Collectivist Banking

This certainly didn’t take long in occurring. Anytime the Socialist of the EU get a chance to screw the pooch, they do. This time it is Italy’s turn in the barrel.

Here comes another global financial crisis …

Is another global financial crisis on the horizon?

Investors are increasingly worried that an escalating political crisis in Italy could lead to a populist, euroskeptic government taking power. As a result, there’s rising uncertainty about whether the country might eventually abandon the euro currency zone or default on its giant debt pile. To make things worse, the Trump administration continues to toy with the idea of a trade war with Europe and China. That would be the last thing the global economy would need if the Italian situation deteriorates further. Debt crises and trade wars are a toxic combination.

To fully understand the risk, it’s helpful to recall that before there was a Brexit, there was the threat of Grexit. There was widespread concern a few years ago that Greece’s government debt crisis would force it to exit the eurozone, and that such a shock departure would be a crushing blow to both the broader European economy, in the middle of recession, and the American economy, which was still recovering from its own downturn. [snip]

Thankfully, the worst didn’t happen. Europe muddled through thanks to a combination of Greek debt bailouts and massive money printing by the European Central Bank. But Italy poses a far bigger threat than Greece ever did.

Italy is the eurozone’s third-largest economy, 10 times the size of Greece’s. It also has the world’s third-largest sovereign debt market, some $2.7 trillion. Only Greece has a higher public debt-to-GDP ratio in the eurozone. My AEI colleague Desmond Lachman, a former International Monetary Fund official and Wall Street emerging market strategist, argues that Italy’s troubles have the potential to roil the global economy much like the 2008 Lehman bankruptcy. (The 10th anniversary of “Free Market Day” is coming!) America wouldn’t be spared.

That’s just one of the problems with Donald Trump’s America First worldview. It ignores how America is deeply and irreversibly enmeshed in the global economy through linkages we probably don’t fully understand, as the original global financial crisis of 2008 showed.

Italy is a mess. It’s too big to fail, but also too big to bail out. To a large extent, it will need to save itself though economic reforms that boost its lagging productivity and reduce its debt load as a share of the economy. And America cannot simply sit idly by and pretend that this is not our problem. [snip]

Italy must get its financial house in order. But America also has a role to play, such as avoiding trade disputes with Europe or China that will exacerbate market tension and potentially weaken global growth. There is little evidence that any of the trade actions currently being contemplated by Team Trump would have much impact on economic or job growth. But a second global financial crisis surely would.

Typical of the Socialist/Progressive politicians and bankers, they now want other peoples money (OPM) to solve their debt.
The world governments have been playing with Monopoly Money; it’s worth is zero. The answer to the value of the fiat paper is to print more.

Biased Agendas

Perhaps some of you can remember back to the Good Ole Jimmuh Carter days where interest rates on a used car started at 11.5% and up and Oh, just try to buy a house. Jimmuh liked Socialism, thought it was good for the little people. That’s mere “peanuts” compared to what the Bamster bunghole had in store for you.

This is NOT a mere ‘coincidence’… from Rico

Who was President of the US from 2009-2016?
– No, I am not referring to the fake Social Security number he used, the fake Birth Certificate he produced, or even the fake name and persona…I refer to the sudden ‘explosion’ of the US money supply. Look at the attached chart. We can talk about the doubling of the national debt during the same period another time, but be assured that neither one was a mere ‘coincidence’ it was an intentional effort to smash America financially.

Doubt me? Consider Weimar, Argentina, Zimbabwe and Venezuela.
– How many of those people wished they had Gold instead of fiat currency?

It’s too late for you when you have both too many and not enough paper fiat notes at the same time.

Laissez le bon temps rouler

This week the market has been going up. One has to believe the Institutions have decided they shaken the Muppets out, taken their money and now can get back to the real game of taking advantage of each other.

[Most Recent Quotes from www.kitco.com]

Toon in

Here today, Gone today

For those that figured to ‘get quick rich’ in Bitcoins, you had a better chance of scoring fast in a NY 8thAve three card monté game.

Bitcoin Is Falling Fast, Losing More Than Half Its Value in Six Weeks

Bitcoin plunged below $8,000 in intraday trading, extending its sharp rout since the start of the year in a selloff triggered by a widening regulatory crackdown on cryptocurrencies.

Late Friday in New York, bitcoin had recovered to $8,524, down 6.8% on the day after slipping below $7,700. That was the lowest level since November.

At its low point, the digital currency had fallen about 60% from an intraday record of $19,783 in December, according to research site CoinDesk Inc. That marks bitcoin’s third biggest drop over the past five years. It fell 76% in the spring of 2013 and 85% from November 2013 to January 2015. [snip]

Meanwhile, some big banks are putting up roadblocks to buying bitcoin. JPMorgan Chase & Co., Citigroup Inc. and Bank of America Corp. said Friday that they no longer would allow credit-card holders to use the cards to buy bitcoin.

Regulatory scrutiny is behind much of the reason for bitcoin’s sudden fall. India is the latest country to crack down on the cryptocurrency market, following in the footsteps of China and South Korea. That pressure shows that governments are turning out to be much harder to circumvent than cryptocurrency advocates once thought. [snip]

In Japan, $530 million of a cryptocurrency called NEM was swiped in a heist on the exchange Coincheck Inc.

In the U.S., regulators have warned of fraud in initial coin offerings, a new form of fundraising by which a company creates a new virtual coin or token and offers it for public sale. The offerings have attracted billions of dollars.

Even Facebook Inc. is cracking down. The social-media company said this past week that it would stop running ads promoting cryptocurrencies and initial coin offerings.

“I don’t think this is the end of the line for cryptos, but I’m certainly not touching any until more stability can be reached,” Mr. Beene said.

If you can’t hold it, you don’t own it. Never forget that.
That applies to everything including PAPER currency.

Investing in Cryptocurrencies

What a haul. Unregulated, untraceable and convertible to any currency desired. As the old tune goes, “Who could ask for anything more.”

Crypto currency….aaand it’s gone…from Rico

Biggest crypto ‘hack’ yet.

Hacker’s breached CoinCheck’s security and stole $400 million worth of crypto.
– That’s bigger than the $350 million Mt.Gox lost in two hacks in 2011 and 2014.

Observations

I need to put this in. I don’t buy or sell metals, stocks, bonds or any fiduciary instruments for third parties. I do not give financial advice other than don’t be a sucker, Caveat emptor. I read much and listen to responsible financial reportage. Other than that, it’s a nasty world out there.
I believe that the Government thinks all money is theirs. The less they know about what you have the better off you are.

In a past post on the bitcoin price plunge one of the readers made this tongue in cheek comment. “I have invested heavily in Beaniecoin, which is a virtual plush toy-based currency. I am already rich.” Actually quite insightful to the vagaries of trendy markets. He made another point which is also worth examining. What is the value of the word “rich”?

In reverse order, the value of the word ‘rich’ depends on your current net worth. A thought of hitting PowrBall to some is a Godsend. Warren Buffet wouldn’t buy a ticket. It a matter of perspective.

Speaking to investments, they’re all gossamer. You took your money and you bought paper. Yes! You bought paper with a promise that it MIGHT be worth something in the future. Nowhere is it written that it will be.
Take Exxon Mobil (XOM). Currently worth about $88±. That is a substantial company but the price does fluctuate. Depending upon your strike price you either make or lose money based on the economy and your personal financial condition.

GE is another story. A Blue Chip industrial used to be in the $30±/share range now selling for $16.45±/share and going up and down like a kid with a new Pogo stick. The SEC is investigating the company’s accounting practices from back when Immelt was CEO. I own GE as a disclosure.

The above are examples of investments where there is substantial capital backing your your purchase. Feel better? Think K-Mart, Sears, J C Penny, Macy’s, Toy’s R Us and how many other businesses that were on the stock exchanges only to have their stocks become worthless. Some of aforementioned are teetering, others are going to close. They had capital behind them too.

A different investment is EFT, Electronically Traded Funds. People buy metals this way, gold, silver, palladium copper etc. They believe they own those products. These sales are leveraged some 30 times to each ounce of metal existing. If there is a run, there is a clause in those contracts called Force Majure. This states that if there isn’t a sufficient amount of product to cover all calls, the uncovered calls get back their capital in dollars.
So much for owning metals held by some one else.

The Cryptocurrencies have nothing backing them. Pretty much like the US dollar. What you say? Yup! What is backing the good ole USD is about $20 trillion of debt. America isn’t on the Gold Standard, Nixon took us of that in 1972. The USD is a fiat currency; recognized as the world’s reserve currency simply because we have the printing press. Think about what that REALLY means. Think not just inflation by serious devaluation.
Now think Bitcoin. That is a fiat currency, worth what they say it is and those saying are numbered around 1000 people. That is who holds the most currency. You own bitcoin; you own paper.

Which brings us to the big rule of capital, investing and ownership.

If you don’t actually hold it, you don’t own it.