Posted on 12/14/2011 10:48:51 AM PST by blam
KYLE BASS: Last Week's EU Summit Agreement Was A 'Doomsday Machine'
Mamta Badkar
Dec. 14, 2011, 12:23 PM
In a new interview with CNBC, Kyle Bass, managing partner at Hayman Capital Management, said that Europe is moving closer to restructuring as even "the citizens of those most troubled and profligate nations are losing confidence in the Euro dream".
Comparing the European Monetary Union to his extended family, Bass said he was unlikely to sign a joint and several liability agreement with family members, and that was the problem in Europe. He said he expects the monetary bloc to break-up. In the interview, Bass gave us his bearish outlook on Europe:
"If you get out a blank piece of paper and have a look at it, that's the plan they're working from right now. Everything is an agreement in principle. There are no details. It's very difficult to arrange such a disparate group of people, and get them all to cede their fiscal sovereignty to call it a central taxing authority, and in the absence of that, it won't work.
…I think that if you look at this last agreement, from the last summit, it's somewhat of a doomsday machine. What they're talking about, are the ECB and governments guaranteeing the debts of the banks which in turn buy the debts of their country that's making that guarantee, pledging it at that central bank and getting more money to go buy more debt of those countries.
It's somewhat sophomoric if you ask me. It is a circular reference that i don't think institutional investors around the world are going to buy, they might hoodwink some retail investors into buying these things.
(snip)
...there are no buyers of peripheral bonds."
(Excerpt) Read more at businessinsider.com ...
Bookmark to watch later. Thanks for posting. Did he mention the Japs at all? He’s been saying they’re prime for default as well.
(1 Timothy 5:8) But if any provide not for his own, and specially for those of his own house, he hath denied the faith, and is worse than an infidel.
Maybe the Euros are dragging it out as long as they can to do maximum damage to the arrogant flyweight that is running for reelection.
I chose to look at the 10 year gold chart. There is no real sell off in gold. The price has reverted to the trend line. The big increase was anomaly
If you trust extrapolation, gold at the trend will hit $2,000 by late July
Prepper’s Ping!
Prepper’s Ping!
There’s a shortage of butter in Norway. A pound is selling for $465 today. Crazy, but who knows how soon the dominoes will fall in the US?
http://www.freerepublic.com/focus/f-chat/2820414/posts
He’s said they’ll go after Europe. The we are after that.
http://www.youtube.com/watch?v=5V3kpKzd-Yw
Then we are after that.
Regarding the commodity crash, it’s more complicated than that.
A primary factor is that the “paper gold” holders and investors are dumping their paper gold like crazy. They’ve realized that they will not be able take delivery of paper gold. Those investment funds that were padded with PM futures were keeping that ETF pricing in place. No one wanted to sell that paper for fear it would crash the price and a lot of portfolios would take a shot in the arm.
I stated about a year ago that the price of gold would go up, that as the fiat-currency situation worsened, those who thought they “had gold” would realize they would not and that they would dump their paper, and that this would lead to a drop in the price of gold.
Another part of the reason that the commodities are dropping is because the bubble that is the Chinese economy is now popping. China does not need commodities as they pretended to need them for the past decade. So, many holders of paper and physical are getting the sense that in the next six months or so China is going to be dumping a lot of their commodities to get cash to pump into their deflating bubble. So, folks are selling while the price is still high.
I’m no investor or adviser, just someone who loves to read.
But it looks to me that the price will continue to drop for a few months and that this will provide a great opportunity to buy.
When the price starts to climb again, it will be because so many people are fearing the death of fiat-currencies and the implosion of sovereigns over their debt problems.
When that happens, the price of gold will skyrocket and it will not be coming down. I’ll be keeping a close eye on silver, which is all I can afford, and that only when it is very cheap.
Just my opinion and research the issue out the wazzoo before making any investments.
The velocity of money is low and yet the central banks keep printing more and more money. Of course, this new money hasn’t made it past the first tier of the money-lending process, so it hasn’t really ‘hit the streets,’ though it has been bouncing back and forth in the equities markets to prop those up artificially.
This is why I am so confused when Mish (Mike Shedlock) keeps going on and on about deflation and how the possibility of hyperinflation is “laughable.”
IF that new money ever gets pushed out through the second tier of the money-lending process and the velocity of money increases, inflation will fly off the charts. How it does not result in hyperinflation (there is already no confidence in the currencies), is beyond me.
No, I don’t. I wonder if he needs a ghost writer to shadow him about and document his life for his eventual autobiography.
I’d be happy to volunteer, if it enabled me to prep to that degree.
Not to worry. The Bernyanky has hinted that there may be some QE after the first quarter of next year.
That gives Obammie the Commie just enough juice (they hope) to float our economy through the 2012 elections.
The good news is that it won’t work (law of diminishing returns as evidenced by how little the previous three rounds of QE has accomplished).
Very true.
Mish has an article out there today about this very fact.
The dollar has actually remained about steady since 2005, but gold has continued to rise compared to the dollar. It is still way ahead of the dollar.
I wouldn’t be surprised if this correction takes gold down another couple hundred dollars an ounce until it starts to climb again.
I’m hoping silver goes down to the low 20’s or high teens, at which time I’ll buy.
Debt Saturation.
Only by crossing the Rubicon, the ultimate moral hazard, can the central banks push money into the hands of the consumer.
They have to give it away. Literally.
Some of this was attempted a couple of years back when everyone got a "refund" of x dollars on their taxes. However, the government is the only party that can do that (at least in modern history) and they have to BORROW that money. The political feasibility of that diminishes by the day.
Only by completely breaking the faith of debt, destroying all financial assets holders in the process, can the Fed inject this money where it will be SPENT.
Other than that it will languish and shrink as banks, brokerages and markets trade it around.
That's what has driven up stocks and commodities while real estate continued to decline. No the holders of those assets are turning around to find nothing but a cold wind at their back. And they NEED the cash to cover all their other bets at the same time the price of their assets is declining.
The central banks of the world have created about $25trillion in new money over the last 4 years and not a cent has reached the average Joe.
It just goes into banks, brokerages and markets to be, literally and actually, destroyed.
The value of the currency will fall without the supply of money being inflated. That inflation will require people to borrow and spend just to get by. Governments will also give the money away for free in the form of food stamps and other such emergency-relief programs. That will increase the money supply which will fuel the inflation and the destruction of faith the currency.
There will be deflationary impacts as well, as there always are.
But the end result will be the same: death of the fiat currencies, massive inflation, default, and war.
CHECK-KITING PING!
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