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"To say Greece simply cannot repay isn’t the end of the story. As Europe moves towards a more rational debt policy with Greece, there is an enormous economic cost, not to mention social and perhaps political, to any delay. I worry about the terrifyingly low level of sophistication among policymakers and the economists who advise them when it comes to understanding balance sheet dynamics and debt restructuring. Greece’s debt overhang imposes rising financial distress costs and increasingly deep distortions in the institutional structure of the economy over time, and the longer it takes to resolve, the greater the cost."

Put on the a tin foil hat if you must, but US dollar's rally is resuming after short consolidation phase.  I think the rally is only about 1/3 of where it is eventually going.  

ECB putting interests of banks over those of people … again.

People versus the banks ... time to take a stand ...

The chart below, which presents not only the total amount of sovereign gold holdings, but indicates the percentage of the monetary base backed by gold reserves, shows something rather stunning.

With the ECB escalating matters this afternoon, the craziness of European leaders talking past one another in an effort to create the next headline-driven narrative continued to gather pace today. That idiocy was nowhere more obvious than when EU President Martin Schulz warned ominously that Greece risks national bankruptcy if it continues down the path of non-agreement when Greek finance minister Yanis Varoufakis has previously explained quite clearly that "Greece is already bankrupt."

While the media world follows every step of the new Greek finance minister Yanis Varoufakis (or "YV") with morbid fascination, and for good reason - he is so subdued it makes him flamboyant to a media world unaccustomed with modesty -  the truth is that, for all his best intentions, Yanis as well as the Prime Minister, are merely frontmen for popular consumption. The real brains behind the latest Greek attempt at tearing away the hated "oppressive" shackles of debt (which nobody had a problem incurring originally when everything was going smoothly, but that's a topic for another day) is a banker who sits 3000 kilometers away, on Paris' Boulevard Hausmann, and who is a self-described "pro-market socialist", and fan of The Clash. Meet Lazard's Matthieu Pigasse, the banker, whose actions in the next few days, as the WSJ puts it, will shape  "Europe’s financial future."

• Arab World Unites to Condemn ‘Barbaric’ Death of Jordanian Pilot (BBG)
• Jordan hangs two Iraqi militants in response to pilot's death (Reuters)
• As Oil Prices Climb, Some Harbor Doubts (WSJ)
• Taiwan plane cartwheels into river after take-off, killing at least 19 (Reuters)
• Seven dead as commuter train hits car near New York City (Reuters)
• Apollo’s 600% Profit on Oil Company Leaves Rivals Behind (BBG)
• Greece's rock-star finance minister Yanis Varoufakis defies ECB's drachma threats  (Telegraph)

• RBA cuts interest rates to record low of 2.25% (SMH)
• RBI keeps rates on hold (Reuters), India allows banks flexibility on big projects to reboot growth (Reuters)
• BP slashes capital spending by 20% (FT)
• Greek Retreat on Writedown May Move Fight to Spending (BBG)
• Rosneft accounting move helps BP beat profit forecast (Reuters)
• Amazon in Talks to Buy Some of RadioShack's Stores (BBG)
• Behind Obama's budget proposals, a gloomy view of the future (Reuters)
• How the Justice Department, S&P Came to Terms (WSJ)
• Staples, Office Depot in Advanced Talks to Merge (WSJ)

Because admitting that the Venezuelan utopia is failing due to the policies of Hugo Chavez' "socialist revolution" would leave the thread by which Venezuelan socialism hangs ready to snap, President Maduro has shifted the blame for hyperinflating-price-based staples shortages and food lines from a cut in oil revenues to the dastardly capitalists. As The BBC reports, Maduro ordered the arrest of executives of one of the country’s largest pharmacy chains for allegedly creating shortages of everything from diapers to heart medicine. A triumphant information minister proclaimed, "we came, we normalized sales, we summoned the owners, we arrested them and they're prisoners for having provoked the people with economic war."

• Germany Sees No Need to Scrap Troika in Overseeing Greek Turnaround (WSJ)
• European markets subdued as Chinese data weighs (Reuters)
• U.S. Oil Workers Strike Enters Second Day as Crude Prices Slide (BBG)
• Oil prices rally above $55 as investors pile in (Reuters)
• Obama Wants a New Tax on U.S. Companies' Overseas Profits (BBG)
• If Trading Bonds Is Hard, Think About Pain When Rates Rise (BBG)
• Julius Baer Braces for Swiss Franc Impact (WSJ)
• Coke, Budweiser win as Super Bowl ad battle gets serious (Reuters)

With every central bank scrambling to export deflation, and with the Saudis doing everything in their power to definancialize crude as an investment asset and destroy the US shale patch, it is probably no surprise that the ECB is utterly hopeless to prevent Europe from sliding into an all out deflationary contraction, which this morning Eurostat confirmed when it reported that in January, Euro Area deflation was "worse" (assuming it is worse when consumers pay less for goods and services, which it only is if they are sinking in debt) than the -0.5% expected reading, instead sliding from -0.2% in December to -0.6% in January, which also happens to be tied for the worst deflationary print in the Euroarea history, matching the number from July 2009 when the world was reeling in the global Great Financial Crisis depression.

• Falling Prices Spread Pain Far Across The Oil Patch (WSJ)
• ISIS Group Claims Responsibility for Attacks That Killed 27 in Egypt (NBC)
• Russia Unexpectedly Cuts Key Rate as Economy Eclipses Ruble (BBG)
• Greece’s Feisty Finance Minister Tries a More Moderate Message (NYT)
• U.S. homeownership hits 20-year low, but new households growing (Reuters)
• Indian Banks’ Shares Plunge as Bad-Loan Provisions Surge (BBG)
• Underground Terror Network Said to Benefit Would-Be Jihadists in Europe (WSJ)
• Russia warns West support for Kiev could lead to 'catastrophe' (Reuters)

We suggested the Greek pivot from Europe to Russia was building previously, and now, we get confirmation from Russia's finance minister Anton Siluanov that the pivot could be mutual, who told CNBC in the interview below:

*RUSSIA WOULD WEIGH FINANCE FOR GREECE IF ASKED, SILUANOV: CNBC

With fire and brimstone spewing from Germany over the potential for Greece to veto any and everything, it seems Russia may just have stymied Europe's leverage over the newly democratic nation.

• Fed seen remaining patient with rate guidance amid global turmoil (Reuters)
• National Weather Service apologizes for blizzard forecast miss (CBS)
• Greek PM Tsipras pushes on with radical change, markets tumble (Reuters)
• Obama Drops Plan to Raise Taxes on ‘529’ College Savings Accounts (WSJ)
• Hard Choices on Easy Money Lie Ahead for Fed Chief (Hilsenrath)
• Debt That Once Boosted Its Cities Now Burdens China (WSJ)
• Skymark Said to File for Bankruptcy After Airbus Deal Flops (BBG)
• Heavy Fighting Drains Ukraine Government’s Options and Finances (WSJ)

"Foreign Minister Nikos Kotzias is due in Brussels on Thursday to discuss possible additional sanctions on Russia over the conflict in Ukraine. Before the cabinet even meets for the first time tomorrow, the Greek government said that it disagreed with an EU statement in which President Donald Tusk raised the prospect of “further restrictive measures” on Russia." The punchline: In recent months, Kotzias wrote on Twitter that sanctions against Russia weren’t in Greece’s interests. He said in a blog that a new foreign policy for Greece should be focused on stopping the ongoing transformation of the EU “into an idiosyncratic empire, u_nder the rule of Germany.” And when it comes to the natural adversary of any German imperial ambitions in recent history, Europe has been able to produce only one answer...