We Have Seen This Play Before

Courtesy of Hugo Salinas Price @ Fekete Research:

Ambrose Evans-Pritchard in “The Telegraph” (The Telegraph, April 2, 2014†) is quite worried about deflation in the Eurozone; he says it may become entrenched, which would lead to economic disaster for Europe.

What we are seeing is a repeat performance, on the world stage, of a previous failed experiment with fiat money, as documented by Andrew Dickson White, in his classic book: “Fiat Money Inflation in France 1790 – 1797”, reprinted in 1933, when a great believer in monetary tinkering was just getting started.

In Revolutionary France, the French National Assembly gathered together the best and brightest men in France. They were the leading lights of the time. As worshippers of the goddess Reason, they could not for the life of them understand why human reason should not be able to devise an artificial money which would make the French economy function to perfection.


At the time, there were opponents to the idea of floating a new, artificial currency, to be named the “Assignat”. They pointed out the disastrous consequences of the prior French experiment with artificial money, launched in 1720 by the highly intelligent Scottish adventurer, John Law. But like those of us today, who are convinced that the present monetary dispensation will end in a huge world disaster, they were out-debated by those who represented the dominant spirit of the time. Continue reading

9 Signs That China Is Making A Move Against The U.S. Dollar

Courtesy of The Economic Collapse blog:

On the global financial stage, China is playing chess while the U.S. is playing checkers, and the Chinese are now accelerating their long-term plan to dethrone the U.S. dollar.  You see, the truth is that China does not plan to allow the U.S. financial system to dominate the world indefinitely.  Right now, China is the number one exporter on the globe and China will have the largest economy on the planet at some point in the coming years.

The Chinese would like to see global currency usage reflect this shift in global economic power.  At the moment, most global trade is conducted in U.S. dollars andmore than 60 percent of all global foreign exchange reserves are held in U.S. dollars.  This gives the United States an enormous built-in advantage, but thanks to decades of incredibly bad decisions this advantage is starting to erode.  And due to the recent political instability in Washington D.C., the Chinese sense vulnerability.  China has begun to publicly mock the level of U.S. debt, Chinese officials have publicly threatened to stop buying any more U.S. debt, the Chinese have started to aggressively make currency swap agreements with other major global powers, and China has been accumulating unprecedented amounts of gold.  All of these moves are setting up the moment in the future when China will completely pull the rug out from under the U.S. dollar. Continue reading

European Youth Unemployment, it’s not a pretty picture!

The PIGS nations have all now smashed through the Maginot Line of 40% youth unemployment with Italy finally catching up (Italy 40.5%, Portugal 42.5%, Spain 58.2%, and Greece 62.5%). What is more concerning is that not only are these rates extremely high but they are accelerating, seeing their rates rising faster in recent months.

Europe’s youth unemployment rate continues to climb higher (24.4%) having not fallen for 2 years. Spain is the ‘winner’, of sorts, with 41 consecutive months without a drop in youth unemployment. With welfare benefits running dry, Sweden and Switzerland temperaments already running high, the climate this summer could quite easily get alot hotter, escalating into full scale social unrest.

Ireland, the silver lining, has seen its youth unemployment rate drop for 10 of the last 11 months and has dropped to a ‘respectable’ 26.6%, the lowest since July 2010. The issue with Irelands figures is that they have high instances of emigration when things start to turn for the worst, as well as the FAS employment courses that take youth unemployment numbers down further. Things could be alot worse.


Which Eurozone Countries are Growing?

Courtesy of the IMF/Goldman Sachs Global ECS research, I present the Euro and periphery growth charts…this as good as it will get and expect the majority to turn red in the near future. I will point out that Spain should be outlined in blue as it received a bailout but hey the figs are from the IMF (insolvent) and Goldman Sachs (also insolvent) so what do you expect.