Tag Archives: Money

Peter Schiff and Doug Casey on the Real State of the Economy

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“The president is bragging now that the deficit is finally below $1 trillion, but that’s the deficit in the recovery. If we slip into a legitimate or acknowledged recession, where are the deficits going to go, $1.5 trillion, $2 trillion? And how can we possibly finance that when the world is already saturated with the debt that we’ve issued to stimulate us out of prior recessions?  [..]  I think we are on the edge of something that is much worse than what we had in 2008 and 2009. I look around the world at places where you can put your capital, real estate is overpriced, the stock market is greatly overpriced, the bond market is in a historic bubble, that’s about the best short sale I can think of in the world.”

http://www.internationalman.com/articles/peter-schiff-and-doug-casey-on-the-real-state-of-the-economy

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Ecuador Bans Bitcoin, Plans Its Own State-Run Digital Money

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“The law gives the government permission to make payments in ‘electronic money’, but decentralized digital currencies like bitcoin will now be prohibited.  The proposed electronic money is to be backed by the assets of the Banco Central del Ecuador, the nation’s central bank. The National Assembly will oversee the new currency while the central bank will develop and integrate it into the broader financial system.  Companies offering digital currency services will have to withdraw from operations or cease entirely.  This includes BitPagos, which recently raised $600,000 and had plans to grow in Ecuador’s bitcoin market.”

http://www.coindesk.com/ecuador-bans-bitcoin-legislative-vote/

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In Gold We Trust 2014

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“The In Gold We Trust 2014 report takes a sober look at the big picture in the monetary system and offers a holistic analysis of the gold sector. This is the eighth edtion of the report. It is written by Ronald Stoeferle who is the managing partner at Incrementum AG in Liechtenstein. He manages a global macro fund, focusing on a proprietary management approach, heavily influenced by the Austrian School of Economics.  Probably the most important of the ongoing trends is the frightening observation that we arrrived in terra incognita when it comes to our monetary world. This is the result of continuing monetary interventions by central banks around the world.”

http://www.incrementum.li/en/research-analysis/in-gold-we-trust-2014/

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BRICS establish $100bn bank and currency pool to cut out West

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“The group of emerging economies signed the long-anticipated document to create the $100 bn BRICS Development Bank and a reserve currency pool worth over another $100 bn. Both will counter the influence of Western-based lending institutions and the dollar.  The new bank will provide money for infrastructure and development projects in BRICS countries, and unlike the IMF or World Bank, each nation has equal say, regardless of GDP size.  Each BRICS member is expected to put an equal share into establishing the startup capital of $50 billion with a goal to reach $100 billion. The BRICS bank will be headquartered in Shanghai.”

http://rt.com/business/173008-brics-bank-currency-pool/

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Cyprus: 16 months of capital controls, banks still pitifully capitalized

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“It’s been over a year since the banking system in Cyprus officially went bust.  On Friday, March 15, 2013, practically everyone in the country went to bed thinking that everything was just fine.  Many had probably gone to the bank that very day to do business, or logged on to an Internet banking platform.  Yet the very next morning, they woke to a completely new reality: the nation’s banks were broke, and the government was in no position to rescue them.  All the promises they had been told about government guarantees and having a ‘well-regulated’, sound banking system turned out to be lies.”

http://www.sovereignman.com/finance/cyprus-despite-16-months-of-capital-controls-banks-still-pitifully-capitalized-14686/

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IMF pronounces Bulgaria’s banks safe, 2 weeks before bank run

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“Earlier this summer, IMF bureaucrats went to Sofia, Bulgaria to study the country’s economic progress.  And roughly a month ago, they released an official report which stated, among other things, that Bulgarian banks are ‘stable and liquid.’  Talk about epic timing. Because less than two weeks later, Bulgaria’s banking system was in the throes of a full-blown crisis.  There was a run on two of the nation’s largest banks—several hundred million dollars had been withdrawn in a matter of hours.  And the Bulgarian central bank had to step in and take over both of them or risk a collapse in the entire system.”

http://www.sovereignman.com/trends/genius-imf-pronounces-bulgarias-banks-safe-just-two-weeks-before-bank-run-14679/

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The Logical Conclusion of the Modern, Monetary Argument

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“One of the most terrible things about the globalization of finance, money and industry is that it homogenizes booms and busts. There is literally nowhere to go. As economic centralization continues, these cycles will only worsen. These days in the West – and certainly in Washington – Republicans are sure they can mandate a technocratic interest-rate rule that will restrain the Fed from doing inordinate damage to the economy. Ironically, Democrats argue for more flexibility and less government interference regarding money. This would be admirable from a free-market standpoint except that they are arguing on behalf of a MONOPOLY facility. As usual, both parties get it wrong.”

http://www.thedailybell.com/news-analysis/35494/The-Logical-Conclusion-of-the-Modern-Monetary-Argument/

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Income Investing When Interest Rates Rise

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“Cash is trash these days because yields are too low. You lose purchasing power after inflation and taxes. You’ll find that on a five-year CD you’re going to earn a little over 2%.  You can earn a higher yield with longer maturity bonds, but investors fear rising interest rates. Once the Fed starts to raise short-term rates (and perhaps before), other rates will rise. That will reduce the value of bonds and bond funds. A modest rate increase will reduce the value of the bonds by more than one year’s interest income.  When you want higher yields than cash and fear what rising rates will do to bonds, consider putting the safe or fixed-income portion of your portfolio in certain types of annuities.”

http://www.investingdaily.com/20770/income-investing-when-interest-rates-rise/

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Bulgarian Pres. Blames ‘Lack Of Faith In Institutions’ For Bank Runs

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“Bulgarians’ lack of faith in institutions sparked runs on two banks and triggered the worst financial crisis in 17 years, the nation’s president said.  ‘Let me make this very clear: there is no banking crisis in my country, but there is a crisis of confidence,’ Rosen Plevneliev said today.  With low trust in institutions, rumors, attempts at destabilization and speculative attacks can ‘create a panic,’ the president said.  The central bank blames an ‘organized attack’ of ‘criminal actions’ for the run on First Investment Bank. Corporate Commercial Bank lost deposits because of a dispute between a majority shareholder and a large depositor, Capital newspaper reported June 18, citing unidentified people.”

http://www.bloomberg.com/news/2014-07-04/bulgarian-leader-rues-confidence-crisis-after-bank-runs.html

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The Curious Case Of The Bulgarian Bank Runs

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“Because of the extent of the fraud, BNB say that nationalizing CorpBank is not an option – it describes it as ‘a bottomless barrel’. The Bulgarian Finance Ministry estimates that the cost of the deposit guarantee will raise the public deficit from 1.8% of gdp to 3%, putting it at the Maastricht treaty limit. This will be seen as a considerable disappointment in Brussels, which in the recent European Semester report advised the Bulgarian government not to allow the deficit to rise any further. And it raises considerable questions about the capability of the BNB to supervise banks effectively. Only a month ago CorpBank was given a clean bill of health. Now it is bankrupt because of a major fraud.”

http://www.forbes.com/sites/francescoppola/2014/07/12/the-curious-case-of-the-bulgarian-bank-runs/

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