Baltic Dry Index. 511 +02 Brent Crude 60.60
LIR Gold Target in 2019: $30,000. Revised due to QE programs.
The race is not always to the swift, nor the
battle to the strong, but that's the way to bet.
Damon Runyon.
It’s showdown day in Brussels. David takes on Goliath for the amusement of
all, but also for democracy in continental Europe. Will Greece be able to get
out from under the German jackboot? Don’t bet on it. Germany has an unenviable
record when it comes to crushing its continental neighbours, it has no friends.
As paymaster of Euroland, Germany told Greece yesterday, “it’s my way or the
highway.” If that view prevails today and Greece doesn’t abjectly surrender,
Greece will be struggling to get back on the New Drachma by Monday.
Below, why it all may be for naught.
In gambling the many must lose in
order that the few may win.
George Bernard Shaw
Why Greece Won’t Ever Be Able to Pay Off Its Debts With Austerity
History shows the country is facing
a wall few nations surmount
5:41 PM WET February 19, 2015
The Greek negotiators who went to Brussels in mid-February to argue for more
lenient terms from their lenders were especially concerned about one thing in
any new deal: the target for achieving and keeping a primary surplus. A measure
of austerity, it’s what a government earns in taxes each year, minus what it
spends on everything except interest payments on its own debt. It’s usually
expressed as a share of gross domestic product.Under its four-year-old bailout program, Greece has dragged itself from a primary deficit of 10 percent to a 3 percent surplus, at great cost in jobs lost. The terms of the bailout demand that Greece reach a surplus of 4.5 percent and hold it for the length of the program. There’s little reason to believe that’s possible.
Since 1995 all the countries of the euro area reached an aggregate primary surplus of 3.6 percent only once, in 2000. That number is back below zero. (Even Germany, the Federal Republic of Austerity, reached its own peak of 3 percent only twice, in the last quarter of 2007 and the first of 2008.) In 2011 the Kiel Institute for the World Economy looked at the records of all Organisation for Economic Co-operation and Development countries from 1980 to 2010. It found that few countries could maintain a 3 percent surplus and almost none could keep a surplus above 5 percent. This suggested a limit to what countries can do, the report concluded. They could cross those thresholds briefly, but “over years and decades, this goal is almost entirely illusory.”
----And 4.5 percent is not all that
Greece’s lenders are asking. In theory, the country will pay off its debt
through thrift and economic growth until it can reduce its debt to the euro
zone standard of 60 percent of GDP. To do that, says the International Monetary
Fund, Greece must sustain a primary surplus of 7.2 percent from 2020 to 2030.
Only Norway has maintained a surplus that high for that long.
More
Germany Rejects Loan Request Saying Greece Must Meet Conditions
11:57 AM WET February 19, 2015
(Bloomberg) -- Germany rebuffed
Greece’s request for an extension of its aid program as euro-area finance
ministers prepare to meet to avert a cash crunch for the region’s most-indebted
nation.
The Greek proposal “doesn’t meet
the criteria agreed upon in the Eurogroup on Monday,” German Finance Ministry
spokesman Martin Jaeger said in an e-mailed statement. “In truth, it aims at
bridge financing without meeting the requirements” of the rescue program.
European Commission Spokesman Margaritis Schinas moments earlier had said the
Greek letter could be the basis for a “reasonable compromise.”
With the Greek state and its banks
shut out of financial markets and dependent on emergency aid to stay afloat,
Prime Minister Alexis Tsipras is retreating from his pledges to end austerity
as the country’s creditors tighten the financial vise. While he’s not yet gone
far enough to satisfy Germany, Greek bonds held on to earlier gains as a
spokeswoman said Finance Minister Wolfgang Schaeuble still plans to meet his
euro-region counterparts in Brussels on Friday.
More
Greece defiant as Germany tears up last-ditch EMU compromise on austerity
'There is no macro-economic argument for further fiscal tightening. The only reason for doing so is on punitive grounds,' says Greece's Yanis Varoufakis
Greece has vowed to reject any
demands for further austerity at a last-ditch meeting with eurozone creditors
on Friday, even though the country risks running out of money by next week
without a deal.
Yanis Varoufakis, the Greek
finance minister, said there can be no agreement if the EMU creditor powers
continue to insist that Greece sticks to the terms of its EU-IMF Troika
bail-out and increase its primary budget surplus from 1.5pc to 4.5pc of GDP by
next year.
“We have bent over backwards to
reach an accord. We are perfectly prepared to refrain from any moves that would
jeopardize financial stability or Greek competitiveness. But what we cannot
accept is that the fiscal adjustment, agreed by the last government, be carried
through just because the rules say so,” he told The Telegraph.
The defiant stand by the Leftist
Syriza government raises the risk of an irreversible showdown when finance
ministers from the Eurogroup converge on Brussels on Friday for yet another
emergency meeting.
While there is mounting
irritation in EU circles over Germany’s refusal to give ground, and signs of a
Franco-German rift are emerging, the Greeks are on thin ice. Failure to agree a
deal could set off a chain-reaction as capital flight accelerates, leading
ineluctably to a sovereign default and ejection from the euro.
“We have already done more fiscal
tightening than has ever been done by any country in peace-time, and Greece is
still in depression with declining nominal GDP. There is no macro-economic
argument that can be made for further tightening,” said Mr Varoufakis.
“The only reason for doing so is
out of ideology or on punitive grounds. All we are seeking is a way to end the
debt-deflation cycle and restore the credit circuits of the Greek economy,” he
said.
More
Whenever a man does a thoroughly
stupid thing,
it is always from the noblest motives.
it is always from the noblest motives.
Oscar Wilde
At the Comex silver depositories Thursday final figures were: Registered 68.10
Moz, Eligible 106.65 Moz, Total 174.75 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
While we all await Grexit, or worse, Greece staying
in the dying euro on its own dark red socialist spendthrift terms, we present
today the burning question on all Englishmen’s minds. Well a handful of
Englishmen anyway, those with some semblance of English history, before James
the second of Scotland started us all off on the route to become British.
Below, when England was twined with today’s
Ukraine.
How bad a guy was Richard III?
The funeral for Shakespeare's greatest villain is fast approaching. But did he really kill the princes in the Tower?
By Dominic Selwood 3:58PM GMT 18
Feb 2015
Late Tudor England was a lethal environment for the politically unwary, with
errors of judgment frequently resulting in a one-way trip to Tyburn.
Fortunately, Shakespeare knew the rules of the game well. When he brought out
Richard III, he was keenly aware that his arch villain was not some random
monarch from a bygone age — Richard was the last Plantagenet king of England,
whose throne Henry Tudor (Henry VII) had seized in battle at Bosworth Field a
century earlier. For obvious reasons, the Tudors were a little sensitive when it came to Richard. Their preferred line was that he was depravity incarnate, which ensured everyone could remain grateful to Henry Tudor for having prised him off the throne.
Naturally, there were plenty of Tudor writers willing to cooperate. Take the chronicler John Rous (c. 1420–92) who swiftly stopped praising Richard as a “good Lord” when Henry VII was crowned, and instead recalled how Richard had taken two years to gestate before eventually being born with teeth, long hair to his shoulders, and a hunchback. Sir Thomas More, Raphael Holinshed, and others carried on in much the same vein. But it was Shakespeare who created the Richard that would become burned into our collective memory — “the son of Hell”, a monomaniac murderous psychotic who “know's t no law of God nor man”.
However,
among the many bloody deeds Shakespeare laid at Richard’s door — some genuine,
many not — the most notorious is undoubtedly the murder of the two young “Princes in the
Tower”.
(Actually, “princes” is a bit of an understatement. One of them was the
reigning king of England.)
So, when the mitred clerics solemnly pray over Richard III’s mangled skull and bones in Leicester on 25 March, will the nation be reinterring a much maligned and worthy king, or a monstrous tyrant guilty of infanticide and regicide?
The facts are straightforward.
More
Another weekend, and signs of
spring arriving are everywhere along the countryside part of the Thames Valley.
My guess is that Germany will prevail over Greece, and that an Arctic winter is
about to descend on Athens, but in the long run Greece is better off defaulting,
exiting the dying wealth destroying euro, and returning to the drachma and independence.
Have a great weekend everyone.
"Those entrapped by the herd instinct are drowned in the deluges of history. But there are always the few who observe, reason, and take precautions, and thus escape the flood. For these few gold has been the asset of last resort."
Antony C. Sutton
The monthly Coppock Indicators finished January
DJIA: +124 Down. NASDAQ: +220 Down. SP500: +178 Down.
No comments:
Post a Comment