Category Archives: Economic Crisis

All You Need To Know About The Autumn Statement.

I’m afraid there is STILL no money!



Filed under Economic Crisis, News

The US Economic Event Horizon

Event Horizon- In general relativity, an event horizon is a boundary in spacetime beyond which events cannot affect an outside observer. In layman’s terms, it is defined as “the point of no return” i.e. the point at which the gravitational pull becomes so great as to make escape impossible.- Wikipedia


Opening scene

The USS Government a Constitution class starship is drifting aimlessly toward a giant black hole. There is nothing wrong with the warp engines, it is drifting because of an argument between the Captain, Kirk, and a small group of red shirted security men over who should take the helm. The argument began after Kirk decided to change the regimen of the Chief Medical officer Dr McCoy.

The Chief of Engineering, Scottie has warned Kirk that it will take 24 hours to warm the warp engines up before they can pull away “Aye, we cannae start her cold captain, she’ll never take it.”  Kirk coolly looks out of the main viewing screen where the abyss looms ever larger.

One of the security guards, Smith, steps forward, “We demand that McCoy return to his original working regime. Otherwise we won’t allow Scottie to turn the engines on.”

First officer Spock addresses Smith, ” We are fast approaching the event horizon, beyond which there is no escape. If that happens we will continue to be sucked into the black hole regardless of what action we take. The ship will then enter the black hole and be crushed by the immense pressure into a tiny point  the size of an atom.”

“Will there be Obamacare in the black hole ?” Smith angrily asks.

“No, Mr Smith because we will all be dead.” Spock explains patiently.

“Hah Hah! So, there won’t be Obamacare in the black hole.” Smith gleefully replies, “At last a real choice for the crew !”

This conversation continues in different ludicrous variations.



Filed under Economic Crisis, News

USA Closes


The decision of Republicans to insist that they would only vote to fund the US  federal government in return for a one year postponement  to ‘Obamacare’, key parts of which go into force today, will now see the US government effectively shut down. As a consequence 700,000 non essential government workers will be temporarily laid off without pay.

Although this shut down will cost the US economy $8 billion a week, markets around the world have so far not reacted too adversely.

That said is is important to note that if this is not resolved within 3 weeks, and money is not made available to fund government debt and the unthinkable happens and the USA defaults, then this would lead to a global economic meltdown.

It is irresponsible and a betrayal by any politician from any country to put party politics above their own country’s economy, and by extension, above their country’s security.

Although no one believes the Republicans would force the USA to default on it’s debt, the longer this goes on the more nervous the financial markets will get and there is always the danger other unforeseen situations (black swans) compounded with the current nervousness might precipitate a crisis.

I expect the Republicans to back down and nothing will happen but I’m also aware that this unnecessary argument might have unforeseen consequences.


Filed under Economic Crisis, News

Wonga And Usury

Wonga's Adrian Beecroft

Wonga’s Adrian Beecroft

Interestingly, it is thought that the concept of paying interest derived originally from the expected natural increase in a herd of livestock, a simple compensation for what the lender might have expected to accrue if he had not lent out his property. Somehow, as money has evolved into an increasingly abstract concept there has developed a disconnect between any natural basis for rates of interest and what often is charged.

The divisive effects of unchecked interest charging has been known since money itself first started to circulate and many ancient and diverse cultures have sought to legislate against it. From ancient Greece to ancient China, many countries have outlawed loans with any interest. Usury was at times denounced by a number of religious leaders and philosophers in the ancient world, including Moses, Plato, Aristotle, Cato, Cicero, Seneca, Aquinas, Muhammad, Jesus, and Gautama Buddha.

“And what do you think of usury?” — “What do you think of murder?” – Cato

“If thou lend money to any of My people, even to the poor with thee, thou shalt not be to him as a creditor; neither shall ye lay upon him interest.” – Exodus 22:24

“Thou shalt not lend upon interest to thy brother: interest of money, interest of victuals, interest of any thing that is lent upon interest.” – Deuteronomy 23:20



The First Council of Nicaea (325) forbade clergy from engaging in usury. The Third Council of the Lateran (1179) decreed that persons who accepted interest on loans could receive neither the sacraments nor Christian burial. Pope Clement V made the belief in the right to usury a heresy in 1311, and abolished all secular legislation which allowed it. Pope Sixtus V (1585 – 1590) condemned the practice of charging interest as “detestable to God and man, damned by the sacred canons and contrary to Christian charity.”

But slowly, over time the moral imperative has been supplanted by the profit motive.

Today we discover the Church of England’s £5.5bn investment portfolio included a stake in Accel Partners, a US venture capitalist that co-funded the launch of Wonga, a company that charges up to  5,500% APR.

Perhaps more importantly we should ask ourselves how it is possible that ‘Loan Sharking’ in the UK has become legal ?

Could it be because that Adrian Beecroft, who owns Wonga, has dontated more than £500,000 to the Conservative Party since 2006 ?

Could these generous donations to the Conservative Party also explain why Adrian Beecroft was commissioned to report on employment law soon after the Conservative led coalition came into power ?  Know the man by his report, released on Monday 21 May 2012, the “Beecroft Report” recommended that the government should cut red tape in order to make the hiring and firing of employees easier. This apparently, was one of the least offensive suggestions that made it past the spin doctors and was actually published.

‘Donations’ to political parties are tax deductible. So if you want an example of ‘having your cake and eating it’ then look no further than donations like this. These ‘donations’ have effectively cost Adrian Beecroft nothing. In fact, it could be argued that these ‘donations’ were made at the expense of the general public.

But of course, Adrian Beecroft got nothing from this ‘philanthropy’, did he ?

So what next ? Arise Sir Adrian ? Lord Beecroft of Wonga ?


Filed under Economic Crisis, News

The Relationship Between Immigration And Growth

The Office for Budget Responsibility appears to be recommending that the UK increase immigration to promote growth. Why ?

Well, it boils down to a very simple argument, it goes like this; The only sector in the UK that is growing is the service sector. The service sector needs people to ‘service’. If the number of people increase then the service sector continues to grow. Increased population should also see a stimulus for the construction industry. The primary sector, which involves the extraction of resources directly from the Earth, this includes farming, mining and logging, and the secondary sector, which involves the processing products from primary industries (production) are in terminal decline and even the service sector itself is under pressure from online efficiency.

Clark's Sector Model (1950)

Clark’s Sector Model (1950)

By continually increasing the population of the country it is possible to create the illusion of economic growth but this con trick can not go on forever. Perpetual growth within a finite structure is as impossible as perpetual motion.

The lower birth rate counteracting increased longevity should be seen as a sign that our society is self-righting and naturally compensating for medical developments. It should be welcomed as a possible new stage in human social development and our leaders should attempt to adapt to this new paradigm.


Decreasing UK birth rate. Uptick in the last decade is caused by cultural changes as a consequence of immigration.

In fact if other places in the world had reached a similar stage then the issues associated with essential finite resources like water which arise from a massively overpopulated world, currently 7 billion, would be largely assuaged and the planet would be a more peaceful place.


But all of this does not sit comfortably with capitalism which demands perpetual economic growth to sustain itself.

And if that weren’t bad enough only the wealthiest 5% of the UK population benefit from from the so called economic growth derived from immigration while the other 95% of the population bear the costs which sees their own living standards fall in real terms.

I guess the question that every person currently living in this country, regardless of whether they were born here or not, need to ask themselves is just how many people do you want to share this country with ? According to the 2011 census the current UK population is 63,182,000. How big has the poplulation got to get before our leaders recognise the folly of immigation fueled economic growth ? 80 million ? 100 million ? 200 million ?

What kind of country do you want to live in ?

For more thoughts on this subject please read Peak Employment and Immigation: Cui Bono

The Office for Budget Responsibility said that spending on the state pension, social care and healthcare will rise from 14 per cent of Britain’s GDP to almost a fifth.


Its analysis suggests that Britain’s borrowing as a propotion of GDP would rise to 99 per cent if there is a steady flow of immigrants. If there was a complete ban on immigrants, borrowing would rise to 174 per cent of GDP.

The Telegraph


Filed under Economic Crisis, News, Politics

The Decline And Fall…………..

………….Or What Happens When There Is Not Enough Bread To Pay For The Circus.

Once upon a time there was a central banker who had thought up a new scheme which would ensure that everyone would get filthy rich. He took his idea to the Emperor who was greatly impressed. “What do you need from me to make this work ?” asked the Emperor.

“It’s very simple.” replied the banker. “Place £1 on the first square of my exchequer board in the first quarter, the following quarter place £2 on the next square, the third quarter double the sum once more and place £4, and keep on doubling the amount each quarter ad infinitum.”

“And this will ensure everyone gets filthy rich ?”

“Absolutely” replied the banker, “It will ensure perpetual growth, we’ll all get stinking rich.”

“Excellent ! here is your first pound from my very own pocket.” the Emperor declared.

After ten years the Emperor called the central banker back to his palace. “I know we’re all getting stinking rich, just as you said we would but this next quarter we’ve got to place over £1 Trillion on your exchequer board and in just another two years we’ll have to place over £140 Trillion.”

“Errrrm” pondered the banker “We could always print more pounds, I suppose………………………………”

OK, a frivolous illustration but my point is that the money has run out, or to be more accurate the economic system is unsustainable and only has the illusion of stability by the use of complex accounting tricks, more akin to alchemy than mathematics. The modern day philosopher’s stone doesn’t turn lead into gold but gold into paper or tungsten. The spot price of gold has been contaminated but that is the subject of an altogether different topic…

This article is about what happens to our society when the money runs out. Has anyone else noticed that since the beginning of the financial crisis the UK has been dogged by a number of seemingly unrelated crises ?

You see, before the ponzi scheme became apparent there was just so much money sloshing around that nobody delved too deep into corrupt and deviant practices. Even those on state benefits had Sky satellite dishes crucified to their council house walls, we could all afford to eat Tuscan sun-dried tomatoes marinated in a pesto infused vinaigrette with our Scottish kiln smoked salmon, the nameless elves from China shipped container loads of the latest must have branded trainers, clothes, and electrical goods, all at very affordable prices.

But then………..Double, double toil and trouble; Fire burn, and credit bubble.

You see, you don’t understand just how many people were being paid off with all that money and as long as enough trickled down to you, you never thought about asking.

The police are a very good example. Ever since Margaret Thatcher realised in the early 1980s that as long as you could keep the police onside you could just about screw over any other group of people in the UK, the police have had extremely generous working practices and financial arrangements. Most police officers probably wouldn’t agree but that says more about the amnesic affect of thirty years of preferential treatment, which now appears to them to be a right. There was a time before that when policemen, firemen, and medical staff all recognised each others social contribution as being similar but to pay for the police arrangements the firemen and the nurses had to make sacrifices.

Some might suggest that it is extremely brave of this government to try and ensure that the ‘we’re all in it together’ mantra applies to the police also. I would suggest that they are only doing it because they literally have no alternative. It’s not brave to do what has been forced on you, regardless of how brave a face they put upon it. I only mention the police example because the ‘Plebgate’ incident indicates clearly what happens when you don’t pay them off.

But by far the worst leeches were the bankers, businessmen, crooked politicos, civil servant mandarins, defence contractors, media moguls, and basically everyone who went to the right school, or belonged to the right family, who felt they had a god given right to be kept in the circumstances that their parents had become accustomed to. A bonfire of the quangos is a bonfire of patronage. They all had to be paid off in some way before you got your share.

Their payment ensured their complicity and silence.

And like the decadent Romans before them, not satisfied with all that money could buy, they thought they could take what they had no right to take.

There is a difference between Law and Justice. When the law applies equally to all it can often be just but justice is not law, justice stands above the law and can stand outside of it.

So, what happens when there is not enough bread to pay for the circus ?

The people cease to be distracted.


Filed under Economic Crisis, News

Economic Equivalent of War

The Prime Minister, David Cameron, has told the CBI today that the UK is facing the ‘economic equivalent of war’, or as the Telegraph has it today-





However, as those of us with memories slightly longer than a goldfish will recall, the phrase was first coined by Vince Cable at his parties conference in 2011.

Business Secretary Vince Cable has told the Liberal Democrat conference that the economic challenges facing the UK are the “equivalent of war”.

In a bleak assessment of the future, he said the era of ever-rising living standards had ended and people were just worrying about “how to survive”.

BBC News

Needless to say, that when Vince Cable originally said this he was accused of scaremongering by Conservatives on the right of the party but that is just a side issue, hypocrisy by politicians just isn’t news anymore. What is of interest is the context and consequences of these statements because what Vince Cable and David Cameron are talking about are two subtly different things dressed up in the same clothes.

If it is war then who is the UK at war with ? This is an obvious question that might occur to you. It could be argued that the UK is in an economic war with everybody else but as any solution must come through cooperation, the idea that the UK is at war doesn’t really hold up. Certainly, the UK is in competition but that is the nature of capitalism and it has always been the case.

Actually both Vince Cable and David Cameron are both trying to convey the idea that the UK public will have to make sacrifices.

Vince Cable was looking at the UK and European economic fundamentals and he could see that the status quo was not sustainable. Default by Greece, whether it is called default or not, is inevitable and this will likely be the start of a slow motion domino default scenario. Under these circumstances the UK would have to become more self sufficient and even consider policies such as rationing. To understand why this might be necessary you need to try and imagine a world where fiat money is no longer worth the paper it’s printed on and that trade between sovereign states no longer takes the form of credit but must be faciliated by exchanging goods or commodities such as gold. This may only be the case for a relatively short period before a broad trade arrangement can be put in place but under those circumstance the UK would have to dig deep.

Cameron, on the other hand, is talking about a different kind of sacrifice, and not so universal. He is talking about sacrificing the checks and balances on government (bypassing the civil service) and sacrificing regulation (cutting red tape). These sacrifices are made by you and are to the benefit of the businessmen he was speaking to and who financially support his political party.

Both Mr Cable and Mr Cameron are drawing on our innate patriotism  but I would suggest that Mr Cable was just giving us fair warning, whereas Mr Cameron is seeking to exploit the situation for his own political agenda.


“Patriotism is supporting your country all the time and your government when it deserves it.” – Mark Twain



Filed under Economic Crisis, News

Do We Need a New Reformation ?

On this day, the 31st October, exactly 495 years ago, in 1517, a German monk in his mid thirties left his accomodation in the early morning, wrapped against the dawn cold in his woollen cowl he briskly walked towards the castle church in Wittenberg. On arrival he withdew from the folds of his habit a hammer, some nails, and a document and he proceded to nail the document to the church door. The monk’s name was Martin Luther, the document would become known as the 95 theses, and those hammer blows would reverberate down the centuries.

Before we set about examining the question within the title, it seems appropriate that we should look first at the situation which prompted Martin Luther to write the 95 theses. The terms ‘catholic’ and ‘protestant’, today, seem to me to define religious, almost tribal, allegiance but the word ‘catholic’ comes from the Greek word καθολικός meaning ‘univeral’ and it was first used in the second century AD. The word ‘protestant’ literally means protester and only came into use after the events described in the opening paragraph.

As the church increased in power so it attracted the ambitious and corrupt. Luther was particularly enraged by the selling of indulgences. He felt that the sale of indulgences was a gross violation of the original intention of confession and penance, and that Christians were being falsely told that they could find absolution through the purchase of indulgences.

Today, almost 500 years later the central banks and financial elites are similarly corrupt. Capitalism has been undermined.

Isn’t it time that we had a new Reformation ?

As we approach the quincentenary of this momentous event, shouldn’t we be demanding wholesale reform ?

And what do you think should be in a new 95 theses ?

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Filed under Economic Crisis

Is The UK Out Of Recession ?

Hmmmm, what happens next ?

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Filed under Economic Crisis, Humour, News

FBI Arrest Man in Fake Money Plot.

Quazi Mohammad Rezwanul Ahsan Nafis, 21, parked a van full of explosives outside the Federal Reserve Bank in downtown Manhattan, which he thought contained real money, on Wednesday morning.

The Federal Reserve were quick to reassure the public that no real money had ever been at risk as it had been replaced with fake paperwork long before the attack.

Nafis travelled to the US on a student visa in January this year, intent on waging a “jihad”, the FBI alleged. Over the course of the next three months he plotted his attack, all the time completely unaware that the authorities had replaced anything of value with worthless paper long before.

After the arrest the US attorney for the Eastern District of New York said: “As alleged in the complaint, the defendant came to this country intent on conducting a terrorist attack on US soil and worked with single-minded determination to carry out his plan.


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Charles Ponzi Wins Nobel Prize for Economics 2012.

The Nobel Prize Committee have unanimously decided that Charles Ponzi will postumously receive the Nobel Prize for Economics in 2012.

Gustav Gustavesson, the chairman of the committee justified the decision. ” No single person has had a greater influence on modern economics than Charles Ponzi and now that the entire global capitalist system is modeled on his thinking, it seems only right that we should recognise his achievements.”

Born in Italy in 1882, Carlo Pietro Giovanni Guglielmo Tebaldo Ponzi, developed his economic model in the USA during the 1920s. He died in 1949 and so won’t be able to receive his prize personally.

However, his great grand daughter Jessica Ponzi will collect the medal on his behalf. “My great grandfather would be delighted to see that his economic model now formed the basis of the global capitalist system.” she exclusively told me. “And I will be delighted to collect the award on his behalf.”


Filed under Economic Crisis, Humour, News

Graph: Top Tax Rates Comparison.

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Filed under Economic Crisis, Humour, News

Why I Bought Gold.

1oz Gold Britannia

This is not an advertisement but a genuine attempt to pass on my own experience and to explain why I made the decision I did and when.  I am not a natural ‘gold bug’ and I’ve resisted up until this point buying gold, understanding, as everyone should, that although the global economic situation is uncertain at best, precarious at worst, it does not guarantee an increased return on an investment in physical gold, especially as I suspect that there are powerful interests with the motive and opportunity to manipulate the gold price, thus muting the clear danger signal  that a steep rise in gold would normally produce. Although, fairly recently the price of gold has been higher, it is still historically high and my investment had to be based on the presumption that this was the ‘new normal’, atleast, and until  the profound problems within the economic system could be resolved. Seeing no resolution ahead, I felt confident enough to broaden my portfolio and buy gold.

This raises another point because I would never have invested everything I had in gold alone. Looking around I found no other investment opportunity that was without similar or even greater risk. Money in the bank is being deflated, Property values could face a huge slump, Sovereign Bonds, even those from countries thought ‘safe’ are precarious, the Stockmarket appears to be a bubble inflated with QE and unconvincing political reassurances. I was looking for a place to put some money for between 6 and 8 months, under the circumstances gold looked to be a good hedge with minor downsides [accepting the ‘new normal’] yet with considerable upsides. Applying a very personal risk assessment [fairly arbitary too] that there was only a 10% chance that within 8 months the economic situation would be better [a very generous assessment in the absence of a paradigm shift in political attitudes], a 40% chance that it would get worse [extremely conservative], and a 50% chance that it would be the same [generously ignoring that “it being the same” after yet another 8 months would actually be worse], I judged a 10% chance that I would make a minor loss on the investment, a 40% that I would benefit, and a 50% chance that I would neither lose nor benefit significantly.

Why now ?

Not being a trader but instead looking for a hedged investment for 6 to 8 months I was content that although the low volume during the summer might produce volitility in the stockmarket, if the gold price was being manipulated, that same low volume would actually be easier to keep it stable and broadly with the gold price fluctuating between £1,000 and £1,050 per oz  since mid June that has been borne out. But with the return to high volume and with difficult yet unavoidable political decisions pending over the next 3 months I wanted to buy before the beginning of September. Excepting last year the 3 month period from the beginning of September since this crisis began has seen steady increases in the gold price, last year the increase started earlier and peaked mid September. With US Pesidential elections in November, Europe will be left to deal with it’s own problems alone, no incumbant would dream of risking a second term by being seen to bail out the Europeans.

In the end I bought 2012 1oz Gold Brittanias. They are legal tender in the UK with a face value of £100 and as such are not subject to Capital Gains Tax or VAT. I chose the largest 1oz Brittania because it was closest to the Gold spot price. Each coin cost £1,100.

I bought through and I was happy with the service they provided.

So, now I’ve put my money where my mouth is, we’ll see over the next few months how things turn out but I’m fairly confident that I won’t lose too much on the deal and could make 10%. I’m not following the daily ups and downs as I don’t expect any big moves for a while but as gold does have a certain power over the imagination I’ll keep a broad look out for panic and bubble over the next 4 months.

Apologies for taking such a long time to return after my holiday. Once the school term starts again things should be back to normal.


Filed under Economic Crisis

Mario Draghi in Vertigo.

Vertigo voted best film ever.

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Filed under Economic Crisis, Humour

The Big Screen Reality.

by Moraymint

What is the big screen reality ? It is the economic/energy equation.




I’m pretty clear in my own mind having researched this matter exhaustively now for the past 7 years (as a physicist and businessman, as it happens).  Unless and until our politico-economic Establishment adjusts its paradigm, ie adjusts its view of how the world works within a revised economics framework, then we’re going to see more and more articles like this one making futile screams for a return to industrial age rates of economic growth (whilst debating relatively trivial economics indicators that miss the fundamental point).

It ain’t gonna happen, guys, it just ain’t gonna happen: in my book the laws of physics trump an obselete economics paradigm any day (a paradigm largely developed within mankind’s industrial, ie fossil fuel era).  Recognising that you have a problem is half the battle in solving it.  If we think that the developed world’s debt problem and the interminable recession/depression that appears to be going with it is killing us today, just wait and see how things look tomorrow when we haven’t re-established that ‘urgently needed growth’.


Perhaps indeed.  Are our politicians and economists preparing our complex societies for a lower energy future, I wonder, and the economic contraction that goes with it, or are we sleepwalking in to something pretty disastrous here?

How long before European electorates wake up to the massive destruction their politicians have inflicted on them?

Let me tell you something; for as long as the developed world’s politicians fail to grasp the economy as an energy equation, “massive destruction” will be an understatement for what happens over the next decade or so.

But even now, concepts like ‘the economy as an energy equation’ or, dare I say, ‘the end of growth’ are treated by the economics Establishment as the rantings of raving lunatics.  So, an urgent return to economic growth it shall be then; or else.

PS Anybody noticed a slight problem with energy in India recently?  Do you think the situation there (and elsewhere around a world desperate to re-establish rampant economic growth … they need/want 6% pa in India apparently) will get (a) better, or (b) worse over the coming years?

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Football Teams Like Tulips ?

On the day questions are asked over Manchester United’s ‘overextended’ IPO valuation and the recent bankruptcy of some of Britain’s big clubs, it’s worth asking if the mania for buying football clubs resembles the 17th century Tulip Bubble [graph above]. But it’s not just UK clubs which are facing problems. Some of Europe’s biggest clubs are mortgaged to the hilt and are owned, in all but name, by Spanish and Italian banks. Ironically, these clubs are worth more on the balance books of the banks [which include the nominal value of overpriced players] than they could ever realise as assets and so the farce must continue for now or those banks would be further weakened.

Glasgow Rangers will not be alone, the peak of the ‘Football Bubble’ has already been reached and some very big European football clubs are bound to follow them into bankruptcy.

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The European Tinder Box.

by Moraymint

I wonder if harsh economic realities could transcend generally accepted logic.  The common perception of unravelling events relies, by and large, on politicians remaining in close control of events and in particular in tight control of their societies.

But when institutions start running out of cash and people don’t get paid on a grand scale (which must now be well and truly on the cards in saying the coming 1 – 3 years, if not within the coming months), then politicians’ grand economic and political plans can rapidly turn in to the proverbial ‘ball of chalk’.

Like many people I struggle to discern the details of unfolding events over the coming months.  However, my age and instinct tell me that Europe’s political elites are losing control of their own societies even now.  There are more than 18 million people unemployed in Europe today and, for as long Europe’s political class stays on its current course, that unemployed rate will climb and climb.  That’s a really bad state of affairs; indeed, it’s life-threatening.

Eventually, I judge that the smouldering European tinder box will burst forth in to flame and thence on to conflagration.  At which point all bets are off.  No amount of logical and neat arguments about how politicians will engineer a European superstate without an explicit democratic mandate so to do will counteract the incandescent rage that could grip a critical mass of European citizens going without work, going without shelter, going hungry and living without hope.

It’s this ‘direct action’ by angry citizens that would scupper the controlled, totalitarian formation of a European superstate, I believe.  But I accept that I may be quite wrong in this and that the Europeans could well end up stumbling like lambs to the slaughter when it comes to their political masters implementing acoup de continent’ and forcing the formation of the United States of Europe on 495 million people.  God help them if it happens that way.

And if it does, there would need to be revolution in the UK to prevent our own political class from stitching us in to that self same socialist-fascist nightmare that would be the nascent USE.

Frankly, with each passing day now I can barely believe what the European political class is doing and getting away with.  It’s both scary and shameful and made so much worse by the benign way in which our own ignorant and cowardly political class just goes with the flow. Europe is on the verge of being raped and our own politicians don’t know where to look, still less what to do.


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The Loop of Doom

by Catherine Carr

The ECB to buy bonds in the secondary market:

This frees up money for the banks to lend….
But  will they lend to the private sector ? Will they hell !
So the banks put the money into new issue Government bonds…
Allowing the Spanish to pay their bloated public sector…

What does this mean for Spain ???

Well their overall debt is increased and therefore their interest payments…
The ratings agencies will lower their ratings because off the increased debt and likelihood of default…
The markets will then sell off their current and new holdings because the likelihood of a default has increased….
Yields rise…..

Now go back to the top to see what happens next…. the only break in this is loop bankruptcy

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Full Spanish Bailout Will Cost €650bn …………..It’s Impossible !

by Moraymint

It’s always absolutely terrific when economic realities start to slaughter political fantasies.

Personally these days I’m placing all my bets on economic realities eventually destroying first the euro monetary union and then second the European Union (EU) itself.

I’m reasonably hopeful about the euro collapsing, but I fear that the EU will prevail for some time to come.  The EU will probably have to be destroyed by the direct action of citizens rather than by economics per se (normal democratic arrangements in Europe have been all but snuffed out by the Lisbon Treaty).  That said, in the end economics is really only the actions and study of humanity itself and as such its ideas are often little more than common sense (according to Ed Conway, anyway).

So, we have to trust that eventually common sense and humanity will prevail over Europe’s oligarchic ruling elites and that order and prosperity will return to the European continent.  On the other hand, if Europe’s ruling mafia (that toxic mix of arrogant politicians, unaccountable bureaucrats and all-powerful bankers) prevails, then God help Europe’s citizens over the coming decade.

Incidentally, where the hell is anyone going to find €650 billion just like that?  Let’s be honest, by any measure you care to choose, the euro/EU is unmitigated madness.

As an ex-military man, I learned that a deception plan is an integral and vital component of any battlefield strategy.  The European Union will almost certainly turn out to have been one of the greatest deceits in history.  The citizens of Europe and the UK were never supposed to understand the true intentions of their political elites.  But, “oh what a tangled web we weave, when first we practise to deceive …”.

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EU Lemmings

by Moraymint

Europe’s politico-bureaucratic and banking “elites” are seemingly oblivious.  Indeed, even millions of European citizens themselves still seem to believe the euro/EU to be fundamentally “a good thing”.  In my view, this has everything to do with the European Commission’s annual “communication” (propaganda) spend of some €2 billion.

European citizens don’t know if they’re coming or going.  They think they believe in the euro/EU, but they know they don’t like 25% unemployment (and climbing) and standing in lines at soup kitchens.

We’re witnessing the most grotesque disconnect between a ruling elite (a toxic mixture of politicians, bureaucrats and bankers) and the ruled themselves.  The situation in Europe has all the ingredients of revolution, if not sooner, then later … at this rate anyway.

There are days when I think that if Europe’s politico-bureaucratic-banking elite press on with “ever closer union” whilst singing the euro/EU is “irreversible” chorus, then there’ll come a day when the European Commission headquarters will be razed to the ground by a critical mass of disaffected and hungry Europeans.

Meantime, however, most European citizens still seem to be oblivious to the trajectory of their beloved project, whilst most Brits probably couldn’t give a toss about Europe for as long as ‘Britain’s Got Talent’ and ‘Come Dine With Me’ are showing on the telly (if you see what I mean).

You can sense how frustrated Winston Churchill must have felt in the run up to WW2 … it’s surreal watching Europe descend slowly but surely in to socio-economic chaos (or enforced misery at best), knowing that it needn’t be like this.

We’re probably witnessing the most destructive example of ‘groupthink’ in modern history.

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