Greece Worse Off Than Ever
Things have gotten worse for Greece. In the 44 trading days since the PSI deal was struck, Greek government bonds are down over 44% in price –
trading below 12% of par today for the first time ever. The Athens Stock Exchange index is down an incredible 35% since 3/22 – back at 22 year lows! Officials from Russia are chiming in on what they feel is a need for Greece to get off the euro for the sake of the Union. Just like America is awaiting more Quantitative Easing, the EU is anticipating the same thing. It’s an ongoing process of kicking the can down the road with the can now sitting on the side of the cliff.
Investors have pulled together about 60 billion euros to buy noncore loan assets at European banks, according to PricewaterhouseCoopers. Financial institutions are being forced by regulations to trim riskier lending, and major hedge funds and private-equity companies are standing by to snatch up bargains. Few deals have been made, thanks to efforts by the European Central Bank to prop up banks. So essentially, government intervention are causing people to invest into something that people would never of invested in if they were to make their own educated decisions.
The Manipulation Government Chess Game
The bond market is indicating that inflation expectations are declining, possibly giving the Federal Reserve additional leeway to launch another round of quantitative easing or otherwise try to stimulate the economy. “Two months ago inflation expectations were high enough that the Fed could have been criticized for stoking inflation with a QE program,” said Eric Van Nostrand, Credit Suisse’s U.S. interest-rate strategist. “But they’ve fallen enough in recent weeks that Fed Chairman Ben Bernanke has more political room to maneuver.” Looks like a reason to inject our economy with more stimulus!
When you really consider all the moving pieces that the politicians and Fed officials are dealing with, they really do have a significant amount on their plate to get from where they are to their intended goal. Imagine trying to have to manipulate inflation, manipulate deflation, manipulate gold prices, manipulate stock prices, manipulate interest rates, manipulate foreign relationships, manipulate success, all in the name of manipulating the vote of the majority. It really becomes a giant chess game to achieve Keynesian objectives and selfish fulfillment.
You can bet that they will exercise every power they have to attempt to do what they have to do.
QE3 is on its way!
Recession Goes On
The U.S. will likely fall back into a recession if scheduled spending cuts take effect and Bush-era tax cuts are allowed to expire this year, the Congressional Budget Office said. If the U.S. falls off this “fiscal cliff,” the economy will probably contract 1.3 percent in the first half of 2013, the CBO said. Needless to say, the tax cuts need to continue along with even more cuts. It’s disgusting to imagine all of the politicians “foaming at the mouth,” who are wanting to raise our taxes to steal from one person and redistribute it to someone else. To be honest, the thought of having to pay more taxes is downright nauseating and something hard to swallow. Keep in mind these Bush tax cuts are just on the Federal side and not even taking into account states that are trying to steal from their workers. If you are lucky enough to live in the “golden state,” you might be looking at a 1-2% tax increase on upper income wages.
John Williams from Shadow Stats put out some interesting information. His research simply takes the data that is reported today and computes it in the same way it was done years ago before significant amounts of manipulation and changes to favor government image. So with that understanding, our GDP would still be below where it was in 2000. Someone needs to forward Shadow Stats’ statistics to the government!
Japan Got Downgraded
Japan is about to hit a 240% debt to GDP by the end of the year. Fitch has lowered its assessment of Japan’s sovereign credit to A+ which is a rating just above Spain and Italy. Unfortunately, these credit ratings do everything they can to prevent the investors from panicking which is why when things start looking bad they still have an A+. It’s the politically correct thing to do.
The CFTC is Diluting the Silver Market.
105,231 contracts, or 500 million ounces, of paper silver were dumped onto the COMEX in one hour. 500 million physical ounces is approximately 2/3 of what is produced globally in one year.
The agenda to suppress the price of the commodities is clear and very evident. The time will come when enough people will pull together to call the bluffs of the decision makers and it will be at this moment where the emperor will emerge with no clothes. Something happening in the electronic trading world of silver can send the paper markets into major panic causing the physical to climb exponentially.
Opt-out of conventional wisdom!!!