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Brazilian President Dilma Rousseff got a rare bit of respite on Tuesday when a Supreme Court justice granted an injunction that delays a lower house vote which could have paved the way for impeachment proceedings.

House speaker Eduardo Cunha has remained defiant, vowing to exercise his “constitutional prerogative” to review impeachment requests.

Of course Cunha has his own set of problems. Allegations of corruption tied to the discovery of Swiss bank accounts have led to calls for his resignation and that, in turn, has Rousseff’s “aides fear[ing] the speaker could try to speed up the impeachment process.” As Reuters notes, if Cunha accepts even one of three impeachment petitions he has on his desk, “a parliamentary commission with representatives of all parties would analyze it and put it to a lower house vote.”

It is essentially a race against time to see if the house ethics committee will force his resignation before he can secure the lower house support to force a Senate impeachment trial.

For her part, Rousseff has accused the opposition of “coup-mongering” following last week’s ruling by the TCU that she cooked the fiscal books.

Meanwhile, as the intractable political stalemate keeps investors on edge regarding whether the government will be stable enough to enact the reforms needed to plug the budget gap, the economy continues to crumble.

We got a look at retail sales for August today and the picture was not pretty. Core retail sales fell by a larger-than-expected 0.9% month on month and July was revised lower to -1.6%. Broad retail sales fell 2.0% auto sales crashed 5.2%. Annually, core fell by 6.9% broad by 9.6% yoy. Here’s Goldman with the takeaway:

The near-term outlook for private consumption and retail sales remains negative owing to the significant deceleration of credit flows from both private and public banks, high levels of household indebtedness, declining job creation and real wage growth, higher interest rates, higher taxes (including via inflation), higher utility and transportation tariffs, heightened economic and political uncertainty and very depressed (record low) consumer confidence.

…click on the above link to read the rest of the article…

The G-30 Group Of Central Bankers Warn They Can “No Longer Save The World”

October 11, 2015

The G-30 Group Of Central Bankers Warn They Can “No Longer Save The World”

In a detailed report by the Group of Thirty, central bankers warned that ZIRP and money printing were not sufficient to revive economic growth and risked becoming semi-permanent measures. As Reuters reports, the flow of easy money has inflated asset prices like stocks and housing in many countries but have failed to stimulate economic growth; and with growth estimates trending lower and easy money increasing company leverage, the specter of a debt trap is now haunting advanced economies. “Central banks have described their actions as ‘buying time’ for governments to finally resolve the crisis… But time is wearing on,” sending a message of “you’re on your own” to governments around the world.

The G30 begins their report rather pointedly…

Central banks worked alongside governments to address the unfolding crises during 2007–09, and their actions were a necessary and appropriate crisis management response. But central bank policies alone should not be expected to deliver sustainable economic growth. Such policies must be complemented by other policy measures implemented by governments.

At present, much remains to be done by governments, parliaments, public authorities, and the private sector to tackle policy, economic, and structural weaknesses that originate outside the control or influence of central banks. In order to contribute to sustainable economic growth, the report presumes that all other actors fulfill their responsibilities.

Roughly translated… central bankers are saying “you are now on your own.”

Central banks alone cannot be relied upon to deliver all the policies necessary to achieve macroeconomic goals. Governments must also act and use the policy-making space provided by conventional and unconventional monetary policy measures. Failure to do so would be a serious error and would risk setting the stage for further economic disturbances and imbalances in the future.

And the “need to exit” appears to be front and center for The G30 bankers…

…click on the above link to read the rest of the article…

Moscow Demands Britain Explain “Green Light To Shoot Down Russian Jets”

October 11, 2015

Moscow Demands Britain Explain “Green Light To Shoot Down Russian Jets”

The chances of escalation from a proxy war to outright war just went to 11 on the Spinal Tap amplifier of sabre-rattling. A day after British and NATO pilots were reportedly given the green light to take drastic action against Russian fighter jets if they come under threat during missions over Iraq, Interfax reports that the Russian Defense Ministry has demanded clarification. Senior defence sources say it is just a matter of time before our fighters are involved in a deadly confrontation with Russian jets.

The Chinese, it appears, are wholeheartedly behind Putin’s efforts, judging by the following puff-piece from Xinhua (unofficially China’s government mouthpiece)…

Russia’s recent military intervention in the Syrian war in the form of airstrikes and missile attacks aimed both at supporting the government of President Bashar Al-Assad in combatting the Islamic State (IS) has reaped initial gains.

Russia’s bombing campaign in Syria, which began on Sept. 30, has strengthened the Syrian government, laying the foundation for a dialogue with all countries concerned to come up with solutions that could drag Syria out of the internal conflict that has lasted for more than four years.

According to Russia Today, Russia started its bombing campaign in Syria with a goal to provide air support to the government troops in fighting various terrorist groups, primarily the IS.

Russian air strikes hit 55 Islamic State group targets in Syria in the past 24 hours, the defense ministry said Saturday, as Moscow ramped up its military campaign in the war-torn country.

Russia’s air force has attacked a total of 112 targets since the start of the military actions.

On Thursday, Syrian government troops launched large-scale ground offensives under the cover of Russia’s repeated air strikes. At the same time, Russia launched 26 cruise missiles from the Caspian Sea and destroyed 11 IS targets.

…click on the above link to read the rest of the article…

Snowden Has A Simple Solution To Get To The Bottom Of The US Afghan Bombing “War Crime”

October 7, 2015

Snowden Has A Simple Solution To Get To The Bottom Of The US Afghan Bombing “War Crime”

Overnight, Medecins Sans Frontiers, or the “Doctors without Borders” medical group which suffered a tremendous loss of life at the hands of US bombardment this past Saturday, stepped up its criticism of what it has previously called a US “war crime.”

As Reuters reports, earlier today it called for an independent international fact-finding commission to be established to investigate the U.S. bombing of its hospital in Kunduz, Afghanistan, which it deems a war crime, and which it would use to decide whether or not to file criminal charges, although it was unclear against whom precisely: perhaps 2009 Nobel Peace Prize winner Barack Obama?

Why independent: because as MSF said “we cannot rely on internal investigations by U.S, NATO and Afghan forces.”

Instead, the medical charity said that the commission, which can be set up at the request of a single state under the Geneva Convention, would gather facts and evidence from the United States, NATO and Afghanistan. MSF said it sent a letter on Tuesday to the 76 countries who signed up to the additional protocol of the Geneva Convention that set up the standing commission in 1991.

There is one problem: neither the United States nor Afghanistan are signatories and Francoise Saulnier, MSF lead counsel MSF, said that the consent of the states involved is necessary.

Good luck getting it.

Assuming the US does “agree” to comply with this fact-finding mission, we expect the full data dump – after all the necessary scrubbing of the evidence of course – to take place, some time in 2019.

For now, however, the MSF is not backing down: “If we let this go, we are basically giving a blank check to any countries at war,” MSF International President Joanne Liu told a news briefing in Geneva. “There is no commitment to an independent investigation yet.”

MSF is in talks with Switzerland about convoking the international commission of independent experts.

“Today we say enough, even war has rules,” Liu said.

…click on the above link to read the rest of the article…

Russian Warships Launch Missile Attack On Syrian Targets, Clearing Way For Iran Ground Invasion

October 7, 2015

Russian Warships Launch Missile Attack On Syrian Targets, Clearing Way For Iran Ground Invasion

In case it wasn’t clear enough what was set to happen soon after the Russian air force had spent a few days softening up anti-regime positions on the ground, allow us to spell it out: with the opposition on the run thanks to five days of aerial bombardment, Iran will now send in the Hezbollah/Shiite militia/Quds clean up crew, who will personally ensure that whoever is left in the wake of the Su-34 strikes is swiftly eliminated at close range.

You see, this is how you conduct an actual war and you needn’t be a West Point graduate to understand it. Russia has essentially debilitated Assad’s opposition from the air and now, Iran will (both figuratively and literally in all likelihood), simply walk up and execute anyone who’s left and that, as they say, will be that. Of course Damascus will get to claim that the SAA emerged victorious with the help of Russian air support, but in reality, there is no SAA. Just as we said weeks ago, the ground campaign is being orchestrated from Damascus by Quds commander Qasem Soleimani. Here’s Reuters:

The Russian government says its Syria deployment came as the result of a formal request from Assad, who himself laid out the problems facing the Syrian military in stark terms in July, saying it faced a manpower problem.

Khamenei also sent a senior envoy to Moscow to meet President Vladimir Putin, another senior regional official said. “Putin told him ‘Okay we will intervene. Send Qassem Soleimani’.

“Soleimani is almost resident in Damascus, or let’s say he goes there a lot and you can find him between meetings with President Assad and visits to the theater of operations like any other soldier,” said one of the senior regional officials.

…click on the above link to read the rest of the article…

Saudi Oil Minister Puts On Brave Face Amid Severe Headwinds: “Eventually, Economic Producers Will Prevail”

October 5, 2015

Saudi Oil Minister Puts On Brave Face Amid Severe Headwinds: “Eventually, Economic Producers Will Prevail”

As the EM world looks on helplessly while Saudi Arabia’s war with the US shale complex (and, by extension, with the Fed) serves to keep crude prices depressed putting enormous pressure on commodity currencies and accelerating emerging market outflows, the question is whether Riyadh’s SAMA piggy bank can outlast the various capital market lifelines available to America’s largely uneconomic shale drillers.

It’s tempting to simply say “yes.” That is, with the next round of revolver raids due in days and with HY spreads blowing out amid jittery US markets, it seems unlikely that maligned US producers will be able to survive for much longer, and despite the fact that data out yesterday shows Riyadh’s FX reserves falling to a 32-month low, the Saudi war chest still amounts to nearly $700 billion, giving the kingdom plenty of ammo. However, between maintaining subsidies, defending the riyal peg, and fighting two proxy wars, Saudi Arabia’s fiscal situation has deteriorated rapidly, forcing Riyadh to tap the bond market in an effort to help plug a hole that amounts to some 20% of GDP.

Given the above, some have dared to suggest that in fact, the Saudis could lose this “war” just as they may be set to lose their status as regional power broker to Tehran thanks to Iran’s partnership with Moscow in the ongoing effort to shore up Assad in Syria and wrest control of Baghdad from the US.

But don’t tell that to Saudi Arabia’s Oil Minister Ali al-Naimi who says that despite all the uncertainty, the economics of oil exploration and production will prevail at the end of the day. Here’s Reuters, citing Economic Times:

Saudi Arabia’s Oil Minister Ali al-Naimi believes economic producers will prevail over higher-cost suppliers and OPEC’s share of the market will rise, India’s Economic Times newspaper reported on its website on Monday.

…click on the above link to read the rest of the article…

Heading Toward a Collision: Syria, Saudi Arabia and Regional Proxy Wars

October 2, 2015

Heading Toward a Collision: Syria, Saudi Arabia and Regional Proxy Wars

A recent Guardian article (“Saudi Arabia says there is no future for Assad in Syria”) Saudi Foreign Minister Adel al-Jubeil is quoted saying, “This [the Syrian civil war] could be a more lengthy process and a more destructive process but the choice is entirely that of Bashar al-Assad.” The foreign minister did not specify how Assad would be forcibly removed, only that Saudi Arabia would tolerate nothing short of a complete regime change in Syria. Jubeil but claimed that Saudi Arabia is backing “moderate rebels” in the civil war.”

The Saudis are indeed backing ‘moderate’ rebels — if the Nusra Front, an al-Qaida affiliate is considered ‘moderate’. It is ostensibly allied with Saudi Arabia.) With memories of Afghanistan in mind, Saudi Arabian officials are genuinely concerned about “blowback,” and for good reasons. A branch of Islamic State (aka: ISIS or ISIL) in Saudi Arabia has already carried out attacks in its northeastern, predominantly Shi’ite province and against the Saudi government itself. Saudi officials are well aware that Islamic State, with its own roots in Saudi Wahhabism (an extreme form of fundamentalist Islam) the ruling family could come under attack, in part because of its close relationship to Washington.

A February 2014 report by Reuters reported that Saudi Arabia had recently banned its citizens from fighting in ‘foreign wars’, promising 3-20 years imprisonment for violating this law. It also banned its citizens from sending material support to certain Jihadi groups fighting in Syria. It cannot stop private individuals inside or outside the Kingdom from giving millions to support the actions of ISIS, however, considered by some to be a form of ‘Islamist fascism’.

…click on the above link to read the rest of the article…

UBS Is About To Blow The Cover On A Massive Gold-Rigging Scandal

September 28, 2015

UBS Is About To Blow The Cover On A Massive Gold-Rigging Scandal

With countless settlements documenting the rigging of every single asset class, it was only a matter of time before the regulators – some 10 years behind the curve as usual – finally cracked down on gold manipulation as well, even though as we have shown in the past, central banks in general and the Fed in particular are among the biggest gold manipulators.

That said, we are confident by now nobody will be surprised that there was manipulation going on in the gold casino. In fact, ever since Germany’s Bafin launched a probe into Deutsche Bank for gold and silver manipulation, it has been very clear that the only question is how many banks will end up paying billions to settle the rigging of the gold market (with nobody going to prison as usual, of course).

Earlier today, we learned that the Swiss competition watchdog just became the latest to enjoin the ongoing gold manipulation probe when as Reuters reported, it launched an investigation into possible collusion in the precious metals market by several major banks, it said on Monday, the latest in a string of probes into gold, silver, platinum and palladium pricing.

Here are the details that should come as a surprise to nobody:

Global precious metals trading has been under regulatory scrutiny since December 2013, when German banking regulator Bafin demanded documents from Deutsche Bank under an inquiry into suspected manipulation of gold and silver benchmarks by banks. Even though the market has moved to reform the process of deciding on its price benchmarks, accusations of manipulation have refused to go away.

Switzerland’s WEKO said its investigation, the result of a preliminary probe, was looking at whether UBS, Julius Baer, Deutsche Bank, HSBC, Barclays, Morgan Stanley and Mitsui conspired to set bid/ask spreads.

“It (WEKO) has indications that possible prohibited competitive agreements in the trading of precious metals were agreed among the banks mentioned,” WEKO said in a statement.

…click on the above link to read the rest of the article…

Now What?

September 19, 2015

Now What?

September 18 – Reuters: “The world’s leading central banks are facing the risk that their massive efforts to revive economic growth could be dragged down again, with some officials arguing for bold new ideas to counter the threat of slow growth for years to come. A day after the U.S. Federal Reserve kept interest rates at zero, citing risks in the global economy, the Bank of England’s chief economist said central banks had to accept that interest rates might get stuck at rock bottom. In Japan, where interest rates have been at zero for more than 20 years, policymakers are already tossing around ideas for overhauling the Bank of Japan’s huge monetary stimulus program as they worry that it will be unsustainable in the future, according to sources familiar with its thinking. Separately a top European Central Bank official said the ECB’s bond-buying program might need to be rethought if low inflation becomes entrenched.”

Most just scoff at the notion that there has been a historic global Bubble, let alone that this Bubble has over recent months begun to burst. Talk of an EM and global crisis is viewed as wackoism. Except that the Federal Reserve clearly sees something pernicious in the world that requires shelving, after seven years, even the cutest little baby step move in the direction of policy normalization.

The Fed and global central banks responded to the 2008 crisis with unprecedented measures. When the reflationary effects of these policies began to wane, the unfolding 2012 global crisis spurred desperate concerted do “whatever it takes” monetary stimulus. This phase has now largely run its course, and there is at this point little clarity as to what global central bankers might try next.

Clearly, great pressure will remain to hold rates tight at zero. I fully expect policymakers at some point to see no alternative than to implement additional QE.

…click on the above link to read the rest of the article…

The Petroyuan Cometh: Launch Of Renminbi-Denominated Oil Futures Contract Imminent

September 11, 2015

The Petroyuan Cometh: Launch Of Renminbi-Denominated Oil Futures Contract Imminent

Whenever one talks about the death of the petrodollar, the unspoken question lurking just beneath the surface is this: is the rise of the petroyuan just around the corner?

This year, we’ve gotten quite a bit of evidence to suggest that the answer to that question may indeed be a resounding “yes.” In May for instance, Russia surpassed Saudi Arabia as the largest oil supplier to China and what’s especially notable there is that beginning in 2015, Gazprom began settling all of its crude sales to China in yuan meaning that, at least partly, the petrodollar was supplanted just as soon as its death became inevitable.

Now, just as China has moved to play a greater role in determining the price of gold by participating in the LBMA auction and by establishing a yuan-denominated fix, it’s moving quickly to create a yuan-denominated oil futures contract. Here’s Reuters:

China’s push to establish a crude derivatives contract has been met with early scepticism, but oil executives say the country’s growing economic influence means a third global crude benchmark is inevitable.

A derivatives contract would give the Shanghai International Energy Exchange, known as INE, a slice of an oil futures market worth trillions of dollars, offering a rival to London’s Brent and U.S. West Texas Intermediate (WTI).

And while others have tried and failed, China brings its might as the world’s biggest oil buyer, a strong dose of political will and the alignment of its financial and banking system for a yuan-denominated contract.

“The energy industry is still manned, literally, by people from the West. But the world moves on, and there’s a change of guard,” said a senior market executive, speaking on the sidelines of a major industry gathering in Singapore this week, at which delegates spoke on condition of anonymity.

“China has become the world’s biggest oil trader, and that means that an oil price will be set there, like it or not.”

…click on the above link to read the rest of the article…

Puerto Rico To Run Out Of Cash By Year End, Faces $13 Billion Shortfall

September 9, 2015

Puerto Rico To Run Out Of Cash By Year End, Faces $13 Billion Shortfall

Remember when two months ago Schauble jokingly offered Jack Lew to “trade” Greece for Puerto Rico? Something tells us in the interim period the German finmin changed his mind because while the Greek can has been kicked again, if only for the time being until bailout #4, the full severity of the Puerto Rican insolvency was laid out for all to see moments ago when top officials and outside advisors to the commonwealth released a highly-anticipated report showing that even after implementing proposed economic reforms and budget cuts, the island’s whopping funding gap of $28 billion will at best be reduced to “only” $13 billion over the next several years.

Even worse, as the FT reports according to the report of the so-called Working Group, the Treasury’s single cash account and Government Development Bank would exhaust available liquidity before the end of the year, creating a cash shortfall in late November or early December. In other words, Puerto Rico is Greece, and unlike the German colony, Puerto Rico does not have any negotiating leverage to threaten a departure from the dollar zone, or threaten to print its own currency.

FT adds that “while the government will be able to manage around those year-end issues, the cash crunch will come to a head in June, when officials on the Working Group conceded it would be nearly impossible to tap financial markets. The plan, which will be closely scrutinised by investors who have just agreed a restructuring with Puerto Rico’s electric power authority, included proposals to consolidate the commonwealth’s education department, reorganise the Department of Economic Development and create a fiscal oversight board.”

The plan will hardly be greeted with cheers domestically as it anticipated “austerity” that makes recent Greek sacrifices seem like a walk in the park: cost cuts identified included a continued salary freeze for government employees and a request for a waiver from the Jones Act, which requires shipping to and from US ports to be conducted with American crews and vessels, increasing the territory’s transportation expenses.

…click on the above link to read the rest of the article…

China Takes “10 Steps Back,” Slaps 20% Reserve Requirement On Currency Forwards

September 1, 2015

China Takes “10 Steps Back,” Slaps 20% Reserve Requirement On Currency Forwards

Overnight, China decided to take steps to reduce “macro financial risks.”

And by that they mean “do something quick to help ease pressure on the yuan” and by extension, on the PBoC’s rapidly depleting FX reserves.

To that end, starting October 15 banks will have to hold the equivalent of 20% of clients’ FX forward positions with the PBoC, where the money will sit, frozen, for a year, at 0% interest.

Obviously, that will drive up the cost of taking speculative positions which the PBoC hopes will help narrow the gap between onshore and offshore yuan and bring down volatility, although the degree to which this will help fill the CNY-CNH spread looks like an open question.

“It’s a move to ease the reduction in foreign-exchange reserves,” Tommy Ong, managing director for treasury and markets at DBS Bank Hong Kong, tells Bloomberg. “It will also remove lots of speculative trades that aim at short-term gains as the reserves have a minimum lock-up period of one year,” adds Stan Chart’s Becky Liu.

Here’s a bit of color from FX strategy desks via Bloomberg:

Andy Ji, Singapore-based currency strategist at CBA:
- This is typical FX control, as it limits the FX forward positions
- PBOC has intervened before in the forward market, but imposing the 20% limit on outstanding forward position will require less intervention effort
- Spread on CNY and CNH may not substantially narrow on this move alone, as global demand on dollar remains high and China economic grow remains slow
Fiona Lim, Singapore-based senior FX analyst at Maybank:
- This seems to be another move to discourage yuan forward selling and to lower yuan depreciation expectations
- Offshore-onshore yuan gap has been pretty persistent because of yuan depreciation expectations and officials want to narrow the gap
- Gap will be sustained as the economy continues to remain under pressure
  …click on the above link to read the rest of the article…

Brazil Throws In Towel On Budget; Citi Compares Fiscal Outlook To “Bloody Terror Film”

August 31, 2015

Brazil Throws In Towel On Budget; Citi Compares Fiscal Outlook To “Bloody Terror Film”

Late last week, Brazil officially entered a recession as the economy contracted 1.9% in Q2, a quarter in which Brazilians suffered through the worst stagflation in over ten years.

What was perhaps worse than the GDP print however, was budget data for July which was meaningfully worse than expected. “On a 12-month trailing basis the consolidated public sector recorded a 0.9% of GDP primary deficit in July, worse than the 0.6% of GDP deficit recorded in December and, therefore, increasingly distant from the new unimpressive +0.15% of GDP surplus target,” Goldman noted.

We summed the situation up as follows: “No primary surplus for you!”

And while analyzing LatAm fiscal policy doesn’t make for the most exciting reading in the universe, this particular budget battle is critical for a number of reasons, the most important of which is that Brazil’s investment grade credit rating might just depend on it and to the extent the country is forced to concede that it will not, after all, hit its primary surplus target this year, junk status could be just around the corner. Needless to say, if Brazil is cut to junk, that will do exactly nothing to help the country combat a bout of extremely negative market sentiment tied to Brazil’s rather prominent role in the great emerging market unwind.

Sure enough, government sources have now confirmed that embattled President Dilma Rousseff – whose political woes are making it nearly impossible to pass legislation designed to plug gaps – will now submit a 2016 budget proposal that projects a deficit. Here’s Bloomberg:

The Brazilian government will send to Congress Monday a budget proposal for 2016 that projects a primary deficit instead of the previously expected surplus, according to two government sources familiar with the matter.

…click on the above link to read the rest of the article…

Ukraine Reignites – 50 Injured After Grenade Attack On Parliament

August 31, 2015

Ukraine Reignites – 50 Injured After Grenade Attack On Parliament

Amid the Ukraine government’s vote for constitutional changes to give its eastern regions a special status(that it hopes will blunt their separatist drive) protests have turned deadly as RT reports 50 Ukrainian nation guards have been injured in a greande blast near parliament in Kiev.

The clashes began earlier in the day…

Following, as Reuters reports, Ukraine’s parliament on Monday voted for constitutional changes to give its eastern regions a special status that it hopes will blunt their separatist drive…

At a rowdy session, a total of 265 deputies voted in favor in the first reading of a “decentralization” bill, backed by President Petro Poroshenko’s political bloc and his government – 39 more than that required to go through.

But many coalition allies, including former prime minister Yulia Tymoshenko, spoke against the changes and it is open to question whether Poroshenko will be able to whip up the necessary 300 votes for it to get through a second and final reading later this year.

Approval of legislation for special status for parts of Donetsk and Luhansk regions, which are largely controlled by Russian-backed separatists, is a major element of a peace agreement reached in Minsk, Belarus, in February.

Though a ceasefire is under pressure from sporadic shelling and shooting which government troops and rebels blame on each other, Western governments see the deal as holding out the best possible prospect for peace and are urging Ukraine to abide by the letter of the Minsk agreement.

But they have not turned deadly as a greande attack leaves 50 national guard injured…

…click on the above link to read the rest of the article…

Greece reverts back to a BARTER economy as global financial system unravels

August 24, 2015

Greece reverts back to a BARTER economy as global financial system unravels

Greece’s finances and its national economy have both deteriorated so dramatically that now average citizens are being forced to do something they haven’t had to do since the country was occupied by Nazi Germany: Barter for their basic needs and essentials.

As reported by Reuters, the rise in bartering comes amid a government-imposed cash squeeze stemming from an Athens-imposed three-week closure of the country’s banks on June 28. Since then government capital controls, put in place to avoid a run on banks, have limited the supply of cash in the hands of ordinary Greeks.

Reuters further reported:

Wild boar and power cuts were Greek cotton farmer Mimis Tsakanikas’ biggest worries until a bank shutdown last month left him stranded without cash to pay suppliers, and his customers without money to pay him.

Squeezed on all sides, the 41-year-old farmer began informal bartering to get around the cash crunch. He now pays some of his workers in kind with his clover crop and exchanges equipment with other farmers instead of buying or renting machinery.

‘It’s a nightmare’

Tsakanikas has become part of an expanding barter economy that many Greeks abhor because they see it as a step back from modern life, Reuters continued. However, many others are embracing it as a means to an end: Short-term economic survival.

When Tsakanikas rented a field in early August, he agreed he would pay for it with a portion of his clover crop.

Learn more: http://www.naturalnews.com/050888_Greece_barter_economy_financial_collapse.html#ixzz3jjOU62zf

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