So Spain will suffer a collapse, most likely of its banking system resulting in a sovereign default (barring a bailout). When this happens, some €1 trillion+ worth of collateral (still rated AAA by EU banks) will be sucked out of the system.
Congratulations Mario Draghi, you promised unlimited bond buying and you bought less than one month’s worth of gains for Spain. If you want proof positive that Central Banks are losing their grip on things, the above chart is it. The moment we take out that trendline again, it’s GAME OVER (what more can the ECB promise?)
While the media world is abuzz with last night’s Presidential debate, I’d like to cut through the noise and present you with two truly staggering facts that need to be kept in mind as the backdrop for the US Presidential Election
There is no indication that the Obama administration has even considered this eventuality. Indeed, I have not heard anyone on the left refer to Bernanke or the poison of his policies at any point in the last few months.
Real leaders don’t WHINE about their jobs. They don’t blame others for their mistakes. And they surround themselves with quality advisors to help them in making decisions.
I want to draw your attention to the fact that the Fed balance sheet is DOWN $50 billion year over year. This confirms that the Fed has in fact been engaging in mostly verbal intervention over the last year rather than actual monetary intervention.
How does the US economy add 800K+ jobs during a month in which employment taxes and consumer spending FALL? Answer: magic! Or actually the BLS lied... again.
History has shown us countless times that centrally-?planned, command style economies do not produce long-?term economic growth. We’ve seen this will the Soviet Union, the UK, the US-?since the Tech Crash, and today in China.
Spain was already experiencing a banking crisis as well as a sovereign crisis. It’s now on the verge of a constitutional crisis (as well as its ongoing sovereign and banking crises).
The mainstream media is attempting once again to draw the public’s opinion towards issues that are ultimately fringe issues that impact a small percentage of us in order to ignore the large-scale major issues that affect all of us.
Yes, you read that correctly. High ranking members of the US Federal Reserve believe that because a one time purchase of an iPad is cheaper, the increase in the daily cost of food and energy is balanced out.
Let me be clear: if US Treasuries collapse, then the US has lost credibility in the global markets and we’re going to face a currency Crisis. I am not saying that this will happen right now. Europe could always implode first, buying the US some time. But at some point the US debt situation will lead to a Crisis. And the Fed is pushing us ever closer to this with QE 3.
So who will be buying Spanish bonds? Apparently no one but the ECB. And the ECB will only do this if Spain agrees to austerity measures… which Spain doesn’t want. Talk about a mess.
Indeed, it is now clear, via QE 3, that the Fed has gone “all in” in its commitment to money printing. QE 2 put food prices to record highs… what do you think QE 3 (which is unlimited) will do to the cost of living?
That high school students, even those who are borderline-failing their SATs, have a better understand of economics and job growth than Washington bureaucrats.
