Economics

20 Signs That The Next Great Economic Depression Has Already Started In Europe

"The truth is that Europe is a lot like the United States. We are both drowning in unprecedented levels of debt, and we both have overleveraged banking systems that resemble a house of cards. The reason why the U.S. does not look like Europe yet is because we have thrown all caution to the wind. The Federal Reserve is printing money as if there is no tomorrow and the U.S. government is savagely destroying the future that our children and our grandchildren were supposed to have by stealing more than 100 million dollars from them every single hour of every single day. But the alternative scares the living daylights out of our politicians." Continue reading →

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Argentina’s Mad Dash for U.S. Dollars

"If you find yourself driving through the suddenly packed condo canyons of Miami—lamenting not having bought during the property crash—shake a fist or two at the Argentines. So many of them ponied up 80 percent cash down payments on units that South Florida’s condo depression rather abruptly turned into another boom. Their thinking was defensive: Swap iffy pesos for dollars and store that value in U.S. property, out of the prying hands of the government back home. Now, with Buenos Aires finding some rather innovative ways to crack down on the flight to dollars, that spirit of capital preservation has morphed into a panic." Continue reading →

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Humiliating Viral YouTube Interview To Cost Job Of Argentina’s Economy Minister?

"Argentine Economy Minister Hernan Lorenzino’s appearance on Greek television in which he abruptly ended an interview and refused to speak about inflation in Argentina has spurred speculation he may quit, Clarin newspaper reported, without citing its sources. President Fernandez met with Lorenzino to express her concern that he lost credibility among voters after he told an aide at the interview that he wanted 'to go' after the reporter asked what he planned to do if the IMF sanctioned the country for not improving its inflation index, Clarin said. Deputy Eco. Minister Kicillof would replace Lorenzino, Clarin said, without citing anyone." Continue reading →

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The Global Status Quo Strategy: Do More of What Has Failed Spectacularly

"The only metrics that count are debt and the ability to service that debt. Households have this tiny little problem known as declining income that makes it impossible to service more debt unless interest rates fall to near-zero. Presto-magico, real interest rates (adjusted for inflation) are near-zero, and can't fall any lower. That means the Fed has run out of room to lower rates. From here on, households will only be able to service more debt if their income rises. Alas, with full-time employment back to 1980 levels, that is not even a remote possibility." Continue reading →

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$2 Trillion Underground Economy May Be Recovery’s Savior

"The shadow economy is a system composed of those who can't find a full-time or regular job. Workers turn to anything that pays them under the table, with no income reported and no taxes paid. Shadow economies are usually associated with illegal activity, such as drug dealing. But anecdotal evidence indicates that off-the-books work in today's job market includes personal and domestic workers, such as housekeepers and nannies. It also includes firms that hire hourly or day construction labor, information technology specialists and Web designers. Many who have a job that doesn't pay enough take another one that pays under the table." Continue reading →

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The Corruption of Capitalism in America Excerpt: Chapter 17, Serial Bubbles

"Never before in history had the nation's financial system been pummeled by two gigantic bubbles and two devastating crashes in such a brief interval. That Greenspan's heir apparent managed to detect the Great Moderation at the midpoint of this cycle of financial violence was only added testimony to the degree to which monetary policy had become unhinged. It was no longer plausible, therefore, to describe the New York Stock Exchange, NASDAQ, and the various venues for equity derivatives as a free market for raising and trading equity capital issues. Instead, they were violently unstable casinos, ineptly stage-managed by a central bank." Continue reading →

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Detlev Schlichter: Could Bitcoin be the money of the future?

"The crypto-currency Bitcoin is still merely a speck on the global monetary landscape. It is young, experimental, and for all we know, it may ultimately fail to break into the monetary mainstream. However, on a conceptual level I am willing to call it a work of genius and arguably the most exciting development in the field of money for more than 130 years. Let’s say since the start of the Classical Gold Standard in 1879. Does this sound like hyperbole? Well, let me explain." Continue reading →

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Takedown Of Paper Gold Unleashes Global Run On Physical Gold And Silver

"Precious metals dealers now find themselves being overwhelmed with orders in the United States, in Canada, in Europe and over in Asia. Will this massive run on physical gold and silver soon lead to widespread shortages of those metals? Instead of frightening people away from gold and silver, the takedown of paper gold seems to have had just the opposite effect. People just can't seem to get enough physical gold and silver right now. Those that wish that they had gotten into gold when it was less than $1400 an ounce are able to do so now, and it is absolutely insane that silver is sitting at about $23 an ounce." Continue reading →

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Slump in gold price releases years of pent-up retail demand

"Gold retailers struggled to cope this week as parents buying dowries, casual shoppers and tourists snapped up bars, coins, nuggets and jewellery as a slump in the price of the yellow metal released years of pent-up retail demand. The price decline in the past week, the steepest in 30 years, has tarnished gold's appeal for the portfolio investors whose money had fuelled a 12-year bull run. As investors rush out, consumers that were priced out of the market for years have rushed in. In the United States, sales of American Eagle gold for two days this week topped the volumes for the whole of March." Continue reading →

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Gold Down, What Now?

"Generally, after a stark price correction like this, you will tend to see a prompt rally, followed by another bout of weakness, testing the prior bottom. This should play out over the next few weeks, which will pave the way for an excellent entry or re-entry point to stock up on gold. It is important to note that, in my view, you can wait and watch gold calmly. There is no need to rush (back) in. Gold negativity is very high and it will take time to pick up momentum. But you should certainly not wait too long. Fundamentally, all of the reasons that made gold an ever more attractive asset over the past years are still fully in place, and increasingly so." Continue reading →

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