Now that the Greek bailout has been undertaken, the marketplace is turning its attention to other nations believed to be under economic or financial stress. The term "PIGS" originally referred to the "fearful foursome" of Portugal, Ireland, Greece and Spain. Italy has appeared to be on the verge of joining this uneviable assemblage of financial wreckage - creating the revised "PIIGS".
As has been written here in recent weeks, the so-called austerity program enacted by Greece is a farce. It is hardly "austere" to force lazy government workers to actually work! It is hardly austere to reduce the absurdly generous early retirement packages which allow some civil servants to retire as young as 45. Where can I sign up for that deal?
The other PIGS are now enacting their own "austerity" measures in an attempt to be more pro-active before their nations hit the crisis fever that was triggered by the Greek financial meltdown.
José Sócrates, Portugal’s prime minister, is expected to announce tough new austerity measures today, including a “crisis tax” on companies and wages, to reduce the country’s massive budget deficit.
Portugal's new austerity package, which follows similar moves by Spain, Greece and Ireland, is being introduced under pressure from Lisbon’s European Union partners for sharp budget cuts in support of a €750 billion emergency plan to defend the Euro.
Angry trade union leaders immediately called for a “mobilisation” against what they called “harsh and unjust” measures, expected to include a 1 % increase in value added tax to 21% and increases of up to 1.5 % in income tax. Unions opposed to cuts? Shocking! (Sarcasm intentional)!
The increases are expected to include a 2.5 % increase in corporate tax to 27.5 %. Politicians and public sector managers will also see their salaries cut by 5 %.
The new measures are designed to reduce the budget deficit by an additional €2.1 billion, from 9.4 % of Gross Domestic Product (GDP) in 2009 to 7 % this year and 2.8 % in 2013. Portugal’s original deficit target for this year was 8.3 % of GDP.
José Luis Rodríguez Zapatero, Spain’s prime minister, angered his trade union allies but cheered financial markets on Wednesday when he announced a surprise 5 % cut in civil service pay to accelerate cuts to the country’s budget deficit.
In what he called one of the hardest speeches of his life, Mr Zapatero told parliament how Spain planned to reduce its deficit by an extra 0.5 % of GDP this year and another 1 % of GDP in 2011, a total of €15 billion.
The new measures should help bring the deficit down from 11.2 % of GDP in 2009 to just over 6 % of GDP in 2011.
Surprisingly, trade unionists were outraged at what they said were harsh measures. One regional leader of the small United Left political party called for “rebellion and a general strike”. Shocking! (Sarcasm intentional)!
Thus far, Ireland has surprised the market skeptics by pro-actively embarking on a draconian plan to tackle its debt, which includes large public sector pay cuts, and resolve the bad loan problems at its banks.
Pledging to cut public sector spending by 7.5 % of GDP this year alone has not spared Ireland market pain. Last week its bonds were trading at a spread of 3 % over German Bunds. The moves have prevented the country from being deemed a full-blown basket case.
Italy, has been on the cusp of becoming the 5th member of this elite group. However, a very well received bond sale indicates that Rome is not yet ready for inclusion. Italy just sold €3 billion of 2015 notes at an average yield of just 2.57 %, which was 2 basis points lower than existing comparable debt. This demonstrates a substantial level of market confidence.
The problems in the Euro-Zone only BEGIN with Greece. Bail-out or not, the key to success will be a return to economic growth for all the affected nations. Greek unemployment is now more than 12% and is expected to rise to 14% over the next year or so. Until the European Union economies start to show growth, the budget deficits will continue to widen and the threat of a massive round of sovereign debt defaults will be an ongoing issue.
Marko's Take
Please visit us on You Tube. You can access video blogs covering topics such as the Federal Reserve, Income Taxes, Social Security, Peak Oil and a mock "State Of The Union" address by clicking here http://www.youtube.com/markostaketv. Our most recent video is on the FRAUD and Ponzi Scheme known as Social Security. It can be accessed by clicking here http://www.youtube.com/markostaketv#p/u/0/twFn9XyP2rI.
Thursday, May 13, 2010
Wednesday, May 12, 2010
Greek Bail-Out Destined To Fail
Now that the collosal bail-out of Greece has been enacted, it's time to take a step back to analyze both the prospect for success and examine the appropriate remedies.
As has been written in Marko's Take numerous times, the problem with Greece is its system. The problems in Athens were decades in the making and can NOT be fixed by throwing around a few measley hundred billion dollars.
Greece suffers from an entitled population that has been coddled by the promises of socialist governments - allowing the people to expect to be taken care of. The problem with that reasoning is that the more people who are recipients of the government dole, the less productive they become. The people who are pulling the cart are taxed into oblivion and eventually wonder why they should be made to support the corrupt and lazy.
Greece is known for its corruption. It has a very high proportion of it work force employed by the government. Many government employees have been given lavish early retirement packages.
The rather modest budget cuts will NOT fix the problem. The only impact of these cuts in the short run will be to remove stimulus from the economy and facilitate a further downward spiral. Greece has one of the largest deficits as a proportion of Gross Domestic Product (GDP) in the world. Unless the economy grows, this will only grow worse.
The formula applied to Greece is hardly novel. The identical remedies were tried with Argentina in 2001, which suffered the world's largest debt default in 2001. They failed. According to Cristina Fernandez, Argentina's President, the bail-out repeated "the same recipes they applied to us, which provoked what happened in 2001".
Argentina, as an IMF member, voted for the Greek bail-out, but “critically”, Ms Fernández said, adding that the enforced austerity will have “terrible consequences” on the economy.
In the 1990s, Argentina was a devotee of the pro-market Washington Consensus and pegged the Peso to the Dollar. But it racked up debt and its economy crashed. Argentina savagely devalued its currency and became a pariah on international financial markets.
Speaking at an event on Monday night to refinance debt for Argentina’s provinces, Ms Fernández defended the demand-driven economic model, which has delivered several years of high growth, championed by her husband, Néstor Kirchner, in his 2003-07 government and which she has continued since.
The long-term solution for Greece is a complete overhaul of its economy and changing the mind-set of the population. This will be no easier there than here in the United States, where out-of-control social programs like Social Security and Medicare threaten to bankrupt us. Socialism has NEVER worked and NEVER will.
Only a return to a market-driven model, after a period of austerity, can possibly return Athens to a positive trajectory. Let's hope that Greece gets the message, the rest of the Euro-Zone gets the message and American gets the message. If we don't, we will suffer the same fate as Greece.
Marko's Take
Please visit us on You Tube at http://www.youtube.com/markostaketv. Our lastest video, on that Ponzi Scheme also referred to as Social Security, can be accessed by clicking here http://www.youtube.com/markostaketv#p/u/0/twFn9XyP2rI. Our 7-step solution to this mess will be uploaded shortly.
As has been written in Marko's Take numerous times, the problem with Greece is its system. The problems in Athens were decades in the making and can NOT be fixed by throwing around a few measley hundred billion dollars.
Greece suffers from an entitled population that has been coddled by the promises of socialist governments - allowing the people to expect to be taken care of. The problem with that reasoning is that the more people who are recipients of the government dole, the less productive they become. The people who are pulling the cart are taxed into oblivion and eventually wonder why they should be made to support the corrupt and lazy.
Greece is known for its corruption. It has a very high proportion of it work force employed by the government. Many government employees have been given lavish early retirement packages.
The rather modest budget cuts will NOT fix the problem. The only impact of these cuts in the short run will be to remove stimulus from the economy and facilitate a further downward spiral. Greece has one of the largest deficits as a proportion of Gross Domestic Product (GDP) in the world. Unless the economy grows, this will only grow worse.
The formula applied to Greece is hardly novel. The identical remedies were tried with Argentina in 2001, which suffered the world's largest debt default in 2001. They failed. According to Cristina Fernandez, Argentina's President, the bail-out repeated "the same recipes they applied to us, which provoked what happened in 2001".
Argentina, as an IMF member, voted for the Greek bail-out, but “critically”, Ms Fernández said, adding that the enforced austerity will have “terrible consequences” on the economy.
In the 1990s, Argentina was a devotee of the pro-market Washington Consensus and pegged the Peso to the Dollar. But it racked up debt and its economy crashed. Argentina savagely devalued its currency and became a pariah on international financial markets.
Speaking at an event on Monday night to refinance debt for Argentina’s provinces, Ms Fernández defended the demand-driven economic model, which has delivered several years of high growth, championed by her husband, Néstor Kirchner, in his 2003-07 government and which she has continued since.
The long-term solution for Greece is a complete overhaul of its economy and changing the mind-set of the population. This will be no easier there than here in the United States, where out-of-control social programs like Social Security and Medicare threaten to bankrupt us. Socialism has NEVER worked and NEVER will.
Only a return to a market-driven model, after a period of austerity, can possibly return Athens to a positive trajectory. Let's hope that Greece gets the message, the rest of the Euro-Zone gets the message and American gets the message. If we don't, we will suffer the same fate as Greece.
Marko's Take
Please visit us on You Tube at http://www.youtube.com/markostaketv. Our lastest video, on that Ponzi Scheme also referred to as Social Security, can be accessed by clicking here http://www.youtube.com/markostaketv#p/u/0/twFn9XyP2rI. Our 7-step solution to this mess will be uploaded shortly.
Tuesday, May 11, 2010
Rising Chinese Inflation Augurs Well For Gold
The Chinese economy is growing at double-digit rates, yet, instead of rejoicing, the Chinese leadership is worried. Beijing has slowly begun to take steps to begin to cool its economy and an increase in interest rates is thought to be coming sooner rather than later. The various stimulus plans appeared to have done their job, but now comes the inevitable effect on prices.
Recently released data indicates that the Chinese economy is overheating and that prices are beginning an upward creep. Consumer prices in China rose 2.8% in April from the same month a year earlier, the fastest pace in 18 months - but below Beijing’s full-year target of 3% , data released on Tuesday showed.
Adding to fears of potential overheating, Chinese property prices jumped 12.8% in April from a year earlier, the biggest increase since records began in 2005, although sales volumes have already fallen substantially in many big cities in reaction to a string of government measures to cool the market.
More disturbing was the news that Producer prices rose 6.8% in April, up from March’s 5.9% rise, indicating that consumer prices are likely to increase faster in the coming months.
Food prices make up about a third of China’s consumer price index and were the main driver of higher inflation in April, rising 5.9% from a year earlier, while non-food prices rose a mere 1.3%.
With the benchmark one-year bank deposit interest rate at 2.25% , Chinese savers are already faced with negative real interest rates, making investments in the booming property market more attractive.
The fear of Chinese policy tightening has dogged commodities markets in recent weeks, with base metals well off their mid-April peaks.
This morning, copper for delivery in three months fell 2.1% to $6,970 a tonne on the London Metal Exchange. Aluminium was off 2.9% at $2,075 a tonne, while lead – particularly exposed to moves in Chinese demand as it is used in car and electric bike batteries – dropped 3.7% to $2,022 a tonne.
As inflation creeps up in China, as well as the rest of the Asian-bloc, it will undoubtedly spill-over into the rest of the world. Just as Chinese infation is rearing its head, so should that in the United States. Washington has also enacted substantial stimulus programs and the accompanying inflation is inevitable.
Especially in a low interest rate environment, this can only be bullish for Gold. It's no surprise that the yellow metal has taken center stage, broken out to new all-time highs and will undoubtedly explode higher as the world scrambles for the only bona-fide infation hedge. Investors would be wise to jump on board before its too late.
Marko's Take
Please visit us on You Tube at http://www.youtube.com/markostaketv. Our latest video, explaining the Ponzi Scheme known as Social Security, can be accessed by clicking here http://www.youtube.com/markostaketv#p/u/0/twFn9XyP2rI.
Recently released data indicates that the Chinese economy is overheating and that prices are beginning an upward creep. Consumer prices in China rose 2.8% in April from the same month a year earlier, the fastest pace in 18 months - but below Beijing’s full-year target of 3% , data released on Tuesday showed.
Adding to fears of potential overheating, Chinese property prices jumped 12.8% in April from a year earlier, the biggest increase since records began in 2005, although sales volumes have already fallen substantially in many big cities in reaction to a string of government measures to cool the market.
More disturbing was the news that Producer prices rose 6.8% in April, up from March’s 5.9% rise, indicating that consumer prices are likely to increase faster in the coming months.
Food prices make up about a third of China’s consumer price index and were the main driver of higher inflation in April, rising 5.9% from a year earlier, while non-food prices rose a mere 1.3%.
With the benchmark one-year bank deposit interest rate at 2.25% , Chinese savers are already faced with negative real interest rates, making investments in the booming property market more attractive.
The fear of Chinese policy tightening has dogged commodities markets in recent weeks, with base metals well off their mid-April peaks.
This morning, copper for delivery in three months fell 2.1% to $6,970 a tonne on the London Metal Exchange. Aluminium was off 2.9% at $2,075 a tonne, while lead – particularly exposed to moves in Chinese demand as it is used in car and electric bike batteries – dropped 3.7% to $2,022 a tonne.
As inflation creeps up in China, as well as the rest of the Asian-bloc, it will undoubtedly spill-over into the rest of the world. Just as Chinese infation is rearing its head, so should that in the United States. Washington has also enacted substantial stimulus programs and the accompanying inflation is inevitable.
Especially in a low interest rate environment, this can only be bullish for Gold. It's no surprise that the yellow metal has taken center stage, broken out to new all-time highs and will undoubtedly explode higher as the world scrambles for the only bona-fide infation hedge. Investors would be wise to jump on board before its too late.
Marko's Take
Please visit us on You Tube at http://www.youtube.com/markostaketv. Our latest video, explaining the Ponzi Scheme known as Social Security, can be accessed by clicking here http://www.youtube.com/markostaketv#p/u/0/twFn9XyP2rI.
Monday, May 10, 2010
U.S. Gold Corporation: A Junior Explorer Ready To Go Big Time
While the Euro-Zone's problems continue to make the headlines, investors should NOT lose sight of the emerging opportunity in the precious metals market and junior miners. Against a backdrop of a 1,000 point intra-day loss in the Dow Jones Industrial Average last Thursday, GOLD surged above the $1,200 level as it begins the long-awaited hyperbolic growth phase.
That said, we wish to continue our series on junior precious metals companies with incredible promise to make huge gains in this very exciting phase of the bull market. Today's featured company is U.S. Gold Corporation (UXG), an American-based explorer with significant land holding in Nevada and Mexico. UXG continues to report excellent drilling results and appears poised to take this relatively unknown company to the next level.
Rob McEwen, Chairman and CEO of US Gold, is also the Company's largest shareholder with 21% of the stock and does not draw a salary. Previously, McEwen was the founder and former Chairman and CEO of Goldcorp Inc. (GG), where its Red Lake Mine in northwestern Ontario, Canada is still considered to be the richest gold mine in the world.
During his tenure at Goldcorp, McEwen transformed the company from a collection of small companies into a mining powerhouse, growing its market capitalization from US $50 million to approximately $8 billion. The shares of the Company produced a compounded annual growth rate of 32%.
UXG's Nevada holdings are concentrated in the Cortez Trend - of the Battle Mountain-Eureka Gold Belt that includes American Barrick's (ABX) Cortez (35 million ounces of gold) to the north and the Ruby Hill mine (4 million ounces) to the south. US Gold's combined properties on the Cortez Trend sit 10 miles south of Barrick's recent discovery.
While the Cortez Trend remains under-developed, recent discoveries indicate that it could rival the famous Carlin Trend which is located approximately 30 miles to the northeast where reserves and mineralized material are estimated to be 180 million ounces.
The Company also owns approximately 500,000 acres of mineral rights in Mexico's Sinaloa State. Exploration work was initiated in early 2008 and has produced encouraging results including the exciting El Gallo discovery announced in November 2008.
McEwen believes that GOLD will rise to $2,000 per ounce this year and to an ultimate high of $5,000. Sounds pretty familiar. Could he be a reader of Marko's Take?
The company's investor presentation could be accessed by clicking here http://www.usgold.com/presentation/pdf/24.pdf.
According to UXG's most recent financial statements for the quarter ended March 31, 2010, liquidity was ample with more than $35 million in cash, short-term investments and GOLD bullion. The Company is debt-free.
As an asset play, UXG's value should be viewed based on its resources. All holdings have been independently audited with an "NI 43-101" - a national instrument for the Standards of Disclosure for Mineral Projects. The Instrument is a codified set of rules and guidelines for reporting and displaying information related to mineral properties owned by, or explored by, companies which report these results on stock exchanges.
According to the most recent review, UXG has "measured and indicated" holdings of 3.3 million ounces of Gold, primarily in Nevada and 9.8 million ounces of Silver in Mexico. Based on 122 million shares outstanding and current prices of the metals, this reveals an asset value of approximately $30 per share. UXG closed Friday at $3.27 per share.
Naturally, this valuation doesn't include the costs of development and mining, nor does it include the potential value of FUTURE discoveries. Since 2007, "measured and indicated" Gold resources in Nevada have nearly tripled! Given the prodigious history of the Cortez Trend, further resource discoveries would seem highly likely. The company intends to invest $18 million in the coming year to add to its resource base.
UXG is traded on the Amex and is quite liquid - trading approximately 1 million shares per day. The Company intends to list on the NYSE as soon as it can.
As a disclosure item, I hold some UXG. This stock is not for the feint of heart. The stock traded at nearly $7 per share in late 2007 before declining to about $.50 at the bottom of the financial crisis in late 2008. This stock should only be considered by aggressive holders with a high tolerance for risk.
Marko's Take
Everything you never wanted to know about Social Security is revealed on our latest You Tube video which can be accessed here http://www.youtube.com/markostaketv#p/u/0/twFn9XyP2rI. Our subsequent video, to be released in the next week, will propose a 7-step solution to the Social Security mess. For information on "Peak Oil", the Federal Reserve, Income Taxes and a mock "State of The Union" address, you can access all by clicking here http://www.youtube.com/markostaketv.
That said, we wish to continue our series on junior precious metals companies with incredible promise to make huge gains in this very exciting phase of the bull market. Today's featured company is U.S. Gold Corporation (UXG), an American-based explorer with significant land holding in Nevada and Mexico. UXG continues to report excellent drilling results and appears poised to take this relatively unknown company to the next level.
Rob McEwen, Chairman and CEO of US Gold, is also the Company's largest shareholder with 21% of the stock and does not draw a salary. Previously, McEwen was the founder and former Chairman and CEO of Goldcorp Inc. (GG), where its Red Lake Mine in northwestern Ontario, Canada is still considered to be the richest gold mine in the world.
During his tenure at Goldcorp, McEwen transformed the company from a collection of small companies into a mining powerhouse, growing its market capitalization from US $50 million to approximately $8 billion. The shares of the Company produced a compounded annual growth rate of 32%.
UXG's Nevada holdings are concentrated in the Cortez Trend - of the Battle Mountain-Eureka Gold Belt that includes American Barrick's (ABX) Cortez (35 million ounces of gold) to the north and the Ruby Hill mine (4 million ounces) to the south. US Gold's combined properties on the Cortez Trend sit 10 miles south of Barrick's recent discovery.
While the Cortez Trend remains under-developed, recent discoveries indicate that it could rival the famous Carlin Trend which is located approximately 30 miles to the northeast where reserves and mineralized material are estimated to be 180 million ounces.
The Company also owns approximately 500,000 acres of mineral rights in Mexico's Sinaloa State. Exploration work was initiated in early 2008 and has produced encouraging results including the exciting El Gallo discovery announced in November 2008.
McEwen believes that GOLD will rise to $2,000 per ounce this year and to an ultimate high of $5,000. Sounds pretty familiar. Could he be a reader of Marko's Take?
The company's investor presentation could be accessed by clicking here http://www.usgold.com/presentation/pdf/24.pdf.
According to UXG's most recent financial statements for the quarter ended March 31, 2010, liquidity was ample with more than $35 million in cash, short-term investments and GOLD bullion. The Company is debt-free.
As an asset play, UXG's value should be viewed based on its resources. All holdings have been independently audited with an "NI 43-101" - a national instrument for the Standards of Disclosure for Mineral Projects. The Instrument is a codified set of rules and guidelines for reporting and displaying information related to mineral properties owned by, or explored by, companies which report these results on stock exchanges.
According to the most recent review, UXG has "measured and indicated" holdings of 3.3 million ounces of Gold, primarily in Nevada and 9.8 million ounces of Silver in Mexico. Based on 122 million shares outstanding and current prices of the metals, this reveals an asset value of approximately $30 per share. UXG closed Friday at $3.27 per share.
Naturally, this valuation doesn't include the costs of development and mining, nor does it include the potential value of FUTURE discoveries. Since 2007, "measured and indicated" Gold resources in Nevada have nearly tripled! Given the prodigious history of the Cortez Trend, further resource discoveries would seem highly likely. The company intends to invest $18 million in the coming year to add to its resource base.
UXG is traded on the Amex and is quite liquid - trading approximately 1 million shares per day. The Company intends to list on the NYSE as soon as it can.
As a disclosure item, I hold some UXG. This stock is not for the feint of heart. The stock traded at nearly $7 per share in late 2007 before declining to about $.50 at the bottom of the financial crisis in late 2008. This stock should only be considered by aggressive holders with a high tolerance for risk.
Marko's Take
Everything you never wanted to know about Social Security is revealed on our latest You Tube video which can be accessed here http://www.youtube.com/markostaketv#p/u/0/twFn9XyP2rI. Our subsequent video, to be released in the next week, will propose a 7-step solution to the Social Security mess. For information on "Peak Oil", the Federal Reserve, Income Taxes and a mock "State of The Union" address, you can access all by clicking here http://www.youtube.com/markostaketv.
Saturday, May 8, 2010
Iran Nuclear Showdown Looms Closer
Iran's nuclear program is one of the most controversial issues in one of the world's most volatile regions. American and European officials believe Tehran is planning to build nuclear weapons, while Iran's leadership mainains that its goal in developing a nuclear program is to generate electricity and preserve its vast oil reserves.
Top American military officials said in April 2010 that Iran could produce bomb-grade fuel for at least one nuclear weapon within a year, but would most likely need two to five years to manufacture a workable atomic bomb.
Pronouncements from Tehran have been all over the map. In a recent statement by Iranian cleric Ahmad Khatami, Iran has entered the world's "nuclear club" and major powers should accept it.
Khatami, a conservative hardliner also warned the major powers that Iran could "endanger your entire world" in any future confrontation.
The United States and Israel, Iran's arch foes, have not ruled out military action if diplomacy fails to resolve the row.
Iran, a predominantly Shi'ite Muslim state, has said it would respond to any attack by targeting U.S. interests in the region and Israel, as well as closing the Strait of Hormuz, a waterway crucial for global oil supplies.
One key to reaching a non-military solution has been the cooperation of the United Nations Securtiy Council. China, which imports 12% of its oil from Iran, has been the most reluctant to endorse stringent sanctions.
President Nicolas Sarkozy of France told President Hu Jintao of China that nations would have to impose new sanctions on Iran if it refuses to curb its nuclear program, official Chinese news organizations reported on last week.
France has joined with the United States and Britain in pushing for a new package of economic sanctions from the United Nations (UN). Those countries accuse Iran of using its nuclear program to try to develop weapons. Iran has said it is interested in pursuing nuclear power, not arms.
Addressing the UN, President Mahmoud Ahmadinejad of Iran said that relations with the United States might never be repaired if new sanctions were imposed against his country, that the United Nations atomic agency had no authority to interfere into matters like missiles and that, despite his contested re-election last year, Iran had not become a republic of fear.
Later in the day, he suggested that relations with Tehran might never recover from a United States push for new economic and military sanctions against Iran through the United Nations Security Council. New penalties would “mean relations between Iran and the U.S. will never be improved again,” Mr. Ahmadinejad said at a news conference.
Of major concern is what options the U.S. has in response to a threatened attack by Iran against Israel or in attempting to sabotage Middle East oil supplies.
Defense Secretary Robert M. Gates has warned in a secret three-page memorandum to top White House officials that the United States does not have an effective long-range policy for dealing with Iran’s steady progress toward nuclear capability, according to government officials familiar with the document.
One senior official, speaking anonymously, described the document as “a wake-up call.” But White House officials dispute that view, insisting that for 15 months they had been conducting detailed planning for many possible outcomes regarding Iran’s nuclear program.
Mr. Gates’s memo appears to reflect concerns in the Pentagon and the military that the White House did not have a well prepared series of alternatives in place in case all the diplomatic steps finally failed. Separately, Admiral Mike Mullen, chairman of the Joint Chiefs of Staff, wrote a “chairman’s guidance” to his staff last December conveying a sense of urgency about contingency planning. He cautioned that a military attack would have “limited results,” but he did not convey any warnings about policy shortcomings.
Thus, as Iran continues the development of its nuclear arsenal, options available to contain the situation appear limited. Israel has repeatedly warned of a pre-emptive strike if diplomatic initiatives fail. So far, the Obama Administration has successfully convinced Israel to remain patient while discussions are taking place.
However, given the stated intention of Iran to retaliate if sanctions are imposed, the potential outcomes are strewn with high risk. The last thing the sputtering world economy needs is a major disruption of Middle East oil supplies or an all-encompassing regional war.
Marko's Take
Our latest You Tube video, entitled "Social In-Security: The Problem", which tells you everything you need to know about the world's largest Ponzi scheme is now posted here http://www.youtube.com/markostaketv#p/u/0/twFn9XyP2rI. Our subsequent video, entitled "Social In-Security: The Solution" outlines a 7-step program to fix the mess. Hope you tune in!
Top American military officials said in April 2010 that Iran could produce bomb-grade fuel for at least one nuclear weapon within a year, but would most likely need two to five years to manufacture a workable atomic bomb.
Pronouncements from Tehran have been all over the map. In a recent statement by Iranian cleric Ahmad Khatami, Iran has entered the world's "nuclear club" and major powers should accept it.
Khatami, a conservative hardliner also warned the major powers that Iran could "endanger your entire world" in any future confrontation.
The United States and Israel, Iran's arch foes, have not ruled out military action if diplomacy fails to resolve the row.
Iran, a predominantly Shi'ite Muslim state, has said it would respond to any attack by targeting U.S. interests in the region and Israel, as well as closing the Strait of Hormuz, a waterway crucial for global oil supplies.
One key to reaching a non-military solution has been the cooperation of the United Nations Securtiy Council. China, which imports 12% of its oil from Iran, has been the most reluctant to endorse stringent sanctions.
President Nicolas Sarkozy of France told President Hu Jintao of China that nations would have to impose new sanctions on Iran if it refuses to curb its nuclear program, official Chinese news organizations reported on last week.
France has joined with the United States and Britain in pushing for a new package of economic sanctions from the United Nations (UN). Those countries accuse Iran of using its nuclear program to try to develop weapons. Iran has said it is interested in pursuing nuclear power, not arms.
Addressing the UN, President Mahmoud Ahmadinejad of Iran said that relations with the United States might never be repaired if new sanctions were imposed against his country, that the United Nations atomic agency had no authority to interfere into matters like missiles and that, despite his contested re-election last year, Iran had not become a republic of fear.
Later in the day, he suggested that relations with Tehran might never recover from a United States push for new economic and military sanctions against Iran through the United Nations Security Council. New penalties would “mean relations between Iran and the U.S. will never be improved again,” Mr. Ahmadinejad said at a news conference.
Of major concern is what options the U.S. has in response to a threatened attack by Iran against Israel or in attempting to sabotage Middle East oil supplies.
Defense Secretary Robert M. Gates has warned in a secret three-page memorandum to top White House officials that the United States does not have an effective long-range policy for dealing with Iran’s steady progress toward nuclear capability, according to government officials familiar with the document.
One senior official, speaking anonymously, described the document as “a wake-up call.” But White House officials dispute that view, insisting that for 15 months they had been conducting detailed planning for many possible outcomes regarding Iran’s nuclear program.
Mr. Gates’s memo appears to reflect concerns in the Pentagon and the military that the White House did not have a well prepared series of alternatives in place in case all the diplomatic steps finally failed. Separately, Admiral Mike Mullen, chairman of the Joint Chiefs of Staff, wrote a “chairman’s guidance” to his staff last December conveying a sense of urgency about contingency planning. He cautioned that a military attack would have “limited results,” but he did not convey any warnings about policy shortcomings.
Thus, as Iran continues the development of its nuclear arsenal, options available to contain the situation appear limited. Israel has repeatedly warned of a pre-emptive strike if diplomatic initiatives fail. So far, the Obama Administration has successfully convinced Israel to remain patient while discussions are taking place.
However, given the stated intention of Iran to retaliate if sanctions are imposed, the potential outcomes are strewn with high risk. The last thing the sputtering world economy needs is a major disruption of Middle East oil supplies or an all-encompassing regional war.
Marko's Take
Our latest You Tube video, entitled "Social In-Security: The Problem", which tells you everything you need to know about the world's largest Ponzi scheme is now posted here http://www.youtube.com/markostaketv#p/u/0/twFn9XyP2rI. Our subsequent video, entitled "Social In-Security: The Solution" outlines a 7-step program to fix the mess. Hope you tune in!
Friday, May 7, 2010
Plan To Audit Federal Reserve Thwarted By Obama Administration
Chalk one up for our wonderful Congress and President! Possibly the most important piece of legislation on the docket and one supported overwhelmingly by the populace just "withered on the vine". Time to pop those champagne corks, ladies and gentlemen of Washington, your need to obfuscate has once again taken precedence over the rights of the American people to understand what is being done with THEIR money!
Of course, we have to allow for the fact that politicians view tax collections as belonging to THEM. They don't! The Federal Reserve (Fed), so expert at creating asset bubbles, then justifying their existence by rushing in to fix those bubbles, remains shielded from any oversight. What's a few trillion among friends?
Political pressure from the Obama administration, along with the Treasury and Fed, led Senate lawmakers to alter a provision pushed by Sen. Bernie Sanders (I., Vt.) that was gaining momentum. It would have largely repealed a 32-year-old law that shields Fed monetary policy from congressional auditors.
Sen. Sanders, after the intense lobbying by the Obama administration and Fed officials, removed language in his amendment to the financial-regulation overhaul that would’ve opened the Fed’s monetary policy deliberations to audits by the congressional Government Accountability Office (GAO). The original Sanders amendment eliminated those restrictions, which were passed by the Senate in 1978. The bill prevented the GAO from reviewing the Fed’s monetary policy actions, discount window lending, open market operations and transactions with foreign central banks or governments.
The watered-down Sanders amendment requires a one-time audit of the Fed’s emergency credit facilities and an inspection of Fed governance, a review of the selection of regional bank directors and the operation of regional banks’ lending facilities. The measure still requires the Fed to publicly identify borrowers from its emergency lending facilities and other special programs by December 1. But, it doesn’t stipulate ongoing disclosure. So what good is it?
The compromise, endorsed by Senate Banking Committee Chairman Christopher Dodd (D., Conn.) and the Treasury, would require the Fed to disclose more details about its lending during the financial crisis. It would also require a one-time audit of those loans and a one-time review of Fed governance. A formal vote was pushed back until next week. Its endorsement by the Treasury is proof the bill has ZERO teeth.
"At a time when our entire financial system almost collapsed, we cannot let the Fed operate in secrecy any longer," Mr. Sanders said. "The American people have a right to know."
Fed Chairman Ben Bernanke, while insisting on a commitment to "openness" at the Fed, said in a letter to Congress the original Sanders measure would "seriously threaten monetary policy independence, increase inflation fears and market interest rates and damage economic stability and job creation." Mr. Bernanke fails to mention in his letter that the Fed itself has caused economic and financial instability and has utterly mismanaged monetary policy and set the level of interest rates to cause the very financial crisis we're in. (Sarcasm intentional!)
A House bill sponsored by Rep. Ron Paul (R., Texas) that passed in December, contains a proposal similar to the original Sanders measure. If the Senate bill were to pass, it would need to be reconciled in a conference committee. Given the "compromise" bill, the reconciliation process cannot possibly lead to any legislation that would be effective.
Before the last-minute compromise, the Fed's foes appeared to be winning and got a major boost when Senate Majority Leader Harry Reid (D., Nev.) said he would side with Mr. Sanders.
At least half a dozen Obama administration officials joined the high-pressure campaign, including Treasury Secretary Timothy Geithner and Rahm Emanuel, the White House chief of staff. Administration aides credited Mr. Dodd with pushing back against the original amendment and developing an acceptable alternative.
The corrupt wheels of Washington continue to turn. The fact is that an audit of the Fed is not opposed because it could interfere with the great job they do. Rather, it is a desperate attempt to hide their utter incompetence and mismanagement, along with their surreptitious market operations designed to interfere with a free market to serve their political masters.
Marko's Take
Our latest You Tube video titled "Social In-Security: The Problem" is now posted and can be accessed by clicking here http://www.youtube.com/markostaketv#p/u/0/twFn9XyP2rI. We will post "Social In-Security: The Solution" subsequently. Stay tuned for a 7 step plan on how to fix this mess.
Of course, we have to allow for the fact that politicians view tax collections as belonging to THEM. They don't! The Federal Reserve (Fed), so expert at creating asset bubbles, then justifying their existence by rushing in to fix those bubbles, remains shielded from any oversight. What's a few trillion among friends?
Political pressure from the Obama administration, along with the Treasury and Fed, led Senate lawmakers to alter a provision pushed by Sen. Bernie Sanders (I., Vt.) that was gaining momentum. It would have largely repealed a 32-year-old law that shields Fed monetary policy from congressional auditors.
Sen. Sanders, after the intense lobbying by the Obama administration and Fed officials, removed language in his amendment to the financial-regulation overhaul that would’ve opened the Fed’s monetary policy deliberations to audits by the congressional Government Accountability Office (GAO). The original Sanders amendment eliminated those restrictions, which were passed by the Senate in 1978. The bill prevented the GAO from reviewing the Fed’s monetary policy actions, discount window lending, open market operations and transactions with foreign central banks or governments.
The watered-down Sanders amendment requires a one-time audit of the Fed’s emergency credit facilities and an inspection of Fed governance, a review of the selection of regional bank directors and the operation of regional banks’ lending facilities. The measure still requires the Fed to publicly identify borrowers from its emergency lending facilities and other special programs by December 1. But, it doesn’t stipulate ongoing disclosure. So what good is it?
The compromise, endorsed by Senate Banking Committee Chairman Christopher Dodd (D., Conn.) and the Treasury, would require the Fed to disclose more details about its lending during the financial crisis. It would also require a one-time audit of those loans and a one-time review of Fed governance. A formal vote was pushed back until next week. Its endorsement by the Treasury is proof the bill has ZERO teeth.
"At a time when our entire financial system almost collapsed, we cannot let the Fed operate in secrecy any longer," Mr. Sanders said. "The American people have a right to know."
Fed Chairman Ben Bernanke, while insisting on a commitment to "openness" at the Fed, said in a letter to Congress the original Sanders measure would "seriously threaten monetary policy independence, increase inflation fears and market interest rates and damage economic stability and job creation." Mr. Bernanke fails to mention in his letter that the Fed itself has caused economic and financial instability and has utterly mismanaged monetary policy and set the level of interest rates to cause the very financial crisis we're in. (Sarcasm intentional!)
A House bill sponsored by Rep. Ron Paul (R., Texas) that passed in December, contains a proposal similar to the original Sanders measure. If the Senate bill were to pass, it would need to be reconciled in a conference committee. Given the "compromise" bill, the reconciliation process cannot possibly lead to any legislation that would be effective.
Before the last-minute compromise, the Fed's foes appeared to be winning and got a major boost when Senate Majority Leader Harry Reid (D., Nev.) said he would side with Mr. Sanders.
At least half a dozen Obama administration officials joined the high-pressure campaign, including Treasury Secretary Timothy Geithner and Rahm Emanuel, the White House chief of staff. Administration aides credited Mr. Dodd with pushing back against the original amendment and developing an acceptable alternative.
The corrupt wheels of Washington continue to turn. The fact is that an audit of the Fed is not opposed because it could interfere with the great job they do. Rather, it is a desperate attempt to hide their utter incompetence and mismanagement, along with their surreptitious market operations designed to interfere with a free market to serve their political masters.
Marko's Take
Our latest You Tube video titled "Social In-Security: The Problem" is now posted and can be accessed by clicking here http://www.youtube.com/markostaketv#p/u/0/twFn9XyP2rI. We will post "Social In-Security: The Solution" subsequently. Stay tuned for a 7 step plan on how to fix this mess.
Thursday, May 6, 2010
Euro-Zone Budget Deficits Go Parabolic
While the topic du jour, every jour, has been Greece and its whopping budget deficit, fiscal problems within the Euro-Zone hardly end there.
Athens' budget deficit, which ran at 13.6% of Gross Domestic Product (GDP) in 2009, is not the highest in the bloc. Ireland had the biggest fiscal deficit in the European Union last year – larger than both Greece and the UK - according to revised figures published recently by Eurostat, the European Commission’s official statistics office.
The deficit was revised up from 11.8% to 14.3% of GDP after Eurostat ruled that the Irish government’s €4 billion of aid to Anglo Irish Bank must be treated as part of current spending.
Ireland has raised approximately 60% of the €20 billion it needs this year to finance the deficit. Its repayment schedules are manageable with around €1 billion of redemptions due this year, €4 billion next year and €6 billion in both 2012 and 2013.
European Commission's spring forecasts put the UK budget deficit THIS year at 12% of GDP – the highest projected within the European Union and worse than Treasury estimates. The deficit, if realized, would put Britain at the highest deficit of the 27 EU nations.
The country's budget shortfall was the third largest in the EU last year, but will overtake both Greece and Ireland this year, according to the forecasts. Greece's measures to tackle its public finances problems are projected to reduce its deficit to 9.3% of GDP in the coming year.
The commission's forecasts are for a worse deficit than predicted by Alistair Darling at his March budget. In 2010-11, the commission puts the deficit at 11.5% of GDP, compared with Darling's forecast for an 11.1% budget gap.
Even Germany, easily the healthiest economy in Europe, is finding itself struggling. Germany's budget deficit will soar well above 4% of GDP in 2010, breaching European Union rules, Finance Minister Peer Steinbrueck was quoted as saying on Wednesday.
Under the EU's Stability and Growth Pact, Euro-Zone members are required to maintain public deficits below 3% of GDP and public debt at less than 60% of GDP.
This sharp increase in deficit spending stems mainly from the stimulus package enacted by Chancellor Angela Merkel. At €50 billion, it is the largest since 1945.
Unfortunately, budgets are far easier to expand than contract. Politicians have a vested interest in their own re-election and nothing works better than promising something today while postponing the cost for future years. Austerity measures are never embraced by the domestic populations - keeping even the honest politicians from imposing these fixes. The recent riots and violence in Greece is proof that an entitled populace is loathe to take responsibility.
Marko's Take
Our latest You Tube video entitled "Social In-Security: The Problem" is now posted. You can access it by clicking here http://www.youtube.com/markostaketv#p/u/0/twFn9XyP2rI.
Athens' budget deficit, which ran at 13.6% of Gross Domestic Product (GDP) in 2009, is not the highest in the bloc. Ireland had the biggest fiscal deficit in the European Union last year – larger than both Greece and the UK - according to revised figures published recently by Eurostat, the European Commission’s official statistics office.
The deficit was revised up from 11.8% to 14.3% of GDP after Eurostat ruled that the Irish government’s €4 billion of aid to Anglo Irish Bank must be treated as part of current spending.
Ireland has raised approximately 60% of the €20 billion it needs this year to finance the deficit. Its repayment schedules are manageable with around €1 billion of redemptions due this year, €4 billion next year and €6 billion in both 2012 and 2013.
European Commission's spring forecasts put the UK budget deficit THIS year at 12% of GDP – the highest projected within the European Union and worse than Treasury estimates. The deficit, if realized, would put Britain at the highest deficit of the 27 EU nations.
The country's budget shortfall was the third largest in the EU last year, but will overtake both Greece and Ireland this year, according to the forecasts. Greece's measures to tackle its public finances problems are projected to reduce its deficit to 9.3% of GDP in the coming year.
The commission's forecasts are for a worse deficit than predicted by Alistair Darling at his March budget. In 2010-11, the commission puts the deficit at 11.5% of GDP, compared with Darling's forecast for an 11.1% budget gap.
Even Germany, easily the healthiest economy in Europe, is finding itself struggling. Germany's budget deficit will soar well above 4% of GDP in 2010, breaching European Union rules, Finance Minister Peer Steinbrueck was quoted as saying on Wednesday.
Under the EU's Stability and Growth Pact, Euro-Zone members are required to maintain public deficits below 3% of GDP and public debt at less than 60% of GDP.
This sharp increase in deficit spending stems mainly from the stimulus package enacted by Chancellor Angela Merkel. At €50 billion, it is the largest since 1945.
Unfortunately, budgets are far easier to expand than contract. Politicians have a vested interest in their own re-election and nothing works better than promising something today while postponing the cost for future years. Austerity measures are never embraced by the domestic populations - keeping even the honest politicians from imposing these fixes. The recent riots and violence in Greece is proof that an entitled populace is loathe to take responsibility.
Marko's Take
Our latest You Tube video entitled "Social In-Security: The Problem" is now posted. You can access it by clicking here http://www.youtube.com/markostaketv#p/u/0/twFn9XyP2rI.
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