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post #21 of 62 (permalink) Old 12-18-2008, 03:07 AM Thread Starter
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I don't know if you read it today, but Deutsche Bank failed to redeem a bond issue worth about $1.4B today. Germany expects the greatest economic contraction there since WWII. -2%.

Standard & Poor's also said they estimate 20% of all lower-rated businesses in mainland Europe and the UK will do bankrupt in the next 24 months.

The Pound is collapsing, nearing parity with the Euro.

At the same time, the dollar is also dropping from its recent rise in value. The yen is higher than it has been in 13 years. The extreme drop in interest rates are cited, but I wonder if there is more than that. Could the US be de-valuing its currency without actually saying that is what they are doing?
haven't come across the bit about germany, will look for it.

Could very well be that the US is debasing the $, whether or not they are intentionally doing it or not is irrelavant, because even if they weren't, Fed's actions and the incoming president's spending will have the same effects...
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post #22 of 62 (permalink) Old 12-18-2008, 11:30 PM
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Bernanke is a smart guy and knows exactly what he's doing. He's got everyone corralled (mooo!) into bonds and they're going to get fleeced once the "helicopter" policy starts and he bypasses the banks to get money directly into the private and public sector. The dollar will be debased and we may even see Roosevelt type extremes like confiscation of gold happen. The dollar will fare worse than the Euro in this mess, but that's only because the Euro is newer and behind the curve. Already, Germany is refusing to contribute more "stimulus" because, basically, they would be sacrificing the fruits of their conservative fiscal policy to help the more reckless countries. We may well see an unraveling of the Euro due to politics.
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post #23 of 62 (permalink) Old 12-19-2008, 01:41 PM
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Russia: Oil-rich to Oil-broke

Could Iran, Saudi Arabia, and Venezuela be far behind? So starting in January they will be pumping out less (so they say), and making less per barrel.

World Bank: Russia may need help if oil falls more

Excerpt from article

If oil prices in 2009 and 2010 average $30 a barrel, that would be a nightmare scenario for a global economy," Zeljko Bogetic, the World Bank's chief economist in Russia told investors on Friday. "The pressures on the current account and public finances in Russia would quickly rise to a point where the financing constraint would become so sharp that it's possible even to envisage Russia's return from a creditor to international organisations to (that of) a borrower."

At $50 a barrel, Russia could drain much of its reserve funds and run budgetary deficits, but would not face a "meltdown" scenario, said Bogetic.

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post #24 of 62 (permalink) Old 12-19-2008, 01:56 PM
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Bernanke is a smart guy and knows exactly what he's doing. He's got everyone corralled (mooo!) into bonds and they're going to get fleeced once the "helicopter" policy starts and he bypasses the banks to get money directly into the private and public sector. The dollar will be debased and we may even see Roosevelt type extremes like confiscation of gold happen. The dollar will fare worse than the Euro in this mess, but that's only because the Euro is newer and behind the curve. Already, Germany is refusing to contribute more "stimulus" because, basically, they would be sacrificing the fruits of their conservative fiscal policy to help the more reckless countries. We may well see an unraveling of the Euro due to politics.
Germany is already being pulled down. ING is forecasting Germany's greatest-ever quarterly contraction for Q4 2008. Germany relies on exports, and considering how the car market has collapsed just for one example, they are really hurting.

And if Germany is hurting, you know all the weaker EU countries are doing even worse. Imagine if Germany decides to defect from the EU and return to their own currency some day. The UK has always kept the Pound, although one Pound only buys 1.04 Euros these days.

If Germany pulled out of the Euro experiment, leaving only the weaker socialist countries, the Euro would collapse. It is that simple.

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post #25 of 62 (permalink) Old 12-19-2008, 08:33 PM
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Germany is already being pulled down. ING is forecasting Germany's greatest-ever quarterly contraction for Q4 2008. Germany relies on exports, and considering how the car market has collapsed just for one example, they are really hurting.

And if Germany is hurting, you know all the weaker EU countries are doing even worse. Imagine if Germany decides to defect from the EU and return to their own currency some day. The UK has always kept the Pound, although one Pound only buys 1.04 Euros these days.

If Germany pulled out of the Euro experiment, leaving only the weaker socialist countries, the Euro would collapse. It is that simple.
I agree. The UK got knee-deep in the CDS market and, as a result, their pound will be hurt almost as much as the dollar. I kind of hope that Germany pulls out and the Euro collapses. That'll discourage support for a One-World currency.
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post #26 of 62 (permalink) Old 01-26-2009, 01:00 AM
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Revealed: The day the banks were just three hours from collapse | Mail Online
It will be interesting in the morning to see how this affects the pound. can't be good.

The trust issue still seems to be a huge issue for governments and banks. Few believe what they say. When things like the bombshell are revealed above, it only hurts things more even if the collapse was avoided (for now).

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post #27 of 62 (permalink) Old 03-02-2009, 02:21 PM
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The beginning of the end of the EU?

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I agree. The UK got knee-deep in the CDS market and, as a result, their pound will be hurt almost as much as the dollar. I kind of hope that Germany pulls out and the Euro collapses. That'll discourage support for a One-World currency.
EU Rejects a Rescue of Faltering East Europe - WSJ.com
Economic crisis threatens the idea of one Europe - International Herald Tribune
Germany and the richer western countries declined to bail out the east.

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post #28 of 62 (permalink) Old 03-03-2009, 05:35 AM
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Just as predicted -- but who can blame them? We may see similar disputes escalate between our states. Who wants to pay for bailing out California?
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post #29 of 62 (permalink) Old 03-27-2009, 03:28 PM
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This seems to support the original post of this thread

Did Goldman Goose Oil? - Forbes.com

Somebody should go to jail for this crap.

BTW, I thought I would share an interesting story. My dad works in commercial lending and frequently deals with people who have insane net worths. this winter he worked with a potential customer with a net worth over $600M. Only bad thing is that in early 2008 he was worth over a $1.5B?!?!

He had sold an oil company then re-invested in another oil company, losing his butt when the price collapsed. Maybe I'm not cut out to be uber-wealthy, because when I would have cashed out to the tune of ten figures, my biggest problem would have been where to put all the cars, wine, and hookers I would then have bought...

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post #30 of 62 (permalink) Old 03-27-2009, 10:08 PM Thread Starter
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stinks of this.... People and power
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post #31 of 62 (permalink) Old 03-27-2009, 10:45 PM
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The Eastern Europe economic crisis is one of our greatest shames. Not only our financial institutions acted recklessly to say the least, but the medias are simply ignoring the matter. In good Iraqi War style they think that if we stop paying attention the problem will just go away by itself.
Austrian and Italian banks are the worst off, immediately followed by French, Swedish and German institutions.
The EU is not refusing to help: they simply do not know what to do since the problem is well beyond the reach of their small and evil brains. They are only good at bullying Third World countries and imposing expensive enviromental legislation on us, their hapless serfs. Each country is now trying to save her own banks but the question is how? Austrian banks alone are exposed by a sum equalling over 70% of that country's GDP.
The World Bank is currently looking for cash to solve this problem but there's very little forthcoming: only Chinese, Japanese and Arabs have the needed reserves but they want more voting power in return. And the European countries cannot afford that.
The only Eastern Europe country that was holding its own was the Czech Republic but expect situation to worsen a lot since Prime Minister Topolanek was forced to resign because he "wasn't doing enough", namely he stuck to a much sounder spending and lending politics than his neighbours. Expect their currency to rebound a little ("Obama-style") and then drop together with Romanian, Esthonian, Polish etc currencies.
Another thing that's passed under silence is the fact that there begins to be the remote possibility of at least one Euro country defaulting its debt. Main candidates are the four little PIGS (Portugal, Italy, Greece and Spain) plus Ireland. This is reflected by the fact that these five governments have to pay considerably higher interests on loans from foreign banks than, say, Germany or the Netherlands. Last country to default its foreign debt was the Soviet Union back in 1989.
Finally our enlightened leaders have decided to spend money we don't have to "jumpstart the economy" by building railroads, bridges, harbors etc we don't need and we cannot afford right now. Call it Roosevelt style.
How are they gonna pay for it? Let's just say that the FED isn't alone in this inflationary world.
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post #32 of 62 (permalink) Old 03-28-2009, 12:15 AM Thread Starter
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How are they gonna pay for it? Let's just say that the FED isn't alone in this inflationary world.
It looks like they will be paying but in actually they are destorying the savings and livelyhood of the people by inflation to get it done. To "pay" for something you need to incur a cost, governments don't incur costs, people subservent to their govts face the costs...
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post #33 of 62 (permalink) Old 02-01-2010, 01:02 PM
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The rest of the world goes in the tank, governments which have propped up their industries for decades (Airbus?) suddenly are cash-strapped. Oil-rich countries become oil-broke as they run huge deficits to keep power. The EU effectively disbands as each country goes back to its own currency, in hindsight the nationalism of each was discounted. In good times they can hold their noses and put up with each other, but now in bad times they protect their own kind.
It is probably poor forum ettiquite to quote yourself, but I wonder if Greece will be the straw that broke the Euro's back?
Should Germany bail out Club Med or leave the euro altogether? - Telegraph

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post #34 of 62 (permalink) Old 02-04-2010, 11:22 AM
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Sburns,
Not poor FE to quote yourself if you're that clarevoyant (sp)...


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post #35 of 62 (permalink) Old 02-04-2010, 12:45 PM
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The issue won't be decided at the EU. It will be settled in Berlin. Kanzellerin Merkel favors bailing out Greece, whatever the cost. The issue is costing her dearly since the Free Democrats and the Bavarian Christian Party (two faithful and powerful allies of the Merkel Government) are openly opposing any measure to help Greece. Last week the Bundestag Economic Committee also "strongly advised" against any financial help for Greece. No doubt they feel Germany is already in a tight spot for propping up the Baltic Republics and Slovakia.
My personal bet is that Greece will be bailed out. The country risks serious civil unrest if not a revolution: the fact that the Greek police, one of Europe's most brutal, has done nothing to stop the frequent disorders in Athens and Thessaloniki, is a clear signal. Bail us out or the country goes on fire. Bailing Greece out won't be cheap and won't be easy. Papandreou will undoubtedly use the EU as a scapegoat: hey, don't blame me! They forced me to raise taxes!
But Greece is only part of the picture. Hungary, a country Germany desperately wanted inside the EU, is bankrupt and its economy is grinding to an halt. The French and the Dutch will undoubtedly say to the Germans: you wanted them in, now you bail them out. It's none of our business.
Spain is a different and potentially much more lethal beast. The local housing boom made South Florida blush in comparison. And the bust is devastating. Official unemployment figures are now over 15% and climbing. They may reach 20% by the end of 2010. Spanish unemployment subsidies are around 60% of the last paycheck for 18 months. Since all these people lost their jobs in 2009 you may expect the Spanish government will be in for a very rough 2010, especially given the fact that most local government expected to finance themselves using housing taxes. But the houses just sit there waiting for a buyer and building companies go bust one after another. Who is going to pay the bill? Catalunya, Galicia and Euskadi can probably weather the storm since they didn't gamble so much on housing. The rest of the country cannot.
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post #36 of 62 (permalink) Old 02-04-2010, 02:10 PM
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Currently there is such a spread in wealth, and the ability to survive economically, between countries in the EMU that it is unsustainable, IMO.

It seems in the EMU you have countries holding their own (Germany, France, Belgium, et al), and countries who are flat-out broke (The so called PIIGS: Portugal, Ireland, Italy, Greece, Spain). Of those holding their own Germany and France are obviously the big players and the only ones who could possibly have spare funds to bail out Greece.

But to bail out one sets a dangerous precedent for the others. If Greece is saved, why shouldn't Spain or Ireland? And make no mistake, there is a good likelihood of all of them needing help in the next couple of years. I think this is forgotten or ignored by many outside of the situation.

For all sides it seems like a terrible choice. For Germany, bail out Greece and then have to do the same for others, possibly bankrupting yourself as well. Or don't bail any of them and watch as the whole "Club Med" region falls into a deep depression and all of its nasty historical effects. I suppose it is possible the decision could be made to devalue the Euro by inflation of money supply, although this would also have terrible effects on creditor nations within it such as Germany. So what if you receive payments on the loan you own when the currency is worth a fraction of what it was when the loan was originated?

The PIIGS are locked into the Euro and cannot devalue their currency, EU countires not in the monetary union have a clear advantage in this regard should they need it (Sweden and UK for example). Greece and the others may decide "defection" from the Euro as a currency is the lesser of all the painful options. Default on debts and revert to their own currency and it will be basically worthless outside of Greece. But their exports and tourism will pick up and consumption of imports will drop dramatically. A relatively short period of acute pain versus longer suffering as they become an undercalss of the European continent and locked into the Euro. What happens with Greece will be very telling.

If things with Greece do not go the way the German government thinks it should, they instead could be the one who jumps. That was the basic idea of the article. Basically pull out and let their neighbors rot. Nationalism was not eliminated by the EMU, nationalism is another aspect discounted by many when it comes to this ongoing crisis.

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post #37 of 62 (permalink) Old 02-04-2010, 04:33 PM
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Just as predicted -- but who can blame them? We may see similar disputes escalate between our states. Who wants to pay for bailing out California?
I would suggest that everyone read this link. Fact is that California has been helping to prop up the fiscal condition of many other states as well as the federal apparatus. Take a look at the graph. California has been getting screwed for 12 straight years. And some of that money goes to red state welfare - farm subsidies and welfare for so many of our failing small towns. California is one of the nation's cash cows. It has been for a long time. Show some respect, maggots. If California needs any bailout they certainly deserve it. It's high time we got something in return. And that doesn't even take into account the illegal immigration enforcement debacel. That is supposed to be a federal issue but we foot the bill for way more than our fair share. Is it any wonder that some of the state wants to become the nation of Jefferson?

From the article:


"C
ALIFORNIA BALANCE OF PAYMENTS

Last year, Californians sent nearly $20 billion more to Washington in federal taxes than the
state received back in federal spending."

http://www.calinst.org/pubs/bop99.pdf



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post #38 of 62 (permalink) Old 02-04-2010, 04:55 PM
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The Governator could have sent California National Guard troops to the border with Mexico to guard the border, but he chose not to. Illegals are a mixed bag, IMO. On the one hand they suck resources out of health care and the school system. On the other people in CA can always have their cars washed, lawns tended, and homes remodelled for a relative pittance.

It makes everyone else using these (illegal) services look richer than they really are while depressing wages for the legal workforce.

Anyone that has used the services of illegal labor has some responsibility with respect to the current problems caused by them.

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post #39 of 62 (permalink) Old 02-04-2010, 10:18 PM
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The Governator could have sent California National Guard troops to the border with Mexico to guard the border, but he chose not to. Illegals are a mixed bag, IMO. On the one hand they suck resources out of health care and the school system. On the other people in CA can always have their cars washed, lawns tended, and homes remodelled for a relative pittance.

It makes everyone else using these (illegal) services look richer than they really are while depressing wages for the legal workforce.

Anyone that has used the services of illegal labor has some responsibility with respect to the current problems caused by them.
+!

Did you know that 1 out of 3 dollars spent in this country on welfare is spent in California? We need to wean people off the Govt. tit. There should be requirements for job training for benifits, as well as a lifetime cap. We also need to start charging Mexico for all it's sterling citizens that are locked up in our prison system (most recent count in Calif. is 15% of inmates are illegal aliens.)

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post #40 of 62 (permalink) Old 02-04-2010, 11:20 PM
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The Governator could have sent California National Guard troops to the border with Mexico to guard the border, but he chose not to. Illegals are a mixed bag, IMO. On the one hand they suck resources out of health care and the school system. On the other people in CA can always have their cars washed, lawns tended, and homes remodelled for a relative pittance.

It makes everyone else using these (illegal) services look richer than they really are while depressing wages for the legal workforce.

Anyone that has used the services of illegal labor has some responsibility with respect to the current problems caused by them.
Good points. Regarding your middle paragraph, not only does using illegals give you an economic advantage over law-abiding citizens, it also makes those same law-abiding citizens poorer relative to the ones who are employing illegals. Basically, it's crime. You're breaking a law to gain an unfair economic advantage. It's not a serious crime but it is a crime. But then so is smoking marijuana so I guess the natural thing to do is to do whatever the hell you want to. Screw 'em.
No, seriously, I'm 100% against sneaking into neighboring countries unless your life is threatened, like in war. Otherwise, it's just note right, no matter how broke you are. Wait your turn like everyone else no matter how long that may take.
Imagine if Mexico were like Haiti. There would be a constant stream of people coming from there - all those little babies gowing up to come to America. We don't need to make babies, all over the globe there's enough to meet our quota forever . When in the hell are we going to get around to mass sterilization? Start with the people in New Jersey and move south from there. Better make a detour to Utah though. And come west to Richmond and Oakland. Where's god when you need him? Or would that be satan?

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