Hey, remember Greece & it's massive bankruptcy issue? What happened with that? Who bought them?

thanks!

OK. so here is something funny.  Krugman was all happy that the blue line and red line are not affecting each other.

Normal people will ask,.... so what does it all mean? Obviously the blue and red line doesn't do anything to each other. But it's so big. (ie. there is something deeply wrong with money supply and inflation model! It's like finding out your fuel gouge has nothing to do with how far your car can go with left over gas in tank.  something is is mess up in a big way.)



Instead Krugman is celebrating the fact that, the fuel gouge hasn't gone anywhere despite having revved up the engine for good week.



nobody stops and ask, hey, wait a minute, that is crazy sums of money like never before. Where does it all go? it definitely going to blow up soon.



don't become an economist kid. You'll be the laughing stock on the street after the revolution when all that gigantic blue line smashing back into US shore from asia.  







http://krugman.blogs.nytimes.com/2010/12/19/paleomonetarism/

60 Minutes Segment On The States' "Day Of Reckoning"

Says Meredith Whitney: This is the other big crisis besides housing, and the scariest part, she says, is the level of complacency.

Also featured is Chris Christie: "The day of reckoning has arrived."

The focus on the budget problems facing Illinois, which has had to delay payments to all kinds of parties, is definitely worth watching.

As for specifics, Whitney predicts a "spate" meaning 50 or more defaults needed, and suspects the big test will come when bonds need to be rolled over in the spring.

http://www.businessinsider.com/60-minutes-on-state-budgets-2010-12 

 Having written so much about what's wrong with our current economic/financial/political system, what specific actions do you think need to be undertaken to fix things? Is an all-out collapse avoidable?

This is a question that we ask ourselves every day, and no matter how we spin it, we fail to see how an unwind to a previous “restore point” to borrow a computer analogy, is possible at this very late stage in the global Ponzi scheme. We tend to simplify the world: When everything else is stripped, the only two things that matter are a) where is the money coming from? and b) where is it going? And never in the history of the world have so many assets created so little cash flow. To a big extent, this is due to the fact that a bulk of asset purchases in the past three decades have been due not to asset turnover, but as a result of cheap credit resulting from an explosion of credit money through the quadrillion dollar derivative boom. As a result, most incremental dollars go not to organic business growth and economic output, but to satisfying what has become the biggest debt burden in the history of the world, whereby the labor and intellectual output of most goes to fund the living standards of a very few.

Indicatively, when looking at total exchange and OTC traded derivatives, which eventually are converted into some form of credit money, the total tally at last check is just over $1.3 quadrillion. This is about 20 times the total economic output in the world each year. It becomes very clear why the current status quo is unsustainable absent a major global corporate and sovereign liability restructuring: In the bankruptcy business, this process is known as “growing into your balance sheet.” Yet the main reason why the kleptocratic elite has been so opposed to this act is because no debt impairment is possible without eliminating the equity tranche below it. And in an ironic twist in which the Fed supports both the debt and equity markets, there is now about $13 trillion in equity capitalization in the US, which is backed by debt that for all intents and purposes needs to be impaired.

As a result, unless stakeholders in the liabilities of corporate America realize that the assets that collateralize these liabilities are woefully insufficient and come to a compromise in which either they alone or in combination with the creditors come to a consensual “restructuring” of the underlying claims, there is no other possible outcome than a free-fall bankruptcy. However, this will not be some Chapter 7 filed in the bankruptcy court of Southern District of New York. This will be the end of the current financial system. This is also what some consider a "deflationary death spiral." And yes, no matter how much paper the Fed prints, this outcome is inevitable: All the Fed does through money printing is dilute the claims on both sides of the ledger. The best the Fed could then hope for to counteract the deflationary outcome is to generate hyperinflation through a collapse in the reserve currency (i.e., the Zimbabwe outcome). And since this is far more palatable to the Fed, we believe that one way or another, whether by fire or ice (to paraphrase Robert Frost), the existing, very unstable financial system will reach a point when the global systematic reset is inevitable.

http://www.businessinsider.com/zero-hedges-tyler-durden-the-us-is-free-falling-into-bankruptcy-2010-12

Cargo stagnation



We have understood that Chinese cargo ships have been told to proceed at 'wind speed', because of a collapse in US import demand - this is partly visible in the activity amongst Long Beaches shoremen - hence, is this the final proof that the inventory rebuild that drove the recovery in the autumn is OVER? Figure 1 shows the average speed amongst bulk carriers! Bulls - Watch Out!

 

http://www.zerohedge.com/article/nordeas-chart-week-collapsing-us-import-demand

.

http://www.silver-bullion.info/Silver_bullion_prices

Should've invested in cotton when I had the chance. What's killing me now could've made me rich!

Posted by: TsuruShould've invested in cotton when I had the chance. What's killing me now could've made me rich!

 

you can't. Only select few can enter the market and throw in money. It's a highly controlled arena. Also, you think you can just enter a bank and buy a gold bullion or silver even if you have the money? Go see around and check what it takes if you want to buy actual gold  more than few worthless coins or some fraudulant letter of ownership of gold in an undisclosed location. Say you want to buy 5 kilos of gold and have it delivered to your living room. Think about it. So much for free market right?  (and that's just a very modest amount)



That's why you are just a peasant and don't get fat from easy speculative bet.  The best you can do is not be in the middle of stampeding elephants when the chaos come. 



You work hard all your life and prepare for your retirement and kids? Inflation and worthless bond will starve you first. It's going to be big  vietnam era stagflation for prolonged period of time due to US energy cost, capital structure and changing international trade pattern. This is the part you go back to history book and find the most reliable banker in the planet that can hold value over centuries. Those who manages money during revolutions, world wars, massive social transitions, corrupt government collapsing, etc. NY bankers, ain't it. They won't have a clue what's going on when the chaos come. They are the stampeding elephants.



Just remember, you are suppose to be the sheeplees who get slaughtered and pay for all the mess when the dust settled. (even then you still won't know what hits you.)

It's a small amount of coin. Your grandpa or grandma buys it for grandchildren present or something...



kilos man, kilograms of gold. 5, 10, 20's. (you know, macau or dubai style shop.) You go in, drop few hundred Ks and get few pieces of bullions. no question asked.

The Organization of Petroleum Exporting Countries (OPEC) will reduce supplies this month by the most since August as demand for winter fuels in the northern hemisphere passes its peak, according to tanker tracker Oil Movements.

Shipments will drop 1.3 percent to 23.6m barrels a day in the four weeks to January 22 from 23.91m barrels in the period to December 25, Oil Movements said on Thursday in a report. It is the biggest decline since a 1.8 percent fall during the four weeks to August 28. The data exclude Ecuador and Angola.



Exports from Middle Eastern producers, including those from non-OPEC members Oman and Yemen, will decrease by 1.6 percent to 17.55m barrels a day, data from Oil Movements show.



OPEC will skip its traditional first-quarter gathering and have its first meeting of the year in June. Kuwaiti oil minister Sheikh Ahmad al Abdullah al Sabah said on January 5 that oil prices between $80 and $100 a barrel are fair. The commodity traded around $90 a barrel in New York on Thursday.



http://www.tehrantimes.com/Index_view.asp?code=233768

Holy spicy food. Things are going medieval very quickly. Imagine if central banks stop accepting dollar and only want gold (Vietnam era dollar collapse was when UK and france decided to stop accepting dollar and demand gold. )



I don't think Obama knows what he is about to do. (eg. he is hastening the collapse of dollar confidence by forcing people to find alternate mean of payment. Once alternate exist, why bother with worthless dollar?. We are talking about India here. huge economy that can exist outside of dollar economy.)



http://www.zerohedge.com/article/india-offers-pay-iran-oil-gold



It appears that gold isn't really a currency... until it is. The Economic Times reports that India is attempting to ensure steady crude oil supplies from Iran. In doing so it is doing everything it can to pay Iran in a way that avoid loopholes associated with recent US sanctions. And the stunner: "India could settle crude oil import transaction using gold in the short term, while efforts to resolve the deadlock continue." But does Iran realize they can't possibly eat all that gold? Or that The Fed has no way of diluting to oblivion? Or that, unlike the dollar, it is currently not involved in a global race to bottom in which every central bank will have no choice but to print ever more of its linen-infused currencies? Something tells us that the answer to all three is yes.



http://www.ibtimes.com/articles/99316/20110110/india-may-use-gold-to-settle-oil-trades-with-iran-et.htm

This move is possibly due to pressures from the U.S. to further sanction Iran economically because of Teheran's alleged pursuit of a nuclear weapons program.

According to Reuters, oil sales will still run between the two countries until the end of January.  After that, the trade of 400,000 barrels per day may stop unless India finds an alternative to ACU.

This ongoing dispute has generated some interest because it highlights the continual cat-and-mouse-game being played by the U.S., the 'rogue nations' it is trying to pressure economically, and the third-party countries trying to walk a fine line between maintaining their crucial economic relationships with these 'rogue nations' and not angering the U.S.

Furthermore, the gold comment garnered some attention because the denomination of the crude oil trade in the U.S. dollar is an important reason that the dollar has maintained its global reserve currency status. 

Silver Demand Surges 6 Fold in India and World's Richest Man Enters the Silver Market

http://www.ibtimes.com/articles/99182/20110110/gold-silver-platinum-palladium-rhodium-precious-metals.htm

this is hilarious. Hey New York. what's your plan?

Virginia Creates Subcommittee To Study Monetary Alternatives In Case Of Terminal Fed "Breakdown", Considers Gold As Option

In what may one day be heralded as the formal proposal that proverbially started it all, the Commonwealth of Virginia introduced House Resolution No. 557 to establish a joint subcommittee to "to study whether the Commonwealth should adopt a currency to serve as an alternative to the currency distributed by the Federal Reserve System in the event of a major  breakdown of the Federal Reserve System." In other words, Virginia will study the fallback plan of a "timely adoption of an alternative sound currency that the Commonwealth's government and citizens may employ without delay in the event of the destruction of the Federal Reserve System's currency" and avoid or "at least mitigate many of the economic, social, and political shocks to be expected to arise from hyperinflation, depression, or other economic calamity related to the breakdown of the Federal Reserve System." Most importantly as pertain to the currency in question, "Americans may employ whatever currency they choose to stipulate as the medium for payment of their private debts, including gold or silver, or both, to the exclusion of a currency not redeemable in gold or silver that Congress may have designated 'legal tender'." Whether this resolution will ever get off the ground, and actually find that the world is at great risk should gold not be instituted as a backstop currency, is irrelevant. The mere fact that it is out there, should provide sufficient impetus to other states to consider the ultimate Plan B.



http://www.zerohedge.com/article/virginia-creates-subcommittee-study-monetary-alternatives-case-terminal-fed-breakdown-consid

To wit: "In 2010, the BLS reports that the economy added 1.12 million jobs.  Almost 60% of these jobs are in one of three relatively low-paying areas—temporary employment (308,000), leisure & hospitality (240,000), and retail trade (116,000)." In other words, of the 1.1 million private jobs gained in the last year, 650,000 or 60% are jobs that have absolutely no real wealth creation capacity, nor do they provide any real benefits. In fact, the retail jobs are becoming increasingly distressed, as more Americans shop online, leading to a job pickup... in Chinese warehousing and QC plants, and the irretrievable loss of even the lowest paying US jobs.



http://www.zerohedge.com/article/how-fed-spent-2-trillion-and-exchange-we-got-650000-temp-leisure-and-retail-jobs

How The Fed Spent $2 Trillion And In Exchange We Got 650,000 Temp, Leisure And Retail "Jobs"

That question was interesting in late 2006, but by early 2010, it's quite obvious US-china economy have decoupled. China 2010 growth was 10%. in other word, while US economy was collapsing 1% (20-30% of china export), china total growth is unchanged. Few months of dip, but year over year they didn't blink. Don't know about India and brazil number, but my sense they also decoupled. (They can consumed their own walmart crap just as good it seems.)



The way I see it, next china move would be expanding yuan swap and buy out european debt to maintain dollar peg. It's simly another way to recycle unwanted dollar albeit longer and less efficient. China's new wealth created by their growth size is about 5 times larger than US. So they can afford playing this game. this is the part those overpaid hacks in DC can't seem to grasp, that there are bigger economic force at play out there that modern post war US economy never experience. World energy and capital cost are not in DC control anymore. (try as Obama may, he can't create 99c/gal condition to truly repeat Clinton era recovery. Top down cash pumping economy doesn't work. It only creates massive commodity speculation and stupid bubbles like apple and facebook.  So now, you have to watch those stupid craps  pop, like y2K tech bubble and Bush era housing bubble.)



facebook and apple bubble are the size of medium european country GDP by now. Anybody actually believe, that P.O.S facebook is bigger than sweden economy? That place is just filled with screaming teens!  seriously now... talking about AOL era bubble. It's going to be yet another spectacular explosion when the speculative scam is exposed.



so put your money in a bunker, and pull out the lawn chair to watch the firework when it explodes. Go make movies or something.   the social network sequel.

Depends what you mean by "middle class" & third world, if it means income tax brackets in the past 50-60 years. yes it exists and will continue to exist.  But if you mean by a part of stratification of stable social structure. It's a lot harder to say, and I don't think post war definition will work much longer. looking at small area over 4-5 generations, Is being "middle class" in collapsing detroit after 30 years of manufacturing boom the same as being a well to do farmer during imperial thai from 12th to 16th century?



one livelihood structure last about 40 years and end with urban decay, the other 400 years.



Below is GDP sketch over 5 centuries. If you stretch it back over few more centuries, china is the top players in 8 out of 10 centuries. Peaking around 16th century. They've been around the block through the up and down of history, including being imperial power ruling half the globe and under occupation for 200 years. They know their place in history.



If you look at United states position. it's only been through birth expansion up until WWI, then achieve peak of 40% of world GDP after WWII western europe collapse just before entering vietnam war.  (What I am trying to say, the people in DC is a little like small town champ about to enter national competition for the first time. While the other entrants are returning repeat national winners.) By 2050, the next strip in diagram, the projected red part will be twice the size of US, provided the country is still united.



United states has never been in a situation where it has to fight an equal, let alone bigger economic power due to geographical location. (war of independence is the closest, with little sporadic skirmish here and there with declining spain in peripheries.) Japan was 1/3 US size, Germany was 1/5. And that was with rest of europe.



Being a middle class? Everything can turn into shit in the blink of an eye when the number doesn't add up. It means nothing. (Modern example: Astro-hungary, Weimar, Argentina, Soviet. etc...) The number will only get worst. You'll be a middle class with $1Billlon dollar income, enough to buy a loaf of bread. (with an iPad of course)







http://www.visualizingeconomics.com/2008/01/20/share-of-world-gdp/

I never believe for a single second that at current technology, people should go poor, unemployed, not having enough, be in pain, etc...



simple example. look around technology when you grew up. (VCR, Television unit, radio, cd player, computer, video game, telephone, camera, etc.) all these are very expensive items, a lot of man hours going into making it, and a kid certainly can't afford owning all of them. It ill take a hard working family a long time accumulating all those.



Now, grab an iPhone. A single device, that will soon be pretty much distributed for free.  You can do all the activity above and more...!



Take any basic life activities. Food production, energy production, most of household goods. Almost all scarcity is artificial. In almost all industrial sector there is an over production, while new technology is waiting to make current supply useless. More of everything.



Remember how I get loud about LP was like collecting bubble gum wrapper... It doesn't make sense?

Why is it there is homeless people next to decaying urban area full of empty houses? I thought they say the invisible hand of market will solve supply and demand imbalance?



News Flash: it ain't so.



You want to go off grid, driving simple electric car, going high tech nomad, build your own wireless network. Get the fuck out. Who is going to pay telco and utility industry lobbyists?



 

Brent reached $98.80, its highest level since April 2009, before trimming gains to close up 51 cents at $98.12.

The rise came after two Norwegian oil fields had to close on Tuesday due to a gas leak. Both have since reopened.

Alaskan oil production also continued to be hit by a pipeline leak. US light crude rose 75 cents at $91.86.

http://www.bbc.co.uk/news/business-12176898

 

 

Russia may raise its export duty on most crude shipments by as much as 9.1 percent on Feb. 1 after Urals prices climbed.

The standard tax rate will probably be in the range of $344.80 to $346.30 a metric ton from $317.50 a ton last month, according to Bloomberg calculations based on Finance Ministry data. The discounted rate on oil pumped via Russia’s East Siberian-Pacific Ocean pipeline to Asia and from the Caspian Sea may reach between $136.40 and $137.40, from $117.50 a ton.

http://www.bloomberg.com/news/2011-01-12/russia-may-raise-oil-export-tax-9-1-in-february-on-urals-price.html

 

(everybody is playing "Payback is a bitch.")

ffs, Before he is done yapping, entire europe will be recovering, paying down debt and fixing its debt while he still has no clue what to do with US economy. Another round of Quantitative Easing sir? You FAIL, therefore shut up. stop giving advice.



Goldman wanna short PIIGS bond? Better get ready to bail them out, cause they are betting against the biggest player in the planet.



http://www.businessinsider.com/paul-krugman-eurozone-2011-1

Where are we going next, four possible outcomes:

• Eurozone members could choose the path of internal devaluation, but this will lead to high levels of unemployment (current course).

• Members could restructure their debts; markets already assume Ireland and Greece will; if such an outcome was to occur in Belgium and Italy, the impact would be massive.

------------------------



Iceland has signed a currency swap deal worth over $500 million with China, Financial Times reports. Under the three-year agreement, Iceland can pay for Chinese imports in its own currency, the kronur.



http://www.emii.com/Articles/2592908/Derivatives/Top-Stories/Iceland-China-Sign-500M-Currency-Swap.aspx



Iceland’s economic rehabilitation and credit default swaps back at pre-crisis levels are proof the island’s debt is a safe investment as it prepares to tap capital markets, Finance Minister Steingrimur J. Sigfusson said.



http://www.bloomberg.com/news/2011-01-12/iceland-default-swaps-show-investors-debt-safe-sigfusson-says.html

43% increase in turnover of Piraeus port after privatization

http://www.grreporter.info/en/43_increase_turnover_piraeus_port_after_privatization/2825

 



Cosco has signed a 35-year lease and will spend US$707 million to upgrade port facilities, build a new pier and almost triple the volume of cargo the port can handle, reported China Daily.



http://www.dredgingtoday.com/2010/07/15/greece-cosco-will-spend-us707-million-to-upgrade-piraeus-port-facilities/



China and Spain will ink 7.5 billion U.S. dollars' worth of governmental agreements and commercial contracts, visiting Chinese Vice Premier Li Keqiang said Wednesday at a breakfast meeting of Chinese and Spanish businesspersons.



http://news.xinhuanet.com/english2010/china/2011-01/05/c_13677821.htm





http://www.guardian.co.uk/business/2011/jan/12/supportive-china-buys-european-bonds

U.S. corn ZC-FT and soybean ZS-FT futures rallied to 2-1/2-year highs Thursday as signs of tightening global supplies boosted prices for a second day, while demand concerns hit oil and metals prices.



http://www.theglobeandmail.com/globe-investor/us-corn-soybeans-hit-2-12-year-highs-while-oil-prices-slip/article1869361/



price of beef will rise following animal feed cost.

China has made public commitments to buy debt issued by Greece and Portugal, despite America's Pimco, the largest buyer of sovereign debt, declaring the euro countries "a danger zone". Furthermore, China, which already owns 13% of Spanish government debt, has pledged to buy another €6bn worth this year as it seeks to diversify holdings away from US dollar-denominated assets.

With China due to rubber stamp its 12th five-year plan this year – with the stated aim of using its financial clout to move upmarket – there are huge opportunities for developed economies such as Britain to boost exports of good quality products.

Rolls-Royce Motor Cars has unveiled record sales for 2010, with a substantial contribution from China.

"We need to recognise the importance of China, we need to sell and invest there. The Rolls-Royce story is reflected across all the luxury goods makers, for which China is the biggest growth engine," said Standard Chartered's Gerard Lyons, who forecasts that the Chinese economy, which overtook Japan to become the world's second biggest last year, will surpass the US by 2020.

http://www.guardian.co.uk/business/2011/jan/12/era-of-owned-by-china

 

I thought Rolls is owned by Tata. Or is it jaguar.

Nevermind. It's BMW subsidiary.

The only european leader deserve a respect in term of economy. Maybe UK's cameron if he isn't screwing up in the next 2-3 years and can maintain equitable growth.



http://www.nytimes.com/2011/01/16/magazine/16MerkelSarkozy-t.html?ref=magazine&pagewanted=all

THE FUNDAMENTAL problem is that Germans are worried that their manifold sacrifices for national prosperity will be dumped down the drain of Europe’s poorest and most profligate. Despite Germany’s economic success — almost a second economic miracle, after the expensive absorption of East Germany — Merkel therefore has serious political challenges. “The Germans have discovered that they are the only serious global economy in Europe, capable of competing with the United States and China,” says John Kornblum, a former American ambassador to Germany. “But they’re afraid their world is coming apart around them, and what they thought would support them, the European Union, is dragging them down. They realized that the stability pact isn’t working, that the Greeks were lying and maybe others, too, that their banks and French banks were deep in the muck, and they understood this is going to cost a lot of money. So they are behaving in a very demanding way, which smells to some like nationalism. But it really is fear.”

So while Merkel says she is deeply committed to the European Union and the euro, she must, as a politician, manage the angst. A strong minority of Germans feel she has already gone too far down the road of bailing out Europe’s “Club Med.” State elections in 2011 could further hamper her ability to make bold decisions to protect European unity. And she must always be mindful of the German constitutional court, which plays a very strong role in interpreting treaties like those that bind Germany to the E.U.