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Tuesday, 31 January 2012

Portugal is next Euro problem

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.

Equity bull market foundations forming

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

Second Greek bail-out now too small

Greece now needs 145B euros to stay solvent through 2014, 15B more than the second bail-out package, according to Der Spiegel's article.

Friday, 27 January 2012

Stay alert Friday evenings for euro announcement

If Greece were to leave the Euro, or if a major decision were made which affected the Euro, the announcement would likely be made after the Friday close of markets in the USA.

Reasons against gold standard

There are calls for a return to the gold standard, to ensure that money retains its value.  Removal of the gold standard freed governments to print as much currency as they wished.

Thursday, 26 January 2012

Hedge funds stand to benefit from failed Greek debt negotiations

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.

The EU will pay even if Greece doesn't deliver

See Der Spiegel's article, which I acknowledge.

Greece likely to receive permanent bail-out, relieved of all obligations for financial prudence

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

Second Greek bail-out fails

"The IMF has concluded the €130bn bail-out plan for Greece agreed in October will no longer enable Athens to get its €350bn debt pile down to a sustainable level by 2020 – the plan’s principal goal", according to this Financial Times article.

European fiscal agreement "torpedoed"

Most of Europe wants Germany to contribute even more funds to rescue those countries which can't repay their huge debts, but they don't seem to want to agree that they should spend less than their income.

Tuesday, 24 January 2012

European economic self-sabotage

The collective European economy is desperate for revival.  Energy is the lifeblood of human and economic survival:-  restrict energy;  and restrict the economy.  It seems strategically unsound that Europe:  reduces oil, coal,

Oil price linked to gold price?

Iran's linking of oil to gold is an important development.  An increased correlation between the oil price and a rising gold price over the longer term could result, if oil trading becomes increasingly denominated in gold.

Surf report

The surf along Perth's beaches this morning is great:  clean good swell;  easterly (offshore) breeze;  warm water.  A few body surfs make a fantastic start to any day.

India to pay gold instead of US dollars for Iranian oil

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

Greek default will not be a default.

The impending Greek default will not be deemed a default:

US $1 trillion QE money printing probable

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 debt negotiations fail again

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.

Thursday, 19 January 2012

MF Global clients might lose

MF Global clients might not get all their money back, warns an administrator.  More people are "claiming segregated status than there is segregated money".  I acknowledge "Warning on returns from MF Global UK", Financial Times.  Also see "Don't let another MF Global ruin you!"

Greece threatens Greek bailout

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.

European Union fragmentation continues

EU legal action against Hungary confirms further disintegration of the European Union.  The EU is no longer a force for order in Eastern Europe:  from the Baltic States to Bulgaria, hardly an Eastern European country truly stands behind EU projects, according to Der Spiegel

Wednesday, 18 January 2012

Chinese gold market dominance forecast

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.

Current Greek debt status for March 20 repayment deadline

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.

Monday, 16 January 2012

Resource based economies protected by totalitarianism

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.

How to capture trading profits

How many times have you let an unrealised profit turn into a loss? If that has happened to you, you might need to learn how to implement your trade exit strategy reliably.

Friday, 13 January 2012

Options trading volatility lesson

If you trade options, it is essential to understand how volatility affects option premiums and trading.  Click here for a one hour recording which explains some important concepts related to options trading and volatility.

Deep sea gold mine

Copper and gold will be mined from 1600 metre depths in the Bismarck Sea, Papua New Guinea, in one of the world's first commercial deep sea mining projects, by Nautilus MineralsConstruction contracts are now being awarded.

Gold price correction is over - Alf Fields

If you trade or invest in gold or gold stocks, you might find Alf Field's article: "Gold correction is over" of interest.

Wednesday, 11 January 2012

MF Global regulatory oversight failings kept secret

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".

Bankrupt US municipality cuts pensions, saves financial institutions

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.

US national debt now exceeds GDP

Greece and Italy are not the only nations with unsustainably high debt.  US national debt is now more than 100% of GDP,

Tuesday, 10 January 2012

Lenders pay to lend money to Germany

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. 

Friday, 6 January 2012

China - Europe air transport dispute

Mainland Chinese airlines will refuse to pay the European Union's aircraft emissions surcharge.