You Still Believe The Fed Can Stop Deflation?

3/30/2010 11:15:00 AM

Think back to the fall of 2007. The deflationary "liquidity crunch" that over the next year-and-a-half cuts the DJIA in half, decimates commodities, real estate and world markets is only starting. Almost no one believes that the crash is coming -- to a large degree, because everyone is convinced that the U.S. Federal Reserve Bank, with Ben Bernanke at the helm, will never allow deflation to happen: It can just print money!

The excerpt you are about to read is from EWI president Robert Prechter's October 19, 2007, Elliott Wave Theorist. If you find it insightful, read more of Bob's writings in the free Club EWI resource, "Robert Prechter's Most Important Writings on Deflation." (Details below.)

You cannot pick up a newspaper, turn on financial TV or read an economist’s report without hearing that the Fed’s latest discount-rate cut is bullish because it indicates the Fed’s decision to “pump liquidity” into the system. This opinion is so completely wrong that it is hard to believe its ubiquity.

First of all, the Fed does not “decide” where it wants interest rates. All it does is follow the market. Figure 17 proves it. Wherever the T-bill rate goes, the Fed’s “target rate” for federal funds immediately follows. That’s all there is to it.

If you refuse to believe your eyes, then listen to the chairman; Alan Greenspan is very clear on this point. On September 17, a commentator on CNBC asked, “Did you keep the interest rates too low for too long in 2002-2003?” Greenspan immediately responded, “The market did.” Rates were not “too low” or the period “too long,” either, because the market, not the Fed, made the decision on the level and the time, and the market is never wrong; it is what it is. If investors in trillions of dollars worth of U.S. Treasury debt worldwide had demanded higher interest, they would have gotten it, period.

Second, falling interest rates are almost never bullish. All you have to do to understand this point is look at Figure 18.

Interest rates fell persistently through three of the greatest bear markets in history: 1929-1932 in the Dow, 1990-2003 in the Japanese Nikkei, and 2000-2002 in the NASDAQ. The only comparably deep bear market in the past 80 years in which interest rates rose took place in the 1970s when the Value Line index dropped 74%. Economists all draw upon this experience, but they ignore the others. Today’s environment of extensive investment leverage and an Everest of debt in the banking system is far more like 1929 in the U.S. and 1989 in Japan than it is like the 1970s. Why is a decline in interest rates bearish in such an environment? Because it means a decline in the demand for credit. When people want less of something, the price goes down.

The recent drop in rates indicates less borrowing, which means that the primary prop under investment prices -- the expansion of credit -- is weakening. That’s one reason why stock prices fell in 2000-2002 and why they are vulnerable now. This is the opposite of “pumping liquidity”; it’s a slackening in liquidity.

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Read the rest of this important 63-page report, "Robert Prechter's Most Important Writings on Deflation" online now, free! All you need is to create a free Club EWI profile. You'll learn:

• When Does Deflation Occur?
• What Triggers the Change to Deflation
• What Makes Deflation Likely Today?
• How Big a Deflation?
• Why Bernanke Has Been Powerless Against Deflation
• The Big Bailout Bluff
• MORE

Keep reading this free report today -- all you need to do is create a free Club EWI profile.

(Already a free Club EWI member? Finish reading this report here.)

When the federal government becomes the refuge for scoundrels

Automatic Earth

The title for this entry comes straight out of a New York Times article by Andrew Martin, entitled Does This Bank Watchdog Have a Bite?, which deals with John Dugan, the present US Comptroller of the Currency (and a former bank lobbyist). The quote from the title doesn't come from some fringe lunatic, the man quoted is West Virginia Attorney General Darrell McGraw, and yes, he's talking about Washington DC. For good measure, Martin quotes a second Attorney General, Iowa's Tom Miller, who says this about Dugan:

"To have a regulator this partial and this helpful to the people he is supposed to regulate is, to say the least, very troubling,"

Unfortunately for them and the rest of America (except the bankers), Dugan is a well connected man, and a close ally of Treasury Secretary Tim Geithner. Here's an example Martin provides of Dugan's work ethic:

When Darrell McGraw, the attorney general of West Virginia, decided to sue Capital One Bank in 2005, alleging credit card abuses, his office expected to face a phalanx of high-priced defense lawyers. What it didn't expect was that Capital One would get a hand from the federal government. As Mr. McGraw tells it, his legal team was thwarted every step of the way by Capital One and the [Office of the Comptroller of the Currency]. While Capital One didn't comply with Mr. McGraw's subpoenas, it did apply for a national charter with the O.C.C., which it obtained in March 2008. Soon afterward, Capital One notified Mr. McGraw that he no longer had authority over it. For more than a decade, the O.C.C. has beaten back state attorneys general who have tried to enforce state consumer laws against national banks, arguing that federal laws pre-empt those of the states: the O.C.C. has stopped Georgia from enforcing predatory lending laws, intervened in New York's effort to investigate discriminatory lending and opposed a campaign by New England states to curb gift card fees. "It's always disheartening when the federal government becomes the refuge for scoundrels," Mr. McGraw says.

Many of you may say that we should just get rid of John Dugan ASAP. Me, I would say he's exactly where he belongs. More on that in a minute. In the wake of Obama's latest effort at allowing people to stay in their underwater homes, the plan I named "The New Losers Program", here's an interesting stat: nearly 14% of US mortgages are now delinquent. That's about one in every seven homes. And yes, once again, home prices will keep on dropping, so we'll see one in five, then one in four (that's how many are underwater today), etc.. Another good stat: half of all modifiied mortgages default again. What does that spell for the program? I'm happy to see I'm not the only one who thinks that the perverted madness of Fannie, Freddie, and the FHA guaranteeing your neighbor's mortgage with your money should stop. If only because, yes, home prices wil keep on dropping. And you will therefore be on the hook for the losses on both the mortgages AND the securities written on them, while in the long run nothing will have been saved or prevented, the "bad" things will have just been pushed a little bit further into the future. There are some smarter voices popping up, and that's good, even if they don't always seem to be able to think things through to their logical conclusions, likely because these are often of the bitter variety. Here's Bloomberg's Caroline Baum:

Lower Home Prices Can Fix What Government Can't

Alas, all the Fed's purchases and all the government's men can't put the residential real estate market together again. Between them, the federal government and central bank can lower mortgage rates, modify mortgages, use their power to get private lenders to modify mortgages, and create incentives to move inventory, such as the first-time homebuyer's tax credit. What they can't do is manufacture enough artificial demand for an asset that was artificially inflated to begin with. Prices will have to fall, which is how supply is allocated in a market economy. (An occasional reminder is in order given the current spend-money-to-save-money mindset.) The Federal Reserve will complete its purchase of $1.25 trillion agency mortgage-backed securities at the end of this month. Its efforts on our behalf have driven 30-year fixed-rate mortgage rates to half-century lows of sub-5 percent, "which should have been more stimulative than it was,"[..] Almost one-quarter of all residential properties with a mortgage were underwater in the fourth quarter, according to First American CoreLogic. What's done is done. Throwing bad money after good makes no sense. The government can't save housing without sapping something else of needed capital.

Good points (.. but?) . Former National Economic Council director Keith Hennessey has some more:

Should taxpayers subsidize underwater homeowners?

Who is eligible? Under one program, called HAMP, the Home Affordable Modification Program, you are eligible if you:

... live in an owner occupied principal residence, have a mortgage balance less than $729,750, owe monthly mortgage payments that are not affordable (greater than 31 percent of their income) and demonstrate a financial hardship. The new flexibilities for the modification initiative announced today continue to target this group of homeowners. Excuse me? We're going to subsidize someone with a mortgage balance of $700,000?! Let's do a quick back-of-the-envelope calculation. Suppose you have a mortgage balance of $700K, with 28 years left on your 30-year mortgage at a fixed 7% 5.25% . Your monthly mortgage payments would be almost $4,800. If that's greater than 31% of your income, you make less than $186,000 per year.[..] [..] let's look at a homeowner with a fixed rate mortgage who is “underwater” because his home has declined in value so that the house is worth less than the mortgage. His net worth has declined because the value of his home plummeted, and that's tragic. But since he has a fixed rate mortgage, his monthly mortgage payment has not changed. The decline in the value of their home has not affected his ability to make his mortgage payment, and therefore to remain in that home. He can continue to live in his home and wait for the value to appreciate, just as a stockholder can hold onto a stock after a decline and wait for the price to recover. I don't see why taxpayers should subsidize him because he lost money on an investment, just as taxpayers shouldn't subsidize him if he lost money in the stock market.[..] Imagine twin brothers, each with $180K of annual income. One rents, and the other has a $700,000 mortgage on a home that declined from $800,000 in value to $600,000 in value. Both brothers lose their jobs. Why should the renter pay higher taxes to subsidize his brother's mortgage payments? Losing a home due to financial hardship is tragic. Does that make it someone else's responsibility? Why should a broad-based decline in housing prices shift responsibility for planning for a financial loss from a homeowner to taxpayers? Why do policymakers (on both sides of the aisle) think we should make taxpayers (some of whom struggle to make their own mortgage payments, and others of whom rent housing) subsidize someone who lost money on an investment? I would like to hear a sound and compassionate policy argument that addresses my twin brother example. To make sure your argument works, please assume there is also a triplet brother who also rents but recently lost $200,000 in the stock market, and explain how your policy applies to him.

Mr. Hennessey is getting close. But then he veers off the road like a steamroller:

I would be willing to use some tax dollars to subsidize a subset of those homeowners who were fooled or deceived into buying bad adjustable rate mortgages. I would subsidize only the ones who, with a little taxpayer assistance, could afford to keep their home. The hard part is determining who was fooled or deceived. This subsidy would apply only to bad ARMs made in the past and therefore would not be designed as a permanent program.

To have good arguments not to do something, and then propose to do it anyway, I'm going to have to guess that stems from, as I just said, the fear of "bitter conclusions". Moreover, none of it would work if prices keep falling. And more importantly, Mr. Hennessey misses out on the underlying truth behind the New Losers Program. Barry Ritholtz does not. He catches it, so to speak, full frontal:

More Foreclosures, Please . . .

The various foreclosure programs are essentially a way the banks don't have to take their write offs now. Avoid the hangover, have another shot of tequila, push the pain of into the future, regardless of economic cost. Were the banks required to report their mortgages accurately and/or write them down, they would be revealed as insolvent. Now we get to the ugly Truth: The mortgage mods and foreclosure abatement programs are really all about propping up insolvent banking institutions on the taxpayer dollar and at the expense of the middle class. These programs are another losing round of helping Wall Street at the expense of Main Street. It is the worst kind of trickle down economics.

There we go. Now, was that so hard, Ms. Baum, Mr. Hennessey? Twiddling around with these programs, a little more of this, little less of that, is of no use whatsoever, because the intention behind them never was to help homeowners. And if you need a real good strong reason why the programs must be stopped as soon as possible, look no further than this from the Economic Collapse Blog:

The Silent Entitlements Monster: Social Security, Medicare And Interest On The Debt Will Gobble Up Every Single Tax Dollar By 2020

In fact, according to an official U.S. government report, rapidly growing interest costs on the national debt together with spending on major entitlement programs will absorb approximately 92 cents of every dollar of federal revenue by the year 2019. By 2020, that figure will be up around 100 cents of every dollar of federal revenue. It turns out that the "recession" that we have just been through has hit Social Security revenues really hard. And unfortunately, as waves of Baby Boomers start retiring, these "Social Security deficits" are going to get even worse. So where will the money come from to pay the benefits that are owed? For now, the money will come from the $2.5 trillion Social Security Trust Fund that has been accumulated. But keep in mind that the $2.5 trillion figure is extremely misleading. There are not $2.5 trillion dollars sitting around in a bank account somewhere to pay these benefits. The truth is that the Social Security Trust Fund does not contain any actual assets. The only assets the Social Security Trust Fund has are IOUs from the U.S. government. So basically the U.S. government owes the Social Security Trust Fund $2.5 trillion dollars, and now it turns out that the Social Security system is going to start needing that money. So where will the U.S. government get that money? Well, they will borrow it of course.[..] As a society, we are really between a rock and hard place. If we continue on the same path, the United States government is going to go bankrupt. But any politician who tries to cut benefits or raise taxes will likely face the wrath of the voters at the ballot box. So for now the U.S. government just continues to spend even more money and continues to go into increasing amounts of debt - apparently hoping that somehow everything will just turn out okay. But things are not going to turn out okay. We are headed for a financial mess of horrifying proportions. [..] until severe financial pain starts happening, a large percentage of the American people are not going to be motivated to do anything about this problem. But by then it will be too late.

Ten years from now, and probably quite a bit sooner, The United States of America will be hopelessly bankrupt. That's what its own Government Accountability Office says. But people like John Dugan, Tim Geithner, and yes, Barack Obama, keep on inventing plans that shield the banks from losses, but not the citizens. Indeed, the citizens' money goes directly towards keeping banks afloat while ever more Americans find their homes underwater. And that's why Comptroller of the Currency John Dugan is in the right spot at the right time. He sticks out like a sore thumb, but cutting him off is no use: the whole hand is mortally wounded. And mortgage modification plans or financial regulation schemes don't matter anymore. As I've often said, this is not a financial crisis, it's a political one. It's the politicians who owe their plush seats to the very institutions they now pretend to want to re-regulate, who have allowed it to happen. And even for the lone voice who's halfway sincere, it doesn't matter anymore, we're long past that stage. As I've also often said, and was pleased to recently hear Michael Moore repeat, the only thing that works is to get money out of politics. However, in the present political system, that means the politicians, the very people who would presently be tasked with getting that money out of politics, are the ones who most benefit from keeping it in. And that defines a political crisis like nothing else does. Politicians would lose their votes if they cut entitlements and debt (which will bankrupt the nation), and they would lose their campaign money (and further perks) if they go against the money cabal (which will keep the government in the hands of the few, acting against the many) . How you solve that by any means other than pitchforks, or worse, you tell me. Mortgage mods ain't going to cut it. Not even a new Glass Steagall will. The Daily Telegraph's Jeremy Warner, interwoven with curious Thatcher admiration (shouldn't the Brits just LOVE Angela Merkel?), gets a few things right about his own country, and many others like it.

Strikes and strife are only just beginning

Even the Chancellor now concedes that when the axe falls it will need to be deeper and tougher than anything attempted under Margaret Thatcher. Using published Treasury projections, the Institute for Fiscal Studies calculates that after taking account of "protected" areas of spending such as health and schools, the cuts elsewhere in public services and administration will have to be of the order of 25 per cent. In the event of a fully blown funding crisis, they would be deeper still. Nothing quite like it has been attempted since the 1930s. Is Labour, still trailing the vestiges of its socialist roots, substantially funded by union donations, and politically dedicated to the provision of state-funded services and welfare, really up to the job? If Labour ministers were being asked to poison their own children, the task that awaits could scarcely be grimmer. The reason the Chancellor is not telling us how he might do it is not just because he fears the truth would cost votes, but because he doesn't know.

We are a tragic species indeed. We can see ourselves drown, and can't do a thing to prevent it.

theautomaticearth.blogspot.com

Fake Silver "Moly-Bars"?

Bix Weir

A while back Rob Kirby wrote an article revealing that over 1.3 million of the 400 oz gold bars may actually be gold plated tungsten.

http://news.goldseek.com/GoldSeek/1258049769.php

This was a shocking revelation that will profoundly effect the gold market and yet it is the most simple of cons. Who ever checks to see if their 400oz gold bars are filled with tungsten??? NOBODY! 400 oz gold bars are handled with kit gloves by those fortunate enough to own them. They represent an astounding amount of value in such a small package. They come in special cases and are wrapped in beautiful cloths. When you buy them you are scared to touch them...who in their right mind would ever drill a hole in them to see if they are real?!

We'd better start thinking a little harder...a little smarter. It is truly amazing that NOBODY ever checks to see if their gold is .999 fine. Buyers almost always trust the markings on the bar even though they have no idea when those markings were placed there or who the refineries that produced them are connected to...

http://www.roadtoroota.com/public/146.cfm

Wanna get rich? If you had no morals you could buy a low quality, unmarked gold or silver bar and "decorate" it with these tools:

https://shop.rings-things.com/cart/pc/viewPrd.asp?idproduct=19092&idcategory=2696

This is where a big problem lies in the world of gold and silver. We have "trusted" the big guys for too long and they have abused that trust at every turn.

So let's look at how the gold/tungsten problem is related to silver. Here was my take:

Fake Gold Portend Silver Explosion

http://www.roadtoroota.com/public/148.cfm

In this article I contended that fake silver could not be as easily substituted as fake gold:

"The silver situation was a little trickier than just creating fake silver bars. The problem was that, unlike gold where it is unheard of to melt down "Good Delivery" bars, large silver bars purchased from the exchanges were routinely removed from inventory and melted down to be used for industrial purposes. If the "Good Delivery" silver bars were filled with something like tungsten or lead the industrial users would know almost immediately. That kind of visibility would have called into question all "Good Delivery" metals on the major exchanges."

What I didn't fully understand at the time was that there is one public silver stockpile that rarely, if ever, removes the physical silver from their "inventory" and that is the iShares Silver ETF (SLV). Of course, I never believed they actually had all that silver they claim to but I wasn't sure how the con worked. Back in the 1980's there were lead filled silver bars floating around but they weren't hard to spot for the dealers. Lead has a density of 11.342 gm/cm3 and silver has a density of 10.501 or an 8% difference. Not that hard to spot for a professional.

But it made me curious as to what other metal might be closer to the density of silver and voila'''MOLYBDENUM HAS AN ALMOST IDENTICAL DENSITY TO SILVER!

The density of molybdenum is 10.220 gm/cm3 or only a 2.7% difference and is commonly coated with silver for industrial applications! As a matter of fact there is a long list of companies who make Molybdenum bars as well as specialize in Molybdenum coating.

List of Moly Bar Manufacturers http://www.thomasnet.com/products/molybdenum-bars-3287109-1.html

So could it be that SLV (who boasts JP Morgan as their "Custodian") does not have .999 fine silver bars in their inventory but rather a significant supply of silver plated Molybdenum bars? Let's face it, if the banking cabal figured out that they could gold plate tungsten bars don't you think they also considered silver? Could this be the entire REASON why SLV was approved by "the powers that be" to the surprise of all the silver bugs?

As Paulson, Geithner, Summers, Goolsbee and everyone else who has been involved in the rigging of the markets has stated...

"WE WILL DO WHATEVER IT TAKES TO KEEP THE MONETARY SYSTEM STABLE".

Could "whatever it takes" include flat out fraud? Of course it does!

Let's look for clues that there may be some 1,000 oz "MolyBars" floating around in the SLV inventory.

The fact the SLV has given it's controllers a considerable amount of legal leeway is no secret. The prospectus has more holes than Swiss cheese that's been shot point blank with buckshot. There are more articles covering this subject on the internet than there are bars of real silver in their inventory!

Hidden amongst it's many flaws, the SLV prospectus is carefully written to allow for silver that is not .999 fine. There is no specification as to the amount of silver required to be in their silver! Not .999, not .900, not .500, not Sterling, not plated, not coated...nothing. The original prospectus included the term "SILVER BULLION" when it was describing the silver holdings, but a year later the word "BULLION" was stricken from the prospectus. At the same time JP Morgan changed their liability as custodian from $1B to 265M+ troy ounces. OUNCES OF WHAT? Silver wrapped Hershey's Kisses?

Sure they define an "Ounce" as:

"Ounce" -- A troy ounce, equal to 1.0971428 ounces avoirdupois, with a minimum fineness of 0.999. "Avoirdupois" is the system of weights used in the U.S. and Great Britain for goods other than precious metals, gems and drugs. In that system, a pound has 16 ounces and an ounce has 16 drams."

But they never use the capitalized word "Ounce" in the context of the prospectus as it relates to silver. Any decent lawyer will tell you that it's the oldest trick in the book. Define a term with a capital letter yet never capitalize it in the context of the document. The capitalized term "Ounce" as defined is never used again. So why define it if you don't use it... unless you are trying to deliberately mislead the reader of the prospectus!

Just another con.

The same goes for the word "silver". Not once is "silver" defined or capitalized. They almost screwed up in the first prospectus by using the term "silver bullion" but they fixed that boo-boo. But the most damning evidence that the silver in SLV is not the real deal is in the prospectus and the SLV 10k SEC filing..

SLV PROSPECTUS

"However, the custodian is not responsible for conducting any chemical or other tests designed to verify that such silver meets the purity requirements referred to in the Trust Agreement."

SLV SEC 10K

"Silver transferred to the Trust in connection with the creation of Baskets of iShares may not be of the quality required under the Trust Agreement. The Trust will sustain a loss if the Trustee issues iShares in exchange for silver of inferior quality and that loss will adversely affect the value of all existing iShares."

FIRST THEY SAY THAT THEY ARE NOT RESPONSIBLE FOR THE QUALITY THEN THEY SAY IF THEY QUALITY IS BAD iSHARES WILL TAKE THE HITS...WHICH THEY ARE NOT RESPONSIBLE FOR!

Why in the world would JP Morgan take on a multi-billion dollar liability to act as custodian if they are not going to even check the silver that comes into the warehouse? Because they don't. It's just another Ponzi scheme with the illusion of grand silver deposits that never leave the watchful eye of the custodian or the "Authorized Participants".

The key to faking silver bars is that they can not be sold into the industrial market as the melting point of Moly is much higher and it doesn't have the same electrical conductivity. The SLV inventories represent the perfect resting place for "silver bars" to be stored publicly yet not removed for industrial uses. Clearly it can't be in the COMEX or LME warehouses since both exchanges can be called for delivery.

JP Morgan manages the physical silver which can only be withdrawn by this short list of "Authorized Participants"...who know where their loyalties lie!

Barclays Capital Inc

Citigroup Global Markets Inc.

Credit Suisse Securities (USA) LLC

EWT, LLC

Goldman Sachs & Co.

Goldman Sachs Execution & Clearing L.P.

Intrade LLC

JP Morgan Securities Inc.

Knight Clearing Services LLC

Merrill Lynch Professional Clearing Corp.

Newedge Group USA

PruGlobal Securities, LLC

Scotia Capital (USA) Inc.

UBS Securities LLC

Virtu Financial BD LLC

Although we really don't know if the "Authorized Participants" have any rights to remove silver since we haven't seen their contracts, we do know that they have NOT removed much silver since its inception...interesting...

Back to the "MolyBars"

Now that we know that SLV has no legal requirement to hold .999 silver bars lets look for more evidence of "MolyBars". I guess a tell-tale sign would be an increase in Molybdenum production since the announcement and introduction of the Silver ETF in 2005/2006'''well what do you know...

Was it Ronald Reagan that said "Trust but VERIFY"?

I'm not going to get into the fact that the COMEX is now allowing physical delivery in ETF shares because that may be a little too "conspiratorial" for such an upstanding news service as the Road to Roota Letters.

WAIT! Bart Chilton (the New Sheriff in town) and the recently fully funded CFTC staff will surely catch on to any "funny business" going down in ETF gold and silver holdings...oops...

Let's just say I've been down this road before:

Let's face it, the only way to regain trust in the gold and silver markets will be to completely overhaul the entire physical testing and storage system.

Basically, we need a global remelt and re-certification.

As for us little guys...this kinda makes you wish you had paid the premium for those 1oz Gold and Silver Eagles...surely we can trust the US Government...can't we?

When this is all over those of us sitting with real, verifiable .999 gold and silver will be Kings of the World...

EVERYONE ELSE WILL BE JOKERS.

May the Road you choose be the Right Road

Bix Weir

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Credit Crisis, Outrage, Far From Over

Bob Chapman

The re-nomination of Ben Bernanke, as Chairman of the Federal Reserve, has to be one of the ultimate political insults, particularly coming from Republicans, as did his predecessor, Alan Greenspan, both have taken America and the world down the sewer. Ben Bernanke saved Wall Street, the banks, insurance companies and a myriad of other Illuminist firms.

This is the same Ben who refused to release records to uncover where $2 trillion had gone in the loan program that followed the collapse of Lehman Brothers. This is an appellate defeat for the Fed. We would expect they will next appeal to the Supreme Court. This is important to the Fed, because a loss would not only expose which institutions were insolvent, US and foreign, but it would expose what collateral was accepted for these so-called loans, and have they been paid back?

The Fed and American and foreign bankers gambled and lost, so it was up to American taxpayers to bail them out. Needless to say, these actions were outrageous. The Fed not only had no authority to do what they did, but they did, but they also suborned perjury. We wonder how the Appeals Court missed that? The Fed has buried our country in debt, allowed unbelievable leverage and absolutely refuses to tell us what they are up too. Except for a few in Senate and House hearings, questioning is a total farce. The Fed has done as it pleases for 97 years and that has to stop. We cannot allow Ben Bernanke to lie before Congress and get away with it either. We also cannot allow any corporation or financial institution to keep two sets of books and not mark their investment to market.

The financial world is a very small world and everyone knew what was going on at Lehman, just as they knew what Berne Madoff was up too. As usual a conspiracy of silence prevailed in order to allow the wholesale fleecing of the American public to continue unabated. In Wall Street and banking there is still honor among thieves. The Fed knew what was going on at Lehman and let it continue. That is how Mr. Bernanke purgered himself before Congress. Merrill Lynch had already warned the SEC and Fed as to what was actually going on at Lehman. Lehman committed fraud and its officers have thus far gotten away with it. Where is the SEC with civil charges and where is our Justice Department? They both only make selective prosecutions, most of which are based upon politics or the connections of the players. The only time they go after insiders is when they are forced too, like in the recent fine against Berkshire Hathaway, Warren Buffett's firm, for accounting fraud of $200 million. The fine was $100 million, so as you can see crime pays. What is worse is that other firms are doing the same thing. This is all part of the mantra that no major financial firm should be allowed to fail. They are too big to fail.

The big bad secret is that if banks and other financial companies reported their true financial positions they'd be out of business - insolvent. The Fed and the SEC are certainly well aware of these problems, but the game goes on. The fraud is intentional and conscience. They know there are two sets of books, that MBS on their books are virtually worthless, they just bought $1.1 trillion worth of the toxic waste and they are well aware that the shadow inventory on their books is at best worth $0.30 on the dollar. In fact, everyone within the beltway knows it, just like seven years ago they all knew Fannie Mae and Freddie Mac were broke. As you can see, there is no law; it is only what these people want it to be. Faithfully all regulators and our elected representatives look the other way. They allow corruption to flourish. One thing that can be guaranteed is that if you report any of these frauds nothing is liable to happen. Today that is the American way - crime pays.

As we have said before the exposure of the problems in Greece, those of all the PIIGS and in the US, California, Arizona, Pennsylvania, New Jersey and New York, open a whole new phase of the debt crisis. The world is in a sovereign debt crisis. In Europe and in the US there are talks regarding a reduction in leverage in currency, which will only cause a liquidity crisis. A rise in interest rates will only compound the problem.

In addition we believe mortgage debt, both commercial and residential, will be sucked into the vortex adding to the woes. This is a replay of what occurred in the 1930s in the debt markets. Do not forget the bond market is 10 times bigger than the stock market and if something has to be sacrificed it will be the stocks, not the bonds. The replay will find stocks falling first, followed by bonds. The bond problem is already very visible; 19 nations have had their credit ratings cut and the US and UK and others will soon follow. That is why we continue to say that the only safe haven is in gold and silver related assets. As we have said previously the only way to handle the problem is for nations to meet, have a multilateral official devaluation and debt default settlement. That will be followed by a deflationary depression, which will be accompanied by another worldwide war. The debt load, particularly in advanced economies, is overextended and unsustainable at more than 400% of GDP in the US alone. That is 25% higher than US debt was in the 1930s. Those who do believe debt will be settled and currencies devalued, also know that recovery from that debt will take 20 or more years.

At the center of this greed and corruption are derivatives and securitization, which are simply a Ponzi scheme form of finance. These instruments were central to bringing down AIG and GM. The lenders, the large banks, brokerage houses, investment banks and insurance companies wrote these financial products, most of which are and were uncollateralized. As a result of this unethical disaster the American taxpayer was put firmly on the hook to repay this debt and to bail out the lenders. In addition, as you have been recently informed, these products were responsible in part for Greece's current problems. What Goldman Sachs did was transform government debt into derivatives, which were insured by CDSs. In time the euro zone will break up as a result of this and other factors. If England were to withdraw from the EU that could as well break up the European Union. Speculators have been purchasing Greek CDSs, anticipating debt default and as a result the euro has plunged. All of this is the result of turning world markets into a casino.

As you can see the problems are not going away and they won't disappear until the system is purged. More than $3 trillion has been poured into GM, AIG, Fannie Mae, Freddie Mac and Wall Street banks and brokerage houses by American taxpayers via the Fed and the Treasury. As a result the biggest violators have become even bigger, which was the intention from the beginning. As an example, JPMorgan Chase, Bank of America, Wells Fargo, Citigroup and Goldman Sachs hold almost 40% of all bank deposits. The credit crisis and the debt crisis are far from over. The desk chairs have just been rearranged. Not only will seven million more people lose their homes this year creating a 3-year home inventory for sale, but also lenders will get hit with commercial real estate they cannot possibly finance. We see another minimum of four more years of defaults both in the US and Europe. Taxpayers cannot save the system indefinitely, especially when the players that caused all this are back leveraging and speculating again.

We are facing a commercial debt crisis that no one expects. We are going to see hundreds of US banks fail this year, which the FDIC does not have the funds to cover. This year or next we are facing a sovereign debt crisis in the US, Europe and elsewhere. We are looking at tariffs on goods and services next year. All derivatives should be outlawed except on transparent exchanges and present positions should all be unwound. Europe is already moving ahead on this matter and hopefully an international conclusion can be reached. In addition Glass Steagall should be reinstated and the Fed's job be turned back to the Treasury Department.

Bearing out what we discussed earlier there is little talk of all G-7 members soon reaching more than 100% of GDP in public debt. As a result every one of these 7 countries have serious problems. In addition they are still expanding M3 or M4. Power and cash consumption shifts more and more toward governments. Banks have cut back lending by some 20%. They are holding government paper probably at the behest of government. The foreign treasury buying could very well be the Fed funding the purchases. Then the carry trade and hedge funds do their part as well. This could be a position of diminishing returns if interest rates rise in the real market, which we believe they will. Some 30 major nations have the same problem the US has and that is funding their own debt, as well as America's. Again, we have long believed that Treasury funding from the UK, Caymans and other sources was merely a front for Fed purchase of Treasuries. That in part is what the swap agreements are all about. This 40% increase in US monetary base normally would cause inflation, perhaps even hyperinflation, but the affect of 22-1/8% unemployment, low wages and a strong deflationary undertow has held inflation at an official 2-1/2% to 3%, or a real 7-1/2%. We see money and credit continuing to grow at 16% although the Fed has been drawing liquidity from the system. Normally we'd say that the US would emulate Japan's 20 years of deflationary depression, but this time it is different. Japan wasn't carrying the debt load the US is today. Japan began off a lower center. The luxury of 20 years of sideways movement that Japan experienced is not available to the US, because of their massive sovereign debt that grows by the minute.

As we pointed out previously foreign holdings of dollars by other central banks has fallen from 64.5% of assets to 60.5%. this has been caused by internal funding needs and flight from the dollar. This fall in dollar reserves sooner of later will force the Fed to raise rates to draw in more dollars to fund US debt. These exercises will also crowd out other corporate borrowers, again putting upward pressure on interest rates. Somewhere along the chain problems will arise and it will snap. We believe that event will be when multilateral official devaluation and debt defaults take place and those events are not far away.

We are at a juncture where governments cannot really help like they could previously and in order to survive they will have to take care of themselves. For the moment they have neutralized a bankrupt banking system by creating enough liquidity to offset deflation. As demands grow the need for liquidity grows just to keep the insolvent system afloat. This approach is funding sovereign debt, but it is not allowing loans to small- and medium- sized businesses and individuals. The system's worst days lie ahead. Take advantage of the interlude, it will be short lived.

The Mortgage Bankers Association reports its index, which shows purchase and refinance applications, saw the latest week in March loan application volume decrease 4.2%. The Purchase Index component rose 2.7%. The Refinance Index fell 7.1% week-on-week. The Purchase Index fell 15% year-on-year. These numbers were called an improvement by the mainline controlled media, if you can believe that.

JPMorgan Chase is cutting a deal with your government for a $1.4 billion tax refund. This is a benefit for taking over Washington Mutual. JPM paid only $1.9 billion for Wamu. If the tax break is allowed they have 73.6% of the purchase price back. JPM wants to score $10's of billions for a $500 million investment. The public gets screwed again and the criminals on Wall Street win.

theinternationalforecaster.com

Chasing the Gold Standard

Linda Brady Traynham

I suppose it is an article of faith here in the Bar that the first nation to adopt a true gold standard is going to have a commanding advantage internationally?

If not, it is here in the Whiskey Redan, deep in the heart of Texas. A "redan," you will recall, is a fortification with only three corners, and I chose the term partially because Gary had already snagged "the Whiskey Bunker" and to allow myself to define what the three most important factors are easily, according to my whim of the moment. Today I'm going to go with "God, Gold, and Guns," which you will notice is in alphabetical order. We don't discuss religion in the Bar, politics and economics being quite controversial enough, so that leaves us with Gold and Guns.

We can deal with the Gun facet pretty easily: if a government doesn't have "guns" (i.e., military forces sufficient to deal with less than friendly neighbors), it won't be long before a nation is absorbed by more belligerant and better-armed forces. If the people don't have guns, governments tend to overreach. When the people don't have guns, crime rises.

Which brings us to everyone's favorite topic, shimmering metals, and, in particular, the much-disputed question of whether they are a "barbaric relic" or the best means of assuring both a stable monetary system and preventing governments from inflating through the printing press.

Amazing, isn't it, how putting matters simply can make them much clearer? Why doesn't any government have a gold standard? Because there was too much "money" and power to be gained by going to fiat currency. Despite the obvious advantages geopolitically why isn't anyone doing more than flirting very tentatively with the idea of money that is backed unit for unit with gold or silver? Because governments don't want to give up the power they have or fear that cutting back on so-called "safety nets" would lead to their destruction. More than that, every nation I can think of quickly has spent itself into such a hole that it cannot simply recall all of the paper currency and swap it out for gold and silver at parity or even a sensible fraction thereof. I doubt that the Feds could have managed a penny on the dollar even before the stupifying debt incursion of the last eighteen months–and we have only their unverified word on how much physical gold is on hand. A country with no foreign debt might have some chance of pulling conversion off without devastating consequences, but are there any governments that don't have foreign debt or own that of others? Perhaps a period with a two- or three-tiered exchange rate, such as Hugo Chavez inagurated recently, would work. In Venezuela, now, what your money is worth depends upon what you are spending it on! My idea of good economic policy does not include armed guards in business establishments to prevent the owners from raising their prices. Ceylon (sorry, "Sri Lanka") tried it but is too small; Monaco isn't a good candidate, either, nor is Andorra.

So there the golden fruit hangs, seemingly out of reach. IF a country with reasonable clout (the US, Britain, BRIC, perhaps even an OPEC member) could make the transition without losing heads or thrones there would be no further question of what the world's reserve currency would be. We can certainly take Saudi Arabia off the list of possibilities because the price of keeping the house of Saud in charge is $70/barrel in giveaways. Short of defaulting internally and externally and eliminating the notion of "entitlements" the Feds and Parliament certainly can't get away with it, and such actions would surely precipitate blood in the streets of a nation where 40% of the citizens are on the dole and 40% of those employed work for government at some level.

I learned long ago from a very fine general, "Don't bring me a problem unless you have a solution." This saved the general a lot of frivolous complaints, but it did something better: the person who has the problem is most likely the one best-qualified to formulate a solution. It forces people to think for themselves as well as taking into account their familiarity with the restrictions and results. Of course I have an answer to the problem of what nation can–and must, by its Constitution–adopt a strict gold standard, and by fortuitous happenstance that country neither prints fiat "money" nor does it have vast foreign or internal debt. It is laboring under the small inconvenience of having been occupied by a foreign power for a hundred and fifty years.

Yes, I'm back to the campaign to restore the Republic of Texas via a public vote whether to request an amendment to the US Constitution to allow Texas to be admitted as a State (a process that will take at least twenty years and bales of Timmy's paper) or to ratify the current treaty between those United States and the Republic of Texas, reclaim our independence, suggest with firm politeness that the Feds and all of their works retire to their side of our respective borders, and insist that Washington abide by the 2004 decree of a Federal Judge that Washington "cease and desist hostilities against the land and people of Texas." I don't know about you, but I consider the IRS and federal mandates to be hostile.

The day one more than fifty per cent. of the voters agrees we would prefer to be the ninth richest nation in the world rather than a satrap of Baghdad on the Potomac, we revert instantly to our 1836 Constitution which has been updated with scrupulous legality only to include universal sufferage. Other than that the Convention, very wisely indeed, left that splendid brief document alone.

Our Constitution states specifically that "money" shall consist of gold and silver coins we mint ourselves. You can look up the "for profit corporation dba the State of Texas" and see what our financial position is with Dun and Bradstreet. (While you're at it, check on the for-profit corporation dba the USA.) You can infer easily how rapidly expenses will drop when ties are cut with DC. Consider just a few...the cost of gasoline, alcohol, and tobacco...the end of Federal mandates which cost us billions a year...the immediate and very real "raise" everyone employed within our borders would receive when income taxes and FICA were removed. Our Constitution, like yours, forbids taxing earnings or heads, but we can make it stick when you didn't. The true dream of the Republic is not to regain a Wild West with saloons, spittons, and gunfights, but to start over very, very carefully, learning from the mistakes and abuses of the past 175 years and attain a true Jeffersonian republic.

Our money will be "good as gold" because it will be gold. True, for convenience there may be paper currency, but it will say "redeemable for the equivalent in precious metals," not "Federal Reserve Note." Your $100 dollar bill is an IOU you cannot count on collecting; if we had one, it would be worth roughly a tenth of an ounce of gold today, tomorrow, and for decades to come. Yes, the metals market does fluctuate, doesn't it? So do exchange rates. I can see the scurry to hold Texas Gold or even fully-backed paper (be that notes or even bonds if we chose to offer some) because our money will be real. Today's Bernanke is the equivalent of an Andrew Jackson twenty years ago, a loss of 80% of stated value. The dollar of today is worth less than 4% of an oversized bill a hundred years ago. That is the penalty of fiat currency. We have our own system of Texas banks and deposits in them would be far safer than in your local, FDIC "guaranteed" banks. We'll have bullion to back our claims. They don't.

I cannot foresee the Republic of Texas feeling any need to sell bonds, but if it did they would be an excellent value so long as we break free without being invaded again by US or UN forces. Americans are so accustomed to having everything controlled by the fell hand of the Statists that it can be difficult to grasp how few legitimate expenses a truly Constitutional government has. In "Educating the Masses," archived here, I discussed my solution to the one thing the Texas Constitution says about education: that there must be a "plan" to educate the children. Compare the cost-effectiveness (to say nothing of the superior results we can guarantee) of my plan versus Washington, D.C. spending $14,000/year/student. When the kids can go to private schools there for as little as $7,000 a year (Although Obama's children are in pricey Friends at eight times that), why on earth is there a disastrously ineffective public school system in the District of Columbia? Silly question; power, the ability to tax and spend, and the politics of envy and racism. As an aside, I am appalled by the very concept of "hate speech." Someone explain to me why speech permitted under the First Amendment is showing up at a military funeral with a sign that says "Thank God for dead soldiers," clearly meant to mock, not to comfort the family, but I will be walking on very thin ice if I say what I think about a Marine General's suggestion that gay troops be billeted together! I haven't any objection to "separate but equal" (a school system that produced superior education and far less strife; propinquity has not lead to true friendship between those of different color and religions), but I really disapprove of putting all of the–someone come up with a word that won't get me arrested–in barracks where they can party hearty after lights out knowing that everyone else there is either a potential partner or like-minded. That is scarcely conducive to "good order and discipline." Wry laugh. We can understand Thomas Jefferson's sensible suggestion that a brothel be located close to the University of Virginia so that the boys' minds wouldn't be distracted in a time when young ladies were supervised strictly. I have trouble with a Lysistrata Corps.

Back to business. At a guess, fewer than 2% of you, dear readers, reside in our fair Republic. (Simple arithmetic. Divide by 50 plus at least Australia, Switzerland, China, and South Africa, where I correspond with readers.) The reasons our fight to regain our freedom should be of interest to you are myriad: as an example to your own governments and citizens; as a shining dream you can partake of by applying for citizenship and paying a flat 10% tax during your probationary period; and as an investment opportunity that is far safer than what goes on in your land, just for starters.

Our goal is to reduce government intrusion to the bare minimum required to keep the peace, internally and externally. Government HAS no other valid purposes than to protect the citizenry and its borders. When the Colonies broke off from England (an England somewhat distracted at the time or the rebellion would never have succeeded) it was for a dream of freedom, the most minamal of governments, and–laughter–individual gain. Nothing wrong with that, free enterprise being the best way to raise the standard of living of all citizens. Our promise is of a Republic where what you earn is yours to keep, where local "taxing authorities" cannot demand property taxes to fund their pet projects, where income is generated primarily through taxes on foreign corporations–including those headquartered in the US–and tariffs, and you are free to use what you earn to support your family, start or expand a business, and prepare for your own future. No, there won't be any welfare, but those who will not work can either not eat, convince friends/family/churches/charitable institutions to support them, or go to any of your forty-nine states. That worked for Tommy Thompson, and it will work for us.

Just imagine a truly gold-backed currency, and no income taxes, property taxes, "sin" taxes, EPA, NEA, or socialized medicine. I'll close with a discussion of that. I receive Social Security, and if I live to be well over a hundred I am unlikely to recoup what we "contributed" for over forty years. I have no choice about being on Medicare, which takes precedence over the TriCare a "grateful" government promised me for life for the sacrifices John and I made. The government removes that sum without my permission, and my only option is to refuse my stipend and have no medical insurance at all other than TriCare, which doesn't appear to cover much any more. The tariff last year was right at $1200, making the (very unusual) three trips I made to the doctor cost me $412 each, including co-pays. This is not my idea of a good bargain. This price will probably triple in coming months, in a world where Obamacrats, desperate for money, denied any COLA increases for the next three years. Left to my own devices I would have a catastrophic care policy and simply pay the current average of $110/visit. In the world we are trying to make no one will provide "free" medical care for those whom, quite frankly, we expect to seek refuge in your welfare states, but no one will attempt to mandate what arrangements you make for your medical care, either. I did an analysis based on what it cost to go to our family doctor in 1955–cash only, of course. In inflation-adjusted dollars it would cost you $35 for a standard office visit if the government and "health care insurance" did not exist.

The "land of the free and the home of the brave" doesn't look much like that to me, any more. The latest Gary North suggests that the "trade of the decade" is to shed all stocks and buy uranium. I'm sure that is excellent advice...but suggest that you hedge your bets by investing in Texas-based corporations. If our bid for freedom fails, Texas was still the last into the depression and hit most lightly by it. Ah, but if we succeed...I am certain you could take to the idea of dividends paid in gold.

Regards, Linda Brady Traynham March 30, 2010

Linda Brady Traynham is a former editor and analytical project report writer and is now a Whiskey & Gunpowder field correspondent on a ranch in the Republic of Texas. She studied Counseling at Boston University and got her Masters degree in Philosophy from the University of Hawaii.

whiskeyandgunpowder.com

FINANZA/ La Grecia affonda e l’Italia finisce nel mirino di Goldman Sachs

Mauro Bottarelli

Economia e Finanza

martedì 30 marzo 2010

A lanciare l’allarme ci ha pensato un osservatore molto speciale, ovvero il più grande detentore del mondo del debito europeo: per il vice-governatore della Banca centrale cinese, infatti, «la Grecia è solo la punta dell’iceberg, ora la più grande preoccupazione è ovviamente rappresentata da Spagna e Italia». Eccoci, qualcuno comincia a prendere la mira.

Il vertice europeo dei capi di Stato e di governo, nei fatti, non ha sortito alcun effetto: la risposta alla crisi greca è stata ovviamente quella più semplice e scontata, ovvero un intervento misto di Fmi ed Europa, con quest’ultima che si limita a prestiti bilaterali di ultima istanza al fine di evitare l’infrazione dell’articolo 125 dei Trattati comunitari.

Detta così, appare molto formale. Nei fatti, si è dovuto mediare tra la volontà tedesca di non pagare per gli errori di Atene e il dato di fatto in base al quale i fondi del Fmi non erano sufficienti a coprire il fabbisogno finanziario di cui la Grecia necessita assolutamente entro giugno per rifinanziare il debito. Una cosa è certa e lo ha confermato Lorenzo Bini Smaghi: «Il compromesso raggiunto ha evitato una Lehman europea».

Verissimo. Ora, però, si teme che la politica tedesca porti alcuni tra i paesi più esposti in una spirale deflattiva. A dire il vero, il rischio è esattamente l’opposto: per mangiare il debito pubblico, facendolo di fatto pagare ai cittadini-contribuenti, la ricetta migliore è quella dell’inflazione e non manca molto alla riproposizione in grande stile di questa strategia di leva macroeconomica. Ma, pur avendo evitato la nostra Lehman, il peggio è davvero passato?

Stando ai calcoli di Erik Nielsen di Goldman Sachs, la Grecia deve racimolare 24,7 miliardi di euro entro la fine di maggio: le ammortizzazioni di lungo termine del debito rappresentano il 7% del Pil quest’anno, il 10,2% nel 2011, l’11,8% nel 2012, il 9,7% nel 2013 e il 10,4% nel 2014. Insomma, la Grecia deve affrontare sia una crisi di liquidità che di solvibilità. Per Nielsen, che ha preparato al riguardo il report “Here comes the Imf”, «non è affatto chiaro e scontato che i rappresentanti politici europei abbiamo compreso la reale entità del problema».

Su questo, non abbiamo dubbi. Anche perché, a differenza dei burocrati, il signor Nielsen sa leggere davvero i bilanci e spulciando i dati ufficiali resi noti lo scorso mese dalla Grecia ha scoperto che «in termini di cash, il debito greco è al 16% sul Pil e non al 12,7% che viene spacciato in termini di accumulazione». Tradotto, la Grecia sta affondando. Per riuscire a uscire dal baratro, la Grecia dovrà dar vita a una sorta di svalutazione interna di almeno il 20-25% per ritrovare competitività: ma questo significa draconiani tagli salariali e, quindi, una crisi sociale alle porte.

Insomma, siamo a una sorta di riproposizione del default controllato che nel 2003 colpì l’Uruguay: peccato che all’epoca il tutto era fatto sotto la tutela di un molto più sano Fmi, ora si naviga a vista. E, oltretutto, con scarsissima conoscenza dei reali limiti che l’Europa conoscerà nel prossimo decennio a livello di crescita. A dircelo è il cemento.

Già, il cemento e la sua richiesta. Sembra assurdo ma non è così poiché il cemento è la cartina di tornasole della crescita economica, portando con sé il dato aggregato dell’infrastrutturazione: opere ma anche case, quindi il dato disaggregato della natalità. Ebbene, guardate il grafico allegato. Parla delle prospettive di crescita nel decennio 2010-2020: l’Asia è al 7,7%, l’Europa dell’Est al 6,7%, l’Africa e il Medio Oriente al 5,7%, l’America Latina al 5%, l’America della grande crisi al 4,4%. E l’Europa dei soloni anti-mercato? All’1,7%, ovvero un nano tra i giganti. E parliamo di prospettive decennali: da qui al 2020 l’Europa sarà di fatto ferma, a un terzo della crescita annua statunitense.

(clicca qui per vedere il grafico ingradito)

Questo nonostante Irwin Stelzer, l’eminenza grigia di Rupert Murdoch, l’altro ieri nel suo domenicale “American account” sul Sunday Times prendesse nuovamente - e sempre più pesantemente di mira - Barack Obama, dicendo chiaramente che «non smetterà con la sua politica finché non avrà tramutato l’America in Europa». Un segnale a chi di dovere, pare. Capite ora perché la crisi greca è davvero la punta dell’iceberg?

Parlando economicamente, ormai all’Europa sono venuti a mancare i fondamentali. Lo dice nel suo ultimo outlook anche Nouriel Roubini, secondo cui «le difficoltà già presenti in paesi come Grecia, Spagna, Irlanda e Portogallo saranno aggravate dai non più prorogabili pacchetti di austerità fiscale che porteranno una contrazione della crescita in un momento in cui il settore privato, anche quello finanziario, è ben lungi dall’aver ritrovato un proprio punto di equilibrio».

Insomma, sono tempi bui. Soprattutto quando tornano le coincidenze e gli accadimenti a orologeria. Appare quantomeno sospetto, infatti, il ritorno del terrorismo qaedista con l’attentato alla metropolitana di Mosca, proprio quando Gazprom, l’ente energetico statale russo, aveva cominciato una campagna molto aggressiva in Europa, in particolar modo nel Regno Unito dove era pronta a un investimento da 1 miliardo di sterline per diventare il principale fornitore di carburante del paese.

Si tratterà certamente di una coincidenza, ma nel dubbio conviene sempre cercare la verità tra le righe della realtà, oltre che tra quelle della storia. Attenzione, si muovono persone e cose là fuori. E, purtroppo, cominciano a muoversi - ancora - i cds sul rischio di default sovrano. Anche italiani questa volta. Lo ha detto Goldman Sachs. Speriamo che Mario Draghi approdi dove deve, ovvero alla Bce, altrimenti la macabra danza suicida della Germania porterà tutti, noi compresi, nel vortice della stagnazione.

© Riproduzione riservata.

http://www.ilsussidiario.net/News/Economia-e-Finanza/2010/3/30/FINANZA-La-Grecia-affonda-e-l-Italia-finisce-nel-mirino-di-Goldman-Sachs/76222/

L’Irlanda si prepara a salvare il sistema bancario

Il ministro delle Finanze irlandese, Brian Lenhinan, renderà noti oggi i dettagli del suo piano per ristrutturare il sistema bancario del Paese. L’obiettivo è quello di liberare gli istituti di credito soprattutto dai prestiti “tossici” legati al mercato immobiliare, al fine di rilanciare il settore. Il responsabile economico del governo di Dublino parlerà oggi al parlamento mentre, separatamente, la National Asset Management Agency annuncerà il costo dell’operazione, che prevede anche il trasferimento dei bad loans di Allied Irish Banks e di Bank of Ireland Plc.

Quello che Lenhinan tenterà di ottenere è un’uscita del sistema finanziario dalla crisi provocata soprattutto dal crollo del segmento real-estate. Ma non sarà facile, dal momento che stando alle stime degli analisti il settore bancario irlandese avrebbe bisogno di almeno 25 miliardi di dollari per risollevarsi. Secondo Brian Lucey, docente al Trinity College di Dublino - riferisce l’agenzia Bloomberg - le misure messe in campo dal governo potrebbero portare lo Stato a controllare la maggioranza in Allied Irish. Ma potrebbero non bastare: «Una trasfusione d’emergenza, ora, può garantire la sopravvivenza - ha spiegato Lucey -, ma in futuro potrebbero essere necessari altri interventi».

D’altra parte, solo Allied Irish ha bisogno di 7 miliardi di euro per coprire le proprie perdite, secondo quanto riferito dall’Irish Times questa mattina.

http://www.valori.it/italian/finanza-globale.php?idnews=2203