Yearly Archives: 2013

The Next Domino: Slovenia Government Bond Yields Spike

"The country, another relative newcomer to the euro, is struggling with its own banking problems. The IMF expects Slovenia will have to recapitalize its three largest banks this year, which could cost a billion euros. That will increase Slovenia's budget deficit, which is bad news because the country is already having trouble selling sovereign bonds on the open market in order to finance the government. So, the question is whether Slovenia will be the next EU member state to need a bailout. Slovenia's top central banker, Marjo Kranjec – who also sits on the ECB Governing Council – says it's not going to happen." Continue reading →

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Cyprus’ New Reality: Cash Society Without Cash

"Cyprus’ sudden acquiescence to demands by international lenders to confiscate 40 percent or more of bank deposits over 100,000 euros ($130,000) and limit withdrawals to 100 euros per day, while keeping the banks shut, has turned much of the country overnight into a fright-filled society with many people unable to get their hands on enough cash to pay for anything except food. Credit cards weren’t being accepted because businesses believe they won’t be paid, making the instruments as worthless as the plastic of which they are made. Checks weren’t being accepted either as Cyprus has become a cash society, even if most people are cashless." Continue reading →

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Think Twice Before Accepting Bank Transfers For Online Payment

If you're a seller on Ebay or any number of other peer-to-peer commerce sites, chances are you've run into a buyer who either maliciously charges-back the transaction despite having received the product, or a buyer who is operating using someone else's stolen credit card or other financial account. The accepted wisdom is that a bank transfer is the safest payment option to accept, on the basis that it cannot be reversed once it is credited to the recipient's account. Unfortunately, that is not true in the case of ever-increasing online fraud. Continue reading →

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The dangerous drift towards world war in Asia

"A former adviser to the People's Liberation Army (PLA) says a rising cadre of officers has slipped the leash and picked up attitudes all too like the Japan's firebrand officers in the 1930s, when they defied orders from Tokyo. He said these young bloods are on a 'collision course' with the US-dominated global system. As `black swans' go, an outright war between the two great powers of Asia would surely be dramatic, and it could not easily be contained since America is bound by treaties to defend Japan if it is attacked. This includes an attack on the Senkaku islands. One shudders to think what would happen if China and the US itself came to blows in any form." Continue reading →

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‘Mr. Yen’ cautions on Japan’s ‘unsafe’ debt trajectory

"'A debt ratio of 245pc of GDP is not really safe, and it is not happening because we are investing,' said Takehiko Nakao, Japan's 'Mr Yen' or vice finance minister in charge of the exchange rate. Mr Nakao said the scope for further fiscal stimulus is running out and the country must restore public finances to a sustainable path by the middle of the decade. The comments touch on an acutely sensitive topic. A number of global hedge funds and banks have begun "shorting" Japan's debt, the world's biggest at $23 trillion. They are mostly taking positions through the credit default swap (CDS) market, betting that Japan will be the next big crisis theme." Continue reading →

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Whom to Believe on Gold: Central Banks or Bloomberg?

"Based on current data, the net increase in central bank gold buying for 2012 was 14.8 million troy ounces – and that's before the final 2012 figures are in for all countries. This is a dramatic increase, one bigger than most investors probably realize. To put it in perspective, on a net basis, central banks added more to their reserves last year than since 1964. The net increase – so far – is 17% greater than what was added in 2011, which was itself a year of record buying. Whatever gold's price movements, positive or negative, central bank officials have continued adding a lot of ounces to their reserves." Continue reading →

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Insider buying of gold stocks surges to multi-year highs

"Insiders are typically contrarian investors – buying shares when they perceive them to be undervalued. Right now, it appears many think the stocks are going for fire-sale prices. They are usually early, too. Historically, insider transactions often foreshadow market moves six- to 36-months in advance. While that may be quite a wait, it’s interesting to see insiders display this level of confidence in a sector that the broader investment community has been fleeing." Continue reading →

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Bill Bonner: What a wicked world!

"The insiders risk losing everything if they run out of money. Without money, they can’t buy votes. They can’t continue to move resources to themselves. And they can’t afford their phoney programmes and claptrap redistributions systems either. In short, without access to money everything falls apart. So, a government such as Cyprus will do anything – including stabbing its major industries in the back – in order to keep the cash flowing. Cyprus is a tax haven and a money centre. Clipping bank accounts is ruinous for its business. But if that’s what it takes to stay in business, that’s what the Cypriot insiders will do. Is Britain different? France? America?" Continue reading →

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Thomas Sowell: Can It Happen Here?

"The U.S. government is very unlikely to just seize money wholesale from people's bank accounts, as is being done in Cyprus. But does that mean that your life savings are safe? No. If they do it slowly but steadily, they can take a big chunk of what you have sacrificed for years to save, before you are even aware, much less alarmed. That is in fact already happening. When officials of the Federal Reserve System speak in vague and lofty terms about 'quantitative easing,' what they are talking about is creating more money out of thin air, as the Federal Reserve is authorized to do -- and has been doing in recent years, to the tune of tens of billions of dollars a month." Continue reading →

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