GUEST POST - Silver Producers Enter Profitable Phase

Wednesday, June 29, 2011

--- by Sean Rakhimov ---
Over the past nine months or so silver has finally garnered the attention it deserves in the financial headlines after virtually tripling in price in that period and challenging its all-time high of US$50/ounce, well in time for it to be helpful to those paying attention.

Live Video From Athens' Syntagma Square

A live video feed from the protest in Athens' Syntagma Square. Greek workers have called for a 48-hour general strike, opposing the austerity measures that are a pre-condition for the Greek bailout, currently estimated at €138 billion.
UPDATE: The livestream went offline. This is a video from last night in Athens.

Austria's Green Party In Position to Kill the Greek Bailout Package

Friday, June 24, 2011

While EU leaders look forward to a multitude of emergency meetings until July 20, when Greece has to pay back a government bond with a volume of €6.6 billion, the fate of Greece's bailout may ultimately lie in the hands of the Green party in the dwarf nation Austria.
Austria's Green Party sent an open (German language) letter to the country's chancellor Werner Faymann on Thursday, threatening to boycott a vote in the Austrian parliament where a 2/3 majority is needed for a change of the constitution that would allow Austria to participate in the €138 billion bailout package for the Hellenic peninsula. As a Euro member Austria has the obligation to take part in the bailout that is hugely unpopular with voters/taxpayers.
The Greens got 9.8% of the votes in Austria's latest elections, making them the 4th biggest party in the five party Austrian parliament.
In their German language letter published on the party's website the Greens demand 2 key adaptions of the bailout package from Austria's socialdemocrat-conservative coalition government. The letter is signed by Chairwoman Eva Glawischnigg, budget speaker Werner Kogler and foreign policy speaker Alexander van der Bellen.
  • Firstly the Greens demand an obligatory inclusion of private creditors (that's the banks) and the regulatory introduction of an orderly default mode for bankrupt Euro members that shall be part of the final version of the legislature of the moneyless €750 billion European Stability Mechanism (ESM) that shall come to life in 2013 when the current European Financial Stability Facility (EFSF) will end. The greens explicitly noted that chancellor Faymann should inform the other Euro governments of their intention to block a constitutional change for the ESM if such measures are not taken.
This initiative finds my full support as it is clearly written on the wall that the Eurozone will see more defaults than Greece only. This was also indicated by Dutch central bank governor Nout Wellink last week. He proposed to double the ESM to an almost unimaginable €1.5 Trillion. This sum may still not be enough as Greek debt currently stands somewhere between €310 billion and €467 billion.
Europe needs a clear framework for such events that are historically much more frequent than politicians want to admit. In the last 2 centuries almost every European country has defaulted at least once. It was a major political blunder in the creation of the Euro not to include rules for those who turn out to be too weak for the Euro.
  • Secondly the Greens would support the issuance of Eurobonds by the European Central Bank (ECB) as proposed by outgoing ECB President Jean-Claude Trichet, arguing that this would strengthen European solidarity and could also help preventing another attack of speculators on bonds of single countries.

UPDATED - ECB Website Went Down

Thursday, June 23, 2011

Die the European Central Bank (ECB) get hacked?
The website of the ECB at has been offline for more than an hour as of 14:20 GMT.
H/T to Austrian Tweeter @grasbueschel who was the first to note this event.
UPDATE: The ECB website went online again at 15:55 GMT

Total Exposure of Europe Towards Greece Stands at €310 Billion (Or €467 Billion?)

Greece, the heat is definitely on. According to this table (h/t @ZH_CB) based on official data and OpenEurope estimates Greece owes a tad more than €310 billion to its European bank creditors.
Total EU (EMU + non EMU) exposure to GRE  on Twitpic
Click image for better resolution
When checking single country data, the biggest conspicuousness is the exposure of French and German banks coming in at €165 billion or more than half of the total exposure and this again is much more than admitted by the European Commission last November, which put German bank exposure with €28 billion at hardly two Fifths of the sum stated now.
This again raises the questions if we are told 99% lies or is it even 100%.

FWIW: The Fed's Key Indicator Forecasts for 2011 - 2013

The Federal Reserve has had a dismal record with its projections of key indicators in the past decade. As the Fed has expressed a clear bias towards optimism, only to revise everything to the downside, I would take the latest forecast with no less than at least 2 grains of salt.
This time is no different. The Federal Reserve Board and the presidents of the local Fed banks has reduced its forecasts mostly to the downside
Click for fullscreen mode in order to read the Fed's very optimistic forecast that now projects only 2.7% to 2.9% GDP growth in 2011 after an April set of data that had seen GDP growth markedly higher at 3.1% to 3.3%. Inflation is expected to remain below 2% but we all know that the Consumer Price Index (CPI) has rather become a Cheap Political Instrument that is manipulated by hedonic changes according to the whim of TPTB in the past 2 decades.
Make sure to check out the graphical display of the Fed's forecasts on page 2 of the document displayed below.
Fed key indicator forecasts 2011-2013
Click to enlarge
The Fed itself, mandated to keep inflation low and employment high, meanwhile takes itself out of the game. Fed Chairman Ben Bernanke said in the second press conference ever after a FOMC meeting that he expects to stand on the sideline for at least another 2 to 3 meetings, keeping the Fed Funds rate unchanged at between 0% and 0.25%.

British MEP Blasts EU For Greek Bailout, Says It Will Lead to 3rd Bailout

Wednesday, June 22, 2011

Nigel Farage, Member of the Europen Parliament (MEP), lambasted the European Parliament (EP) on Wednesday, saying that the planned EU growth package puts Greece on the straight road for another bailout.

Farage also reminded Greek MEP Niki Tzavela that Britain left the European Exchange Rate Mechanism (ERM) in 1992, after it was forced to raise interest rates to the double level of Germany then. This had cost the UK one million jobs.
Nigel Farage is the only knowledgeable MEP who understands that the EFSF and ERM will not work as described here 20.10.2010 - The Day The EU Started Dying and here "The ESM Will Be Just Another Failed Attempt Of Fighting Debt With Debt".

Debtocracy - The Movie

Tuesday, June 21, 2011

Watch this video! For the first time in Greece a documentary has been produced by the audience. “Debtocracy” seeks the causes of the debt crisis and proposes solutions, hidden by the government and the dominant media. It has become an instant hit with more than one million views on various platforms since it was published.
The movie has been online since a month and delivers both a timeline of the Greek debt crisis plus statements from discontent Greeks who criticize the prevailing neoliberal policies that grounded the roots if Greece's fiscal disaster by uninhibited deficit spending. It has to be noted that the decision to accept Greece as a Euro member had been inofficially taken long before Greece joined the Euro on June 19, 2000 as the first new Euro member after the initial 14 countries and special zones like the Vatican had adopted the currency on December 31, 1998. As it now comes to light, EU officials and central bankers had discarded all warning signs in their political drive to spread the common currency across the continent and were well aware that Greece had cooked its economic statistics books.

Was Greek Finance Minister Fired Because of a Slip of Tongue?

Friday, June 17, 2011

Faced with a debt crisis that will finally see no other cure than a Greek default Premier Georges Papandreou has reshuffled his cabinet on Friday, replacing Finance Minister George Papaconstantinou with Evengelos Venizelos, who held the post of Defence Minister until now.
According to Bloomberg G-Pap fired his finance minister in orer to quell a rebellion amongts his own party ranks.
But there may me more to the story. On Wednesday ran an alert saying "PAPACONSTANTINOU: GREECE CAN'T ACCESS MARKETS"
This alert, where Papaconstantinou effectively conceded Greece's default, was never followed by a backup story and was never seen on any other newswire.
It may have been exactly this slip of tongue sending Greek yields somewhere close to the moon. 30% yields are certainly designed to shut out Greece from capital markets. Or could you afford that?
The theory gets a little more weight from 2 contradictory statements from Berlin on Wednesday morning. First Berlin called for a delay of negotiations until September and only a few minutes later the German government came out saying that Greece could expect emergency help at any time.

Video Proof That the Euro Has Not Worked for Greece

Wednesday, June 15, 2011

If anyone still needs proof that the Euro is no good concept for Europeans, but just another fiat money-Ponzi ending in foreseeable massive devaluation, check out this bird view of protests in the Greek capital Athens. Greek CDS spreads rocketed an unprecedented 170 basis points to a record 1,760 bp and we can comfortably rule out any contribution from the tourism industry this year
Prime Minister Georges Papandreou has offered his resignation on Wednesday. This may bring a new face, but do nothing to resolve the Greek Euro disaster.

VIDEO: More than 40,000 protesters spread violence in Athens as the government wants to save €30 billion in the next 3 years, employing radical austerity measures dictated by creditors and the IMF.
Only one thing changed in deadlocked negotiations in the past 2 weeks. Estimates for the needed package shot up 50% to €120 billion, after a €100 billion package arranged in 2010. When guesstimates arrive at such wide ranges I doubt that we are yet at the end of that deficit road.

A First In History: The Coming Simultaneous European Banking Collapse

Sunday, June 05, 2011

Watching international financial policy persisting on a concept to fight debt with more debt in an environment where official GDP growth rates only remain positive because of ridiculously low deflators, while interest rates apart from those central bank help for banks via laughingly low interest rates begin to surge everywhere else, this observer begins to wonder if one can expect anything else than a fast-rolling, simultaneous European banking collapse.
Engulfed in more exponentially rising debt on public and private levels than ever before there simply cannot be another end of the longest growth cycle in history than a simultaneous collapse of international banking when lending freezes up due to fears about the real creditworthiness of the respective counter party.
Globalization will have made it possible.
Bank Reserve Requirements: EU 2% - China 21%
The rise of supra-regional financial institutions that have evolved from two decades of radical deregulation of financial markets and are now too big to fail overshadows all major industrial nations as it has given birth to unprecedented bulks risks never seen before. The situation gets aggravated by the fact that banks have never held more derivatives than nowadays.

Wikinvest Wire