Thursday morning, and once again I changed my title due to the seemingly minute-to-minute changes in Europe, moving at the pace of “ludicrous speed”, per a scene from one of my favorite 1980s movies, Spaceballs:
I literally can’t get through an email, or type a paragraph, before the next headline pops up that something dramatic has occurred in Greece, or Italy, or France, etcetera. The much ballyhooed G-20 meeting commences this morning in Cannes, France, yet another “Emergency Meeting” held in a five-star hotel, attended by a bunch of well-heeled blowhards from around the world with below average intelligence but above-average schmoozing skills. YOU are paying for these multi-million dollar meetings, which do nothing but make an already terrible situation worse. I ASSURE you, ANYTHING these morons touch will turn to lead.
Think about all the “Emergency Meetings” that were expected to “save the day”, just in the past month alone. There was a G-7, TWO ECB meetings, a Fed meeting, and now the G-20 boondoggle, appropriately set in France, potentially the final flash point of the Euro’s demise, and with it the Western financial system. If not France, another “black swan” will surely emerge, such as an “unknown unknown” like MF Global.
Before I get to Europe, I want to focus a bit more on MF Global, which, as usual, the media is eager to dismiss and move on from. This bastardized derivatives monstrosity rose to Wall Street prominence by buying assets from the disgraced, bankrupted REFCO in 2005, a perfect start to life for a “tier one CRIMINAL enterprise.”
MF’s failure has sparked a firestorm of speculation regarding its exposure to potentially dangerous, chain-reaction producing derivatives. As of now, 150,000 customer accounts are frozen, and apparently yesterday’s $700 million embezzlement estimate has already doubled to $1.5 billion.
This is chump change in today’s age of UNFETTERED MONEY-PRINTING, but the bigger question is whether a derivatives daisy chain could commence from to this “black swan” failure. As always, derivatives kingpin and head government stooge, JP Morgan, is sniffing around the wreckage trying to suck up any remaining blood. Remember, JPM has, BY FAR, the largest derivatives exposure on earth.
Actually, there is one more topic I need to get to before I return to the European CHAOS, the ongoing MELTDOWN of the U.S. economy, soon to return to the front page news. Yesterday, the Federal Reserve met, and once again emerged with the look of a deer in headlights. The first thing Bennie stated was he saw “economic improvement”, no doubt from the falsified, easily debunked 2.5% GDP growth number posted last week. However, if you survived these initial “primer” comments without losing your lunch, you’d see that the Fed’s ACTIONS didn’t match those sentiments, not by a longshot.
To start, the decision to leave rates at 0%-0.25% (we’ll be there FOREVER, by the way) was 9-1 in favor, compared to 7-3 in favor at the last meeting just six weeks ago. Moreover, the three dissents at the last meeting were from Fed governors that wanted to RAISE rates, while at this meeting, the one dissent was from a governor that wanted to LOWER rates to, presumably, a stone cold ZERO….
Next, the official statement raised the Fed’s inflation expectations, while significantly reducing its economic projections. But I thought Bennie saw “economic improvement”…
Finally, Bennie contradicted himself by saying “growth will be frustratingly slow”, and that the Fed is considering all potential monetary options, including the purchase of mortgage-backed securities to stabilize the housing market. Good luck with that one!
By the way, who would they be buying MBS bonds from? Government-owned, taxpayer-funded Fannie Mae, the largest owner and originator of mortgages in America?
If so, that would make the Fed itself the largest owner and originator of mortgages in America. And given that the Fed is owned by BANKS such as Goldman Sachs and JP Morgan, perhaps they, too, can partner with John Paulson to create new, “repackaged” MBS’ destined to fail!
Have no fear, goldbugs! The printing press is just getting started, and as sure as night follows day, OVERT QE3 will be announced shortly…
…particularly if the insane notion of “nominal GDP targeting,” which appears to be gaining support (proposed by GOLDMAN SACHS – LOL), takes hold…
And speaking of potential “Black Swans”, one final note on America, the land of freedom and democracy. Does it strike anyone as peculiar that rumors of an Israeli attack on Iran surface just DAYS after Obama commits to mobilizing its currently Iraq-based troops to the Persian Gulf?
I don’t know WHAT will happen involving the U.S. and IRAN, or WHEN, but I do know SOMETHING is coming, and frankly I fear the potential GLOBAL impact of such an event FAR MORE than the collapse of Greece.
And speaking of Greece, it’s time to get to the topic of today’s RANT, the CHAOS that is rapidly spreading in Europe, soon to engulf the entire Euro Zone in a conflagration yielding the collapse of the Euro and HYPERINFLATION in numerous nations, including MAJOR economies such as France, Italy, and the UK.
Geez, I walk into the kitchen to get my Cocoa Pebbles, and by the time I get back two MAJOR headlines hit out of Europe, justifying my new RANT title, as well as how DIRE and FLAMMABLE the EU situation has become.
To start, the ECB, under its new head moron, former GOLDMAN SACHS banker Mario Draghi, cut interest rates from the pitiful level of 1.50% to the even more pitiful 1.25%, an act of DESPERATION that will only be surpassed when they shortly go to ZIRP; that is, if the ECB even exists by the next time they meet…
…next, the announcement that Greek PM Papandreou, the pathetic bloke unlucky enough to have the nation collapse under his watch, will likely resign in the next 30 minutes…
Clearly, the near-term fate of the Euro rests on whether Greece agrees to the harsh austerity terms imposed by the last week’s bailout proposal (as if they’d honor them even if they agree to do so). As of yesterday, Greece planned to hold a referendum on this proposal on December 4th, but Germany and France (how is France dictating ANYTHING?) are demanding a swift decision, no less because the G-20 is meeting NOW, potentially to decide the fate of the entire Western banking system.
Greece DESPERATELY needs cash to fund near-term interest payments, and the farce over debating an eight billion Euro payment is beyond ludicrous, approaching PLAID (for true Spaceballs fans). Greece WILL NOT survive in the Euro, perhaps dying by its own hand. The only question is whether the subsequent “credit event” (YES, it will be a credit event) will serve as the final coup de grace for all of Europe.
Not to be outdone, the ITALIAN government is on the verge of collapse as well. The Euro Zone’s third largest economy, one of the most highly indebted and mismanaged nations on earth, is flying without a rudder, heading into a G-20 meeting which could have significant ramifications for the entire Western world.
So there you have it, readers. Complete and utter European CHAOS, which will NOT be positively resolved, no way, no how. The Euro WILL be dissolved, and with it the HYPERINFLATION monster unleashed across large swaths of the continent. Next up, France, followed by the UK, and finally the United States.
PROTECT YOURSELF, and do it NOW! And, by the way, the link below is to a 12-minute internet interview I did with SGT Report, published last night.
This is our exclusive interview with writer and financial pundit ‘Ranting Andy’ Hoffman. Andy just joined Miles Franklin precious metals as its Director of Marketing. In this discussion, we touch on the MF Global debacle, silver & gold, and current events. If you’re interested, the guys at Miles Franklin will treat you fairly and help you load up on physical silver or gold. Just a head’s up: Time’s running out!
|DERIVATIVES DESTROYING THE WORLD: Ranting Andy|