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As harve has touched on, re inflation and interest rates, its a hell of complicated set up to understand correctly (nobody does imho), the news always presents it very clean, simplistically and wrong.

Go Greek strikes Go.... It's not often I support strikes, but in this I do. They are absolutely right that Greece does not need more lending. It can't afford what it owes full stop, they still need t

Afraid not, old bean; China has been a Communist People's Republic since, when, 1947? Just because it's a Tory government that's doing all the kow-towing makes not a jot of difference...But I bet that

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  • Location: Sth Staffs/Shrops 105m/345' & NW Snowdonia 219m/719'
  • Location: Sth Staffs/Shrops 105m/345' & NW Snowdonia 219m/719'

    It could all depend on what fresh bull$h1te new economic policies the Eurocrats and the US dream up over the weekend.

    Edited by kar999
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  • Location: Stoke Gifford, Bristol
  • Location: Stoke Gifford, Bristol

    Looks like the double-dip recession (the one that everyone bar Osbourne could see a mile off) is about to commence...Praise be to the bankers!

    Not sure it's to do with the banks this time around - more to do with western govts spending what they never had in the first place!

    There are still plenty of strong companies out there, who are just sitting tight or expanding into less debt-riddled countries.

    Bargains to be had, at some point, for both private investors and the large institutions.

    One word of warning from me-

    Quality co.s' shares will become absolute bargains at some point soon - maybe worth snapping up - but market turmoil also provides the chance for 'stronger' co.s to pick up 'bargains'.

    You may pay a bargain basement price, only to find that a stronger co. makes a bid, and suddenly you're 'cheap' share become a takeover at a rock bottom price -

    result is that any quick profit you thought you'd get is gone because a co. has been picked up on the cheap!

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    Posted
  • Location: Orleton, 6 miles south of Ludlow
  • Location: Orleton, 6 miles south of Ludlow

    FTSE slightly up today +1% at 5095. Dow up about 0.5%.

    Gold looks as though it could hit $1900 this week — it's currently at $1890.

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  • Location: Sth Staffs/Shrops 105m/345' & NW Snowdonia 219m/719'
  • Location: Sth Staffs/Shrops 105m/345' & NW Snowdonia 219m/719'

    Is that the sound of the printing presses?

    Traders were speculating that the Federal Reserve may unveil further measures to kick-start the world's biggest economy. Chairman Ben Bernanke will be making a speech at the central bank's annual meeting on Friday

    .FTSE was up over 3% for part of the day. Will be interesting if there's another rally holds tomorrow

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  • Location: Laindon,Essex
  • Location: Laindon,Essex

    The Sovereign Debt Crisis Is Never Going To End Until There Is A Major Global Financial Collapse

    July 7, 2011

    by Michael T. Snyder, End of the American Dream

    Read more http://inteldaily.com/2011/07/the-sovereign-debt-crisis-is-never-going-to-end-until-there-is-a-major-global-financial-collapse/

    In the past, there certainly have been governments that have gotten into trouble with debt, but what we are experiencing now is the first truly global sovereign debt crisis. There has never been a time in recorded history when virtually all of the governments of the world were drowning in debt all at the same time. This sovereign debt crisis is never going to end until there is a major global financial collapse. There simply is no way to unwind the colossal web of debt that we have constructed in an orderly fashion. Right now the EU and the IMF have been making “emergency loans” to nations such as Greece, Ireland and Portugal, but that is only going to buy those countries a few additional months. Giving more loans to nations that are already drowning in red ink may “kick the can down the road” for a little while but it isn’t going to solve anything. Meanwhile, dozens more nations all over the globe are rapidly approaching a day of reckoning.

    All of the bailouts that you are hearing about right now are simply delaying the pain. The reality is that when the “emergency loans” for Greece stop, Greece is going to default. Greece is toast. The game is over for them. You can stick a fork in Greece because it is done.

    One of the big problems for Greece is that since it is part of the euro it can’t independently print more money. If Greece cannot raise enough euros internally Greece must turn to outside assistance.

    Unfortunately, at this point Greece has accumulated such a mammoth debt that it cannot possibly sustain it. By the end of the year, it is projected that the national debt of Greece will soar to approximately 166% of GDP.

    The financial collapse of Greece is inevitable. If they keep using the euro they will collapse. If they quit using the euro they will collapse. When the rest of Europe decides that it is tired of propping Greece up the game will be over.

    At this point very few people are interested in lending Greece more money.

    As I wrote about yesterday, many of the nations around the world are only able to keep going because they are able to borrow huge amounts of money at low interest rates.

    Well, nobody wants to lend money to Greece at a low rate of interest anymore.

    Today, the yield on 2 year Greek bonds is back over 28 percent.

    Fortunately for the rest of the world, Greece is just a very, very small part of the global economy, but when interest rates start spiking like that on U.S. debt or Japanese debt the entire world financial system will be thrown into chaos.

    So why is there so much of a focus on Greece right now?

    Well, there is a real danger that the panic will start to spread.

    The other day, Moody’s Investors Service slashed the credit rating on Portuguese government debt by four notches.

    Portuguese debt is now considered to be “junk”.

    But even more alarming is that Moody’s stated that what is going on in Greece played a role in reducing the credit rating of Portugal.

    The following is a portion of what Moody’s had to say when they cut the credit rating of Portugal by four notches….

    Although Portugal’s Ba2 rating indicates a much lower risk of

    restructuring than Greece’s Caa1 rating, the EU’s evolving approach to providing official support is an important factor for Portugal because it implies a rising risk that private sector participation could become a precondition for additional rounds of official lending to Portugal in the future as well. This development is significant not only because it increases the economic risks facing current investors, but also because it may discourage new private sector lending going forward and reduce the likelihood that Portugal will soon be able to regain market access on sustainable terms.

    Do you understand what is being said there?

    Basically, Moody’s is saying that the terms of the Greek bailout make Portuguese debt less attractive because Portugal will likely be forced into a similar bailout at some point.

    If the EU is not going to fully guarantee the debt of the member nations, then that debt becomes less attractive to investors.

    The downgrade of Portugal is having all kinds of consequences. The cost of insuring Portuguese government debt set a new record high on Wednesday, and yields on Portuguese bonds have gone haywire.

    If you want to get an idea of just how badly Portuguese bonds have been crashing, just check out this chart.

    But it is not just Portugal that is having problems.

    Just recently, Moody’s warned that it may downgrade Italy’s Aa2 debt rating at some point within the next few months.

    Spain is also on the verge of major problems and Ireland may need another bailout soon.

    Things don’t look good.

    Unfortunately, if the dominoes start to fall the entire EU is going to go down.

    Big banks all over Europe are highly exposed to sovereign debt and they are leveraged to the hilt.

    It is almost as if we are looking at a replay of 2008 in many ways.

    When Lehman Brothers finally collapsed, it was leveraged 31 to 1.

    Today, major German banks are leveraged 32 to 1, and major German banks are currently holding a tremendous amount of Greek debt.

    Anyone with half a brain can see that this is going to end badly.

    So how is the European Central Bank responding to this crisis?

    They are raising interest rates once again.

    That certainly is not going to help the PIIGS much.

    But Europe is not the only one facing a horrific debt crunch.

    In Japan, the national debt is now up to about 226 percent of GDP. So far the Japanese government has been able to handle a debt load this massive because the citizens of Japan have been willing to lend the government gigantic mountains of money at interest rates so low that they are hard to believe.

    When that paradigm changes, and it will, Japan is going to be in a massive amount of trouble. In fact, an article in Forbes has warned that even a very modest increase in interest rates would cause interest payments on Japanese government debt to exceed total government revenue by the year 2019.

    Of course the biggest pile of debt sitting out there is the national debt of the United States. The U.S. is so enslaved to debt that there is literally no way out under the current system. To say that America is in big trouble would be a massive understatement.

    In fact, the whole world is headed for trouble.

    Right now government debt around the globe continues to soar at an exponential pace. At some point a wall is going to be hit.

    The Wall Street Journal recently quoted Professor Carmen Reinhart as saying the following about what we are facing….

    “These processes are not linear,” warns Prof. Reinhart. “You can increase debt for a while and nothing happens. Then you hit the wall, and—bang!—what seem to be minor shocks that the markets would shrug off in other circumstances suddenly become big.”

    That is the nature of debt bubbles – they keep expanding and expanding until the day that they inevitably burst.

    Governments around the world will issue somewhere in the neighborhood of 5 trillion dollars more debt this year alone. Debt to GDP ratios all over the globe continue to rise at a frightening pace.

    Because the world is so interconnected today, the collapse of even one nation will devastate banks all over the planet. If even one domino is toppled there is no telling where things may end.

    The combination of huge amounts of debt and huge amounts of leverage is incredibly toxic, and that is what we have all over the globe today. Almost every major nation is drowning in a sea of red ink and almost all of our major financial institutions are leveraged to the hilt.

    There is only one way that the sovereign debt crisis can end.

    Very, very badly.

    I hope you are ready for what is coming

    Read more http://inteldaily.com/2011/07/the-sovereign-debt-crisis-is-never-going-to-end-until-there-is-a-major-global-financial-collapse/

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  • Location: Leeds/Bradford border, 185 metres above sea level, around 600 feet
  • Location: Leeds/Bradford border, 185 metres above sea level, around 600 feet

    A lot of overhype in that article.

    Ireland is doing fine, slashing its debt and growing.

    Italy may well see a downgrade but it has a low default risk and lans to have a budget surpluss by 2014.

    Spain is growing and slashing its deficit.

    Greece needs to cut 12% of its budget although they seem to have frozen spending instead, relying on growth which does'nt seem to be there. Potential for another bailout.

    Portugal is at major risk of a bailout in 2012. Refusing to commit to austerity and in recession.

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    Posted
  • Location: Taasinge, Denmark
  • Location: Taasinge, Denmark

    A lot of overhype in that article.

    Agreed, but it is worth noticing that the USA will suffer greatly at the hands of peak everything. If any one country conducted its affairs as though the sky is the limit, it is the USA, to use one of their expressions. It is dawning on many US people that they have been living in a fool's paradise. If I lived, for example, in Daphne, Alabama, I would certainly be wondering how on earth I could continue my present lifestyle in years to come. It is miles to work - if there is any that is - it is miles to Walmart or Delchamps, and air-conditioning will become unaffordable, making the sweltering heat unbearable during the day and nights sleepless. Southern California apparently has no water, and the likes of Las Vegas speak for themselves. I am at a loss to even comment on places like Cincinatti, though I hear it has changed a little since I visited in 1996.

    The United States has genuine and serious concerns. I hope they deal with their problems and don't create world turmoil.

    Edited by Alan Robinson
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    Posted
  • Location: Stoke Gifford, Bristol
  • Location: Stoke Gifford, Bristol

    Every bubble bursts at some point.

    Gold may be priced at its highest already - the 'herd' normally piles in to any stock, commodity or share when the bubble is at bursting point.

    Is the Gold bubble about to burst?

    Update today -

    The price of gold dropped almost 6% by the end of the London trading session, a fall of more than $100.

    Gold stood at $1,770 an ounce, down from Tuesday's "fix", or end price of $1,876.

    During a volatile week for the precious metal, its price has fallen since topping $1,900 an ounce during trading overnight in Asia on Tuesday.

    Edited by Bristle boy
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    Posted
  • Location: Sth Staffs/Shrops 105m/345' & NW Snowdonia 219m/719'
  • Location: Sth Staffs/Shrops 105m/345' & NW Snowdonia 219m/719'

    http://www.usdebtclo...debt-clock.html

    Interesting to watch, even though quite troubling....

    Interestingly Japan tops the Public Debt table and they just keep plodding along.

    Greece's abscence from the table is rather disappointing.... maybe it can't cope with 4 digit numbers. Posted Image

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  • Location: Sth Staffs/Shrops 105m/345' & NW Snowdonia 219m/719'
  • Location: Sth Staffs/Shrops 105m/345' & NW Snowdonia 219m/719'

    Markets on the fall again... (It's all Thatchers fault... joke.... see political thread)

    Stocks retreated as panic selling pushed Gemrany's DAX Index down 4 percent in 15 minutes amid speculation that Germany’s public finances are deteriorating and that regulators may impose restrictions on the market.

    German stocks fell as much as 4 percent, the biggest drop this week, amid speculation regulators in France, Spain and Italy will extend a ban on short-selling.

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    Markets on the fall again... (It's all Thatchers fault... joke.... see political thread)

    Stocks retreated as panic selling pushed Gemrany's DAX Index down 4 percent in 15 minutes amid speculation that Germany’s public finances are deteriorating and that regulators may impose restrictions on the market.

    German stocks fell as much as 4 percent, the biggest drop this week, amid speculation regulators in France, Spain and Italy will extend a ban on short-selling.

    Yet the CAC has only fallen moderately
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    Posted
  • Location: Sth Staffs/Shrops 105m/345' & NW Snowdonia 219m/719'
  • Location: Sth Staffs/Shrops 105m/345' & NW Snowdonia 219m/719'

    "GDP growth unrevised at 0.2%"

    There used to be a UK economy thread but this is probably as relevant in here as the slow down is more a global issue than unique to UK despite (what Ed Balls might think) with UK April to June growth ahead of France and that of Germany, the mighty powerhouse of Europe.

    Quarter 3 should be interesting but I wouldn't be suprised to see negative territory from a few countries.

    All eyes, and the markets, on this afternoons speech by Ben Bernanke, the head of the US central bank. Dust down those printing presses ... here comes another round of QE.

    Edited by kar999
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  • Location: Leeds/Bradford border, 185 metres above sea level, around 600 feet
  • Location: Leeds/Bradford border, 185 metres above sea level, around 600 feet

    "GDP growth unrevised at 0.2%"

    There used to be a UK economy thread but this is probably as relevant in here as the slow down is more a global issue than unique to UK despite (what Ed Balls might think) with UK April to June growth ahead of France and that of Germany, the mighty powerhouse of Europe.

    Quarter 3 should be interesting but I wouldn't be suprised to see negative territory from a few countries.

    All eyes, and the markets, on this afternoons speech by Ben Bernanke, the head of the US central bank. Dust down those printing presses ... here comes another round of QE.

    As much as i am glad that we grew more than France and Germany in Q2, Germany in Q1 grew more than we will for this entire year.

    As for QE, i do not believe that it is the solution. Given that fiscal contraction is needed, this is one of the few cases where we should do nothing. Should we enter a recession, we could pause for thought (freeze rather than cut) and come up with a credible medium to long term plan.

    I agree in regards to Q3.

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  • Location: Taasinge, Denmark
  • Location: Taasinge, Denmark

    Germany in Q1 grew more than we will for this entire year.

    Personally, I take government figures with a pinch of salt, particularly when they come from those quarters. Propaganda, politics, eloquence, talking up markets, not to forget being involved in markets. All across Europe it can be difficult sometimes to see what is private enterprise, and where taxpayer's money is being spent for various reasons. How many banks are partly owned by federal authorities? Most Germans are deeply conservative, in particular they like to feel their leaders are competent and can be relied upon to provide more of the same, usually meaning a secure job. In times of change like these, what does anyone expect the German government to tell the world?

    I never forget several decades ago being in competition with a German shipyard for a certain contract. In those days European regulations restricted shipyard subsidies to 9% or so. We never won the contract, it went to Germany for considerably less than our break-even price. Yes, it all came down to Deutchland being more efficient ..........in providing subsidies. What we thought was 9% total, was in Germany considered 9% total per subsidy source, and Stadt Kiel, Schleswig Holstein and Bonn all chipped in with 9% each.

    Job security is one of Germany's top priorities.

    Edited by Alan Robinson
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    Posted
  • Location: Near Lauder, SE Scotland, 175 m asl
  • Location: Near Lauder, SE Scotland, 175 m asl

    The intersting story (although a bit too much fantasy) of Iceland its people's ongoing refusal to pay the debt of bankers:

    http://newsnetscotla...revolution.html

    A story missing from our media: Iceland's on-going revolution

    ....What happened next was extraordinary. The belief that citizens had to pay for the mistakes of a financial monopoly, that an entire nation must be taxed to pay off private debts was shattered, transforming the relationship between citizens and their political institutions and eventually driving Iceland’s leaders to the side of their constituents. The Head of State, Olafur Ragnar Grimsson, refused to ratify the law that would have made Iceland’s citizens responsible for its bankers’ debts, and accepted calls for a referendum.

    ......But Icelanders didn't stop there: they decided to draft a new constitution that would free the country from the exaggerated power of international finance and virtual money. (The one in use had been written when Iceland gained its independence from Denmark, in 1918, the only difference with the Danish constitution being that the word ‘president’ replaced the word ‘king’.).

    To write the new constitution, the people of Iceland elected twenty-five citizens from among 522 adults not belonging to any political party but recommended by at least thirty citizens. This document was not the work of a handful of politicians, but was written on the internet. The constituent’s meetings are streamed on-line, and citizens can send their comments and suggestions, witnessing the document as it takes shape. The constitution that eventually emerges from this participatory democratic process will be submitted to parliament for approval after the next elections.....

    ....And those of Italy, Spain and Portugal are facing the same threat.

    They should look to Iceland. Refusing to bow to foreign interests, that small country stated loud and clear that the people are sovereign.

    That’s why it is not in the news anymore.

    EDIT. Worth reading this to make a more informed opinion as the above is not quite factual at times.

    http://grapevine.is/...oing-Revolution

    EDIT2:

    http://grapevine.is/Features/ReadArticle/ZOMBIE-POLITICS

    Edited by scottish skier
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  • Location: Taasinge, Denmark
  • Location: Taasinge, Denmark

    The intersting story (although a bit too much fantasy) of Iceland its people's ongoing refusal to pay the debt of bankers:

    http://newsnetscotla...revolution.html

    A story missing from our media: Iceland's on-going revolution

    ....What happened next was extraordinary. The belief that citizens had to pay for the mistakes of a financial monopoly, that an entire nation must be taxed to pay off private debts was shattered, transforming the relationship between citizens and their political institutions and eventually driving Iceland’s leaders to the side of their constituents. The Head of State, Olafur Ragnar Grimsson, refused to ratify the law that would have made Iceland’s citizens responsible for its bankers’ debts, and accepted calls for a referendum.

    ......But Icelanders didn't stop there: they decided to draft a new constitution that would free the country from the exaggerated power of international finance and virtual money. (The one in use had been written when Iceland gained its independence from Denmark, in 1918, the only difference with the Danish constitution being that the word ‘president’ replaced the word ‘king’.).

    To write the new constitution, the people of Iceland elected twenty-five citizens from among 522 adults not belonging to any political party but recommended by at least thirty citizens. This document was not the work of a handful of politicians, but was written on the internet. The constituent’s meetings are streamed on-line, and citizens can send their comments and suggestions, witnessing the document as it takes shape. The constitution that eventually emerges from this participatory democratic process will be submitted to parliament for approval after the next elections.....

    ....And those of Italy, Spain and Portugal are facing the same threat.

    They should look to Iceland. Refusing to bow to foreign interests, that small country stated loud and clear that the people are sovereign.

    That’s why it is not in the news anymore.

    EDIT. Worth reading this to make a more informed opinion as the above is not quite factual at times.

    http://grapevine.is/...oing-Revolution

    EDIT2:

    http://grapevine.is/...ZOMBIE-POLITICS

    One thing worth remembering is that despite its geographic size, Iceland has just a very small population. It is inconceivable - to me at least - that Icelanders are less informed about their national affairs than we British are about ours. On the contrary, I am quite convinced Icelanders are far more involved in domestic matters than we.

    They were more than happy to invite bankers to Iceland as long as their presence provided revenues for health care, new roads, and all other varieties of infrastructure or benefits. This Iceland welcomed. Now it is a different story it seems. Well, although I never personally lost anything to Icelandic banks, I have little sympathy for the Icelanders, who seem to me a pretty unprincipled bunch. Posted Image

    Edited by Alan Robinson
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  • Location: Sth Staffs/Shrops 105m/345' & NW Snowdonia 219m/719'
  • Location: Sth Staffs/Shrops 105m/345' & NW Snowdonia 219m/719'

    Personally, I take government figures with a pinch of salt, particularly when they come from those quarters. Propaganda, politics, eloquence, talking up markets, not to forget being involved in markets.

    Why so suspicious?. The figures come from National Office of Statistics and companies BY LAW have to send in monthly returns to the NOS.I have filled in hundreds in my career. ...

    We all know governments (Labour and the tories have done it for years) use different statistics for their own ends... CPI and not RPI....Those out of work... those on JSA etc. ...... they usually say what the basis for any shift in index measuremnets are whether you agree or not.

    unless you are sugesting corruption .Posted Image

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  • Location: Near Lauder, SE Scotland, 175 m asl
  • Location: Near Lauder, SE Scotland, 175 m asl

    One thing worth remembering is that despite its geographic size, Iceland has just a very small population. It is inconceivable - to me at least - that Icelanders are less informed about their national affairs than we British are about ours. On the contrary, I am quite convinced Icelanders are far more involved in domestic matters than we.

    They were more than happy to invite bankers to Iceland as long as their presence provided revenues for health care, new roads, and all other varieties of infrastructure or benefits. This Iceland welcomed. Now it is a different story it seems. Well, although I never personally lost anything to Icelandic banks, I have little sympathy for the Icelanders, who seem to me a pretty unprincipled bunch. Posted Image

    I agree with what you say to a fair extent, although much of what happened lay with the government, rather than the average icelandic joe. At the same time, while I sympathise, I don't feel that people who invested money in Iceland due to the high interest rates automatically deserve their cash back. If you want to store your cash overseas for a high return, you accept the risk if it goes belly up.

    Edited by scottish skier
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  • Location: Sth Staffs/Shrops 105m/345' & NW Snowdonia 219m/719'
  • Location: Sth Staffs/Shrops 105m/345' & NW Snowdonia 219m/719'

    I don't feel that people who invested money in Iceland due to the high interest rates automatically deserve their cash back. If you want to store your cash overseas for a high return, you accept the risk if it goes belly up.

    It's not just individuals here that lost money. Many British ratepayers generally lost out. Wasnt it the Western Isles that lost their shirt with their local government investments just to name one council amongst many?

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