by Tyler Durden
Via Mark J. Grant, author of Out of the Box,
“Always remember, your focus determines your reality.”
-George Lucas
Our reality has changed in the last twenty-four hours. The
Bank of England and the European Central Bank have re-affirmed their
old positions since the Fed has changed tacks. The initial reactions
will be a spike in equities and a fall-off in the valuations of the
Pound and the Euro to the Dollar. These, however, are first blush
reactions as the color fades from the bloom.
It may well be, as
Europe is in much worse financial condition than the United States, that
there is a policy reason for the European positions but it may well
also be a calculated move to devalue the major European currencies. Whatever the actual reasons, the European statements have certainly sounded the trumpet that the “Currency Wars” have reignited.
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Showing posts with label Germany. Show all posts
Showing posts with label Germany. Show all posts
Saturday, July 6, 2013
The Currency Wars Reignite
Etichette:
Bank of England,
central banks,
European Central Bank,
France,
Germany,
Ireland,
Italy,
Portugal,
real estate,
Reality
Sunday, June 30, 2013
Henry Smyth: Is this the Rothschild Moment for Gold?`
by rcwhalen.com
"Interest is the difference in the
valuation of present goods and future goods; it is the discount in the
valuation of future goods as against that of present goods."
Ludwig von Mises
“Planning for Freedom”
We’ve all been watching the selloff in the global gold market. Armies of chicken littles are in a frenzy due to suggestions that the Fed may be ending its quantitative easing, so I thought this is a good time to check in with my friend Henry Smyth of Granville Cooper Asset Management Ltd. (GCAM). Henry is a former Coutts & Co. banker and a very astute observer of the global financial markets. We spoke last week in New York. -- Chris
RCW: Henry, the gold market has been taking a beating in the past few months. What do you see as the drivers of the gold market today?
Etichette:
China,
fixed,
Germany,
Metals,
Precious,
Quantitative Easing,
Reserve Currency,
Volatility,
Zurich
Saturday, May 11, 2013
Is Mr. Buffett Right about not Holding Gold?
By: Julian D. W. Phillips, Gold/Silver Forecaster - Global Watch
Who is Warren Buffett? He's 'Yoda' of the financial world. He is a man brilliantly skilled at making profits with considerable expertise in the U.S. economy and its corporations.
Gold is, as he says, a dormant item pulled out of the ground and stored in vaults thereafter. It is not for 'just making profits because it is an entirely different animal to corporations. The big difference is that Buffett has been making money for around 70 years, whereas gold has been preserving wealth for around 5000 years. Buffett is mortal and coming to the end of his life, whereas gold is not. Mr Buffett's ability to make money is dependent on the continuation of a growing U.S. economy. More importantly it depends on his mortal skills as an investor. Gold is immortal.
Who is Warren Buffett? He's 'Yoda' of the financial world. He is a man brilliantly skilled at making profits with considerable expertise in the U.S. economy and its corporations.
Gold is, as he says, a dormant item pulled out of the ground and stored in vaults thereafter. It is not for 'just making profits because it is an entirely different animal to corporations. The big difference is that Buffett has been making money for around 70 years, whereas gold has been preserving wealth for around 5000 years. Buffett is mortal and coming to the end of his life, whereas gold is not. Mr Buffett's ability to make money is dependent on the continuation of a growing U.S. economy. More importantly it depends on his mortal skills as an investor. Gold is immortal.
Etichette:
Germany,
gold market,
gold reserve,
Investing,
Investing gold,
Investment,
U.S. economy,
Warren Buffett
Sunday, May 5, 2013
A. Gary Shilling - Six Realities In An Age Of Deleveraging
by Lance Roberts of Street Talk Live blog
In Part III of Lance's series of reports from the
10th annual Strategic Investment Conference, presented Altegris
Investments and John Mauldin, the question of how to invest during a
deleveraging cycle is addressed by A. Gary Shilling, Ph.D. Dr.
Shilling is the President of A. Gary Shilling & Co., an investment
manager, Forbes and Bloomberg columnist and author - Mr. Shilling's list
of credentials is long and impressive. His most recent book "The Age Of Deleveraging: Investment Strategies In A Slow Growth Economy" is a must read. Here are his views on what to watch out for and how to invest in our current economic cycle.
Six Fundamental Realities
- Private Sector Deleveraging And Government Policy Responses
- Rising Protectionism
- Grand Disconnect Between Markets And Economy
- Zeal For Yield
- End Of Export Driven Economies
- Equities Are Vulnerable
Private Sector Deleveraging And Government Policy Responses
Household deleveraging is far from over.
There is most likely at least 5 more years to go. However, it could be
longer given the magnitude of the debt bubble. The offset of the
household deleveraging has been the leveraging up of the Federal
government.
The flip side of household leverage is
the personal saving rates. The decline in the savings rate from the
1980’s to 2000 was a major boost to economic growth. That has now
changed as savings rate are now slowly increasing and acting as a drag
on growth.
However, American’s are not saving
voluntarily. American’s have been trained to spend as long as credit is
readily available. However, credit is no longer available. Furthermore,
there is an implicit mistrust of stocks which is a huge change from the
90’s when stocks were believed to be a source of wealth creation
limiting the need to save.
Etichette:
bear market,
debasement of yen,
Federal Reserve,
Germany,
Gross Domestic Product,
Japan,
Monetary Policy,
Quantitative Easing,
trade deficit,
Yen
Tuesday, April 30, 2013
Will the US dollar hyperinflate?
The hyperinflation of a currency is typically described as an event, as if one day everything is normal and then the next day hyperinflation is manifest throughout the economy. This description explains, for example, how the hyperinflations that destroyed the currencies in Germany in the 1920s, Serbia in the 1990s and Zimbabwe more recently are generally viewed.
Hyperinflations, however, are not spontaneous. They do not appear “out of the blue”. It is therefore more accurate to describe hyperinflation as a process. There are many steps taken on the road to hyperinflation that ultimately and eventually leads to the destruction of a currency.
Etichette:
1971,
Debt Ceiling,
Germany,
gold,
government,
hyperinflation,
Nixon,
Zimbabwe
Sunday, April 7, 2013
The Chess Game of Capital Controls
The best indicator of a chess player's form is his ability to sense the climax of the game.
–Boris Spassky, World Chess Champion, 1969-1972
Why would it want to physically move the metal from New York? It's not as if US vaults are not secure, and since Germany already owns the gold, does it really matter where it sits?
You may recall that Hugo Chávez did the same thing in late 2011, repatriating much of his country's gold reserves from London. However, this isn't a third-world dictatorship; Germany is a major ally of the US. So what's going on?
Etichette:
Bundesbank,
fiat currency,
Germany,
gold market,
Hugo Chávez,
Physical bullion gold,
US bankruptcy
Why Cyprus Matters (And The ECB Knows It)
by zerohedge.com
WHEN THE RED QUEEN IS AFTER YOUR HEAD
When Zig turns to Zag and the Red Queen is after your head then extraordinary care is necessitated. To quote Holmes, "The game is afoot" on the Continent.
I have been asked, with some frequency, why the bondholders have not been tagged in the Cyprus fiasco. That answer is simple. Most of Cyprus's bonds are pledged as collateral at the ECB or in the Target2 financing program. Then one may also ask why the bonds of the two large Cypriot banks are not being hit. The answer is the same; most are held as collateral at the ECB or Target2. In both cases, remember uncounted liabilities, the government of Cyprus has guaranteed the debt. Consequently if the two Cyprus banks default it is of small matter as the sovereign has guaranteed the debt. However if the country defaults and leaves the European Union then it will matter and matter significantly as the tiny country of Cyprus would wipe out the entire equity capital of the European Central Bank. While it is not a matter of public record it is estimated that Cyprus has guaranteed about $11.6 billion of collateral at the ECB.
WHEN THE RED QUEEN IS AFTER YOUR HEAD
When Zig turns to Zag and the Red Queen is after your head then extraordinary care is necessitated. To quote Holmes, "The game is afoot" on the Continent.
I have been asked, with some frequency, why the bondholders have not been tagged in the Cyprus fiasco. That answer is simple. Most of Cyprus's bonds are pledged as collateral at the ECB or in the Target2 financing program. Then one may also ask why the bonds of the two large Cypriot banks are not being hit. The answer is the same; most are held as collateral at the ECB or Target2. In both cases, remember uncounted liabilities, the government of Cyprus has guaranteed the debt. Consequently if the two Cyprus banks default it is of small matter as the sovereign has guaranteed the debt. However if the country defaults and leaves the European Union then it will matter and matter significantly as the tiny country of Cyprus would wipe out the entire equity capital of the European Central Bank. While it is not a matter of public record it is estimated that Cyprus has guaranteed about $11.6 billion of collateral at the ECB.
Friday, March 29, 2013
After Cyprus, Who Is Next?
by zerohedge.com
Short answer: we don't know.
We do, however, know something we have been pointing out since early 2012 - when it comes to the funding structure of European banks, there is a dramatic difference between the US and Europe. In the US, as we showed most recently two months ago, the Big Three depositor banks (JPM, Wells and Bank of America, excluding the still pseudo-nationalized Citi), have a record $858 billion in excess deposits over loans.
Short answer: we don't know.
We do, however, know something we have been pointing out since early 2012 - when it comes to the funding structure of European banks, there is a dramatic difference between the US and Europe. In the US, as we showed most recently two months ago, the Big Three depositor banks (JPM, Wells and Bank of America, excluding the still pseudo-nationalized Citi), have a record $858 billion in excess deposits over loans.
Etichette:
Bad Bank,
Bank of America,
Bond,
European Central Bank,
Germany,
LTRO,
Netherlands,
Shadow Banking
The Deeper Meanings of Cyprus
by oftwominds.com
The deposit-confiscation "bailout" of Cyprus reveals much about the Eurozone's fundamental neocolonial, neofeudal structure.
At long last, Europe's flimsy facades of State sovereignty, democracy and free-market capitalism have collapsed, and we see the real machinery laid bare: the Eurozone's political-financial Aristocracy will stripmine every nation's citizenry to preserve their power and protect the banks and bondholders from absorbing losses.
The deposit-confiscation "bailout" of Cyprus confirms the Eurozone's fundamental neocolonial, neofeudal structure and the region's political surrender to financialization.
The E.U., Neofeudalism and the Neocolonial-Financialization Model (May 24, 2012)
Let's list what Cyprus reveals about the true state of financial-political power in Europe:
1. The Core-Periphery terminology masks the real structure: the E.U. operates on a neocolonial model. In the old Colonialism 1.0 model, the colonizing power conquered or co-opted the Power Elites of the periphery regions, and proceeded to exploit the new colonies' resources and labor to enrich the Imperial core.
The deposit-confiscation "bailout" of Cyprus reveals much about the Eurozone's fundamental neocolonial, neofeudal structure.
At long last, Europe's flimsy facades of State sovereignty, democracy and free-market capitalism have collapsed, and we see the real machinery laid bare: the Eurozone's political-financial Aristocracy will stripmine every nation's citizenry to preserve their power and protect the banks and bondholders from absorbing losses.
The deposit-confiscation "bailout" of Cyprus confirms the Eurozone's fundamental neocolonial, neofeudal structure and the region's political surrender to financialization.
The E.U., Neofeudalism and the Neocolonial-Financialization Model (May 24, 2012)
Let's list what Cyprus reveals about the true state of financial-political power in Europe:
1. The Core-Periphery terminology masks the real structure: the E.U. operates on a neocolonial model. In the old Colonialism 1.0 model, the colonizing power conquered or co-opted the Power Elites of the periphery regions, and proceeded to exploit the new colonies' resources and labor to enrich the Imperial core.
Etichette:
Central Bank Eurozone,
Cipro,
collapse,
default,
European Central Bank,
Germany,
Leverage,
Neocolonialism
Tuesday, March 19, 2013
For Everyone Shocked By What Just Happened... And Why This Is Just The Beginning
Today, lots of people woke up in shock and horror to what happened in Cyprus: a forced capital reallocation mandated by political elites under the guise of an "equity investment" in insolvent banks, which is really code for a "coercive, mandatory wealth tax." If less concerned about political correctness, one could say that what just happened was daylight robbery from savers to banks and the status quo. These same people may be even more shocked to learn that today's Cypriot "resolution" is merely the first of many such coercive interventions into personal wealth, first in Europe, and then everywhere else.
Etichette:
crisis,
European Central Bank,
France,
Germany,
Global crises,
Greece,
IMF,
Italy
Germany And IMF's Initial Deposit Haircut Demand: 40% Of Total
by Tyler Durden
As the President of Cyprus proclaims to his people that "we' should all take responsibility as his historic decision will "lead to the permanent rescue of the economy," it appears that the settled-upon 9.9% haircut is a 'good deal' compared to the stunning 40% of total deposits that Germany's FinMin Schaeuble and the IMF demanded. This action, his statement notes, enables the rescue of 8,000 banking sector jobs and ensuring the liquidity of the banks, "allowing the economy to proceed decisively to a new beginning." Ekathimerini reports," this is the first time in the eurozone that a levy has been imposed not on the interest of bank accounts but on the capital itself," and was the only way to bridge most of the the gap between the EUR17bn Nicosia needed and the EUR10bn the ESM was offering, though tax on interest in Cypriot banks will also rise to 20-25%. It is the 40% haircut requirement that concerns us the most as clearly going forward that means other nations, starting Monday (or Tuesday given national holidays) see deposit outflows surge, as the willingness to take such steps is now painfully clear.
As the President of Cyprus proclaims to his people that "we' should all take responsibility as his historic decision will "lead to the permanent rescue of the economy," it appears that the settled-upon 9.9% haircut is a 'good deal' compared to the stunning 40% of total deposits that Germany's FinMin Schaeuble and the IMF demanded. This action, his statement notes, enables the rescue of 8,000 banking sector jobs and ensuring the liquidity of the banks, "allowing the economy to proceed decisively to a new beginning." Ekathimerini reports," this is the first time in the eurozone that a levy has been imposed not on the interest of bank accounts but on the capital itself," and was the only way to bridge most of the the gap between the EUR17bn Nicosia needed and the EUR10bn the ESM was offering, though tax on interest in Cypriot banks will also rise to 20-25%. It is the 40% haircut requirement that concerns us the most as clearly going forward that means other nations, starting Monday (or Tuesday given national holidays) see deposit outflows surge, as the willingness to take such steps is now painfully clear.
Etichette:
Cipro,
default,
European Central Bank,
Germany,
Greece,
IMF,
Italy,
recession,
recovery,
Unemployment
Friday, March 15, 2013
Fed Injects Record $100 Billion Cash Into Foreign Banks Operating In The US In Past Week
Source: H.8
Those who have been following our exclusive series of the Fed's direct bailout of European banks (here, here, here and here), and, indirectly of Europe, will not be surprised at all to learn that in the week ended February 27, or the week in which Europe went into a however brief tailspin following the shocking defeat of Bersani in the Italian elections, and an even more shocking victory by Berlusconi and Grillo, leading to a political vacuum and a hung parliament, the Fed injected a record $99 billion of excess reserves into foreign banks. As the most recent H.8 statement makes very clear, soared from $836 billion to a near-record $936 billion, or a $99.3 billion reserve "reallocation" in the form of cash - very, very fungible cash - into foreign (read European) banks in one week.
Those who have been following our exclusive series of the Fed's direct bailout of European banks (here, here, here and here), and, indirectly of Europe, will not be surprised at all to learn that in the week ended February 27, or the week in which Europe went into a however brief tailspin following the shocking defeat of Bersani in the Italian elections, and an even more shocking victory by Berlusconi and Grillo, leading to a political vacuum and a hung parliament, the Fed injected a record $99 billion of excess reserves into foreign banks. As the most recent H.8 statement makes very clear, soared from $836 billion to a near-record $936 billion, or a $99.3 billion reserve "reallocation" in the form of cash - very, very fungible cash - into foreign (read European) banks in one week.
Etichette:
Bond,
European Central Bank,
FED,
Federal Reserve,
Germany,
Italy,
Shadow Banking,
Sovereign Risk
Thursday, February 14, 2013
Europe: The Last Great Potemkin Village Where "The Rich Get Richer, And Poor Get Poorer"
From Charles Gave of GKResearch
On the surface, it would seem that the euro crisis has calmed. Markets have rallied since the summer and, to borrow a phrase from Herbert Hoover, “prosperity is just around the corner.” But outward appearances in Europe are like a Potemkin village. Behind the well-scrubbed facades, Southern Europe is in a death spiral. Anyone convinced that the European monetary union has come through the crisis stronger is a victim of the slickest PR campaign in history.
...
Let’s be very clear here: this is what the euro has wrought. This destruction of the non-German industrial bases has taken place with the active complicity of the European technocrats. They did not even realize that France, the EMU’s second largest economy, for example was becoming hopelessly uncompetitive.
Let's go one step further. According to the official GDP statistics the French economy since the beginning of the euro experiment has done as well as the German economy:
On the surface, it would seem that the euro crisis has calmed. Markets have rallied since the summer and, to borrow a phrase from Herbert Hoover, “prosperity is just around the corner.” But outward appearances in Europe are like a Potemkin village. Behind the well-scrubbed facades, Southern Europe is in a death spiral. Anyone convinced that the European monetary union has come through the crisis stronger is a victim of the slickest PR campaign in history.
...
Let’s be very clear here: this is what the euro has wrought. This destruction of the non-German industrial bases has taken place with the active complicity of the European technocrats. They did not even realize that France, the EMU’s second largest economy, for example was becoming hopelessly uncompetitive.
Let's go one step further. According to the official GDP statistics the French economy since the beginning of the euro experiment has done as well as the German economy:
Etichette:
Borrowing Costs,
Central Bank,
Eastern Europe,
ETC,
European,
fixed,
France,
Germany,
Greece,
Gross Domestic Product,
Italy
Monday, February 11, 2013
Lessons From The 1930s Currency Wars
by Tyler Durden
With Abe picking his new dovish playmate, and Draghi doing his best to jawbone the EUR down without actually saying anything, it is becoming very clear that no matter what level of bullshit histrionics is used by the politicians and bankers in public, the currency wars have begun to gather pace. Japan's more open aggressive policy intervention is the game-changer (and increasingly fascinating how they will talk around it at the upcoming G-20), as if a weaker JPY is an important pillar of the strategy to make this export-oriented economy more competitive again, it brings into the picture something that was missing from earlier interactions among central banks of the advanced economies – competitive depreciation. The last time the world saw a fully fledged currency war was in the early 1930s. Morgan Stanley's Joachim Fels looks at what it was like and what lessons can be drawn for the sequence of events - there are definite winners and losers and a clear first-mover advantage.
Via Morgan Stanley, Back to the 1930s? What Would a Currency War Look Like?
What did the currency war of the 1930s look like?
The backdrop for the currency war of the 1930s was the Gold Standard and the Great Depression (many economists blame the former for the latter). By fixing the value of the currency to the price of gold, the Gold Standard prevented a country from printing too much money. If it did, people would simply exchange it for gold (or for other currencies pegged to gold).
With Abe picking his new dovish playmate, and Draghi doing his best to jawbone the EUR down without actually saying anything, it is becoming very clear that no matter what level of bullshit histrionics is used by the politicians and bankers in public, the currency wars have begun to gather pace. Japan's more open aggressive policy intervention is the game-changer (and increasingly fascinating how they will talk around it at the upcoming G-20), as if a weaker JPY is an important pillar of the strategy to make this export-oriented economy more competitive again, it brings into the picture something that was missing from earlier interactions among central banks of the advanced economies – competitive depreciation. The last time the world saw a fully fledged currency war was in the early 1930s. Morgan Stanley's Joachim Fels looks at what it was like and what lessons can be drawn for the sequence of events - there are definite winners and losers and a clear first-mover advantage.
Via Morgan Stanley, Back to the 1930s? What Would a Currency War Look Like?
What did the currency war of the 1930s look like?
The backdrop for the currency war of the 1930s was the Gold Standard and the Great Depression (many economists blame the former for the latter). By fixing the value of the currency to the price of gold, the Gold Standard prevented a country from printing too much money. If it did, people would simply exchange it for gold (or for other currencies pegged to gold).
Etichette:
central banks,
China,
Debt Ceiling European Central Bank,
France,
Germany,
great depression,
Japan,
Market Share,
Mexico Morgan Stanley,
Norway,
Unemployment,
United Kingdom,
Yen
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