Financial topics

[Higgenbotham]

Yes, a, these events all have exact cyclical relationships and I would also say that if we look at the time it took between the catalyst you inferred and the wall to fall, then with that being a stable non-crisis period, we would want to look at cutting that time back considerably.

Related, had the US not had the world reserve currency, Meredith Whitney would have been correct in her assessment of the defaults. With that cycle I was able to put a pin on the exact day of the silver high and was sure enough of it to sell all my silver, but I haven't been able to come up with anything here. It could be the time has been extended out in the way stated and the weakest link is Europe but I'm not sure this time.

[aedens]

That is why I utilized the cone forward to populate the nominal values we see. As Marc noted he could not short bens thesis from 1983 as noted here and the coordinated failure we accurately distilled from the sweep acount, reg t and other facets for some time now we covered. Ben can only relent in proportion to inflation when bundles grow "inflate" we posit. If growth is over 2.58 percent, or was then and they wasted that set, that is the signal he needs to back out in percentages of change we modeled for later in our view. They need inflation in the political economy to retire the debt but the analysis forgot the discarded consumer who decides all. Nothing like them dealing with facts and I cannot conclude what works since the GD points to what it is and not what they want. Marx was right, created the rope to hang themselves in avarice. As the inane democrats lamented and tossed dirt in the air in sack cloth the other day they will never stop deficits spending. They are utterly corrupted and this is blue and red enlarge as fortold before we existed. We know whats coming and even on our side they deny what Vin is asserting. http://blogs.barrons.com/incomeinvestin ... hoobarrons

That brings year-to-date loan fund inflows to $15.2 billion, surpassing the $12.2 billion total for all of 2012.
One hell of a ROC - I consider John's thought the parabolic phase may catch on when it does in its nature of distortions
and have to run some sets when I get more time later. In my basket view if course to relative actors considered viable
I note lately.

[Higgenbotham]

Ben has ensured that what topples the US can come from outside the US before things get straightened out internally in the US. Marc was right about the post US downgrade period because of what went on in Europe (with the LTRO) rather than anything Ben did. I had calculated that the Germans were smarter than they proved to be and it's only now that they are getting smart, but it's now too late and I think Germany will collapse with Europe. Hurricane Katrina was an important event and a lot of faith was lost but that was papered over in 2012 as the effects hit for the second time, which was a mistake. The KGB is smarter than the Western leadership, either in the US or in Europe; I think they were the only ones to play their collapse cards correctly. I think Russia will come out on top. The amount of money they are squabbling about in Cyprus is about the same amount of loss that occurred when the Bear Stearns subprime hedge funds collapsed in July 2007.

[aedens]

We have forwarded some elements to that regard for some time here. We seen it so we can only forward what we
can to those we know.

[jcsok]

First, the FDIC has done a wonderful job of protecting depositors for the past 4 years. Remember, the FDIC required member banks to prepay insurance for 3 years, which at the time was a hardship on smaller, rural banks. I have followed bank closings for the last 3 years, and although the FDIC has followed the typical governmental path of failing to follow the laws requiring prompt corrective action, therefore imposing significantly greater losses by the FDIC, all in all bank seizures have slowed to a trickle compared to 2-3 years ago. However, the FDIC has only focused on smaller banks, not the Too Big to Fail, because the FDIC can't handle one. When it comes, the dominoes won't stop.

I contend that the Cyprus debacle is a watershed action, the canary in the coal mine that historians will write about. Speculation has abounded for several months that the US may sieze 401k monies. I have read that Canada has essentially warned depositors that their monies are at risk in the event that a bank fails. We know the EU's position. At this point, how can a business continue when significant funds are at risk of theft each weekend; all significant theft by agencies occur after Friday evenings. With QEinfinity, low interest rates on deposits, people are forced to play the only game in town, the only casino that may pay, which is the stock market, and it can only go up. TPTB won't let it go down. Until it does. And then TPTB won"t be able to stop the market, which will take the banks under; the FDIC will be unable to cover losses, the FDIC and FED will seize depositor's monies, and everyone will be broke.

Many small businesses handle millions of dollars in order to eke out a small profit for the owners. A good small business, with a 10% net return and a $100K profit for the owner, would handle $1M. Asset intensive businesses, with low marginal capitalization rates, would handle far more money. Therefore at any given time, could be writing checks or receiving payments in excess of $100,000. If the Cyprus tax is applied on a given weekend, it would have a cascading effect of bankrupting small business. Government takes monies from payer's account, from receiver's account, on down the line. How about a real estate transaction, where the funds are held in escrow? Why should I, or any small business that handles significant monies, continue to take the risk, and then pay income taxes on what they leave after the theft tax? I'm gradually liquidating my business; I will handle half fo the money I did 3 years ago. I don't have to take the risk.

[Higgenbotham]

Cyprus to me means the European Union is done. Cyprus probably won't be enough to unravel it in the next 2 weeks or anything short term, but the EU appears to be going down. I don't know why it was ever thought to be sustainable to begin with. I notice there is so much confusion that even the central EU authorities aren't on the same page, or are pretending not to be to create confusion. The EU should have done a more orderly liquidation of itself starting 3 plus years ago when the crisis first erupted in Greece. Because they held on so long the liquidation will be more disorderly than was necessary and cause problems worldwide. Despite the way the rankings are conducted with Germany 4th or something like that, Europe as a whole is the world's largest economy, even larger than the US, and US corporations get a lot of sales from Europe.

http://www.businessinsider.com/15-sp-50 ... 11-11?op=1

To me, the situation is different than with MF Global where funds really were there and JP Morgan or somebody stole them. The banks don't have the money without a government guarantee and it's my interpretation that the failure of the EU to give a guarantee means the EU itself is declaring that it is bankrupt. Until the next crisis hits in the next country it can remain so and I suppose nothing will change until investors panic. In the case of the 401K and IRA money in the US, I think that will be seized if there is a panic in the US bond market. The US government will force the money into US bonds to support the bond market.

[John]

U.S. Dollar Index - 6 Months



http://www.bloomberg.com/quote/DXY:IND/chart

[Reality Check]

The United States Dollar Index or DXY measures the performance of the dollar against a basket of other currencies including EUR, JPY, GBP, CAD, CHF and SEK. Historically, from 1967 until 2013, the DXY averaged 97.9700 reaching an all time high of 164 in February of 1985 and a record low of 71 in April of 2008.

U.S. Dollar Index - 6 Months



http://www.bloomberg.com/quote/DXY:IND/chart

[Higgenbotham]

It's hard to justify that the dollar is strong now, when it's mostly being measured against 2 currencies that are collapsing, the Euro and the yen. The Euro is about 53% of what the dollar is being measured against in the DXY index. When Europe and Japan were strong, stable areas it may have been OK to point to a stable DXY as an indicator of strength. The fact that the world reserve currency is only about 5% over its 6 year average when being measured against basket case currencies is cause for alarm. The fact that nobody is alarmed indicates to me that the dollar is doomed.

[Higgenbotham]

Obama is cutting the military and removing key generals in order to weaken it and prevent the military from taking over the country.