You know it's like the movie Animal House when the guy is in the middle of the road as the crowd approaching him is about to stampede and he says "remain calm all is fine." This has been the ECB, the EU finance ministers, even the head of the finance ministers Juncker actually admitted to lying to the public and the media recently simply because they are willing to do whatever it takes to try and maintain the single currency. I just don’t see how that's going to be possible. I don’t see how there's any way out of this. They can't paper it over, the way out is austerity and the public's not going to stand for that.
The US has again gotten something of a pass here in the first half of the year as the Fed has been buying about $25 billion worth of treasury securities a week, something that's going to come to an end, we know that. They have over a trillion dollars to finance in the second half of the year, plus the deficit here in the US which they've been funding. The Fed has essentially funded 100% of the US treasury deficit in the first half of this year, and they have funded about 65% of all of the bonds and notes and bills that the treasury has had to sell.
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For Gosh's sakes Robert, it's "remain calm, all is well", not "remain calm, all is fine." Jeepers.
But yes; a democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship. The average age of the world's greatest civilizations has been 200 years.
Great nations rise and fall. The people go from bondage to spiritual truth, to great courage, from courage to liberty, from liberty to abundance, from abundance to selfishness, from selfishness to complacency, from complacency to apathy, from apathy to dependence, from dependence back again to bondage.
Buy gold, get a gun.
Stop electing socialists, soft, hard, RINO, CINO. Ask politicians if they are in favor of balanced budget legislation, reviewing all entitlement programs and eliminiating public sector union's right to strike. Make 'em squirm. Government is not the answer; it's the problem.
Rob from the rich, give to the state.
Robin Hood would be rolling over in his grave.
I think in times of inflation and financial collapse around the world the typical response is more socialism followed by war.
There's a good deal of hyperventilating going on here. Fact is, Greece with its paltry GDP of $305 billion is too small to bring anything down even if there's a 100% default. There were much worse defaults in the 1980s and nothing crashed.
To claim that Greece is going to bring the German DAX below 7000 is just absurd. Germany`s economy is booming, and Greece is irrelevant to that. The DAX is based on corporate earnings, cash flow and dividends, not marginal concerns about how badly Greece fails. The market which gets hit will be the Euro Bond market, not the stock market, but more about that later. Given the size of the Greek debt, the hit will be relatively small. Though every loan made to the Greeks on condition of a new restraint policy simply makes matters worse.
Fact is, Greece`s problems have been beyond conventional solution for some time. The bond market has already started to price in the collapse of the Greek debt structure, and the interest rates now show this.
Why won`t Greece bring about a collapse. Because the EU governments instead of loaning Greece money it won`t pay back will instead have the banks write it off and compensate them.
Now I understand Weldon`s position. He`s got huge holdings in gold. He wants all that money fleeing the bond market to pour into gold instead of the stock market. Never take financial advice from someone who does not disclose his financial interest.
Greece and the US are two entirely different entities. Greece has virtually no meaningful productive economy. Other than tourism, it has relatively trivial industrial activity in things like textiles and food processing. It imports 80% of its electricity, along with all its oil and gas. It`s not really a country; it`s just a tourist theme park.
Liquidate it and be done with it. Let them go back to drachmas trading at about 10,000 to the Cdn. dollar.
Right you are cgh - it is called pump and dump.
cgh: If it was just Greece that was in trouble I would agree, but all the worlds economies are in the same boat including Canada. We just believe our liars more. As for the banks writing off the loans and being compensated by the govts where do they get the money to do so?
I think everyone (other than the pure socialists) believe we are living in very! interesting and challenging financial times. The real question though - where does one hide financially? Everyone has their own thoughts/answers to that! question. There is no way of knowing for sure. It remains to be seen who turns out to have been correct all along.
Read old articles, talk to those who were around for previous financial crisis - you will see there were people who were absolutely fanatical in their belief that they had it all figured out, where to plunk down your! money, the latest "big" thing, and yet turned out to be dead wrong. DotCom Bubble, Hunt bros silver bubble, US housing bubble, Japan property, Dow going below 4500, looney below 50 cents, Dow 30,000, $300 oil, ect
The really really smart/rich people know how to hype and how to stampede others but at the same time have the smarts/discipline to fade quietly out of the picture(dump) while the dumping is good. Think George Soros.
ron:
Learn not to worry about the troubles of the world, learn how to profit from them.
George Soros? No, Michael Campbell on his Saturday morning radio show out of CKNW.
The choice is ours.
Should we become a bunch of chicken littles (oh, no, the left is beating us) or should we figure out the rules of the game, then start playing?
No fear. Play.
Saving the euro? Saving face? No. The EU leadership are trying to guarantee their own safety.
The EU's specific goal in preventing a Greek default is to keep patriots in the Greek army from pushing Greece's incompetent socialist government aside before they let Greece fall into the hands of the communist mob. Once the paycheques of soldiers and policemen start bouncing it's over. The army will deal with the mob and Greece's elites and save their country like they did in 1967. The Third World barbarians who snuck in from Turkey and now are the bane of Greece should make sure they know where Greece's airports and ferries are, as should any Greeks who aren't looking forward to the restoration of rule by men (as opposed to jellyfish), because they won't be safe in Greece any more.
Democracy? The EU don't give a Romanian gypsy's curse for democracy, and never have. Their real fear is that once the Greek socialists finally face the consequences of their corruption and incompetence, normal, decent, hard-working, civilized people throughout Europe will see that they too can take their countries back from banksters, communists, Third World barbarians and their collaborators in national governments. Governments will have two choices---finally start doing the bidding of their peoples, restore their people's liberties, and tell the banksters, communists and barbarians where to go, or be pushed aside by force.
Europe has a lot of Prague Springs in its future--and Bucharest Christmases.
I can't wait.
Ron, pump and dump is exactly the phrase which applies.
Ted, we`re not in the same boat as Greece. Greece has no meaningful economy. It has no way to earn its way out of debt, to pay it back. No, all the world`s economies are not like Greece, particularly Canada. Canada has a large industrial economy and a huge resource base. Greece has none of these. And none of this addresses the BRICK nations, all of which are booming.
Now please stop panicking. Leave that for the survivalist fringe.
Dick Slater: who are these normal, decent, hardworking people you are referring to. In Greece, they are rioting in the streets. When are people like you going to learn that people get the government they deserve. In the case of Greece, they have it right now.
I think gold is the next great bubble that will pop. The price is going up because there is demand that the supply side can't satisfy, therefore the price rises.
But we are not consuming more gold, it is only being stored. It is dug from the ground, under armed gaurd, to be stored in a bank, under armed guard. All we are doing is refining it but we are not consuming more of it.
In fact, the price is rising in part becuase the dollar is worth less. If they keep devaluing the dollar, then gold should hit $2K an once soon. And we are being hit with these ads and news stories that say we should buy more.
cgh: Greece's communist mobs are only a small fraction of the population. Ditto Greece's megarich who think it beneath them to pay taxes. They're the ones who stole the French and German banks' money, not your average Greek working stiff making 700 euro a month and having to pay bribes to doctors out of that to have his child seen to, or the bank tellers killed by communists at their tills. Regular Greeks know that, and have no intention of ending their days as debt-peons of the EU.
When the army finally let the communists have it, purge Athens of the barbarians and shove them onto remote Greek islands pending deportation to the cesspits they came from, and tell the French and Germans that if they want the Parthenon they can come get it the old-fashioned way, regular Greeks will rejoice. Who wouldn't?
And (here's the important part) they'll set an example for the rest of Europe. Once the rest of Europe's governments realize they're one unlucky day away from going the way of Nicolae Ceausescu, then, maybe, they'll start doing the right thing by their people and send Third World scum where they came from and the banksters and communists to jail, where they belong.
The real estate smashup in the US was in part triggered by Fannie & Freddie's collapse. While prices are hitting highs in Vancouver, Toronto, Ottawa & Montreal, prices are off 50% in the US. Actually at prices are down to those in the late 70's early 80's
The Ludwig Von Mises think tank has just revealed that the CHMC is in worse shape than Fannie/Freddie.
RCGZ, I invite you to peruse the excellent, albeit dormant blog by Jonathon Tonge at americacanada.blogspot. com.
Jonathon peers into the real estate boom in Canada, the role if the CMHC in same, and highlights household debt in Canada. Sobering, to say the least.
Adding to the overall discussion here, I would point out that the biggest risk is interbank... Should Greece default, a chain of events will likely induce interbank lockup. Derivatives amplify the risks, leading to cascading calls on positions, leading to liquidity issues, leading to seizure within interbank settlements. One single event has the capacity to lodge a spanner in the global banking cogs.
cgh: Go to debtclock.ca and you will see that Canadas debt is piling up at $1000.00 a second. This is only the fed debt, the provincial and muni debt is not counted. The CPP is in trouble and the govt wants to increase the benefits. How about all the pension plans that the govt hass to top up? Not to mention the average debt that Canadians owe is 150%, higher than the US. WE may have lots of manufacturing and resources but if nowone wants to buy them tthey are usless. BRIC may be buying but China has a trillion dollars of US debt and they are starting to sell, which means that our #1 trading partner, the US has less money to buy goods. There are more problems like this because the world economy is so intergrated. It is like a house of cards and the table on which it sits is starting to shake. Now I am not panicing but I am preparing for trouble, it would be wise to do so also. It has been nice to (talk) to you. Best of luck.
Ted, the debt clock only means something when you measure assets against it. Fine, it's increasing at $1,000/sec. However, Canada's economy is growing at more than $1,400/sec. (3% GDP on $1.5 trillion economy). That means that the debt is shrinking even if NO action is taken to reduce the deficit, let alone pay down debt.
Same thing applies on an individual basis. Debt many be higher, but so too are assets and income. Debt becomes a significant issue when it cannot be serviced or when we run too thin a margin between solvency and bankruptcy. We are nowhere close to that.
"The world's economy is integrated."
Yes it is. But you only seem to want to consider integration from the downside. You have to also look at it from the upside where it's growing as well.
As for the US, our proportion of trade with the US has been sliding for years. It peaked in the mid-1990s at about 89%. It's now about 80% and heading lower. Instead we're now selling more to other areas of the world whose economies are growing strongly.
I would posit that the banking problems are far deeper than what is presented here, but most Canadian banks chose not to participate in the actual run up.
Ted-
You have obviously never seen a speedometer that rolls over a dollar at a femtosecond.