The day China says its currency is backed by gold

Donald Trump has gained a lot of airtime recently talking about how China has been ripping off the United States over the previous decades, artificially devaluing the yuan and protecting China’s own companies at the expense of ours, stealing our technology, and attacking our infrastructure via cyber intrusion. All of that gives one the sneaking suspicion that China is preparing for something, something bad, something devastating for the United States and our children’s future. Chinese actions in the South China Sea adds to this perception, this gut feeling. Why would the communists be building military bases out of nothing so far from home? There really is only one conclusion. Although the China apologists want to dismiss this narrative, taunting its proponents about their tinfoil hats, that uneasy feeling remains vibrant, just the same.

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Greece could be forced to lock down savers’ cash as debt crisis worsens

Greece’s central bank has issued the clearest warning yet that the country is on course to default on its sovereign debt at the end of the month and crash out of the single currency, while finance ministers across Europe also confirmed they are making contingency plans for a messy ending to the crisis.

Athens is due to repay €1.6bn to the International Monetary Fund on 30 June but will be unable to do so unless its creditors release a €7.2bn bailout payment before then. Continue reading

Greece bailout: Europe turns up pressure as cash runs out

ECB looks at restricting emergency lending to Greek banks

More pressure has been heaped upon Athens, as reports suggested the European Central Bank is looking at placing greater restrictions on the use of its emergency lending facilities by Greece’s domestic banks.

Greek banks have tapped around €74bn (£53bn) in emergency liquidity assistance from the ECB to replace the deposits that nervous domestic savers have pulled out of the financial system in recent months. Without that lifeline, the country’s banks would rapidly collapse. Continue reading

Blame Germany If Europe Implodes

While correct, this article is still missing the main point: Germany knew the Euro would fail.

It wasn’t formed out of stupidity, wishful thinking and day dreaming. It was formed with the desire to engineer a crisis and provide a solution that was already in the pipeline a long time ago. Even Alan Greenspan just recently said the only thing that will save the EU is a United States of Europe. Ironically, he unwittingly mentioned what will happen. It will indeed break up, but 10 will remain and one in particular will rise out of intrigue as described in Daniel 8:23 (See also HERE for further explanation).

The Fourth Reich is running Europe and its United States of Europe along with its European Army is coming. You don’t have to believe it, but a lack of belief itself won’t make what was Biblically written from happening.

This is also what happens after a superpower dies — another power has to fill in the vacuum.

 

In 1919, the European nations that had prevailed in WWI imposed onerous peace terms on Germany via the Treaty of Versailles. The harsh economic sanctions and reparations imposed on Germany led to economic catastrophe, massive unemployment, hyperinflation and eventual political turmoil, which led to the rise of fascism a little more than a decade later. After only five years of strict enforcement, France finally relented and canceled some of the more onerous terms of the treaty, but by then the economic and political forces in Germany that would see the rise of Adolph Hitler were already in motion. The Second World War was already inevitable.

The insistence of the WWI allies on political humiliation and economic punishment for Germany presents a remarkable parallel to the position taken by German chancellor Angela Merkel over the question of economic austerity and debt repayment for Greece and other heavily indebted nations in Europe. After the human and economic pain of losing two world wars, is it possible that Germany’s leadership has not learned the key lesson of economics, namely that benevolence is always a better course than retribution? Just ask Vladimir Putin of Russia, who has set back his nation’s economy by decades in order to resist the fearsome specter of a Ukrainian free trade agreement with the EU. Continue reading

Swiss Peg Collapses – The Euro’s Nightmare

On September 6th, 2011 the Swiss National Bank (SNB) was aiming for a substantial and sustained weakening of the Swiss franc after Swiss companies threatened to leave because the rising franc reduced their exports. The SNB would no longer tolerate a EUR/CHF  exchange rate below the minimum rate of CHF 1.20. The SNB set out to enforce this minimum  rate with the utmost determination and it began to buy Euros in unlimited  quantities.

Socrates has been warning about January for the last year. Here is the forecast array on a daily level and it pinpointed the rise in in volatility for today the 15th with a Panic Cycle and turning point due as well as we can see. Continue reading

The EU’s Day of Reckoning: Italy Is Too Big to Bail Out

In the end the central theme of most articles reporting on EU events, is that all roads end up leading back to Berlin, the powerhouse of Europe.

And who knows, perhaps Mario Draghi’s upcoming resignation and a possible wish to be the next Italian president is a sign that he wants to go back and save Italy from the wrath that Greece has suffered: Complete capitulation to Germany in exchange to economically stay afloat and keep from descending into social chaos as a result.

Lest we forget what the European Union founders had in mind for the world’s next superpower (See also HERE and HERE), the United States of Europe led by modern day Assyria’s Fourth Reich.

 

Italy is one of the world’s leading tourist destinations. The ruins of the Roman Empire, in particular, the Coliseum, Palatine Hill, the Pantheon and the Forum, are major attractions. New ruins are now being created to mark the political decay at work at the heart of Italy’s democracy and economic policymaking. These new ruins could well include the country’s central bank and parliament as well as the Eurozone as the stage is set for Europe’s next big economic debt crisis.

At the center of the brewing storm is the issue of confidence. When investors trust sovereign debtors, governments have access to credit markets. When investors lose confidence in a country’s ability to pay, they head for the door. The cost of borrowing goes up and at some point it hits a level where it becomes unaffordable to raise money.

Such a loss of confidence afflicted Cyprus, Ireland, Greece and Portugal between 2010 and 2012, shutting them out of public borrowing, creating the European debt crisis and forcing them to seek financial assistance from the European Union, European Central Bank and International Monetary Fund. Italy barely avoided that embarrassment. Continue reading

US banks are told to be prepared for 30-day crisis

The biggest US banks would be required to hold enough easily sold assets to survive a 30-day credit drought under proposed new Federal Reserve liquidity rules.

The Federal Reserve liquidity coverage ratio proposal, approved unanimously at a meeting in Washington, goes further than the Basel III measure adopted in January and calls for earlier implementation than the EU. Continue reading

The new Great Game: Europe looks within for roots of renewal

Exactly what was predicted here long ago as a potential outcome is now stated in this article: The EU will eventually break up into a two tier hiearchy. Also mentioned was the Mediterranean nations being a source of gas and oil to fuel and rebuild Europe’s economy, which is why Greece and Cyprus have been subjugated into EU vassal states and likely will remain on board any future EU integration — they’re too strategically important to lose. The United States of Europe is indeed coming.

The term “the Great Game” referred to the strategic rivalry between the British and Russian empires in Central Asia. Today’s Great Game is the battle for economic survival in a world of low economic growth. In such a world economic nationalism reasserts itself, reducing free trade in goods and services and free movement of capital. Escalating sovereign debt and banking sector problems will favour European introspection.

Individual European economies are modest in size relative to the US. But as a single entity the European Union, including the 17-member eurozone, accounts for more than 25 per cent of global GDP, making it the world’s largest economic unit. Continue reading

Italy could need EU rescue within six months, warns Mediobanca

Italy is likely to need an EU rescue within six months as the country slides into deeper economic crisis and a credit crunch spreads to large companies, a top Italian bank has warned privately.

Mediobanca, Italy’s second biggest bank, said its “index of solvency risk” for Italy was already flashing warning signs as the worldwide bond rout continued into a second week, pushing up borrowing costs.

“Time is running out fast,” said Mediobanca’s top analyst, Antonio Guglielmi, in a confidential client note. “The Italian macro situation has not improved over the last quarter, rather the contrary. Some 160 large corporates in Italy are now in special crisis administration.” Continue reading

Four Signs That We’re Back in Dangerous Bubble Territory

The United States is already experiencing a false recovery to begin with. While the Dow Jones might very well be going up, it’s quite a poor indicator of the economy’s overall health. Jobs are still being lost while entire sectors are propped up and subjugated through government bailouts. Meanwhile, the healthcare industry will soon be in shambles under the weight of heavy politics, law and regulation.

The next economic crash will hit harder than the last due to this current false recovery already being a mere sugar high from ‘quantitative easing’ and accounting tricks. Yet, the real crippling crash to worry about is likely to be the tsunami not seen after the markets already received the next hit. This is the one that will make the Geat Depression look like a Sundays picnic. The United States is not untouchable and is one significant event away from a total meltdown.

As the global equity and bond markets grind ever higher, abundant signs exist that we are once again living through an asset bubble or rather a whole series of bubbles in a variety of markets. This makes this period quite interesting, but also quite dangerous. Continue reading

Developing World: Euro Loses Attraction as Reserve Currency

Countries in the developing world are drastically reducing their euro holdings as economic instability in Europe leads them elsewhere to stock their currency reserves. Euro holdings are at their lowest level in a decade, according to the International Monetary Fund.

That is the message to be gleaned from the latest installment of the regular International Monetary Fund report on currency reserves held by countries around the world. According to the report, developing economies shed some $45 billion worth of euros in 2012 and have sold close to $90 billion worth of euros since the second quarter of 2011. Continue reading

Spanish unemployment hits record 5.64 million

Believe that’s bad? America itself is not far off. In the United States we’re looking at 14.5% total unemployment. This also doesn’t account for “99%’ers” and various other factors after a revision of what statistics are taken into account.

The number of unemployed people reached 5,639,500 at the end of March, with the unemployment rate hitting 24.4%, the national statistics agency said.

The figures came hours after rating agency Standard & Poor’s downgraded Spanish sovereign debt.

Full article: Spanish unemployment hits record 5.64 million (BBC News)

China Considers Offering Aid in Europe’s Debt Crisis

HONG KONG — Prime Minister Wen Jiabao said Thursday that China was considering whether to work with the International Monetary Fund to play a greater role in financing Europe’s efforts to end a sovereign debt crisis, but he left it unclear whether China was willing to drop conditions that would make its help unappealing for European countries.

Mr. Wen, speaking at a press conference in Beijing after a meeting with Chancellor Angela Merkel of Germany on the first day of her three-day visit to China, said that officials were studying whether China should be “involving itself more” in Europe’s debt troubles through investments in the European Financial Stability Facility and the European Stability Mechanism. This could be done through the I.M.F., he said.

One idea under consideration by China in recent months is whether it could lend money to the I.M.F., which would then lend it to Europe. This would transfer the risk of a European default to the I.M.F.

Russia embraced this approach in December, but was willing to lend only $20 billion. China had $3.18 trillion in foreign exchange reserves at the end of December, dwarfing the reserves of every other country and potentially giving it the financial power to make a much bigger contribution.

Mrs. Merkel is the first of several European leaders scheduled to visit China this month, the latest in a series of signs that China’s huge foreign exchange reserves have begun to give it financial influence to rival Washington’s.

Full article: China Considers Offering Aid in Europe’s Debt Crisis (New York Times)