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Major Economic Warning Sign: The Euro Is Heading For Parity With The U.S. Dollar

December 18, 2016

Major Economic Warning Sign: The Euro Is Heading For Parity With The U.S. Dollar

euro-gears-public-domainThe collapse of the euro is accelerating, and it looks like we could be staring a major European financial crisis right in the face early in 2017.  On Thursday, the EUR/USD fell all the way to $1.0366 at one point before rebounding slightly.  That represents the lowest that the euro has been relative to the U.S. dollar since January 2003.  Ever since 2011, I have been relentlessly warning that the euro is heading for parity with the U.S. dollar.  When the EUR/USD was trading at about $1.40 that must have seemed like crazy talk, but I never wavered.  I just kept warning people that the euro was going to weaken greatly relative to the U.S. dollar.  Here is one example from March 2015: “How many times have I said it?  The euro is heading to all-time lows.  It is going to go to parity with the U.S. dollar, and then it is eventually going to go below parity.”  After Thursday, we are almost there, and once we do hit parity that is going to be a sign that all sorts of chaos is about to erupt in Europe.

For years, so many people that write about our coming economic problems have been proclaiming that the death of the U.S. dollar is imminent.

But I have always taken a different approach.  I have always maintained that the collapse of the euro comes first, and that the death of the U.S. dollar happens some time later.

So many people have wanted to get rid of all of their dollars in anticipation of the coming crisis, but that is a huge mistake.

First of all, without exception everyone needs an emergency fund that can cover at least six months of expenses in case there is a job loss, a health emergency or all hell breaks loose for some reason.

 

 

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

The Price Of Silver Explodes Past 20 Dollars An Ounce As The European Banking Crisis Deepens

July 5, 2016

The Price Of Silver Explodes Past 20 Dollars An Ounce As The European Banking Crisis Deepens

Silver Coins 2 - Public DomainHave you seen what the price of silver has been doing?  On Monday, it exploded past 20 dollars an ounce, and as I write this article it is sitting at $20.48.  Earlier today it actually surged above 21 dollars an ounce for a short time before moving back just a bit.  In late March, I told my readers that silver was “ridiculously undervalued” when it was sitting at $15.81 an ounce, and that call has turned out to be quite prescient.  The Friday before last, silver started the day at $17.25 an ounce, and it is up more than 18 percent since that time.  Overall, silver is up more than 30 percent for the year, and that makes it one of the best performing investments of 2016.  So what is causing this sudden surge in the price of silver?  This is something that we will discuss below…

This sudden spike in the price of silver has definitely caught a lot of analysts off guard.  Some are suggesting that the fact that the Fed is now less likely to raise rates after the Brexit and the fact that the dollar has been slipping a bit lately are the primary reasons for silver’s rise…

This isn’t a gradual increase either. It’s an explosive growth spurt. Just three months ago silver had reached an 11 month high. Now silver prices have reached a 23 month high. Several factors appear to be influencing these gains, including a weakening dollar, and the fact that the Fed may cut interest rates in light of the Brexit vote.

Personally, I don’t buy those explanations.

To me, the continuing implosion of major banks over in Europe is the main factor that is driving investors to safe haven assets such as silver.

 

 

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

The Collapse Of Italy’s Banks Threatens To Plunge The European Financial System Into Chaos

March 8, 2016

The Collapse Of Italy’s Banks Threatens To Plunge The European Financial System Into Chaos

Italy Flag Map - Public DomainThe Italian banking system is a “leaning tower” that truly could completely collapse at literally any moment.  And as Italy’s banks begin to go down like dominoes, it is going to set off financial panic all over Europe unlike anything we have ever seen before.  I wrote about the troubles in Italy back in January, but since that time the crisis has escalated.  At this point, Italian banking stocks have declined a whopping 28 percent since the beginning of 2016, and when you look at some of the biggest Italian banks the numbers become even more frightening.  On Monday, shares of Monte dei Paschi were down 4.7 percent, and they have now plummeted 56 percent since the start of the year.  Shares of Carige were down 8 percent, and they have now plunged a total of 58 percent since the start of the year.  This is what a financial crisis looks like, and just like we are seeing in South America, the problems in Italy appear to be significantly accelerating.

So what makes Italy so important?

Well, we all saw how difficult it was for the rest of Europe to come up with a plan to rescue Greece.  But Greece is relatively small – they only have the 44th largest economy in the world.

The Italian economy is far larger.  Italy has the 8th largest economy in the world, and their government debt to GDP ratio is currently sitting at about 132 percent.

There is no way that Europe has the resources or the ability to handle a full meltdown of the Italian financial system.  Unfortunately, that is precisely what is happening.  Italian banks are absolutely drowning in non-performing loans, and as Jeffrey Moore has noted, this potentially represents “the greatest threat to the world’s already burdened financial system”…

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

Global Stocks Continue To Crash As Oil Plummets And Gold Skyrockets

February 12, 2016

Global Stocks Continue To Crash As Oil Plummets And Gold Skyrockets

Clock Image - Public DomainStock markets around the world continue to collapse as this new global financial crisis picks up more steam.  In the U.S., the Dow lost 254 more points on Thursday, and it has now fallen for five days in a row.  European stocks continued to get obliterated, and financial institutions are leading the way.  But this week what is happening in Japan has been the most sobering.  After falling 918 pointsthe other day, the Nikkei plunged another 760 points early on Friday.  The Nikkei has now fallen for seven of the past eight days, and investors in Japan are in full panic mode.  Overall, global stocks are well into bear market territory, and nearly 17 trillion dollars of global stock market wealth has already been wiped out.

As panic rises, investors are seeking alternative investments.  On Thursday, the price of gold hit $1,260 an ounce at one point before settling back a bit.  But even with the fade at the end of the day, it was still the biggest daily gain in more than two years.  Overall, gold is having its best quarterly performance in 30 years.

Whenever a financial crisis happens, investors seek out safe havens such as gold that can help them weather the storm.  In particular, demand for physical gold is going through the roof all over the planet.  Just check out the following excerpt from a Telegraph article entitled “Investors ‘go bananas’ for gold bars as global stock markets tumble“…

BullionByPost, Britain’s biggest online gold dealer, said it has already taken record-day sales of £5.6m as traders pile into gold following fears the world is on the brink of another financial crisis.

Rob Halliday-Stein, founder and managing director of the Birmingham-based company, said takings today had already surpassed the firm’s previous one-day record of £4.4m in October 2014.

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

Stock Markets All Over The World Crash As We Begin 2016

January 4, 2016

Stock Markets All Over The World Crash As We Begin 2016

Dominoes - Public DomainThe first trading day of 2016 was full of chaos and panic.  It started in Asia where the Nikkei was down 582 points, Hong Kong was down 587 points, and Chinese markets experienced an emergency shutdown after the CSI 300 tumbled 7 percent.  When European markets opened, the nightmare continued.  The DAX was down 459 points, and European stocks overall had their worst start to a year ever.  In the U.S., it looked like we were on course for a truly historic day as well.  The Dow Jones Industrial Average was down 467 points at one stage, but some very mysterious late day buying activity helped trim the loss to just 276 points at the close of the market.  The sudden market turmoil caught many by surprise, but it shouldn’t have.  The truth is that a whole host of leading indicators have been telling us that this is exactly what should be happening.  The global financial crisis that began in 2015 is now accelerating, and my regular readers already know precisely what is coming next.

The financial turmoil of the last 24 hours is making headlines all over the globe.  It began last night in China.  Very bad manufacturing data and another troubling devaluation of the yuan sent Chinese stocks tumbling to a degree that we have not seen since last August.  In fact, the carnage would have probably been far, far worse if not for a new “circuit breaker” that China recently implemented.  Once the CSI 300 was down 7 percent, trading was completely shut down for the rest of the day.  The following comes from USA Today…

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European Leaders Promise The Greek Debt Crisis Will Be Resolved One Way Or Another On Sunday

July 10, 2015

European Leaders Promise The Greek Debt Crisis Will Be Resolved One Way Or Another On Sunday

The End - Public DomainThe wait will soon be over.  Greece submitted a final compromise plan to its eurozone creditors on Thursday, European finance ministers will meet on Saturday to discuss the proposal, and an emergency summit of all 28 EU nations on Sunday will make a final decision on what to do.  The summit on Sunday is being billed as a “final deadline” and a “last chance” by EU officials.  In essence, Greece is being given one more opportunity to embrace the austerity measures that are being demanded of them by their creditors.  So has Greece gone far enough with this new proposal?  We shall find out on Sunday.

For months, the entire planet has been following this seemingly endless Greek debt saga.  Global financial markets have gyrated with every twist and turn of this ongoing drama, and many people have wondered if it would ever come to an end.  But now European leaders are promising us that the uncertainty is finally going to be over this weekend…

This time, the leaders’ summit called for Sunday is being billed by all concerned as the definitive moment that will determine Greece’s future in the euro. It’s “really and truly the final wake-up call for Greece, but also for us — our last chance,” EU President Donald Tusk said on Wednesday, the day after the most recent emergency session.

So what is the general mood of European leaders as they head into this summit?

Overall, it does not appear to be overly optimistic.

For example, just consider what the head of the Bundesbank is saying…

Bundesbank Chief Jens Weidmann, meanwhile, said that central banks have no mandate to safeguard the solvency of banks or governments, and stressed that emergency liquidity to Greece should not be increased.

And even normally upbeat leaders such as ECB President Mario Draghi are sounding quite sullen…

 

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

The German Siege Of Greece Begins (No, This Is Not A Repeat From 1941)

July 7, 2015

The German Siege Of Greece Begins (No, This Is Not A Repeat From 1941)

Siege - Public DomainDid you notice that Greece’s creditors are not rushing to offer the Greeks a new deal in the wake of the stunning referendum result on Sunday?  In fact, it is being reported that the initial reaction to the “no” vote from top European politicians was “a thunderous silence“.  Needless to say, the European elite were not pleased by how the Greek people voted, but they still have all of the leverage.  In particular, it is the Germans that are holding all of the cards.  If the Germans want to cave in and give the Greeks the kind of deal that they desire, everyone else would follow suit.  And if the Germans want to maintain a hard line with Greece, they can block any deal from happening all by themselves.  So in the final analysis, this is really an economic test of wills between Germany and Greece, and time is on Germany’s side.  Germany doesn’t have to offer anything new.  The Germans can just sit back and wait for the Greek government to default on their debts, for Greek banks to totally run out of cash and for civil unrest to erupt in Greek cities as the economy grinds to a standstill.

In ancient times, if a conquering army came up against a walled city that was quite formidable, often a decision would be made to conduct a siege.  Instead of attacking a heavily defended city directly and taking heavy casualties, it was often much more cost effective to simply surround the city from a safe distance and starve the inhabitants into submission.

In a sense, that is exactly what the Germans appear to want to do to the Greeks.  Without more cash, the Greek government cannot pay their bills.  Without more cash, Greek banks are going to start collapsing left and right.  Without more cash, the Greek economy is going to completely and utterly collapse.

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

 

 

Greek Capital Controls Begin: Greek Banks, Stock Market Will Not Open On Monday

June 28, 2015

Greek Capital Controls Begin: Greek Banks, Stock Market Will Not Open On Monday

Update 2: Greece’s Skai reports that if/when banks reopen (supposedly on Tuesday), a 60€ withdrawal limit will be imposed.

Update: In a televised address to the nation, Greek PM Alexis Tsipras assured Greeks that their deposits are safe despite an upcoming bank holiday and despite the fact that Greek stocks will not open for trading on Monday. Tsipras also said Athens has re-applied for a bailout extension and urged Greeks to “remain calm” in the face of what is sure to be a turbulent week.

  • GREEK PRIME MINISTER SAYS GREEK PEOPLE SHOULD REMAIN CALM
  • GREEK PM: BANK OF GREECE PROPOSED BANK TRANSACTION RESTRICTIONS
  • GREEK PRIME SAID GREECE RE-APPLIED FOR BAILOUT EXTENSION
  • GREEK PRIME MINISTER SAYS DEPOSITS ARE COMPLETELY SAFE

Earlier:

Despite the reassurances from any and all elected (and unelected) officials, given the run on bank ATMs in Greece has turned into a stampede, it is not surprising that:

  • GREEK BANKS TO REMAIN CLOSED FROM MONDAY FOR A WEEK: PIRAEUS BANK CEO
  • PIRAEUS BANK CEO THOMOPOULOS SPEAKS TO REPORTERS IN ATHENS

The announcement was made when Piraeus Bank CEO Anthimos Thomopoulos told reporters after a meeting of the government’s financial-stability panel on Sunday. The launch of capital controls just as the Greek summer tourism season starts, is sure to be the final crushing blow to Greece, whose entire economy will now grind to a halt.

At the same time, Finance Minister Yanis Varoufakis said an announcement would be made after a Cabinet meeting due to start imminently in Athens. Which is ironic considering just earlier today Varoufakis said he is opposed to the “very concept” of capital controls:

Yanis Varoufakis @yanisvaroufakis

Capital controls within a monetary union are a contradiction in terms. The Greek government opposes the very concept.

Banks will remain shut until at least after a July 5 referendum called by Prime Minister Alexis Tsipras on whether to accept austerity in exchange for a European bailout, Kathemerini newspaper reported, citing unnamed sources.

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

 

 

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