hmmmm....
On the 28th of May Rajoy said:
“There will not be any (European) rescue for the Spanish banking system,” Rajoy added, before backing calls for the euro zone bailout fund, which will be in place from July, to be able to lend to banks direct."
on the 8th of June - Spain received a bailout...
Pollies will have their hands forced by the market...no question!
Wednesday 13 June 2012
Sunday 10 June 2012
Spain to get $100B plus...from where?
Where were these idle funds before?
With each bailout, systemic risk rises -
http://www.eidesiscapital.com/pdf/Barrons-Going-for-Gold-in-a-Dangerous-World6-4-12.pdf
By definition, many will suffer - one way or the other.
Yet gold, no-one's liability, will move closer to the system. If the article below comes to fruition, the barbarous relic callers may need to re-think...
http://www.theglobeandmail.com/report-on-business/international-business/european-business/a-golden-idea-to-save-or-doom-the-euro/article4243556/
Germany’s idea is coyly named the European Redemption Pact and it is nothing if not creative. While details are scant, here is roughly how this gilded baby would work. Countries with debts greater than 60 per cent of gross domestic product – the (ignored) limit under the European Union’s Maastricht Treaty – would transfer those debts into a redemption fund, which would be covered by joint bonds. The scheme has been called “euro bonds lite.”
Here’s the catch. Countries using the scheme (most would, including Germany, because of generally high debt-to-GDP ratios) would have to cover 20 per cent of their debt with collateral, payable in gold or currency reserves. Default on the payments and you lose your gold. The “sinking” fund would retire the debt over 20 years.
With each bailout, systemic risk rises -
http://www.eidesiscapital.com/pdf/Barrons-Going-for-Gold-in-a-Dangerous-World6-4-12.pdf
By definition, many will suffer - one way or the other.
Yet gold, no-one's liability, will move closer to the system. If the article below comes to fruition, the barbarous relic callers may need to re-think...
http://www.theglobeandmail.com/report-on-business/international-business/european-business/a-golden-idea-to-save-or-doom-the-euro/article4243556/
Germany’s idea is coyly named the European Redemption Pact and it is nothing if not creative. While details are scant, here is roughly how this gilded baby would work. Countries with debts greater than 60 per cent of gross domestic product – the (ignored) limit under the European Union’s Maastricht Treaty – would transfer those debts into a redemption fund, which would be covered by joint bonds. The scheme has been called “euro bonds lite.”
Here’s the catch. Countries using the scheme (most would, including Germany, because of generally high debt-to-GDP ratios) would have to cover 20 per cent of their debt with collateral, payable in gold or currency reserves. Default on the payments and you lose your gold. The “sinking” fund would retire the debt over 20 years.
Sunday 3 June 2012
Einhorn mocks Buffett - my gold is on Einhorn
Done with class and tounge in cheek, Einhorn mocks Buffett!
“The debate around currencies, cash, and cash equivalents continues. Over the last few years, we have come to doubt whether cash will serve as a good store of value. If you wrapped up all the $100 bills in circulation, it would form a cube about 74 feet per side. If you stacked the money seven feet high, you could store it in a warehouse roughly the size of a football field. The value of all that cash would be about a trillion dollars. In a hundred years, that money will have produced nothing. In a thousand years, it is likely that the cash will either be worthless or worth very little. It will not pay you interest or dividends and it won’t grow earnings, though you could burn it for heat. You’d have to pay someone to guard it. You could fondle the money. Alternatively, you could take every U.S. note in circulation, lay them end to end, and cover the entire 116 square miles of Omaha, Nebraska. Of course, if you managed to assemble all that money into your own private stash, the Federal Reserve could simply order more to be printed for the rest of us.”
“The debate around currencies, cash, and cash equivalents continues. Over the last few years, we have come to doubt whether cash will serve as a good store of value. If you wrapped up all the $100 bills in circulation, it would form a cube about 74 feet per side. If you stacked the money seven feet high, you could store it in a warehouse roughly the size of a football field. The value of all that cash would be about a trillion dollars. In a hundred years, that money will have produced nothing. In a thousand years, it is likely that the cash will either be worthless or worth very little. It will not pay you interest or dividends and it won’t grow earnings, though you could burn it for heat. You’d have to pay someone to guard it. You could fondle the money. Alternatively, you could take every U.S. note in circulation, lay them end to end, and cover the entire 116 square miles of Omaha, Nebraska. Of course, if you managed to assemble all that money into your own private stash, the Federal Reserve could simply order more to be printed for the rest of us.”
"We walk the edge of Chaos"
The real economy has been surpassed by the financial or "paper" economy. The debts are too large.The cashflows o not support them, whether private or public. The Greek like contraction is coming to the globe in a "austere" type environment. The Spanish seem to now be front and centre. A program of sorts is needed quick or Lehman 2 is on our doorstep.
As Rickards recently tweeted, "if you think a bank is TBTF, what about a country?"
As Rickards recently tweeted, "if you think a bank is TBTF, what about a country?"
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