Tuesday, 31 January 2012
Portuguese bond yields remain at more than twice sustainable levels: 19.3%, 22% and 16.3% for two, five and ten year maturities, far in excess of the 7% levels which trigger alarm bells for Greece and Italy. On top of Italy's and Greece's needs for significant new borrowings, stabilisation of Portuguese debt will demand more of Europe's bail-out funds, further locking in the likelihood of massive global money printing, the ultimate effect of which will be very high inflation after the velocity of money increases again.
The impending Greek default is possibly laying the foundations for another equities bull market, argues Jim Sinclair in this interview, who predicts that Greek default will probably be deemed a "credit event" and not a default, to protect five major US banks against bankruptcy, who
Friday, 27 January 2012
Thursday, 26 January 2012
This seems to be running out of control. Will the US cover any hedge fund owners should their "bets" lose? See Der Spiegel's article, which I acknowledge.
If you bail someone out twice, they don't need to care anymore. Greece can count on more bail-outs, indefinitely, should Greece want. Europe's granting Greece a second, larger bail-out a year after the first bailout failed, and after it was revealed that Greece's national accounts had been falsified, relieved Greece of any serious incentive to reduce spending to less than income, and for financial prudence. That second bail-out now appears to have failed. Greece "struggles" to meet fiscal commitments agreed for bail-outs. The US will likely prevent Greek default at any cost, because
Wednesday, 25 January 2012
Tuesday, 24 January 2012
Gold as a currency bypasses sanctions for suspected weapons of mass destruction in Iran. Beijing and Moscow maintain top secrecy about alternative financial mechanisms established for Tehran.
Sunday, 22 January 2012
The US is likely to print a further $1 trillion in a new quantitative easing (QE) program. The first four QE programs failed to stimulate the US economy, so this time the cure will be applied a little more heavily. A stock market rally might result.
Greek bond holders failed again to agree to increase their "haircut" to more than the 50% losses they had already agreed. Officials had hoped they would agree before Monday's (23 Jan) meeting of eurozone finance ministers, at which they had hoped "to set in motion the paperwork" for Greece's next bail-out payments. See The Telegraph's "Greek debt deal hits setback", which I acknowledge.
Friday, 20 January 2012
Thursday, 19 January 2012
Greek reforms are hardly making any progress at all, according to "Greece struggles to make necessary reforms". Resistance is too great, and Greek politicians benefit from the existing system: "no one likes to saw away at the branch they are sitting on". Greek bailout, conditional upon reforms, thus remains tentative.
Wednesday, 18 January 2012
Chinese gold consumption has sustained 7.5% pa growth over the last decade, according to Mineweb. Significantly for the future gold price, Chinese investors avoid futures and other derivatives: they buy real bullion, in sympathy with China's strategic aims to dominate the global gold market, and to play a significant global currency role after the impending debasement of the US dollar and Euro.
Negotiations for an increased haircut will resume; Fitch Ratings claim Greece will probably default; and European fiscal agreement is unlikely to be implemented, according to this Bloomberg article.
Tuesday, 17 January 2012
Monday, 16 January 2012
Resource based economies will be partially insulated against impending global financial crises because those with absolute dictatorial political control absolutely need to preserve themselves. Suppression of growing popular uprising and political dissent is more sustainably achieved by "making the populace happy": fostering domestic consumption. Mainland China's Central Communist Party Committee is aware of this, obviously; and they have more than three trillion US dollars in foreign exchange reserves.
Saturday, 14 January 2012
Friday, 13 January 2012
Wednesday, 11 January 2012
It is claimed that regulators and bankruptcy trustees are suppressing information about the MF Global failure, in the article "The neverending MF Global story: regulators block the truth".
Retired municipal employees in Central Falls, Rhode Island will have their pensions cut, as investors in US municipal bonds are spared a haircut, according to "Pensions chopped but investors paid". The parallel with Greek default prevention raises questions.
Tuesday, 10 January 2012
Lenders are paying Germany to lend money to Germany. For the first time ever, Germany has sold short term debt with negative yield. This indicates confidence in the German economy despite failing confidence in Germany's currency, the Euro.