somebody else, then she's going to have to come to terms with the fact that she is putting her own needs ahead of her son because she can't wait a few years until he's out of the house.  By taking yourself out of the equation, she can't continue to ignore that fact. 

Wed, 11/02/2011 - 09:20 | 1836335 Iam_Silverman
Iam_Silverman's picture

"living paycheck to paycheck will become very difficult for her."

Therefore expect the divorce judge to grant her some type of "spousal support".  Now she will be living from paycheck to alimony check.  See?  All better..  Oh, and you can bet that if you are covered by some type of health insurance that the judge may declare that you need to cover her too.  With all of that and child support, I don't think that you can afford for her to leave you.  Maybe some sort of accident is in order?

Wed, 11/02/2011 - 09:30 | 1836372 onetimepost
onetimepost's picture

not living in an alimony State.  I'm willing to do whatever and anything she wants to keep her from moving out.  

I think it would be more helpful if members contributing to this thread explain in simple terms how her means to exist month to month are being eroded by price inflatation.

or that if banks start imploding, sales of "non-autos" from the dealership she works for are going to drop off even more than they have.

or that if the world is being setup for a OWS & New Bank Bailout showdown, anything bad is possible.

I'd like her to read it in the words of the semi-expert commentators.

Wed, 11/02/2011 - 09:39 | 1836410 roccman
roccman's picture

fear her into staying...^^^^^^

 

hmmm...brilliant

 

hey Zero! - roll out doomerdating bro - this could get real!!

Wed, 11/02/2011 - 09:45 | 1836428 Chump
Chump's picture

Tell you what, I have a better idea.  Keep tabs on where she ends up so you know where your son is.  When the shit hits the fan, go collect him and tell her to eat a bag of dicks.

The only thing you can do is protect yourself and your loved ones (to a certain degree) and it sounds like she is fast falling off the "loved ones" list.

Fuck bank implosions and inflation.  It's time to acknowledge that the best "reserves" are food and ammo.  She's not interested and you have no obligation to someone who wants nothing to do with you.  You do have an obligation to your flesh and the blood running in your son's veins.  Plan accordingly.

Wed, 11/02/2011 - 09:45 | 1836430 Iam_Silverman
Iam_Silverman's picture

But, looking at other ZH topics - I don't know that you can convince her.  take for instance the record number receiving SNAP (food stamps).  Her interpretation would be "well, then I will certainly be in the mainstream".  Or how some enterprising folks have discovered that not paying their mortgage suddenly frees up more money for other items.

As for not being in an "alimony" state, that oversight is usually addressed by bleeding heart judges when the "child support" decree is issued.  Where the law is remiss, the judge will make needed "applications of jurisprudence".

Honestly, if she wants to go - let her.  No amount of reasoning is going to keep an unhappy woman where she doesn't want to be.  If life is tough on her, let it be.  Whatever it was she supplied that you are so addicted to, I bet you can find a replacement (maybe even with lower maintenance costs).  Grovelling will not serve your purpose.  Hold the door open for her, and tell her to be sure to pack all of her underpants, as her replacement will definitely need at least three sizes smaller.  Oh, and smile when you say that.

Wed, 11/02/2011 - 10:31 | 1836581 Dumpster Fire
Dumpster Fire's picture

^^^ Motherfucking This!

It's still a shame that youth is wasted on the young.

Wed, 11/02/2011 - 10:05 | 1836491 FreeNewEnergy
FreeNewEnergy's picture

Having never been married - not for lack of trying mind you - but having had many failed relationships, I say you should just let her go. Whatever "irreconcilable differences" she may be perceiving are obviously clouding her thinking, and your attempts to curry support from this group are clearly misguided.

Let her find out how life is without you and move on to a healthy, happy life of your own without somebody nagging the crap out of you.

Let her read this, OK?

And, start acting like a man, not a whining, emasculated wimp.

Wed, 11/02/2011 - 14:19 | 1837125 cranky-old-geezer
cranky-old-geezer's picture

 

 

Besides the many conversations we've had about the personal reasons why she should not move forward, I have explained to her that there's really only two ways the global economy will shake out:  Implosion, or hyper-inflation followed by implosion.

My experience has been when a woman decides she wants to do something, that's it. No talking her out of it.

It's not a decision based on facts. Facts have nothing to do with it. Her decision is typically made in spite of many facts advising against it.

The average woman is smart and rational ...until her emotions take over. Then smart and rational go out the window and she's operating purely on emotion.

You can't reason with emotion. Facts don't enter into emotional decisions.

"Irreconcilable differences" is an emotional decision. No facts are involved, and no facts will change it.

"Irreconcilable differences" does not have to be proven in court. It is assumed to be a valid cause of action for a divorce suit without having to be proven. So forget trying to disprove it in court.

Bottom line, if she wants a divorce, she gets it.

That right there is why marriage in today's society is hopeless. Courts won't make a petitioner prove a valid reason for wanting a divorce.

Yes it's gross perversion of justice. In a typical lawsuit the petitioner must establish preponderance of evidence to get judgment in their favor. Not so in a divorce suit. No evidence is required to get judgment in their favor. Merely asking for divorce judgment is sufficient.

If her mind is made up, that's it. Nothing you say will change her mind. Nothing anyone around her says will change her mind. Nothing any of us here say will change her mind.

If she leaves she's on her own. That's my view. If she ends up homeless on the street, tough shit. She chose to leave. It was her decision.

And I would have no pity for her. However she ends up is her doing, not mine. She's a grown up woman. She's responsible for her decisions and the results of those decisions.

This actually happened in my last marriage. She chose to leave. She filed for divorce and got it.

Later on she hooked up with a scumbag she "fell in love with", let him move in, got in financial trouble with him, got deep in debt, ended up losing her home, losing nearly everything.

Then she wanted to come back. I said no. She made her decision. She lives with it.

Fortunately we had no children together.

Wed, 11/02/2011 - 22:26 | 1839673 boiltherich
boiltherich's picture

I used to have irreconcilable differences too till I hit puberty and I became way over average, at least 8.5 inches.  I mean not to make light of a bad situation but these things too you must learn to accept with peace and if you can laugh about it all the better. 

Being gay I myself never understood why you straight men would put up with females, in reality they are like crazy guys with a hole where their balls should be.  Well, sorry to our female buddies here, I do not mean that the way it came out, but you can attest to the fact that you understand the way women think and deem it superior to the way men think, and men understand men perfectly while wondering what language women are speaking in their own heads. 

Now ironically while I was tapping away on this keyboard some bitch on TV  in the next room named Kardashian was defending her 72 day marriage to a guy she is divorcing.  I have a good idea for Neocon types that will make them happier than shit.  No marriage for gay people, and no divorce for straight people.  Fair?  I do not want to undermine your precious institution of marriage after all, but if I can't neither can you.  Fair?   

Wed, 11/02/2011 - 23:20 | 1839787 Shvanztanz
Shvanztanz's picture

I have some really bad news for you bro. She's already probably been to a lawyer who has filled her with delusions about how (most likely) your "substantial income" needs to be garnished to maintain her lifestyle, whatever it is. The worst news you could can get is that your old lady just can't stand your ass anymore. That's the Lehman moment. Then, there comes the never ending crisis which sees your lawyer and her lawyer colluding in winks and nods to level a forrest to supply paper for the blood sucking orgy they are professionals at orchestrating at YOUR expense. 

Consider this the battle of Warsaw, only it is the beginning of WWII and you have a long, demoralizing and endlessly painful ordeal coming. That's the good news. Once you accept it, you can let the pussy inside of you begin to die so that the cold blooded survivor can take its place.

Get over your hurt feelings and best intentions now. This is your only warning. She is now a Zombie and Zombies want one thing. Blood, yours. She will not get over it and common sense means nothing to her. Consider yourself luck that this happened to you now and not later when you will be older and weaker and less able to bounce back.

"Abandon Hope All Ye Who Enter Here" 

Wed, 11/02/2011 - 09:38 | 1836406 vegas
vegas's picture

Paul krugman is a fucking idiot. Why anybody would listen to this guy is beyond me.

Wed, 11/02/2011 - 10:51 | 1836685 Vendetta
Vendetta's picture

Indeed. I guess a lot of people are still fooled by nobel prizes as some kind of measure of credibility

Wed, 11/02/2011 - 09:47 | 1836441 glepo
glepo's picture

Exposure to private sector loans by country:

1 Greece France 43bn Germany 7bn UK 8bn 2 Portugal Spain 76bn Germany 14 france 13 UK 19 3 Ireland UK 120bn Germany 85 France 20 US 40 4 Spain France 81bn Germany 78 UK 75  US 30  Source BIS

Total Gov net liabilities (from SG study) + private sector debt % GDP:

France 549% / 155% (AAA)

Germany 418% / 128%

Italy 364% / 121%

UK 442% / 215%

Spain 244% / 171%

US 541% / 174%


A large wealth tax–and some have spoken of sums larger than €200 billion–could knock Italy’s public debt ratio down to 80% of GDP leaving total-economy debt where it is now, putting the country’s metrics on the level with some triple-A countries.

What if Italy chooses to leave the Euro?

Italy has a large number of advantages over the rest of the periphery: it runs a primary budget surplus 
(thus it would need to tighten less), net foreign liabilties are small (thus preventing a massive default of the private sector), borrowing from ECB is only 5% of GDP, the country is a net contributor to the EU budget and it has a big industrial base thus benefiting more from a cheaper currency). 
Clearly the cost of servicing the public debt (120% of GDP) would soar (assuming the BTP/bund spread rises 
to the pre-EMU level of 6%, Italy's interest costs would be c 8% of GDP c forecast 4.8% now, thus taking c 1.5% off GDP growth. However, with an average maturity of 7.2 years and only 20% of debt coming due within the next year, higher funding costs would only come through with a lag). 
The problem is that if a big exporter like Italy left the Euro, that would put the rest of peripheral 
Europe under huge deflationary pressure (to try and stop foreign capital and export market share going to Italy)and it is very hard to see how other members of the periphery would not join Italy. 

Italy’s total economic debt is not high by euro-zone standards, and roughly the same as Germany’s. But that’s because private debt levels are low–and wealth levels high–while the state is hobbled with €1.8 trillion in debt. Yet Italian households have financial assets worth an estimated 180% of GDP and unmortgaged real estate worth more than 300% of GDP. 

 

Wed, 11/02/2011 - 23:00 | 1839755 boiltherich
boiltherich's picture

Italy is also the third largest gold reserve holder after the USA and Germany.  (where DID the Germans get all that gold?  Can you say dental fillings?)  2,451.8 metric tons=$112 billion at the totally insane low price of $1725.50 an ounce. 

And while I was fact checking what I already knew by looking up gold reserves at Wiki I noticed something I think is really interesting.  As of a week ago gold reserves were listed with the EU as #1.  Then the USA, Germany, Italy, and I always thought when I saw that over the years that it was pretty unfair to list the EU as number one AND all the constituent EU nations after by their individual ranking.  One or the other but not both.  This evening they no longer list the EU as having a gold reserve.  And I have to wonder what happened there.  Just another dent in the armor?  Someone somewhere knows that the EU will not be around a lot longer?  Or, should I say the EMU/eurozone.  The EU I think can survive this, but the euro no. 

Being a dual citizen in the US and Ireland/EU trust me I have spent a lot of time thinking about it.  I think that the EU is a great thing, the old Europe was fractured, it was as if you had to drive from Boston to Baltimore and go through border checkpoints every 28 miles, with different languages on the signs, and different standards for fuel and speeds and money, and graft.  Economies were hidebound by outdated regulations that changed every time you got out of your car to pee.  Look, Budapest is capital of Hungary, Bratislava is capital of the Slovak Republic, and Vienna is the capital of Austria, they are all just about 40 miles apart.  Having the same money system was convenient but we knew then that it would not work without a US of Europe, and that was something they just are not ready for yet, maybe in fifty years.  Maybe phased in over 30 years.  And we now have the technology to have 26 different currencies and near instantaneous electronic payment with ForEx included.  They did not have that ability back when they decided to push everyone into the euro. 

Keep the EU, but toss the EMU, let the continent adjust to being one unit before integrating a one money policy. 

Wed, 11/02/2011 - 23:03 | 1839759 boiltherich
boiltherich's picture

By the way, Italian gold reserves are those of the government, private holdings are a lot higher and when you include the gold the Vatican has they shoot to number one.  Nobody knows how much gold the Vatican holds but the pope, but I bet it is more than the USA, Germany, and Italy combined. 

Wed, 11/02/2011 - 09:55 | 1836456 glepo
glepo's picture

Exposure to private sector loans by country:

1 Greece France 43bn Germany 7bn UK 8bn 2 Portugal Spain 76bn Germany 14 france 13 UK 19 3 Ireland UK 120bn Germany 85 France 20 US 40 4 Spain France 81bn Germany 78 UK 75  US 30  Source BIS

Total Gov net liabilities (from SG study) + private sector debt % GDP:

France 549% / 155% (AAA)

Germany 418% / 128%

Italy 364% / 121%

UK 442% / 215%

Spain 244% / 171%

US 541% / 174%


A large wealth tax–and some have spoken of sums larger than €200 billion–could knock Italy’s public debt ratio down to 80% of GDP leaving total-economy debt where it is now, putting the country’s metrics on the level with some triple-A countries.

What if Italy chooses to leave the Euro?

Italy has a large number of advantages over the rest of the periphery: it runs a primary budget surplus 
(thus it would need to tighten less), net foreign liabilties are small (thus preventing a massive default of the private sector), borrowing from ECB is only 5% of GDP, the country is a net contributor to the EU budget and it has a big industrial base thus benefiting more from a cheaper currency). 
Clearly the cost of servicing the public debt (120% of GDP) would soar (assuming the BTP/bund spread rises 
to the pre-EMU level of 6%, Italy's interest costs would be c 8% of GDP c forecast 4.8% now, thus taking c 1.5% off GDP growth. However, with an average maturity of 7.2 years and only 20% of debt coming due within the next year, higher funding costs would only come through with a lag). 
The problem is that if a big exporter like Italy left the Euro, that would put the rest of peripheral 
Europe under huge deflationary pressure (to try and stop foreign capital and export market share going to Italy)and it is very hard to see how other members of the periphery would not join Italy. 

Italy’s total economic debt is not high by euro-zone standards, and roughly the same as Germany’s. But that’s because private debt levels are low–and wealth levels high–while the state is hobbled with €1.8 trillion in debt. Yet Italian households have financial assets worth an estimated 180% of GDP and unmortgaged real estate worth more than 300% of GDP. 

 

Wed, 11/02/2011 - 11:24 | 1836890 xcehn
xcehn's picture

Bank runs are extremely likely.  ZH was way ahead of the curve (as usual) on this warning, e.g., see continuing thread s

http://www.zerohedge.com/contributed/after-accurately-predicting-french-...

Wed, 11/02/2011 - 11:27 | 1836908 dcb
dcb's picture

I already know the answer. Print more based on logic that is faulty, dta that is hand picked, and outright lies. There are no structural problems with the markets, transmission mechanisms aren't to be fixed before we embark on further easing, etc. Nope ignore everything about the market/ economy except monetary policy. Where do they find these people? Banks borrow from the discount window, ramp up stocks with endless leverage from the fed, don't have to lend to the real economy, there aren't "position limits" or capitial controls to make sure the loosening of monetary policy goes where it should (into the real economy). credit card rates should not be effected by the prime rate so banks don't giver loans and force people into over priced credit cards. My god there are a million things that could be should be done to market structure before firther easing. Nope we need cheap fund so places like MF global can leverage 40/1.!!!

 

the guy just doesn't get it at all. without proper structure, monetary pollicy is meaningless and can be gamed. Nope cheap funds for hft traders and financial leverage, none for the real economy. that's his perscription and he can't understand why it isn't working, but wants to do more. With friends like him, who needs enemies.

Wed, 11/02/2011 - 12:08 | 1837155 Bunga Bunga
Bunga Bunga's picture

Krugman trashes the Euro politics and requests quantitative easing on a big scale like FED does. He wants that ECB/Draghi is buying Italian bonds like crazy.

Wed, 11/02/2011 - 12:16 | 1837191 topshelfstuff
topshelfstuff's picture

 

I have posted about this several times, and will again...in fact it may be easier to just paste an old post. What I'll add is that where Krugman uses "Emergency Bank Closing", I think it could be better said to be called a "Bank Holiday". A rough draft likelihood would call for about One Week of Banks being Closed, followed by another week of turning in any Cash in Exchange for the New Dollars. All accounts would be adjusted during this time.

Here is the paste and you'll see its simply moving the Decimal Point by two  places. Internally at least two major items that need to be remedied will be, and fairly.
Mortgage Debt would remain Fixed, Student Loans too, and Payable with the New Dollars. Care should be taken to make the new Mortgages clear, and others will need to consider what to do with all the CDS, CDO, and other "Exotic" type OTC Derivatives that nobody seems able to understand nor explain. I won't get into all that here. Let me just paste what I think may be coming. It may be the same with the EURO, come to think of i. Making such a move as a Block, instead of just the US, may have been included in the panning:

[[[ Internal and External, two very different Measures possible, in fact some countries have already used such a dual Valuation. Internal Funding can be done much easier ]]]

 

This is the basic explanation. The finer points can be detailed later. The definite items to be kept Fixed would be Mortgage Debt for everyone, Student Loans, basically Federal Loans.

These would be Payable using the New Currency at the Balance in Current, then the "Old" Currency. Ideally a second  type of Currency can begin to be made available, brilliantly detailed and viewable by going to the website of Hugo Salinas Price. I'll leave a link to that, but for now its more important to focus on the Decimal Point Move.

 

 

its time now to move the Decimal Point by 2 notches. Call a bank holiday, call in all current dollars and issue New US Dollars at $1.00 Current = $100.00 New Dollars


Foreign Debt can be paid at 1% of Current

 

Yes they will get Dollar for Dollar, no default, its just going to be New US Dollars. So the Foreign Debt can be paid-in-full at 1/100, 1% of Current type USD


Mortgages are kept at Current but Payable with New US Dollars....and no more bad mortgages, and correct and make good all the new ones made. This has to be addreessed, and a few other items too.

So we can put these 2 big problems behind us, and start to bring back manufacturing jobs to the US.

 

The word "millionaire" is relative to the country you live in and currency used. Many people in the world are technically "millionaires", but its Billionaires there that carry the same meaning we "used to have" for millionaire. I intentionally bracketed millionaires because haven't we been prepped for this already? Think about it. In the past few years we've been hearing Billions and Trillions tossed about liberally. Its not just the country standing with a debt that can't be paid, so are many Americans, with many more heading that way as we stand now. Wouldn't this allow for Jobs, Manufacturing to return to the US? Its not just about Pay, its about the Purchasing Power of your pay. We have been heading Down, and the Emerging Markets Up, big time, for about a decade now.

 

People who make lets say $800 a week will start making $80,000 a week. Of course a $2 bottle of milk will then be $200...etc., similar to many people in the world, like Japan's YEN, Italy's former Lira, Asia, Mex, Latin America, countries where its common to purchase everyday items in hundreds and thousands. We'll get used to it quickly.

"""""Student loans too?"""""" YES, I didn't include all the details

 

""""And what will Gold and Silver be priced at?""""" as for Au & Ag just add 2 zeros

 

================================

http://www.plata.com.mx/mplata/articulos/articles.asp

 

http://www.plata.com.mx/mplata/articulos/articlesFilt.asp?fiidarticulo=171

He gives the entire method. The main point being to only stamp the weight and purity, Never a dollar amount.

 

Wed, 11/02/2011 - 13:03 | 1837452 tony bonn
tony bonn's picture

so let me get this right....these countries, following the approved keynesian and monetarist protocols of which at least the former krugman heartily endorses, are falling apart? and krugfuck is alarmed? bitch, please! this can't be fo real...

krugfuck is a cancer on the economic voodoo profession...and a mouth piece for the plutocrat banksters....fuck him and the horse he rode in on....

Wed, 11/02/2011 - 16:53 | 1838599 falak pema
falak pema's picture

an alternative viewpoint :

 

DAVID ZERVOS: This Is How The Euro Crisis Will End

Read more: http://www.businessinsider.com/david-zervos-on-greece-and-the-end-of-the-euro-crisis-2011-11#ixzz1caEJyv67

Wed, 11/02/2011 - 17:11 | 1838660 Amschel
Amschel's picture

"The" Nobel Prize winner/s? Seem to only be able to asnwer an economics related question with "you should not expect much from us".

Lol?

How to silence a Nobel Prize winnning economist;Ask him about the conomy.

 

http://www.youtube.com/watch?v=mFdnA5UNmVw&feature=relmfu

Wed, 11/02/2011 - 17:45 | 1838662 Amschel
Amschel's picture

Gold,Silver.

Guns.Ammo.

Food.Water.

God.Family.

Wed, 11/02/2011 - 18:44 | 1839005 silverserfer
silverserfer's picture

Anyone ever put some dep thought into what this country would be like today if the FED was never created back in 1913?

I dont htink anything wil work untill usuary is made illegal and loans are made to the induviduals at 0% interest for thisng like school loans, 1st homes, small business. No debt forgiveness, pay the loan with no bankrupcy options. We dont need the banks to do this.  

Wed, 11/02/2011 - 22:18 | 1839644 LiquidDreams
LiquidDreams's picture

I know Krugman bashing is the cool thing to do around these parts (and SOME of it is well warranted) But don't be so quick to blindly assume old Pauly is wrong. If you listened to him back in 2006, you'd be in pretty good shape: http://www.youtube.com/watch?v=qo4ExWEAl_k

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