PLEASE READ THIS BLOG AND THEN THINK ABOUT THE FACT THAT A COLLAPSE IS COMING AND THEN WATCH FOR THE SIGNS AND PROTECT YOUR WEALTH!!!!
If everyone remembers, just before the crash of 2008, all of the media and advertizing were pushing soaring stock markets, low-interest credit cards, and of course the subprime mortgage loan to anyone with a heart beat. They created the environment to load the public with debt and then when the stock market imploded as they all knew would happen, these banks spiked interest rates and fees making the consumer lose triple the money they would have owed. IT IS A BUSINESS PLAN FOLKS!
Well, they are at it again as the stock market is ready to implode this time from bond debt and this is why you see the advertisement below for 0% interest on credit cards and corporate media is telling you the stock market is soaring when all that's happening is a very few moving money from the protection of gold and bonds getting ready for the coming crash.
DO YOU HEAR ANY OF YOUR PUBLIC INTEREST PUNDITS AND GROUPS GIVING YOU A HEAD'S UP? ARE YOUR POLS SHOUTING OUT AGAINST THE CONDITIONS THAT HAVE WALL STREET JUST AS LOADED WITH LEVERAGE AND READY TO IMPLODE?
Neo-liberals have actually created the rules and laws pushing for this implosion as Obama and Congress created policy to make bond sales soar and the FED policy did the same. They did this because the bond market is tied to public wealth----municipal bonds are public projects. They did this as well to get people out of the once safety of the bond market and back into a high-risk stock market which is where your pension funds are right now, I BETCHYA!
I want to include today an article that is pure capitalism in that it is designed to look like a deal for the public, but its intent is to move money to this investment firm. DO NOT THINK I AM ENDORSING THE PERSON PROMOTING THIS ARTICLE. What this article does do is let you know that something big is going to happen and they indeed tell you the tricks used by the richest to avoid the crashes they create. THIS PART IS REAL. If you remember last crash Warren Buffet moved almost all his money into the gold market making the price for gold soar. So while the stocks and bonds lost 1/2 their value from the massive mortgage loan fraud, Buffett was reaping tons of profit in gold. Well, all the private investment firms are directing the richest to head for those gold investments because they know the stock market is ready to crash and stocks and bonds will again lose more this time around as the economic crisis will be worse. The problem for you and me is that the gold price is already high and getting us all into the gold market now will only create that same boost for the richest and may leave us holding the investment decline yet again. Gold may be a trap, but stocks and bonds are going down for sure.
PLEASE LOOK AT HOW YOUR RETIREMENTS AND INVESTMENTS ARE POSITIONED! DO NOT ALLOW WALL STREET TO USE YOUR PENSION YET AGAIN AS FODDER! Get rid of credit cards.....do not trade over because they will sock you once this coming crash occurs!
The only way to protect against this coming crash is to pull out all investments in stocks and bonds and/or follow the move to gold. THE MID-TERM WAY TO END THIS IS TO GET NEO-LIBERALS OUT OF OFFICE AT ALL LEVELS BY RUNNING AND VOTING FOR LABOR AND JUSTICE!
Low Interest Credit Cards
Icon Intro BT 0% for 18 Months*
Apply Now Apply Securely
Highlights
0% for 18 Months*
Balance Transfer:
0% for 18 Months*
Ongoing Information Regular APR:
12.99%-21.99% (Variable)*
Annual Fee:
$0*
Credit Needed:
Compare Icon Intro APR 0% for 18 Months*
Icon Intro BT 0% for 18 Months*
Apply Now Apply Securely
Show Card Details Chase Freedom® Add to Compare Icon Intro APR 0% for 15 Months
Icon Bonus Cash $200 Bonus After Qualifying Purchases*
Apply Now Apply Securely
Show Card Details BankAmericard Cash Rewards™ Credit Card Add to Compare Icon Intro APR 0% for purchases for 12 billing cycles*
Icon Intro BT 0% for qualifying balance transfers for 12 billing cycles*
Apply Now Apply Securely
Show Card Details Discover it® Add to Compare Icon Intro APR 0%* for 6 Months
Icon Intro BT 0% for 18 Months
Apply Now Apply Securely
Show Card Details Citi® Dividend Platinum Select® Visa® Card Add to Compare Icon Intro APR 0% for 12 Months*
Icon Intro BT 0% for 12 Months*
Apply Now Apply Securely
Show Card Details Slate® from Chase Card Add to Compare Icon Intro APR 0% for 15 Months*
Icon Intro BT 0% for 15 Months*
Apply Now Apply Securely
Show Card Details Capital One® VentureOne® Rewards Credit Card Add to Compare Icon Intro APR 0% until December 2014*
Icon Bonus Miles 20,000 miles with minimum spending requirement*
Apply Now Apply Securely
Show Card Details Discover it® Add to Compare Icon Intro APR 0% for 14 Months
Icon Intro BT 0% for 14 Months
Apply Now Apply Securely
Show Card Details Capital One® Platinum Prestige Credit Card Add to Compare Icon Intro APR 0% until March 2015
Icon Intro BT 0% until March 2015
Apply Now Apply Securely
Updated on December 7, 2013
0% Credit Cards Low interest rate (or 0%) credit cards can save you hundreds of dollars on balance transfers and on routine purchases carried over as credit card balances. Or you may simply want to be rewarded with a preferential interest rate as acknowledgement for good credit history and responsible debt management. Whatever your goals or motivation, zero percent or low interest credit cards can help you maintain the lowest rates available to individuals with excellent to good credit. You can find out more about credit score here.
Keep in mind that there are two main categories of low rate credit cards, namely those that offer a Variable APR and those that give you a Fixed APR. Just like with variable versus fixed rate mortgages, a fixed rate APR will remain relatively stable through the course of the loan. If your card company decides to raise it – which is somewhat rare – they will first notify you of that change according to Federal law requirements. With a variable rate, your APR is tied to a prevailing rate such as the Prime Interest Rate. If the prime rate increases then your APR will most likely follow in a similar fashion.
Generally speaking, credit card companies and banks will extend either 6 or 21 month offers – within the 0% to 3.99% annual interest rate range. That can generate a considerable discount when normal APRs are averaging around 15% or higher. Once the introductory promotional period expires, the APR on a low interest credit card will revert to the regular interest rate. Of course the ideal balance is a credit card that offers a great near term rate followed by an attractive, competitively priced low interest rate for the long term.
The interest rate charged on your credit card is widely regarded as the single most important component of your card. That’s because it determines the major cost for you to borrow or roll over balances and pay them off over time instead of all at once or within the same month that you make purchases. That’s why getting a zero percent or low interest credit card can be huge financial boon, no matter what your credit card usage patterns or money management strategies may be.
_______________________________________________
THE ECONOMIC CRASH IS COMING WHETHER NPR PRETENDS IT ISN'T!
This is a great article on the European debt crisis and the PIGS status as profligate debtors to Germany and the German taxpayers being held hostage to paying for defaulted debt. Remember, it is the German bank Deutsche Bank and US Goldman Sachs that committed sovereign debt fraud that hid these PIGS sovereign debt with 'complex financial instruments' AKA.....fraud.....and so the PIGS taxpayers and citizens have until now been paying for the massive debts from the collusion of banks with each of these nation's political leaders. The money stolen through this sovereign debt fraud was sucked up by the rich just as is happening in the US with our financial frauds.
Understandably the PIGS want out of this TROIKA banking capture and are looking to default one way or the other. They see Iceland and know they made the wrong choice in agreeing to these bailout deals. As this article shows, the behind the scenes wheeling and dealing will hit next year and will create a huge economic collapse at the same time the FED is forced to end its policies because it is leveraged out!
If you listen to corporate NPR they will tell you the PIGS have been dutiful and are proud to have met there debt obligations just as they aired US credit card debtors as being glad to pay back debt accumulated because of the massive Wall Street fraud and economic collapse! NOT SO!!!! ALL OF THESE COUNTRIES WANT OUT BECAUSE THEY ARE SICK AND TIRED OF PAYING DOWN THE BANKER'S DEBT! So, there will be rebellion in Europe and it will hit the US at the same time the FED is forced to end free money for the rich.
Beware of Hedge Funds Bearing Gifts
December 11th, 2013
Written by Adam Whitehead, KeySignals.com Global Economic Intersection
BLUF (Bottom Line Up Front) When Greek politicians and a Hedge Fund which has tendered to buy 10% of all outstanding Greek Debt start to make noises, just as the Fed starts to look as though it is serious about Tapering, we get interested.
Japonica Partners started buying Greek debt in June[i]. It was paying a 25% premium to where the debt was in 2012.
In November Japonica started talking its book; in an open letter demanding that Greece be rated A+[ii]. The rhetoric is quite instructive:
"Call-to-action: It is an irrefutable fact that Greece has accomplished one of history's most extraordinary sovereign fiscal rejuvenations, an A+ performance. Now is the time to progress beyond the current economically irrational and anachronistic accounting that obfuscates that Greece merits an A+ credit rating and government bond interest costs below 5%. Now is the time to recognize that this accounting is the single biggest and most easily removed obstacle to extraordinary growth in Greece. And, now is the time for public policy makers to expeditiously advocate accounting as well as presentation that reflects economic reality, improves decision making,and increases accountability."
Follow up:
If we read it correctly, Japonica is demanding an accounting change to "rejuvenate" Greece's credit rating (and Japonica's P&L). Greece's A+ for effort allegedly translates into an A+ credit rating. It's an elaborate form of accounting casuistry, in an economy which has literally returned back to the Classical Age in order to balance the national accounts. One wonders how a primitive agrarian society will be able to generate the economic activity to pay even 5% on its debt. 5% of no economic activity is still nothing. All that Greece has done is to seize the money injected by the Troika and then move it around the system without allowing it to leak out. Since this money is denominated in Euros, it will leave very swiftly however. Normally investing strategies like this turn the debt into equity in the "rejuvenated" economy. This "rejuvenated" equity is usually in the form of natural resources, such as Oil, which can then be sold for hard currency. Japonica does not appear to be interested in taking a position in Olives or Fetta Cheese however. Japonica has very little faith in the "rejuvenated" Greek economy; nor can it find any hard assets worth owning. Japonica therefore wants to realise "hard currency" in the form of Euros and then get the hell out of Dodge.
Presumably, the Greeks have encouraged Japonica to opine the "call to action". Greece gets a sub 5% interest cost and Japonica makes the trade of the decade.
Let's take a closer look at the Greek position. Currently, Greece has a primary surplus; which is defined as its fiscal revenues being greater than its expenditure, "ex-interest cost". This means that if Greece did not have to pay interest on its debt (quite a big if) that it could finance its projected fiscal expenditures without having to seek another Troika bailout. Ignoring interest payments, Greece has balanced its books. It is clear where this is going. Since Greece does not need another bailout, it is being cute and seeing if it can get away with lowering its interest payments. Japonica is a convenient tool to see how much leverage can be applied in this way.
The dark side of this tale is that since Greece can finance itself without another bailout, it has a pecuniary incentive to default on its interest payments. Most of the debt that is not owned by Japonica is owned by the Greek banks. The banks will implode; but this doesn't matter because they are Greek anyway. At this point Japonica will suddenly cease to be a friend of Greece; and will sue in the hope of triggering a default, which will then force the Troika to bail Greece out rather than risk a domino effect rippling through Portugal, Spain, Italy and Ireland. Said domino effect could then go global and cause America to apply pressure on Europe to go down the bailout rather than bail-in route. The problem for Japonica is that if Greece defaults, only its banks and Japonica go under. The Troika will thus let Greece default and then turn the debt it owns into real Greek "hard assets". If Greece refuses or rebels, it will then face years in the political wilderness. Greece no longer represents the threat it once did on its own. It only becomes a threat if other nations follow.
In our opinion Portugal, Spain , Italy and Ireland are watching the situation carefully; and are hoping that it comes to the brink of default. Currently, they are all following the Greek model. Public expenditure is being cut so that a primary surplus is created. The creation of the primary surplus is the bargaining chip to be used against Northern Europe. Northern Europe is blindly walking in to this trap, by forcing these counties to apply fiscal austerity in order to create the primary surplus. Like Greece, these Peripheral countries have nothing to lose. They have everything to gain, by getting their interest rate costs down and/or getting further fiscal support from Northern Europe. The ECB has been facilitating the process by applying the LTRO to keep Peripheral interest costs down. The LTRO has now however been repaid, so either the ECB must do another one or these countries must do what Greece is doing to get their interest costs down.
It is a totally different story in Northern Europe; and we suggest that they are in no mood to be blackmailed. Germany has in fact hardened its position against a central resolution of the debt crisis and a central banking authority. This has forced the Peripheral countries to rely on blackmail once the ECB stops holding Peripheral interest rates down. Over this weekend the European finance ministers meet to discuss a banking union amongst other things. It should be noted that Jens Weidmann has been getting more militant in his assertions that not all European debt is rated equally; and that capital requirements should be adjusted by the banks to reflect this reality. He has also said that the ECB should not regulate the banks in the long term; and that national regulators should exist under the ECB umbrella. Reading between the lines, we think that he is waiting for a position to attack. Coming out of this weekend we would expect him to turn up the criticism and invective; especially as what he will perceive as charlatans and blackmailers are trying to upgrade Greece.
We have no idea how this will play out; but we have a strong opinion that it will get played out with very volatile consequences in 2014. Factor in the US Taper and the picture looks even more volatile. Our suspicion is that Mario Draghi is resigned to another LTRO; but he cannot do anything until Peripheral interest rates spike upwards. He also has to contend with Angela Merkel; who has now been re-elected and can afford a nasty fight to save German taxpayer funds.
Finally, there is also a strong overweight investor position in Europe, from the likes of Japonica, who are of the view that the ECB -
"will do whatever it takes."
Although not saying actually that he will do whatever it takes to save the Periphery, Draghi intended that he,
"will do whatever it takes to save the Euro."
________________________________________________________
As this article suggests there seems to be market manipulation in gold right now as nations around the world hoard their gold and the largest investors talk gold trash while holding on to it. With an economic crash coming next year,it seems to me the rich are not wanting to let on that gold is being scooped right now. Warren Buffett famously bought large in gold at the 2008 collapse and I think that is happening now!
JUST LOOK INTO THE GOLD MARKET THESE NEXT FEW MONTHS AS THE WORLD ECONOMY STARTS SHAKING!
More Evidence Pointing to Manipulation in Gold Market?
By Michael Lombardi October 16, 2013
Print Page
Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.
While I avidly follow the actions of central banks to see where the gold bullion prices may be headed next, when I look at them today, their actions are speaking louder than words.
Central banks have pretty much stopped selling gold bullion, which is very important. In 1999, a number of central banks in Europe formed an alliance and agreed that they would not sell more than 400 tonnes of gold bullion per year. The agreement was called the Central Bank Gold Agreement (CBGA). In 2004, the CBGA was renewed again; this time the limit was 500 tonnes. Once again, it was renewed for another five years in 2009, and the limit is back to the sale of no more than 400 tonnes of gold bullion per year. The table below shows how much gold bullion the central banks in Europe sold in each period of the CBGA. (Source: World Gold Council web site, last accessed October 11, 2013.)
Notice anything different? The central banks in Europe have put the brakes on their sales of gold bullion. In fact, from September 27, 2012 to September 26, 2013, these central banks only sold 5.1 tonnes of gold bullion! This is hands down the lowest amount sold since the agreement started in 1999.
When it comes to stocks, if owners of a stock aren't selling and there's a significant number of buyers who want to buy, the price of the stock usually goes up as the simple rule of economics come into play: supply and demand.
Sadly, when it comes to gold bullion prices, this is not the case. Gold bullion prices are actually going down despite less supply and more demand. The price action in the gold market doesn't make sense. What if all the conspiracy theories I keep reading about in respect to gold bullion prices being manipulated are right?
As I ponder manipulation in the gold bullion market, I heard recently that the U.S. Justice Department is looking into manipulation in the $5.0-trillion-a-day foreign exchange market. Traders in big banks around the global economy are accused of manipulating key exchange rates. (Source: Reuters, October 11, 2013.) If the biggest market in the global economy can be manipulated, why can't the gold bullion market be manipulated?
I'm sticking to my guns; the depressed prices of well-managed senior and junior gold-producing companies are a screaming opportunity for investors.
If everyone remembers, just before the crash of 2008, all of the media and advertizing were pushing soaring stock markets, low-interest credit cards, and of course the subprime mortgage loan to anyone with a heart beat. They created the environment to load the public with debt and then when the stock market imploded as they all knew would happen, these banks spiked interest rates and fees making the consumer lose triple the money they would have owed. IT IS A BUSINESS PLAN FOLKS!
Well, they are at it again as the stock market is ready to implode this time from bond debt and this is why you see the advertisement below for 0% interest on credit cards and corporate media is telling you the stock market is soaring when all that's happening is a very few moving money from the protection of gold and bonds getting ready for the coming crash.
DO YOU HEAR ANY OF YOUR PUBLIC INTEREST PUNDITS AND GROUPS GIVING YOU A HEAD'S UP? ARE YOUR POLS SHOUTING OUT AGAINST THE CONDITIONS THAT HAVE WALL STREET JUST AS LOADED WITH LEVERAGE AND READY TO IMPLODE?
Neo-liberals have actually created the rules and laws pushing for this implosion as Obama and Congress created policy to make bond sales soar and the FED policy did the same. They did this because the bond market is tied to public wealth----municipal bonds are public projects. They did this as well to get people out of the once safety of the bond market and back into a high-risk stock market which is where your pension funds are right now, I BETCHYA!
I want to include today an article that is pure capitalism in that it is designed to look like a deal for the public, but its intent is to move money to this investment firm. DO NOT THINK I AM ENDORSING THE PERSON PROMOTING THIS ARTICLE. What this article does do is let you know that something big is going to happen and they indeed tell you the tricks used by the richest to avoid the crashes they create. THIS PART IS REAL. If you remember last crash Warren Buffet moved almost all his money into the gold market making the price for gold soar. So while the stocks and bonds lost 1/2 their value from the massive mortgage loan fraud, Buffett was reaping tons of profit in gold. Well, all the private investment firms are directing the richest to head for those gold investments because they know the stock market is ready to crash and stocks and bonds will again lose more this time around as the economic crisis will be worse. The problem for you and me is that the gold price is already high and getting us all into the gold market now will only create that same boost for the richest and may leave us holding the investment decline yet again. Gold may be a trap, but stocks and bonds are going down for sure.
PLEASE LOOK AT HOW YOUR RETIREMENTS AND INVESTMENTS ARE POSITIONED! DO NOT ALLOW WALL STREET TO USE YOUR PENSION YET AGAIN AS FODDER! Get rid of credit cards.....do not trade over because they will sock you once this coming crash occurs!
The only way to protect against this coming crash is to pull out all investments in stocks and bonds and/or follow the move to gold. THE MID-TERM WAY TO END THIS IS TO GET NEO-LIBERALS OUT OF OFFICE AT ALL LEVELS BY RUNNING AND VOTING FOR LABOR AND JUSTICE!
Low Interest Credit Cards
- Compare low interest credit cards from major credit card companies offering 0% APR
- Expert and Independent ratings & consumer reviews
- Secure and immediate online application process
Icon Intro BT 0% for 18 Months*
Apply Now Apply Securely
Highlights
- Click "APPLY NOW" to apply online or call 800-340-7968
- 0% Intro APR on Balance Transfers and Purchases for 18 months. After that, the variable APR will be 12.99% - 21.99% based on your creditworthiness.
- There is a balance transfer fee of either $5 or 3% of the amount of each transfer, whichever is greater.
- No late fees - EVER
- No penalty rate - EVER
- No annual fee - EVER
- Save time when you call with fast, personal help, 24 hours a day.
0% for 18 Months*
Balance Transfer:
0% for 18 Months*
Ongoing Information Regular APR:
12.99%-21.99% (Variable)*
Annual Fee:
$0*
Credit Needed:
Compare Icon Intro APR 0% for 18 Months*
Icon Intro BT 0% for 18 Months*
Apply Now Apply Securely
Show Card Details Chase Freedom® Add to Compare Icon Intro APR 0% for 15 Months
Icon Bonus Cash $200 Bonus After Qualifying Purchases*
Apply Now Apply Securely
Show Card Details BankAmericard Cash Rewards™ Credit Card Add to Compare Icon Intro APR 0% for purchases for 12 billing cycles*
Icon Intro BT 0% for qualifying balance transfers for 12 billing cycles*
Apply Now Apply Securely
Show Card Details Discover it® Add to Compare Icon Intro APR 0%* for 6 Months
Icon Intro BT 0% for 18 Months
Apply Now Apply Securely
Show Card Details Citi® Dividend Platinum Select® Visa® Card Add to Compare Icon Intro APR 0% for 12 Months*
Icon Intro BT 0% for 12 Months*
Apply Now Apply Securely
Show Card Details Slate® from Chase Card Add to Compare Icon Intro APR 0% for 15 Months*
Icon Intro BT 0% for 15 Months*
Apply Now Apply Securely
Show Card Details Capital One® VentureOne® Rewards Credit Card Add to Compare Icon Intro APR 0% until December 2014*
Icon Bonus Miles 20,000 miles with minimum spending requirement*
Apply Now Apply Securely
Show Card Details Discover it® Add to Compare Icon Intro APR 0% for 14 Months
Icon Intro BT 0% for 14 Months
Apply Now Apply Securely
Show Card Details Capital One® Platinum Prestige Credit Card Add to Compare Icon Intro APR 0% until March 2015
Icon Intro BT 0% until March 2015
Apply Now Apply Securely
Updated on December 7, 2013
0% Credit Cards Low interest rate (or 0%) credit cards can save you hundreds of dollars on balance transfers and on routine purchases carried over as credit card balances. Or you may simply want to be rewarded with a preferential interest rate as acknowledgement for good credit history and responsible debt management. Whatever your goals or motivation, zero percent or low interest credit cards can help you maintain the lowest rates available to individuals with excellent to good credit. You can find out more about credit score here.
Keep in mind that there are two main categories of low rate credit cards, namely those that offer a Variable APR and those that give you a Fixed APR. Just like with variable versus fixed rate mortgages, a fixed rate APR will remain relatively stable through the course of the loan. If your card company decides to raise it – which is somewhat rare – they will first notify you of that change according to Federal law requirements. With a variable rate, your APR is tied to a prevailing rate such as the Prime Interest Rate. If the prime rate increases then your APR will most likely follow in a similar fashion.
Generally speaking, credit card companies and banks will extend either 6 or 21 month offers – within the 0% to 3.99% annual interest rate range. That can generate a considerable discount when normal APRs are averaging around 15% or higher. Once the introductory promotional period expires, the APR on a low interest credit card will revert to the regular interest rate. Of course the ideal balance is a credit card that offers a great near term rate followed by an attractive, competitively priced low interest rate for the long term.
The interest rate charged on your credit card is widely regarded as the single most important component of your card. That’s because it determines the major cost for you to borrow or roll over balances and pay them off over time instead of all at once or within the same month that you make purchases. That’s why getting a zero percent or low interest credit card can be huge financial boon, no matter what your credit card usage patterns or money management strategies may be.
_______________________________________________
THE ECONOMIC CRASH IS COMING WHETHER NPR PRETENDS IT ISN'T!
This is a great article on the European debt crisis and the PIGS status as profligate debtors to Germany and the German taxpayers being held hostage to paying for defaulted debt. Remember, it is the German bank Deutsche Bank and US Goldman Sachs that committed sovereign debt fraud that hid these PIGS sovereign debt with 'complex financial instruments' AKA.....fraud.....and so the PIGS taxpayers and citizens have until now been paying for the massive debts from the collusion of banks with each of these nation's political leaders. The money stolen through this sovereign debt fraud was sucked up by the rich just as is happening in the US with our financial frauds.
Understandably the PIGS want out of this TROIKA banking capture and are looking to default one way or the other. They see Iceland and know they made the wrong choice in agreeing to these bailout deals. As this article shows, the behind the scenes wheeling and dealing will hit next year and will create a huge economic collapse at the same time the FED is forced to end its policies because it is leveraged out!
If you listen to corporate NPR they will tell you the PIGS have been dutiful and are proud to have met there debt obligations just as they aired US credit card debtors as being glad to pay back debt accumulated because of the massive Wall Street fraud and economic collapse! NOT SO!!!! ALL OF THESE COUNTRIES WANT OUT BECAUSE THEY ARE SICK AND TIRED OF PAYING DOWN THE BANKER'S DEBT! So, there will be rebellion in Europe and it will hit the US at the same time the FED is forced to end free money for the rich.
Beware of Hedge Funds Bearing Gifts
December 11th, 2013
Written by Adam Whitehead, KeySignals.com Global Economic Intersection
BLUF (Bottom Line Up Front) When Greek politicians and a Hedge Fund which has tendered to buy 10% of all outstanding Greek Debt start to make noises, just as the Fed starts to look as though it is serious about Tapering, we get interested.
Japonica Partners started buying Greek debt in June[i]. It was paying a 25% premium to where the debt was in 2012.
In November Japonica started talking its book; in an open letter demanding that Greece be rated A+[ii]. The rhetoric is quite instructive:
"Call-to-action: It is an irrefutable fact that Greece has accomplished one of history's most extraordinary sovereign fiscal rejuvenations, an A+ performance. Now is the time to progress beyond the current economically irrational and anachronistic accounting that obfuscates that Greece merits an A+ credit rating and government bond interest costs below 5%. Now is the time to recognize that this accounting is the single biggest and most easily removed obstacle to extraordinary growth in Greece. And, now is the time for public policy makers to expeditiously advocate accounting as well as presentation that reflects economic reality, improves decision making,and increases accountability."
Follow up:
If we read it correctly, Japonica is demanding an accounting change to "rejuvenate" Greece's credit rating (and Japonica's P&L). Greece's A+ for effort allegedly translates into an A+ credit rating. It's an elaborate form of accounting casuistry, in an economy which has literally returned back to the Classical Age in order to balance the national accounts. One wonders how a primitive agrarian society will be able to generate the economic activity to pay even 5% on its debt. 5% of no economic activity is still nothing. All that Greece has done is to seize the money injected by the Troika and then move it around the system without allowing it to leak out. Since this money is denominated in Euros, it will leave very swiftly however. Normally investing strategies like this turn the debt into equity in the "rejuvenated" economy. This "rejuvenated" equity is usually in the form of natural resources, such as Oil, which can then be sold for hard currency. Japonica does not appear to be interested in taking a position in Olives or Fetta Cheese however. Japonica has very little faith in the "rejuvenated" Greek economy; nor can it find any hard assets worth owning. Japonica therefore wants to realise "hard currency" in the form of Euros and then get the hell out of Dodge.
Presumably, the Greeks have encouraged Japonica to opine the "call to action". Greece gets a sub 5% interest cost and Japonica makes the trade of the decade.
Let's take a closer look at the Greek position. Currently, Greece has a primary surplus; which is defined as its fiscal revenues being greater than its expenditure, "ex-interest cost". This means that if Greece did not have to pay interest on its debt (quite a big if) that it could finance its projected fiscal expenditures without having to seek another Troika bailout. Ignoring interest payments, Greece has balanced its books. It is clear where this is going. Since Greece does not need another bailout, it is being cute and seeing if it can get away with lowering its interest payments. Japonica is a convenient tool to see how much leverage can be applied in this way.
The dark side of this tale is that since Greece can finance itself without another bailout, it has a pecuniary incentive to default on its interest payments. Most of the debt that is not owned by Japonica is owned by the Greek banks. The banks will implode; but this doesn't matter because they are Greek anyway. At this point Japonica will suddenly cease to be a friend of Greece; and will sue in the hope of triggering a default, which will then force the Troika to bail Greece out rather than risk a domino effect rippling through Portugal, Spain, Italy and Ireland. Said domino effect could then go global and cause America to apply pressure on Europe to go down the bailout rather than bail-in route. The problem for Japonica is that if Greece defaults, only its banks and Japonica go under. The Troika will thus let Greece default and then turn the debt it owns into real Greek "hard assets". If Greece refuses or rebels, it will then face years in the political wilderness. Greece no longer represents the threat it once did on its own. It only becomes a threat if other nations follow.
In our opinion Portugal, Spain , Italy and Ireland are watching the situation carefully; and are hoping that it comes to the brink of default. Currently, they are all following the Greek model. Public expenditure is being cut so that a primary surplus is created. The creation of the primary surplus is the bargaining chip to be used against Northern Europe. Northern Europe is blindly walking in to this trap, by forcing these counties to apply fiscal austerity in order to create the primary surplus. Like Greece, these Peripheral countries have nothing to lose. They have everything to gain, by getting their interest rate costs down and/or getting further fiscal support from Northern Europe. The ECB has been facilitating the process by applying the LTRO to keep Peripheral interest costs down. The LTRO has now however been repaid, so either the ECB must do another one or these countries must do what Greece is doing to get their interest costs down.
It is a totally different story in Northern Europe; and we suggest that they are in no mood to be blackmailed. Germany has in fact hardened its position against a central resolution of the debt crisis and a central banking authority. This has forced the Peripheral countries to rely on blackmail once the ECB stops holding Peripheral interest rates down. Over this weekend the European finance ministers meet to discuss a banking union amongst other things. It should be noted that Jens Weidmann has been getting more militant in his assertions that not all European debt is rated equally; and that capital requirements should be adjusted by the banks to reflect this reality. He has also said that the ECB should not regulate the banks in the long term; and that national regulators should exist under the ECB umbrella. Reading between the lines, we think that he is waiting for a position to attack. Coming out of this weekend we would expect him to turn up the criticism and invective; especially as what he will perceive as charlatans and blackmailers are trying to upgrade Greece.
We have no idea how this will play out; but we have a strong opinion that it will get played out with very volatile consequences in 2014. Factor in the US Taper and the picture looks even more volatile. Our suspicion is that Mario Draghi is resigned to another LTRO; but he cannot do anything until Peripheral interest rates spike upwards. He also has to contend with Angela Merkel; who has now been re-elected and can afford a nasty fight to save German taxpayer funds.
Finally, there is also a strong overweight investor position in Europe, from the likes of Japonica, who are of the view that the ECB -
"will do whatever it takes."
Although not saying actually that he will do whatever it takes to save the Periphery, Draghi intended that he,
"will do whatever it takes to save the Euro."
________________________________________________________
As this article suggests there seems to be market manipulation in gold right now as nations around the world hoard their gold and the largest investors talk gold trash while holding on to it. With an economic crash coming next year,it seems to me the rich are not wanting to let on that gold is being scooped right now. Warren Buffett famously bought large in gold at the 2008 collapse and I think that is happening now!
JUST LOOK INTO THE GOLD MARKET THESE NEXT FEW MONTHS AS THE WORLD ECONOMY STARTS SHAKING!
More Evidence Pointing to Manipulation in Gold Market?
By Michael Lombardi October 16, 2013
Print Page
Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.
While I avidly follow the actions of central banks to see where the gold bullion prices may be headed next, when I look at them today, their actions are speaking louder than words.
Central banks have pretty much stopped selling gold bullion, which is very important. In 1999, a number of central banks in Europe formed an alliance and agreed that they would not sell more than 400 tonnes of gold bullion per year. The agreement was called the Central Bank Gold Agreement (CBGA). In 2004, the CBGA was renewed again; this time the limit was 500 tonnes. Once again, it was renewed for another five years in 2009, and the limit is back to the sale of no more than 400 tonnes of gold bullion per year. The table below shows how much gold bullion the central banks in Europe sold in each period of the CBGA. (Source: World Gold Council web site, last accessed October 11, 2013.)
Notice anything different? The central banks in Europe have put the brakes on their sales of gold bullion. In fact, from September 27, 2012 to September 26, 2013, these central banks only sold 5.1 tonnes of gold bullion! This is hands down the lowest amount sold since the agreement started in 1999.
When it comes to stocks, if owners of a stock aren't selling and there's a significant number of buyers who want to buy, the price of the stock usually goes up as the simple rule of economics come into play: supply and demand.
Sadly, when it comes to gold bullion prices, this is not the case. Gold bullion prices are actually going down despite less supply and more demand. The price action in the gold market doesn't make sense. What if all the conspiracy theories I keep reading about in respect to gold bullion prices being manipulated are right?
As I ponder manipulation in the gold bullion market, I heard recently that the U.S. Justice Department is looking into manipulation in the $5.0-trillion-a-day foreign exchange market. Traders in big banks around the global economy are accused of manipulating key exchange rates. (Source: Reuters, October 11, 2013.) If the biggest market in the global economy can be manipulated, why can't the gold bullion market be manipulated?
I'm sticking to my guns; the depressed prices of well-managed senior and junior gold-producing companies are a screaming opportunity for investors.
RSS Feed
