Leeb - We Will Now See a Gold Standard Imposed in Europe

"With stocks trading lower, along with gold and silver, today King World News interviewed acclaimed money manager Stephen Leeb, Chairman & Chief Investment Officer of Leeb Capital Management.  Leeb told KWN we will see a gold standard imposed on Europe.  Leeb also said the Chinese will move to back the yuan with gold.  Here is what Leeb had to say about the situation:  “Gold is reacting to what’s going on in Europe.  It’s the last resort of liquidity for a lot of people.  It’s been the best performing major asset over the last 12 years.  You have a lot of chaos in Europe an no one knows what’s happening, so there has been a lot of reflex selling of gold.”

Stephen Leeb continues:

“Gold has been a bit stronger than I thought it would be considering the danger of a euro breakup is accelerating.  I don’t think there’s any chance the euro holds together under its current form.  Unemployment among the young in Greece is about 50%.  That can’t stand, it just can’t.

These politicians can’t do this forever.  People are not going to tolerate starvation.  Sooner or later the politicians are going to have to respond.  This means less austerity and more growth, and the end of German hegemony in Europe.

This looks similar to the end of World War I.  Once the euro goes, it will be very much like the end of the war.... 

“You are going to have a lot of currency devaluation.  You are also going to see massive inflation.  Everybody knows what that means for gold.

So you are in the last hours of turbulence for the gold market (to the downside).  Once this correction ends, you are going to have a barnburner to the upside.  Gold will just vault.  I don’t think investors will even remember these frustrating days.  I had been warning we could see this drop in gold because of the problems in Europe, but investors should take advantage of it.

Look at what China is doing.  China is buying gold hand over fist right now.  They are going to move the yuan forward as the world’s reserve currency and it’s going to be partially backed by gold.  The world can also expect to see a gold standard imposed on Europe in the next 12 to 18 months..."

at   http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/5/9_Leeb_-_We_Will_Now_See_a_Gold_Standard_Imposed_in_Europe.html

22 Red Flags That Indicate That Very Serious Doom Is Coming For Global Financial Markets

"The following are 22 red flags that indicate that very serious doom is coming for global financial markets....

#1 According to CNN, the level of selling by insiders at corporations listed on the S&P 500 is the highest that it has been in almost a decade.  Do those insiders know something that the rest of us do not?

#2 Home prices in the United States have fallen for six months in a row and are now down 35 percent from the peak of the housing market.  The last time that home prices in the U.S. were this low was back in 2002.

#3 It is now being projected that the Greek economy will shrink by another 5 percent this year.

#4 Despite wave after wave of austerity measures, Greece is still going to have a budget deficit equivalent to about 7 percent of GDP in 2012.

#5 Interest rates on Italian and Spanish sovereign debt are rapidly rising.  The following is from a recent RTE article...."

at http://theeconomiccollapseblog.com/archives/22-red-flags-that-indicate-that-very-serious-doom-is-coming-for-global-financial-markets

G-10 Macro Data Plunges To Worst In Six Months, Turns Negative

"We have discussed the exuberance and dysphoria that is exhibited by economists in the context of extrapolating trends many times and nowhere is that more clearly pictured than in Citigroup's Economic Surprise Index which tracks the rise and fall of both misses and beats as well as better or worse data. For the first time in over six months, macro data for the G-10 has turned negative (with Europe having been there for a while and the US getting very close) indicating significant weakness. When this data turned from positive to negative in July 2010 it pre-empted the 'rescue' of the global economy via QE2 and each time it has dropped below its 200DMA (which it also just did) we have seen notable deterioration in equity prices soon after. What is more worrisome perhaps is the rate of deterioration over the last two months or so. Four of the last five times we dropped this rapidly we saw significant drops in stock prices soon after (Dec 2008, August 2010, and June 2011). Europe and the US are now trending lower in macro data 'surprises' as decoupling disappears but the US remains a little less bad for those looking for silver-linings - for now.

G-10 macro data has turned negative (upper pane) dropped below its 200DMA and is at its lowest in over six months. The pace of deterioration has been rapid (lower pane) and 4 of the previous 5 times this pace of drop has occurred, equity prices have dropped considerably soon after..."

at http://www.zerohedge.com/news/g-10-macro-data-plunges-worst-six-months-turns-negative

New "Temporary" Border Controls a Vote of No Confidence in Europe; In France, Old Protectionist Idea Reawakened; Disastrous Global Trade Wars Coming Up

"New border controls are another sign of increasing protectionism in European states. It was not supposed to be this way, yet these controls represent a Vote of No Confidence in Europe

Germany and France are serious this time. During next week's meeting of European Union interior ministers, the two countries plan to start a discussion about reintroducing national border controls within the Schengen zone. According to the German daily Süddeutsche Zeitung, German Interior Minister Hans-Peter Friedrich and his French counterpart, Claude Guéant, have formulated a letter to their colleagues in which they call for governments to once again be allowed to control their borders as "an ultima ratio" -- that is, measure of last resort -- "and for a limited period of time." They reportedly go on to recommend 30-days for the period.

Of course, using catchphrases like "ultima ratio" and "limited period of time" is supposed to make such policies sound reasonable and proportionate. After all, the reasoning goes, it's just a few occasional border controls for up to 30 days. What's the big deal, right?

But the proposal is far from harmless and would throw Europe back decades. Since 1995, the citizens of Schengen-zone countries have gotten used to freely traveling within Continental Europe. Next to the euro common currency, free movement is probably the strongest symbol of European unity. Indeed, for many people, it's what makes this abstract idea tangible in the first place..."

at http://globaleconomicanalysis.blogspot.com/2012/04/new-temporary-border-controls-a-vote-of.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+MishsGlobalEconomicTrendAnalysis+%28Mish%27s+Global+Economic+Trend+Analysis%29

Eveillard - We Are Looking At Catastrophe Going Forward

“I’ve been in the business half a century, and I can say yes, we are looking at catastrophe going forward.  As long as those people are around, and they are not just in the US, they are everywhere because they are all Neo-Keyneysians, but as long as those people are around, the money will be printed.  It was true even during the first few years of the Weimar Republic, before inflation became hyperinflation.

It’s not just in the developed world.  Look at China and India.  Even though the long-term prospects are strong, they might be nearing a big bump in the road.  So, current circumstances worldwide are not appealing...."

athttp://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/4/19_Eveillard_-_We_Are_Looking_At_Catastrophe_Going_Forward.html

SUEZ CANAL TRAFFIC POINTS TO GLOBAL SLOW-DOWN

"Here’s an indicator I had never seen before. Reuters is highlighting the slow-down in Suez Canal traffic as a possible harbinger of stagnating global economic growth:

“As this week’s Chart of the Week indicates, traffic through the Suez Canal in Egypt – a key cargo transportation route – has nosedived in recent weeks and months. Currently, Suez traffic is only slightly better than flat compared to year earlier levels. Unsurprisingly, perhaps, the trends in global GDP growth tend to mirror those in traffic transiting the Suez canal; it is logical that trade volumes would flag during periods of contraction or sluggish growth, as is most vividly illustrated by the close correlation between the two indicators at the height of the financial crisis from late 2008 through 2009.”

at  http://pragcap.com/suez-canal-traffic-points-to-global-slow-down

Chris Martenson: "Are We Heading For Another 2008?"

"We all know that central banks and governments have been actively intervening in markets since the 2007 subprime mortgage meltdown destabilized the leveraged-debt-dependent global economy. We also know that unprecedented intervention is now the de facto institutionalized policy of central banks and governments. In some cases, the financial authorities have explicitly stated their intention to “stabilize markets” (translation: reinflate credit-driven speculative bubbles) by whatever means are necessary, while in others the interventions are performed by proxies so the policy remains implicit. All through the waning months of 2007 and the first two quarters of 2008, the market gyrated as the Federal Reserve and other central banks issued reassurances that the subprime mortgage meltdown was “contained” and posed no threat to the global economy. The equity market turned to its standard-issue reassurance: “Don’t fight the Fed,” a maxim that elevated the Federal Reserve’s power to goose markets to godlike status. But alas, the global financial meltdown of late 2008 showed that hubris should not be confused with godlike power. Despite the “impossibility” of the market disobeying the Fed’s commands (“Away with thee, oh tides, for we are the Federal Reserve!”) and the “sure-fire” cycle of stocks always rising in an election year, global markets imploded as the usual bag of central bank and Sovereign State tricks failed in spectacular fashion..."

at http://www.zerohedge.com/news/chris-martenson-are-we-heading-another-2008

Global Systemic Risk Is Rising Rapidly Again

"The risk of the 30 most systemically important financial institutions (SIFI) in the world has risen over 30% in the last three weeks as the effects of LTRO fade and encumbrance becomes the new reality. This less-manipulated, government-bank-reacharound-driven bond-market sense of reality has retraced almost 40% of its improvement from its peak last November at 311bps to its best level mid-March at 171bps. The current 226bps level is extremely elevated and as one would expect is dominated by European and US banks (with US banks on average trading wider than Europeans - which may surprise many but Europeans dominate the worst names - most specifically the Spanish banks)."







Source: Capital Context

at http://www.zerohedge.com/news/global-systemic-risk-rising-rapidly-again?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+zerohedge%2Ffeed+%28zero+hedge+-+on+a+long+enough+timeline%2C+the+survival+rate+for+everyone+drops+to+zero%29

Tedbits: 2012 Outlook, Part 2 - Bombs, er...Bonds; Currencies and Gold

"The UNFOLDING destruction of the developed world’s economies and financial/currency systems continues apace. Public servants are trying to defy Mother Nature with the stroke of a pen; she will not yield to this. Radical Marxist POLITICAL solutions to practical problems are at the end of their collective ropes (double entendre intended). You CANNOT store wealth in paper, PERIOD. Those who do will get what they deserve: NOTHING. It has been and will be printed endlessly from this point forward as Socialist government policies have destroyed wealth creation and substituted Ponzi asset-backed economies in their place. Now those economic models have reached their COLLECTIVE endpoints.
Economies based on models of consuming wealth rather than producing wealth are DOOMED, and this is the definition of the developed world. Switching back to the wealth-production model used prior to 1971 in the developed world will be painful as our leaders have FORGOTTEN what wealth-creating policies to implement and how to do so.

The financial systems of the world sit on TOXIC paper (government bonds and currencies) and they call them assets and reserves – they are NOT, THEY ARE LIABILITIES! To see the enormity of government debt in the biggest economies in the world look at this graphic from www.demonocracy.info :"
 

at http://www.zerohedge.com/contributed/2012-14-08/tedbits-2012-outlook-part-2-bombs-erbonds-currencies-and-gold

Pento - Global Recession, Monetary Madness & Gold

"Today Michael Pento chonicles the mounting problems that Europe is facing and stated that gold is ready to explode higher if the Fed engages in more “counterfeiting.” Pento, who founded Pento Portfolio Strategies, also writes exclusively for King World News about the fact that consumer debt is rising, while savings is tumbling. Here is what Pento had to say: “The mainstream media is busy promulgating the idea that the Great Recession is a fast-fading memory and that it’s now clear sailing for the global economy. But the true numbers belie that notion. One of the supposedly good news items being celebrated in the U.S. was found in the ISM Manufacturing Survey released this week. It increased to 53.4 in March, from a level of 52.4 in the prior month.”

Michael Pento continues:

“However, the somewhat better news on manufacturing came on the back of a U.S. consumer that has fully reverted to their borrowing and consuming ways. Spending increased by 0.8% in February, the most in seven months but incomes only increased by 0.2%. More importantly, real disposable income declined by 0.1%, which was the third such decrease in the last four months. As a consequence, the savings rate fell out of bed to 3.7% from 4.3%, which was the lowest level since August 2009.

Therefore, the small rebound in manufacturing and huge increase in spending by the consumer is ersatz and unsustainable in nature. The problem is that consumer debt has now started to increase once again, at a time when it desperately needs to contract.

The Europeans have taken a small step towards addressing their problems..."

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/4/3_Pento_-_Global_Recession,_Monetary_Madness_%26_Gold.html

READ MORE

Billionaire Hugo Salinas Price - World May Go Down in Flames

"Today multi-billionaire Hugo Salinas Price told King World News a complete catastrophe is unfolding in Europe. He also called Fed Chairman Bernanke “a vampire” and urged people to hold gold and silver because they will be the last things standing. But first, Salinas Price warned about the serious dangers we are facing: “I think that unless we see legislation, somewhere, that is rational and recognizes that gold and silver are really different forms of money, and that this whole scheme of paper is unworkable, then the world is going to go down in flames. The only thing that would last will be people’s savings of gold and silver.”
   athttp://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/3/30_Billionaire_Hugo_Salinas_Price_-_World_May_Go_Down_in_Flames.html

A Reminder...

A reminder from IMF's World Economic Outlook 2009:

"The April 2009 Global Financial Stability Report (GFSR) estimates write-downs on U.S.-originated assets by all financial institutions over 2007–10 will be $2.7 trillion, up from the estimate of $2.2 trillion in January 2009, largely as a result of the worsening prospects for economic growth. Total expected write-downs on global exposures are estimated at about $4 trillion, of which two-thirds will fall on banks and the remainder on insurance companies, pension funds, hedge funds, and other intermediaries."

Eric Sprott - Mainstream Bashes Gold, But New Highs Coming

"Today billionaire Eric Sprott told King World News the central planners are desperately trying to convince the masses that everything is okay. Sprott, who is Chairman of Sprott Asset Management, also said the mainstream media continues to bash gold. But first, he had this to say about the global economy: “I think it’s safe to say we’ve hit that ‘Minsky moment’ where the productive capacity of the country is not capable of paying off the debt. All we’re trying to do is push it down the road so maybe there is some luck and these economies will come to life.”

Eric Sprott continues:

“But all the data we get, whether it’s European PMI, UK GDP, almost any data point we get seems to point to a contraction in Europe. So it’s pretty hard to imagine that anyone is going to pay off their debt when their GDPs are contracting.

So, I think it will be an ongoing process. The powers that be are trying to convince the masses that everything is okay, but the opposite is the case..."

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/3/29_Eric_Sprott_-_Mainstream_Bashes_Gold,_But_New_Highs_Coming.html

Credit Swaps in U.S. Rise by Most This Year on Global Concerns

"A benchmark gauge of U.S. company credit risk rose by the most since December on declining confidence in the global economy as reports showed manufacturing contracted in Europe and China.
The Markit CDX North America Investment Grade Index of credit-default swaps, which investors use to hedge against losses on corporate debt or to speculate on creditworthiness, increased 3.7 basis points to a mid-price of 90.5 basis points at 4:50 p.m. in New York, according to Markit Group Ltd.
A preliminary measure of Chinese manufacturing dropped to 48.1 in March, the lowest level in four months, based on figures from HSBC Holdings Plc and Markit Economics. China had earlier this month cut its economic growth target to 7.5 percent from an 8 percent goal in place since 2005. Euro-area services and manufacturing output also contracted more than forecast even asjobless claims fell in the U.S. last week..."

at http://www.bloomberg.com/news/2012-03-22/credit-swaps-in-u-s-rise-on-concern-global-economy-is-slowing.html 

The Global Economy is Now More Vulnerable to Oil Prices than Ever

"This paper examines the impact of oil price changes on global economic growth. Unlike some recent studies, this paper finds that oil price rises have had significant negative impacts on world economic growth. A time-series analysis of the data from 1971 to 2010 finds that an increase in real oil price by 10 dollars is associated with a reduction of world economic growth rate by between 0.4 and 1% in the following year. As oil prices approach historical highs, the global economy may be vulnerable to another oil price shock..."

at http://oilprice.com/Energy/Oil-Prices/The-Global-Economy-is-Now-More-Vulnerable-to-Oil-Prices-than-Ever.html

GE's Immelt: Global Economy In 'New Era' Of Instability

at http://online.wsj.com/article/SB10001424052970204603004577271354108688794.html