Thursday, June 16, 2011

Inside Story: Greece protests at austerity measures

From: AlJazeeraEnglish | Jun 16, 2011

Inside Story with presenter Teymoor Nabili discusses with guests: Vagelis Agapitos, independent economist; Yanis Varoufakis, professor of economics at the University of Athens; and Fotis Boblas, an activist and protester.

European Stocks Fall on Greek Confidence Vote


European stocks fell to a three- month low as Greek Prime Minister George Papandreou said he will reshuffle his cabinet and seek a confidence vote. U.S. futures and Asian shares also dropped.

The benchmark Stoxx Europe 600 Index fell 0.7 percent to 265.99 as of 8:18 a.m. in London. The gauge has fallen 8.7 percent from this year’s high on Feb. 17 as a slowdown in U.S. job creation suggested the economic recovery may be faltering and speculation grew that Greece might default on its debt. The Euro Stoxx 50 Index slipped 0.9 percent to 2,706.26, the lowest level since November. Standard & Poor’s 500 Index futures fell 0.1 percent today, while the MSCI Asia Pacific Index slipped 2 percent.

“With Greek sovereign debt squarely back on the agenda, risk appetite amongst traders is very much off and equities are coming under sustained pressure as a result,” said Cameron Peacock, a market analyst at IG Markets in Melbourne. “A new government is set to be formed in Athens today against a backdrop of civil unrest and the big concern is that politics gets in the way of the second tranche of the bailout, in turn forcing a debt restructuring in the euro zone.”

Papandreou sought to reassert his authority in a televised address last night hours after police used tear gas to break up protests in central Athens and media reported he was in talks to step down in favor of a unity government. Thousands remained outside Parliament late into the evening, with police estimating the crowd at 8,000 people at 10:20 p.m. local in full

Horror Day on Australian stock market

From the Sydney Morning Herald:

Australian stocks were pummelled today, closing at their lowest in more than nine months as investors fled the market on growing worries about Greece's debt crisis.

The benchmark S&P/ASX200 Index slid 87.6 points, or 1.9 per cent, to 4479.2, while the broader All Ordinaries Index fell 88.7 points, or 1.9 per cent, to 4546.7.

Today's drop lopped more than $25 billion from the overall market's value. The ASX200 has lost about 4.9 per cent this month so far, placing it on course for the worst monthly drop since May last year when concern about Europe's sovereign debt crisis last flared.

The ASX200 has also fallen 9.9 per cent from its April high of 4970 points and is now teetering on the verge of a technical correction, which is generally defined as a drop of 10 per cent. Markets in the region, including Hong Kong's main index, passed that 10 per cent slide today.

Read on at:

Martin Armstrong - The 13-14th June Turning Point

The latest report from the cycles guru, Martin here

Nigel Farage: Bankers+politicians = 'unholy alliance' vs people

From: RussiaToday | Jun 15, 2011

Renowned Eurosceptic and British Euro MP Nigel Farage says saving the banks is why politicians are so determined to bail out Greece and keep it in the Eurozone.

Ben Bernanke has a itchy printer finger

Pakistan Nabs CIA Informants in bin Laden Raid

From: AssociatedPress | Jun 15, 2011

Five Pakistani informants have been arrested for their role in helping the CIA leading up to the raid that killed Osama bin Laden. Among those reportedly arrested: a Pakistani army major.

US stocks post heavy losses on Greek debt fears

From the Sydney Morning Herald:

Big losses on Wall Street have threatened to wipe out the gains made on US markets since the start of the year after concerns over Greece's debts and the cooling American economy spooked investors.

The S&P 500 slid 1.7 per cent to 1265.42 at, trimming this year’s gain to 0.6 per cent. When it closed, the gauge had fallen to the lowest level since March 16. The Dow Jones Industrial Average fell 178.84 points, or 1.5 per cent, to 11,897.27 today.

‘‘It’s a classic 'risk-off' day,’’ said Quincy Krosby, a market strategist for Newark, New Jersey-based Prudential Financial, which oversees $US859 billion.

‘‘They keep talking about kicking the can down the road in Europe. The can is getting heavier and heavier. The dollar-euro trade is on. The economy is in a slow patch. We suspect that weaker economic data should help curtail the march higher in commodities.’’ on

Riots in Greece over austerity cuts

From: AlJazeeraEnglish | Jun 15, 2011

Greek media is reporting that Prime Minister George Papandreou has offered to step down, as politicians struggle to find a way out of the debt crisis.

They are hoping to form a coalition government to agree on a new round of austerity measures.

But outside parliament, tens of thousands of protesters clashed with riot police as anger over the planned cuts spilled over.

Al Jazeera's Alan Fisher reports from Athens

Syntagma Square update

The Marginal Utility of Silver

By Dr. Antal Fekete:

I welcome the Internet debate on the question whether the Mint should be opened to gold and silver. The latest contribution by Hugo Salinas Price, entitled Free Coinage of Gold and Silver - Then and Now, expresses doubts that such a measure, at least insofar as silver is concerned, would work today. One of the arguments he offers is that silver, like all non-monetary metals (but unlike the monetary metal par excellence, gold) has a declining marginal utility. This, he suggests, is an historical change as prior to the 1870s the marginal utility of silver, like that of gold, was constant (or nearly so). In this brief rejoinder I cannot go through all the arguments of his long article, but would like to add my penny of wisdom, such as it is and for whatever it may be worth.

Does silver have a declining marginal utility? I wish I knew! There is but one way to find out: one of the governments must bite the bullet and open its Mint to silver. This would allow all comers to bring forth their bullion and convert it into standard silver coins free of seigniorage charges. If the response were so overwhelming that the Mint would be inundated and forced to close its doors to silver again, it would go a long way to establish evidence for declining marginal utility. It would indicate a panic among owners of silver bullion, prompting them to get rid of their holdings while riddance was good.

If, however, the flow of silver to the Mint was controlled, if the premium on freshly minted silver coins did not precipitously collapse but only showed moderate decline, this would be a strong evidence that the marginal utility of silver, though not constant, showed a record slow decline, second only to that of gold.

To be sure, ultimately, the premium on silver coins would go to zero. But the process would take time, possibly years. The new silver coinage would reach its saturation point where demand for souvenirs and for piggy-bank fillers was satisfied. This, however, would not stop the flow of silver to the Mint. Coins would continue to be minted even after the premium vanished. The new silver coins would go into circulation. People would become confident and start spending their silver coins once they got used to the idea that they could always tap coin circulation for replacement. They could get any number of silver coins on exactly the same terms as they could spend them, that is, without having to pay or sacrifice a premium.

But why would people want to have more silver coined once the hoarding demand for silver coins dried up? Well, that's just the interesting part. People would want to make their purchases of goods and services on the best terms possible. Silver coins would give them the best terms of trade − certainly far better than terms that holders of Federal Reserve notes have. For example, people could negotiate long-term contracts for delivery of grains or crude oil at stable prices if they pay with silver coins, while such contracts were no longer offered to holders of dollar balances.

Gresham's Law has nothing to do with it. People won't stop eating, nor will they want to stop keeping themselves warm in winter just to uphold a badly misunderstood and misquoted economic law attributed to the financial advisor of Queen Elizabeth I. To the extent people will want to eat and keep themselves warm in winter, paper dollars will not drive silver dollars out of circulation. By the way, Gresham's Law, correctly quoted and understood says that worn silver coins will drive full-bodied silver coins out of circulation provided that the government makes worn coins legal tender and forces people to accept them at face value. Absent legal tender provision, people would simply pay for their purchases in silver coins by weight, rather than by tale.

There can be no question that silver coins will start to circulate as soon as the premium on freshly minted coins is reduced to zero, assuming that the Mint is kept open come rain or shine. Already there is pressure on governments to open their Mint to silver. If they haven't done it yet, it's because they know that their banks are insolvent and could not withstand the shock of removal of the prop of legal tender protection for paper money. They hope against hope that their insolvent banks, given time, will be able to heel themselves.

The Chinese government is holding back for one additional reason. It wants to convert as much of its dollar balances into silver as possible before opening its Mint to silver. The Chinese hope to make up for inevitable losses on their dollar account by gains on their silver account. They have to go gingerly about their silver purchases though, not to upset the apple-cart. In waiting, the Chinese take a calculated risk while watching like a hawk what other governments are doing. They certainly don't want to be pre-empted by the Indian or Mexican governments. Early bird gets the worm.

Last year I was in China and I met several officials in influential positions. I came away with the impression that American-trained people in the banking establishment suffer from an overdose of America-worship. While studying at U.S. universities they fell for Keynesianism hook, line and sinker and can't get it out of their system. These people laughed me out of the lecture room when I was trying to tell them about the benefit of a metallic monetary system. But I also met others who were totally immune to America-worship. If they were Communist, it certainly didn't stop them from promulgating a new policy letting Chinese peasants acquire as much silver as they would. This policy makes sense only if China has long-term plans to open its Mint to silver. Naturally the plan, if it is to be effective, must be kept secret for the time being.

When you ask them if they are not afraid that America may beat them to opening the Mint to silver before China does, they would answer with an enigmatic smile. They would mutter something to the effect that sometimes you have to take a chance in assuming that thieves who plot to rob you, while they are sharp at stealing, may in fact be dull at poker.

Think about it. The U.S. may have already lost the silver game against China. Perhaps the Chinese kept the Communist façade for one reason only: they wanted to lull the Americans into a false sense of security that they would never ever open the Mint to silver and gold as they have meekly acquiesced in carrying the yoke of the irredeemable paper dollar forever. Japan's example as an American fiefdom does not appeal to the Chinese, but they are not yet ready to bolt from the dollar-feedlot.

The Americans messed it up so badly that it is hard to find words to talk about it. They should have played copycat at the silver chessboard. When the Chinese built up their silver refining capacity, Americans should have done likewise. They did nothing. When the Chinese started encouraging silver imports and made noises about putting embargo on silver exports, Americans should have followed suit. They did nothing. When the Chinese prompted their banks to extend their silver and gold market activities into their rural heartland, Americans should have imitated them. They did nothing. When the Chinese actively started making their silver and gold mining industry competitive, Americans should have removed the fetters from theirs. Again, they did nothing.

The writing is on the wall: Mene tekel upharsin - the dollar has been put on the scale and found wanting. The Chinese will open their Mint to silver in their own good time. It is their destiny. If they don't talk about it, that's because they want to give a chance and a little extra time even to the poorest Chinese peasant to buy a silver coin or two before it's too late.

China has been on a silver standard since time immemorial. F. D. Roosevelt's silver purchasing policy after 1933 forced them off silver. It was one of his hare-brained monetary schemes to foster inflation in the United States. He was completely oblivious of the fact that he was fostering deflation in China, fatally weakening it and making it an easy prey to Japanese imperialism.

There are simply no reliable estimates how much silver has been coined during the long history of Chinese civilization. Most of those coins are still around in mattresses and cookie-jars. Multiply the number of mattresses and cookie-jars by hundreds of millions. You get the idea.

Chinese peasants are suspicious people. They are still afraid that their nominally Communist government has designs to confiscate their well-hidden silver coins that have escaped Mao's Long March as well as his Great Cultural Revolution. Watch for the day when this enormous silver treasure, the accumulation of millennia, will be released. The Chinese government is in no hurry to give the world an object lesson on what the marginal utility of silver is. The best experts on silver in the world are Chinese but they keep their cards close to their chest. They know that in playing poker it is not a good hand you need but a good brain. One that is not contaminated with Keynesian bunk.

US naval movements around Syria


Military and intelligence sources report that Monday, June 13, the US deployed the USS Bataan amphibian air carrier strike vessel opposite Syria's Mediterranean coast with 2,000 marines, 6 war planes, 15 attack helicopters, including new V-22 Ospreys, and 27 choppers for landing forces aboard.Also this week, US naval units went operational in the Aegean, Adriatic and Black Seas as part of the joint US-Ukrainian Sea Breeze 2011 exercise.

The USS Monterrey cruiser armed with Aegis surface missile interceptors has additionally been stationed in the Black Sea. Western sources additonally report a build-up of ship-borne anti-missile missile strength in the Mediterranean basin.

This huge concentration of naval missile interceptor units looks like preparations by Washington for the contingency of Iran, Syria and Hizballah letting loose with surface missiles against US and Israeli targets in the event of US military intervention to stop the anti-opposition slaughter underway in Syria.

Moscow, Tehran and Damascus, in particular, are taking this exceptional spate of American military movements in and around the Mediterranean as realistically portending American intervention in on

Athens update