Reality Check: 20120518

Here is Gary’s article, Centralization and Its Looming Reversal. For more by Gary, visit his website at http://www.garynorth.com/. This is an insightful article. The situation identified in the first part of the article will be played out over time but is inevitable in some form. Key points are: Voters now suspect (correctly) that all Western Continue reading »

Some Initial Cost Estimates of Greece’s Default

In recent posts, Jean-Claude Juncker: Greece to Leave Euro Area! and The Socialist Revolution Has Begun, we discussed the likelihood of a Greek default and exit from the eurozone. Today, Andrew Evans-Pritchard puts some initial estimates on the impact of this event. We explain the implications. Continue reading »

Socialist Kalifornia: The Horror Story, Parte Deux

This is part two of a two-part series on California from our friend JR. Governor Brown has announced that the state budget deficit for this year is going to be much larger than projected, that more government services are going to be cut and that voters are going to vote on another round of tax Continue reading »

Jean-Claude Juncker: Greece to Leave Euro Area!

Recall Quote of the Day: 20111209 whereby Jean-Claude Juncker stated “When it becomes serious, you have to lie.” Today, Mike Shedlock reports Mr. “Lie When It’s Serious” Juncker Tells Another Whopper: “I Don’t Envisage, Not Even for One Second, Greece Leaving the Euro Area”; Two More Days of Hopefully Futile Coalition Talks on a “Government Continue reading »

What Do California And Detroit Have In Common?

The following is an article from our friend JR. When most people think of the economic decline that is happening in America, most of them think of states like California and cities like Detroit. In both cases, unemployment is rampant, government finances are a mess, and businesses and families are both leaving in droves. So Continue reading »

The Socialist Revolution Has Begun

It’s true that major events rarely have single first causes. A strike by a 5 km-wide asteroid would qualify as a single first cause. But no single event in human affairs is likely to provide one. We can however mark events and dates that standout as perhaps pivotal. May 6, 2012 may go down as Continue reading »

Placing Spain on Deathwatch

Originally with our idea of ‘tracking’ posts, we began them with a discussion or preamble followed by a chronology that is updated as news-worthy events come in. We have decided to reverse the structure so the reader has ready access to the latest events. Below are what we consider to be major events leading to Continue reading »

Tracking the Ownership of US Debt

The size of the US Federal Debt is mammoth and as such has the potential for influencing global markets, economies and currencies in major ways. In order to analyze claims made by others about the nature of the debt, the periodic changes to it, and future scenarios involving the debt, we need to have access Continue reading »

Tracking the Fed Balance Sheet

The aspects of the Fed’s balance sheet that we track weekly (see The Fed’s Balance Sheet) are shown here in a snapshot view and below in some detail. The snapshot is a visual indication of the week-over-week (wow) and year-over-year (yoy) changes in dollar value shown in Table 8 of the H.4.1 statistical release. May Continue reading »

Tracking The Downgrade of Europe (and Others)

When mutual and hedge fund managers want to buy fixed asset securities such as bonds, they rely on rating agencies for an assessment of default risk. This helps them to decide what a fair interest rate is on the debt to reflect the risk premium on their investment. Needless to say, if you are an Continue reading »

King World News: May 2012

This is a site we follow. It’s principal focus is on how precious metals (PM) and PM mining stocks are behaving in the markets. They’re good to listen to if you have this interest. They also touch on other topics of high relevance to today’s principal events in economics, finance, and geopolitics. We will try and make key observations if you don’t have the time to listen. Note that we do not link all audio and blog files. If you do listen, the first minute or so is advertising which you might want to skip. The links appear chronologically from most recent for the month, backwards.

  • 20120520 Gerald Celente (19:38 minutes)
    • Mying comes in.
  • 20120519 The KWN Weekly Metals Wrap (19:38 minutes)
    • Market positions suggest an intermediate bottom is in in PMs.
    • Gold jumped 70% after QE1 was announced. If QE3 is announced, a similar move would take it to $2650. We have a very strong potential for a very sharp up-move.
    • The upside for gold is 1600, 1620, and 1650+.
    • Silver has support at 26 but we need it above 30 before buying comes in.

Reality Check: 20120518

Here is Gary’s article, Centralization and Its Looming Reversal. For more by Gary, visit his website at http://www.garynorth.com/.

This is an insightful article. The situation identified in the first part of the article will be played out over time but is inevitable in some form. Key points are:

  • Voters now suspect (correctly) that all Western governments are headed for bankruptcy because of the pension programs and government-funded medicine, yet these two programs are politically untouchable. Voters demand them. [This tension is seen in the anti-austerity movements in Europe.]
  • The federal government really is headed for default. [This is true of most governments in the developed world.]
  • He then goes into a long dissertation on empires. We feel Niall Ferguson has a better handle on empires and their demise (see our post Niall Ferguson).
  • Unfortunately, he succumbs to the lure of future forecasting and proposes a technological solution to our fiscal and economic dilemma: We live on the cusp of a new era of manufacturing: 3D production. We will have factories on our desks. Certainly this will be a revolutionary technology but its cost effectiveness will relegate it to niche markets. Our reasoning for this is presented at the end of this post.

Some Initial Cost Estimates of Greece’s Default

In recent posts, Jean-Claude Juncker: Greece to Leave Euro Area! and The Socialist Revolution Has Begun, we discussed the likelihood of a Greek default and exit from the eurozone. Today, Andrew Evans-Pritchard puts some initial estimates on the impact of this event. We explain the implications.

Stratfor Geopolitical Weekly: 20120515

France’s Strategy

May 15, 2012 | 0012 GMT

By George Friedman

New political leaders do not invent new national strategies. Rather, they adapt enduring national strategies to the moment. On Tuesday, Francois Hollande will be inaugurated as France’s president, and soon after taking the oath of office, he will visit German Chancellor Angela Merkel in Berlin. At this moment, the talks are expected to be about austerity and the European Union, but the underlying issue remains constant: France’s struggle for a dominant role in European affairs at a time of German ascendance.

Socialist Kalifornia: The Horror Story, Parte Deux

This is part two of a two-part series on California from our friend JR.

Governor Brown has announced that the state budget deficit for this year is going to be much larger than projected, that more government services are going to be cut and that voters are going to vote on another round of tax increases in November. Meanwhile, unemployment is sitting at 11 percent and extended federal unemployment benefits for workers in the state are ending. Because California is one of the worst places in the nation to conduct business, there has been a steady flow of companies leaving the state. Those companies have taken a whole lot of good jobs with them. Due to the lack of jobs and a steady stream of impoverished immigrants coming in from Mexico and other countries, poverty in the state has exploded and crime is rapidly increasing.

Jean-Claude Juncker: Greece to Leave Euro Area!

Recall Quote of the Day: 20111209 whereby Jean-Claude Juncker stated “When it becomes serious, you have to lie.” Today, Mike Shedlock reports Mr. “Lie When It’s Serious” Juncker Tells Another Whopper: “I Don’t Envisage, Not Even for One Second, Greece Leaving the Euro Area”; Two More Days of Hopefully Futile Coalition Talks on a “Government of Personalities”.

So if Juncker says “I Don’t Envisage, Not Even for One Second, Greece Leaving the Euro Area” and leaving will be very serious to catastrophic as is widely reported*, then Greece is leaving the Euro Area.

What Do California And Detroit Have In Common?

The following is an article from our friend JR.

When most people think of the economic decline that is happening in America, most of them think of states like California and cities like Detroit. In both cases, unemployment is rampant, government finances are a mess, and businesses and families are both leaving in droves. So what is causing this? What do California and Detroit have in common? Well, for one thing, both the state of California and the city of Detroit have been run by anti-business socialist control freaks for decades. Once upon a time millions of young Americans that dreamed of a better life flocked to California and Detroit was one of the most vibrant manufacturing cities in the history of the world. But now both of them are in an advanced state of decline, and a lot of the blame can be placed at the feet of the politicians in both cases. Both California and Detroit have become very unfriendly places to businesses and families, so businesses and families have been leaving both California and Detroit in very large numbers. At the same time, the socialist welfare policies in both places have caused them to become magnets for those that enjoy being dependent on the government. Welfare recipients are not likely to pack up and move down to Texas because they know that their benefits would not be nearly as good down there. So both California and Detroit will continue to attract those that want to live under socialist control freaks and it will continue to drive away those that do not want to live under socialist control freaks.

Stratfor Geopolitical Weekly: 20120508

Putin’s Evolving Strategy in Europe

May 8, 2012 | 0854 GMT

By George Friedman

This week, Vladimir Putin was sworn in for a third term as Russian president, and France’s presidential election continued the trend of losses for incumbent European governments when French President Nicolas Sarkozy lost to socialist challenger Francois Hollande. Putin’s return to the presidency was not unexpected; he was never really unseated as Russia’s leader even during Dmitri Medvedev’s presidency. Nevertheless, the changes in Europe exemplified by the French presidential election will require Russia to change its tactics in Europe.

The Socialist Revolution Has Begun

It’s true that major events rarely have single first causes. A strike by a 5 km-wide asteroid would qualify as a single first cause. But no single event in human affairs is likely to provide one. We can however mark events and dates that standout as perhaps pivotal. May 6, 2012 may go down as such a date.

If you follow the mainstream media,  the standard fluff-peddlers, you will likely miss it. But we have seen enough information in the last day from a variety of sources we follow to argue the case that a socialist revolution has begun. In the least case, we should expect large change since the electoral pattern in the last while has been to threaten or defeat established political – and economic – order.

Private: Sam Collins – May 2012

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