The upcoming economic collapse of US and Europe

[AkhandBharat]

Jim Rogers the UK is FINISHED !!!!!!!!!!!!!!!!!!!!!!!!

Jim Rogers the UK is FINISHED !!!!!!!!!!!!!!!!!!!!!!!!

 

[AkhandBharat]

Jim Rogers UK will go bankrupt

Jim Rogers UK will go bankrupt part 1


Jim Rogers UK will go bankrupt part 2

 

[plugwater]

British Army could shrink to its smallest since the Boer War

DRAMATIC cuts in the defence budget, due to be finalised next month, could leave Britain with its smallest army since the Boer War more than 100 years ago.

Defence officials and service chiefs are wrestling with the requirement to cut the overspend, and slash the budget further by about 20 per cent.

Officials are now looking at the possibility of reducing the size of the Army, currently at about 98,000 fully trained men and women, to around 80,000.

"Manpower is the obvious cut to take - because most of the money has already been spent for equipment and you cannot get it back," said a former senior official.

Already most of the money has been committed and spent on big ticket items like the two 65,000-ton aircraft carriers HMS Queen Elizabeth and HMS Prince of Wales, conservatively priced at £3.9 billion, and the Typhoon Eurofighter programme.

The spending cuts are an integral part of the Government's strategic defence review which has been given a November deadline to report. It is hoped to publish it before the public expenditure settlement for all ministries is announced around November 10.

Most of the big decisions will have been taken well before then, according to Whitehall insiders. MoD officials are completing some 43 "work strands" to draw up the options on policy topics ranging from the nuclear deterrent to the role of "soft power" in future British strategic and foreign policy.

These strands will be reduced to 12 main policies to be finalised by the Ministry of Defence in the middle of next month. In September the Treasury will lay down the budget settlements for all the main ministries. Some ministries, including the MoD, are expecting to have to trim their expenditure by up to 20 per cent.

The Army and the RAF, according to early indications from the new coalition government, are likely to have to take the biggest share of the cuts.

At somewhere just over £36 billion a year, the defence budget is still overspent on its medium and long term equipment programmes like the Astute class of submarines and the new Nimrod MRA4 maritime reconnaissance aircraft. New Defence Secretary Dr Liam Fox has committed British forces to continue their present role in Afghanistan, though how they will be able to do so in the face of substantial cuts by the end of next year is something of a mystery.

His stance, informed by his strong links to American think tanks such as the Heritage Foundation, seems to spell the end to the kind of expeditionary adventures promoted by Tony Blair in Iraq and Afghanistan.

Dr Fox appears to favour the Royal Navy as the key to Britain playing a role on the global stage on matters ranging from security in the energy-rich High Arctic and containing Iran's bid to become a nuclear power.

http://www.thisislondon.co.uk/stand...nk-to-its-smallest-size-since-the-boer-war.do

 

[AkhandBharat]

Jim Rogers- Next Recession Will Be Much Worse- April 2010

Jim Rogers- Next Recession Will Be Much Worse- April 2010

 

[AkhandBharat]

Marc Faber On Bloomberg- May 3, 2010

All Western governments will have to be bailed out either by defaulting or print more money but the outcome of either of those scenarios won't be pretty.

 

[AkhandBharat]

Gerald Celente: US is on the verge of a massive economic collapse thanks to Europe woes and unlimited lending. Fascism (A merger of state and corporate powers) has come to United States.

 

[AkhandBharat]

Gerald Celente on Goldseek Radio 29 May 2010

Gerald Celente on Goldseek Radio 29 May 2010 (Euro zone collapse and commodities markets in today's geo-political scenarios and consequences)

 

[AkhandBharat]

Meltup

The train is headed for a cliff! This is an absolutely must watch mind blowing video.

 

[AkhandBharat]

France's Debt Woes Saddle ETFs

France has become the next and most prominent nation in the euro zone to admit that it has a debt problem and that means continued trouble for ETFs with eurozone exposure.

The country's budget minister Francois Baroin said on Sunday it would be difficult to keep the country's top-notch credit rating without some stern budget cuts.
That task became more difficult over the weekend, when the cost of protecting French debt reportedly rose to near record levels that they were in the first week of May.

French banks also started off the week poorly, as large banks saw losses stemming from their significant exposure to Spain and southern Europe.

Spain received more bad news on Friday when Fitch downgraded the country's credit rating. That came after weeks of speculation that the banking sector would weigh on the government's budget. Fitch's downgrade came after Spain was downgraded in late April by S&P.

The recent stabilization in equity and currency markets shows that most of these issues have been priced into the equity and currency markets.

France's admission that its top credit rating is not guaranteed also suggests a new awareness among European countries leaders of the problem they face.

In the long term, it's healthy for the eurozone countries to acknowledge the risks and avoid having the currency union torn apart.

Over the next few years though, austerity measures will likely result in an economic slowdown for the countries in Europe as less stimulus and higher taxes bite into consumption and manufacturing.

Countries not included in the monetary union that are large trading partners with the euro countries due to proximity, such as Great Britain, Switzerland and Eastern Europe, are also likely to face slower economic growth. China may also be at risk, since Europe is it represents the country's largest export market.

The bottom line is that funds such as iShares MSCI Italy(EWI), iShares MSCI Spain(EWP), and iShares MSCI France(EWQ), will continue to underperform U.S. equities going forward, as will foreign and global ETFs with hefty European exposure, such as iShares MSCI EAFE(EFA).

http://www.thestreet.com/story/10771953/frances-debt-woes-saddle-etfs.html

 

[AkhandBharat]

Bond Risk Falls as Investors Pare Bets on Sovereign Debt Crisis

The cost of insuring against losses on European bonds fell as investors pared bets the region's sovereign debt crisis will worsen.
The Markit iTraxx SovX Western Europe Index of credit- default swaps on 15 governments from France to Greece dropped 8 basis points to 156.5, CMA DataVision prices show. The gauge is down from a record closing price of 168.5 on June 4. The Markit iTraxx Financial Index of 25 banks and insurers declined 2 basis points to 198, according to JPMorgan Chase & Co.
The European Central Bank, which meets tomorrow, will leave its key interest rate at a record low of 1 percent until the second quarter of 2011, according to economists surveyed by Bloomberg. European stocks rallied and U.S. futures gained after Reuters reported that China's exports grew about 50 percent from a year earlier.
Default swaps on Portugal fell 13.5 basis points to 338.5, Italy declined 10.5 to 225.5, Ireland decreased 13.5 to 270, Greece dropped 4.5 to 780 and Spain was 11 lower at 254, CMA prices show. France fell 6 basis points to 94.
Contracts on the Markit iTraxx Crossover Index of 50 companies with mostly high-yield credit ratings dropped 2 basis points to 620.5, JPMorgan prices show. The Markit iTraxx Europe Index of 125 companies with investment-grade ratings was little changed at 139 basis points.
A basis point on a credit-default swap contract protecting 10 million euros ($12 million) of debt from default for five years is equivalent to 1,000 euros a year.
Credit-default swaps pay the buyer face value in exchange for the underlying securities or the cash equivalent should a borrower fail to adhere to its debt agreements. A decline signals improvement in perceptions of credit quality.

http://www.businessweek.com/news/2010-06-09/bond-risk-falls-as-investors-pare-bets-on-sovereign-debt-crisis.html

 

[AkhandBharat]

Eurozone in double-dip recession, France, Germany on Knife's Edge

Eurozone in double-dip recession, France, Germany on Knife's Edge

 

[AkhandBharat]

Franco-German Letters Ask for Ban on Shortselling

French Economy Minister, Christine Lagarde, at a press conference in Paris on Wednesday said that financial regulation was "an imperative response to restore confidence in the markets".

The euro zone's top two economies, Berlin and Paris have requested the Commission to ban the short selling of shares and sovereign bonds in EU.

EU Internal Market Commissioner, Michel Barnier is going to propose steps like greater transparency in order to curb short selling of the bonds.

The joint letter written by German Chancellor Angela Merkel and French President, Nicolas Sarkozy proposed the EU-wide ban, as introduced in Germany.

This joint letter was followed with the surprise of postponing the Monday meeting of Merkel-Sarkozy, during which they were expected to discuss their position ahead of the summit.

This last-minute cancellation had the spread the rumors that the Chancellor and the President do not see eye-to-eye for dealing with the crisis.

National regulators in the EU had split over the view of imposing the same type of German ban but are sharing same view of more powers to curtail the shortselling .

A banking lobby of Europe, The Association for Financial Markets in Europe, reduction in settlement times had been ineffective to curb shortselling.

The euro zone crisis will be the top most agenda during the EU summit scheduled on 17 June.

Franco-German Letters Ask for Ban on Shortselling

 

[mikkix]

Us$

US $ is also moving towards crash..
Plz Reply...

 

[AkhandBharat]

UK economy much bigger problem than Greece

UK economy much bigger problem than Greece

 

[AkhandBharat]

The Big Story UK Economy (06-02-2010)

The Big Story-UK Economy-06-02-2010(Part1)


The Big Story-UK Economy-06-02-2010(Part2)

The Big Story-UK Economy-06-02-2010(Part3)

 

[VersusAllOdds]

All the big world currencies (primarily US dollar, UK pound, Euro, Yuan, Yen), are increasing their inflation rates at present, at least I think so. At the same time, their value isn't falling accordingly, given the inflation increase. I think that all those currencies' values are heavily (or less heavily, but anyway, they are) manipulated, and don't reflect their real market value.

The thing is, such system of giving money a fake value has to fail at one point - market ALWAYS leans towards it's real value.

The huge depts that many EU countries now have are slowly begining to surface, and the only reaction to that has been creating a larger money mass. The dept is larger than the money supply, and no matter how much money you create, the dept exceds it. The exponential rate of money supply increase may result in a hyperinflation, something none of the Western economies has ever experienced in it's history. The problem of, for example, Germany, is that it's in a much better situation than Spain, and that it doesn't want to devaluate it's currency (which is the same as Spanish, of course), just because the Spanish have to. That leaves the EU moneymakers in a tough spot - whether to save what's failing or preserve what's still not.

 

[Armand2REP]

All the big world currencies (primarily US dollar, UK pound, Euro, Yuan, Yen), are increasing their inflation rates at present, at least I think so. At the same time, their value isn't falling accordingly, given the inflation increase. I think that all those currencies' values are heavily (or less heavily, but anyway, they are) manipulated, and don't reflect their real market value.

The pound sterling is seeing rather high inflation much like China. They print money to boost the economy and deflate their debt. The Eurozone countries do not have the ability to print their way out of debt, the ECB controls the Euro and is mandated to keep inflation low. They are doing so at under 2% compared to 3.7% for the UK. The value of the pound sterling has fallen accordingly. The value of the Euro has fallen not based on economic activity or money supply, but on speculation that Greece will default. The ECB has used the situation to lower the Euro to increase exports without increasing money supply. In fact ECB money supply is decreasing....

http://online.wsj.com/article/BT-CO-20100531-701492.html?mod=WSJ_latestheadlines

Compare that to 6.6% growth for pound sterling and 30% for Chinese RMB. ECB money supply has been decreasing ever since its peak in 2008.

The thing is, such system of giving money a fake value has to fail at one point - market ALWAYS leans towards it's real value.

Money has a fake value because it is determined by speculation, what people think is and will happen. Free floating currencies are the most accurate as it lets markets determine its value. Pegged currencies like the Chinese RMB are fake currencies as there are $2 trillion in FOREX and a mountain of obfuscation hiding the real data. One can argue that REAL value would have the currency tied to precious metals such as gold and silver, but it isn't feasible to tie currencies when there are not enough metals to back it up. A free floating currency system is not one that has to fail as long as the data received is reliable and rampant speculation is curbed. It is when countries start cooking their books and banks start naked short-selling that problems arise.

The huge depts that many EU countries now have are slowly begining to surface, and the only reaction to that has been creating a larger money mass. The dept is larger than the money supply, and no matter how much money you create, the dept exceds it. The exponential rate of money supply increase may result in a hyperinflation, something none of the Western economies has ever experienced in it's history. The problem of, for example, Germany, is that it's in a much better situation than Spain, and that it doesn't want to devaluate it's currency (which is the same as Spanish, of course), just because the Spanish have to. That leaves the EU moneymakers in a tough spot - whether to save what's failing or preserve what's still not.

The debts of PIGS has been known for a long time. The term has been in existence since 1997. It was the global financial crisis that peaked deficit spending and set off warning bells to the investment community that PIGS won't be able to grow their way out of debt, but have to make real internal reforms. The only real surprise here was Greece and Goldman Sachs colluding to cook their books and the amount of speculation hitting the Euro. As I stated before, ECB money supply is contracting so that isn't a factor for the Eurozone, a problem for the UK yes. A massive problem for the Chinese. The GDP to debt ratio for the Eurozone is 68%, high but not unmanageable. Compared to 72% in the US, a similar figure for China, and 200% in Japan. 3% deficit spending is the magic number to be able to start paying down debt, the Eurozone is well on its way to making this number with massive austerity measures and tax reform. The worlds other major economies are nowhere close to making the progress ECB has had reigning in deficit spending. The US, UK, Japan, China are all out of control.

 

[AkhandBharat]

US govt sells debt bonds to itself!

This is the biggest joke in history. US govt is selling debt bonds to its own treasury!

 

[Armand2REP]

This is the biggest joke in history. US govt is selling debt bonds to its own treasury!

All Central banks buy their own bonds when they want to shore up the value of their currency. If there is not enough demand for debt, they have to create that demand.

 

[AkhandBharat]

All Central banks buy their own bonds when they want to shore up the value of their currency. If there is not enough demand for debt, they have to create that demand.

Hahaha! How does buying back one's own debt bonds shore up a country's currency value? LOL! If the goverment buys back its own debt bonds, it means no other creditors are willing to buy it, which will only lead to currency devaluation because the creditors are losing interest in buying debt and when the debt matures, BOOM, devaluation!

Moreover, how is the government going to pay itself back? By increasing taxes, ofcourse? So, the US government is preparing for a massive tax hike?