The Western world keeps spending its way to disaster → theglobeandmail.com/report-o … le1565375/
The Swiss-based Bank of International Settlements (BIS), the oldest international financial institution in the world, has functioned as the central bank of central bankers for 80 years. In a working paper written by three senior staff economists (“The future of public debt: prospects and implications”), released in March, BIS warns that Greece isn’t the only Western economy with hazard lights flashing.
Indeed, it names 11 more: Austria, France, Germany, Ireland , Italy, Japan, the Netherlands, Portugal, Spain, Britain – and the United States. Without “drastic measures,” BIS says, all of these countries will hit a wall of debt.
When the senior economists at BIS warn 12 of the richest countries on Earth that they must take drastic action to reduce debt, you know that it’s time to check the air bags. The only thing you don’t know, that you need to know, is the precise time of the crash . The lesson is already obvious: Governments can’t drive recklessly, use only the accelerator for braking and not eventually crash.
there is more
The Morgan Kelly school of ‘forecasting’.
Excellent link. Thanks.bis.org/publ/work300.htm
Europe has ‘no alternative’ but to balance its books: Draghi → expatica.com/ch/news/swiss-n … 66664.html
Politicians have slammed speculators for targetting eurozone states and Draghi too said that speculation was a “battle that we have to fight,” even if it was not one that could be won swiftly.Draghi is attending a closed-door conference organised by the Swiss National Bank and the International Monetary Fund. , Chinese central bank chief Zhou Xiaochuan and European Central Bank head Jean-Claude Trichet were due to attend.
there is more
kingworldnews.com/kingworldnews/ … 3A2010.mp3
Jim Rickards: → kingworldnews.com/kingworldnews/ … kards.html
The Euro-bailout and guarantee fund will fail. There are several reasons for this. The initial problem is that governments have borrowed too much and the debt burdens are non-sustainable. How can you solve a debt problem with more debt? All that the program does is to substitute EU debt for the debt of Greece, Portugal, Spain and others. You are replacing national debt with multilateral debt but it’s all still debt. And so-called money creation by the ECB is just another form of debt because Euros issued by the ECB are simply paper liabilities of the ECB itself, so-called “notes” so even the money is just debt. Any possible repayment of the debt involves deep austerity, spending cuts, layoffs, higher taxes, reduced benefits and other actions which will definitely cause a depression in Europe and perhaps 25% unemployment throughout the Euro-zone.
The alternative is to print money which will lead to hyperinflation and the collapse of the Euro. So there are no good outcomes. The G20 and the IMF will try to reliquify the system and create new money through the issuance of SDR’s . At the same time, people will try to protect their wealth by buying gold. So as paper currencies collapse, the money system will become a foot race between SDR’s and gold. Large hedge funds are completely unimpressed with the umbrella for the reasons noted above. They are shorting the Euro and buying gold.
There is one other flaw in the EU plan. In 1992, when George Soros attacked the Bank of England, he did so by selling Sterling and buying dollars. This forced the Bank of England to do the opposite which was to buy Sterling and sell dollars. Since the Bank of England had a finite amount of dollars to sell, Soros knew he could beat them by buying more than they had. However, he needed real money to do this and he was perhaps the only speculator in the world at that time with that much money. Today you do not need money to destroy national finances, you can do this by the creation of synthetic short positions in Euros through the use of credit default swaps (CDS) and other derivative instruments . Goldman Sachs are experts at this. And they can create CDS in potentially infinite amounts since there is no regulation and no margin requirements. In effect, Goldman could create a short position equal to ten times the amount of Euros in the guarantee fund. Goldman can create synthetic short positions faster than the ECB can print money. Therefore, the ECB’s plan is doomed to fail because they cannot beat the speculators who can use CDS instead of real money.
gaius
May 14, 2010, 10:05am
#5
BoyRacer:
https://kingworldnews.com/kingworldnews/Broadcast/Entries/2010/5/13_Jim_Rickards_files/Jim%20Rickards%205%3A12%3A2010.mp3
Jim Rickards: → kingworldnews.com/kingworldnews/ … kards.html
The Euro-bailout and guarantee fund will fail. There are several reasons for this. The initial problem is that governments have borrowed too much and the debt burdens are non-sustainable. How can you solve a debt problem with more debt? All that the program does is to substitute EU debt for the debt of Greece, Portugal, Spain and others. You are replacing national debt with multilateral debt but it’s all still debt. And so-called money creation by the ECB is just another form of debt because Euros issued by the ECB are simply paper liabilities of the ECB itself, so-called “notes” so even the money is just debt. Any possible repayment of the debt involves deep austerity, spending cuts, layoffs, higher taxes, reduced benefits and other actions which will definitely cause a depression in Europe and perhaps 25% unemployment throughout the Euro-zone.
The alternative is to print money which will lead to hyperinflation and the collapse of the Euro. So there are no good outcomes. The G20 and the IMF will try to reliquify the system and create new money through the issuance of SDR’s
. At the same time, people will try to protect their wealth by buying gold. So as paper currencies collapse, the money system will become a foot race between SDR’s and gold. Large hedge funds are completely unimpressed with the umbrella for the reasons noted above. They are shorting the Euro and buying gold.
There is one other flaw in the EU plan. In 1992, when George Soros attacked the Bank of England, he did so by selling Sterling and buying dollars. This forced the Bank of England to do the opposite which was to buy Sterling and sell dollars. Since the Bank of England had a finite amount of dollars to sell, Soros knew he could beat them by buying more than they had. However, he needed real money to do this and he was perhaps the only speculator in the world at that time with that much money. Today you do not need money to destroy national finances, you can do this by the creation of synthetic short positions in Euros through the use of credit default swaps (CDS) and other derivative instruments . Goldman Sachs are experts at this. And they can create CDS in potentially infinite amounts since there is no regulation and no margin requirements. In effect, Goldman could create a short position equal to ten times the amount of Euros in the guarantee fund. Goldman can create synthetic short positions faster than the ECB can print money. Therefore, the ECB’s plan is doomed to fail because they cannot beat the speculators who can use CDS instead of real money.
That’s a sobering post. Any ripostes?
Very interesting.
“It kind of begs the question who’s going to buy these things (Goldman’s CDSs)
Pity. It was looking good up until there.