15 Potentially Massive Threats To The U.S. Economy Over The Next 12 Months

"The following are 15 potentially massive threats to the U.S. economy over the next 12 months....

#1 War With Syria - U.S. Senator John McCain is now publicly calling for U.S. airstrikes against Syria. A military conflict with Syria becomes more likely with each passing day.

#2 War With Iran - A war in the Middle East involving Iran could literally erupt at any time. The following is from a Reuters news report that was issued on Monday....

President Barack Obama appealed to Benjamin Netanyahu on Monday to give sanctions time to curb Iran's nuclear ambitions, but the Israeli prime minister offered no sign of backing away from possible military action, saying his country must be the "master of its fate."

#3 A Disorderly Greek Debt Default - Many reporters in Europe seem to think that this is becoming increasingly likely. So what would a disorderly Greek debt default mean for the global financial system? A leaked report that was authored by the Institute of International Finance says that a disorderly Greek debt default would have some very serious consequences. You can read the full text of that leaked report right here.

#4 An Economic Collapse In Spain - Spain has one of the largest economies in Europe and it is rapidly becoming a basket case. As I have written about previously, the unemployment rate in Spain has hit 19.9 percent, and the unemployment rate for workers under the age of 25 is up to 49.9 percent. Unfortunately, the situation in Spain continues to deteriorate. The following is from a recent article by Marc Chandler...."

at http://theeconomiccollapseblog.com/archives/15-potentially-massive-threats-to-the-u-s-economy-over-the-next-12-months

Brazil Declares New Currency War on US and Europe; Japan Losing Balance of Trade Battle

"The Financial Times reports Brazil declares new ‘currency war’

Brazil has declared a fresh “currency war” on the US and Europe, extending a tax on foreign borrowings and threatening further capital controls in an effort to protect the country’s struggling manufacturers.

Guido Mantega, the finance minister who was the first to use the controversial term in 2010, said the government would not “sit by passively” as developed nations continue to pursue expansionary monetary policies at the expense of Brazil.

“When the real appreciates, it reduces our competitiveness. Exports are more expensive, imports are cheaper and it creates unfair competition for businesses in Brazil,” he said on Thursday after announcing changes to the so-called IOF tax.

In a presidential decree, the government extended the existing 6 per cent financial transactions tax on overseas loans maturing in up to three years. Previously, the levy was applied only to loans with maturities of under two years..."

at http://globaleconomicanalysis.blogspot.com/2012/03/brazil-declares-new-currency-war-on-us.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+MishsGlobalEconomicTrendAnalysis+%28Mish%27s+Global+Economic+Trend+Analysis%29 

David Rosenberg: "The Best Currency May Be Physical Gold"

"Stop us when this sounds familiar:

What a no-brainer to suck at the teat and go long some very transparent and liquid debt that matures in less than three years (how can there not be a rally in global risk assets when Europe's central bank pumps a combined $1.3 trillion into the financial system? Not to mention a second bailout for Greece we were told a year ago there wouldn't be any!). This must be the safest carry trade ever, or at least that is the perception (1% LTRO loan for a 5% Italian bond or a 2% short-term note even ... back up the truck!). Put up a tiny bit of capital and lever it up. It is incredible that we live in a world where the difference between going out of business as a bank and prosperity lies with cheap money being accessed from the central bank balance sheet.

At least LTRO1 was dealing with a possible breakdown of the system since the banks weren't lending to each other. LTRO2 is clearly an overt policy move from the traditional central bank role of being the lender of last resort (which even LTRO1 was to a point) to being the lender of first call, as Peter Tchir aptly puts it. There is no such thing as a free lunch, but there is such a thing as the law of unintended consequences. I can't say I know for sure what they will be or when they will show up, but there are going to be repercussions from a central bank morphing from a bona fide lender of last resort to a gift-giving institution.

Somehow a long gold, short euro barbell looks really good here. Bernanke, after all, now seems reluctant to embark on QE3 barring a renewed economic turndown while the ECB is moving further away from the role of a traditional central bank to take on the role of quasi fiscal policymaking, The German central bank, after all, is responsible for 25% of any losses that would ever be incurred by the massive Draghi balance sheet expansion. Why would anyone want to be long a currency representing a region with a 10.7% unemployment rate, rising inflation rates and free money? Mind you — the same can be said for the US (where U-6 jobless rate is even higher), which is why the best currency may be physical gold (or the producers that trade very inexpensively here and you pickup some leverage)..."

at  http://www.zerohedge.com/news/david-rosenberg-best-currency-may-be-physical-gold

Why I'm Still Bullish on Gold for the Long Haul

"The recent sell off was driven by the prepared statement and comments of our Fed Chairman Ben Bernanke before Congress. The collective market interpretation was that the Quantitative Easing strategies are over, the printing presses have stopped and all has suddenly become “right” with things here in the US and globally. A bit of an exaggeration, I think, or rather wishful thinking. Once the selloff started all the traders using leverage, the so-called “late longs,” and the hot money started heading for the same exit simultaneously. Wall Street's margin clerks were not risking their jobs (not in this economy) and, as in the tales of the Old West, were shooting first and asking questions later. If there was any question about a trader's ability to make a cash margin call in, say, 2 hours – bang! – his position was sold. Result: more lower prices and more investors heading for the door.
So, what has really changed?
In our view, things have gotten slightly better, meaning the blazing fire (Southern Europe, US housing, etc.) may have indeed been extinguished, but the real work has just begun and, in an election year with US debt running at about 100% of GDP, we have our concerns as to how quickly this clean-up will go.
The employment situation, from the surface looks better, for sure. However, from our view the situation, as evidenced by statistics that are revised in walloping percentages month-in and month-out, is unclear at best. Our own guess is that things are worse than reported, with people dropping into an abyss and becoming permanently unemployable, over-aged, or overpriced. This situation will likely provide an overhang of sorts until the economy starts firing again.
As far as consumers go, things may be playing better in Peoria but from our small “window” in New York, they are not all that encouraging. The general populace here, those with whom we bump elbows each day, do not seem likely to take on any big new debt obligations, buy any expensive gifts or exotic sports cars, or take any distant vacations any time soon. Just keeping things going with lower bonuses, less cash, and more deferred payments, is the goal. Have you sent a kid to private school or college lately?” Very expensive. The consumer numbers do change, but suffice it to say that the “little guy” fuels a large majority of the economy's cylinders, so there's still a big piece of the economic “engine” that is not firing so hot.
Housing is also still a mess, albeit getting slightly better, finally after three years. But we are still a long way from “home.” The industry has always been an important driver of economic growth and it will need to “heal” completely to re-establish itself in that role. For now, it may have stopped pulling the economy down recently and will begin to stand on its own over the next 18 months, but it may be years before housing is back pulling the economy up.
And wait! It's an election year (painfully, woefully so). Political Party A will spend all year obstructing anything that Political Party B wants to do. And in lieu of actions, we will have lots of speeches. The retirement of Maine's moderate Republican Senator Olympia Snowe, after three terms, is a painful reminder of our political dilemma.
So back to gold.
Big picture, we believe that gold is a good investment for the long term and should have a proper balance with other assets held in our portfolios. Paper dollars, like our fiat system, have historically never lasted long, and we have seen so many devaluations – announced or otherwise – that we want to make sure we hold disaster insurance always. If that insurance can also slowly appreciate along the way, great. Things may get rocky from time to time, but we are disciplined to keep our eyes on the horizon and not the side of the boat. Gold is a portfolio keeper..."

at http://www.benzinga.com/markets/12/03/2393464/why-im-still-bullish-on-gold-for-the-long-haul?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+benzinga+%28Benzinga+News+Feed%29#ixzz1o4zSwo1a

Eurozone Wrapup: Unemployment Rate 10.7%, Highest Since 1999; Manufacturing PMI Contracts 7th Month; German Retail Sales Unexpectedly Fall

"There was lots of Eurozone news this week outside of the typical Greek default fodder. Nearly all of that news was not pretty. Let's take a look at the key stories.

Eurozone Unemployment Rate 10.7%, Highest Since 1999

The Telegraph reports Eurozone unemployment hits record high of 10.7pc

Data from Eurostat showed that the region lost 185,000 jobs in one month, with the vast gap between North and South growing ever wider. The figures for the previous four months were also revised upwards sharply. There are now more than 450,000 more people without jobs than assumed a month ago.

Klaus Baader from Societe Generale said the outlook was "deteriorating drastically" in the region. "Economic slowdown and fiscal austerity has hit the labour market much harder than previously thought."

Eurozone inflation nudged up to 2.7pc, while the latest PMI data for February confirmed that Euroland's manufacturing is still contracting, though the index rose slighty to 49. The "misery mix" of rising unemployment and inflation is a nasty headache for policymakers, threatening incipient stagflation..."

at  http://globaleconomicanalysis.blogspot.com/2012/03/eurozone-wrapup-unemployment-rate-107.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+MishsGlobalEconomicTrendAnalysis+%28Mish%27s+Global+Economic+Trend+Analysis%29

European Solidarity - "Everybody Knows The Spanish Are Lying About The Figures”

"Back in October, when Greece was rewarded with further bond haircuts for progressively missing its economic targets, even after having gotten caught on at least one occasion making its economy appear worse than it was, we said that it is only a matter of time before "Portugal, Ireland, Spain and Italy will promptly commence sabotaging their economies (just like Greece) simply to get the same debt Blue Light special as Greece." In the aftermath of this statement, we got the Irish and the Portuguese proceeding to slowly but surely do just that. Today, it was Spain's turn to make it 3 out of 4 after as Reuters noted so appropriately, "Spain defies Brussels on deficit target" clarifying that "Spain set itself a softer budget target for 2012 on Friday than originally agreed under the euro zone's austerity drive, putting a question mark over the credibility of the European Union's new fiscal pact. Prime Minister Mariano Rajoy insisted he was acting within EU guidelines because the plan was still to hit the European Union public deficit goal of 3 percent of gross domestic product (GDP) in 2013." That Italy is sure to follow is absolutely guaranteed, however just because the ECB is now indirectly monetizing BTPs the true impact will be delayed far more, and instead of taking prompt steps to remedy the situation, the European complacency will be accentuated by the fact that bond yields are very low, and supposedly indicates the true state of the economy. No. All it indicates is the conversion of future inflation (courtesy of €1 trillion in new money in the past 3 months) for a very temporary respite before all hell ultimately breaks loose as countries pretend everything is ok as bond yields are pushed artificially low. And in doing nothing, the fundamentals in the economy only get worse and worse. Germany knows this very well, and the Economist explains the reaction to Spain's surprising statement today perfectly..."

at  http://www.zerohedge.com/news/european-solidarity-everybody-knows-spanish-are-lying-about-figures%E2%80%9D

Arms sales rise during downturn to more than $400bn, report reveals

"Sales of weapons and military services by the world's biggest arms companies have continued to rise during the downturn and now exceed $400bn (£250bn), a leading independent research body has reported.
Though the increase has slowed, just 1% year-on-year in 2010, the rise in sales has been 60% in real terms since 2002, figures released by the Stockholm International Peace Research Institute (Sipri) showed.
The total sales, including military services, of the top 100 arms companies, reached $ 411.1bn (£257.6bn) in 2010, Sipri said.
However, its report did not include Chinese arms supplies worldwide and has only limited data on Russian arms manufacturers who are vying with US firms in Latin America and other regional arms markets.
The global arms industry is also increasingly concentrated, through mergers and acquisitions, and the top ten arms producing companies now account for 56% of sales – $230bn (£144bn) – Sipri said. Significantly, the entry point for inclusion in the top 100 companies rose from $280m (£175m) worth of sales in 2002 to $640m (£400m) in 2010..."

at http://www.guardian.co.uk/world/2012/feb/29/arms-sales-rise-downturn-military

Explosions Destroy Saudi Oil Pipeline, Sends Oil Prices Soaring

"Among the many factors responsible for the jump in WTI to just shy of $109 over the past hour, and Brent to new records in various currencies, is the following news reported so far only by Iranian PressTV: “An explosion has hit oil pipelines in the flashpoint Saudi Arabian city of Awamiyah in the kingdom’s oil-rich Eastern Province.”

at http://blog.alexanderhiggins.com/2012/03/01/explosions-destroy-saudi-oil-pipeline-sends-oil-prices-soaring-88962/

U.S. sees "no fracturing" of Assad regime

"After weeks of collecting intelligence on Syria and watching the attacks by the forces loyal to Bashar al-Assad, the U.S. sees "no fracturing" of the Syrian regime and assesses al-Assad could remain in power for some time to come if the situation does not change, according to a senior U.S. official.
This the basic conclusion of top officials closely watching Syria, the official said. Unless something changes in the next several days, this will also be the message delivered to the Senate Armed Services Committee next week by Defense Secretary Leon Panetta and Gen. Martin Dempsey, chairman of the Joint Chiefs of Staff. The hearing, called for Wednesday, is the first public hearing in which both men will be publicly questioned by Congress on the Syrian crisis..."

at http://security.blogs.cnn.com/2012/03/01/u-s-sees-no-fracturing-of-assad-regime/

Wolf Richter: Deep Trouble at the Core of the Eurozone

"In France, new vehicle registrations have been plunging. Already down 17.8% in December and 20.7% in January compared to prior year, they sank 20.2% in February. Year to date, the results were even worse than they appear. With 43 selling days in 2012, against 41 in 2011, sales per selling day were down 24.2%. French automakers suffered the most. In February, PSA Peugeot Citroën was down 29.2% and Renault 28.5%.
Last year, the prime à la casse—the cash-for-clunkers à la Française—was doping sales through March 31, 2011. The CCFA (Comité des Constructeurs Français d’Automobile) expects the nosedive to accelerate next month. It also estimates that sales for the entire year will decline by 7-10%, which may be a tad optimistic, given the headwinds France faces.
Layoffs and plant closings will be tough to undertake during the election, as they become highly politicized. Labor Minister Xavier Bertrand issued a stern warning to Philippe Varin, CEO of PSA; layoffs as part of its alliance with GM would be out of the question. Already in November, Varin was summoned by President Nicolas Sarkozy and told to reconsider laying off 6,800 workers.
And layoffs might even be tougher to undertake after the election if socialist François Hollande wins. Last quarter, the French economy lost 31,900 jobs, the first quarterly job losses in two years, and unemployment rose to 9.8%. These trends will put immense pressure on Hollande to do something visible. And for auto manufacturers, it will mean even greater difficulties..."

at http://www.nakedcapitalism.com/2012/03/wolf-richter-deep-trouble-at-the-core-of-the-eurozone.html

Making the United States More Like Greece

"One of the big problems in Greece over the past decade or so is that the government was not honest with its data. Various people assisted in the matter – including Goldman Sachs with respect to some debt issues – but ultimately this was a political decision at the highest level. The people running the country decided to conceal the true nature of their budget and their debt. This deception ended up costing the country dearly – completely undermining its credibility under pressure and making it much harder to turn the fiscal and economic situation around.
House Republicans are now proposing something similar for the United States..."

at http://baselinescenario.com/2012/03/02/making-the-united-states-more-like-greece/

Asia Buys Gold After Massive Single Trade Sell Off During Bernanke’s Testimony

"Wednesday’s sell off is being attributed to one massive sell trade of 31 tonnes on the Chicago Mercantile Exchange during Bernanke’s speech. There are rumours of a large US fund selling and also that the selling may have been by JP Morgan – rumoured to be acting on behalf of an Asian fund. Who sold off and why is less important than the fundamentals of the gold market. Absolutely nothing has changed regarding the fundamentals of gold which remain as sound as ever with broad based demand from store of wealth buyers, institutions and central banks internationally and especially in Asia. Good volumes have been seen on the Shanghai Gold Exchange in recent days. In India, lowest gold prices in a month saw strong physical bullion demand and physical buyers hunting for gold bargains to meet the wedding season demand. India remains the world’s largest buyer of the yellow metal (900 tonnes/year) but China is expected to outpace them this year according the World Gold Council. ETF holdings gained 238,674 ounces to a record high of 70.76 million ounces, showing that institutions and investors remain keen on gold. Also, options data has not changed since Wednesday’s price falls..."

at http://www.zerohedge.com/news/asia-buys-gold-after-massive-single-trade-sell-during-bernanke%E2%80%99s-testimony

Guest Post: If This Is Such a Strong Economy, Why Does This Chart Look Recessionary?

"Is the U.S. really a post-oil economy?

One way to gauge the real economy is to look at charts of the GDP, wages, household debt and the price of oil; another way is to correlate all of these on one chart. The following chart (courtesy of frequent contributor B.C.) plots these four metrics thusly: GDP/(wages/household debt)/price of oil.

What pops out of the chart is what happens when oil spikes higher or declines. In 1973, the first oil shock sent the economy off a cliff. Conversely, when oil fell to $12/barrel in the late 1990s while wages were rising strongly, the plotline peaked, reflecting a strong economy.

In 2008, oil spiked to $140/barrel in 2008, household debt reached record heights and wages began stagnating, and the economy fell into a sharp recession. When oil plummeted back to $40/barrel in early 2009, the plotline spiked up.

When oil prices and household debt are high while wages stagnate or decline, the economy sinks to recessionary levels..."



at http://www.zerohedge.com/news/guest-post-if-such-strong-economy-why-does-chart-look-recessionary

A default that isn’t a default and a sale that isn’t a sale

"One of the biggest frauds of the past few years took place yesterday. The International Swaps and Derivatives Association (ISDA) confirmed that no “event of default” has occurred with the Greek debt restructuring, therefore no payouts on any outstanding Greek Credit Default Swaps (CDS) contracts are due.

The following are just a few of the links this morning on those who disagree with the ISDA. I particularly liked Barry Ritholz’s comment, "Bullshit."

FTAlphaville

Barry Ritholz

WaPo

WSJ

Zero Hedge

.

I wonder if the ISDA decision was not intended to end CDS contracts as a tool used in global finance. That certainly will be the consequence. Who in their right mind would buy an insurance policy on their sovereign bond exposure, knowing that the outcome is rigged and no payout can ever be expected?

I’ll go on record with this one. In less than one year, the bankers and political leaders in Europe will come to hate the ISDA decision. By destroying the private market for sovereign risk insurance, they have made it certain that Spain, Portugal and Italy will be locked out of the global bond market. Global investors were already shunning these countries. The ISDA decision on Greece will just make it worse for other countries that are considered potential default candidates.

There was another development yesterday that had parallels with the ISDA decision on Greece. The US Treasury sent out an email:..."

at http://www.zerohedge.com/contributed/2012-09-02/default-isn%E2%80%99t-default-and-sale-isn%E2%80%99t-sale?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

Why U.S. Gov't Confiscated Gold in 1933. Can it Happen Again?

"More and more investors are asking this question. Many observers and commentators have ridiculed this idea as archaic with the conditions that led to the confiscation being so different as to leave such a possibility as remote as the return of the dinosaurs.
In this the first part of a series on the subject we look at the picture that led to the confiscation and look at factors that caused the confiscation to see if there are reasons why it can happen again, today!

At the left, you will see the actual executive order in which U.S. citizens lost the right to own gold. From May 1st 1933 until 1974, U.S. citizens could no longer hold gold as a protection against paper money, which also lost its gold backing at the same time.
Foreign central banks could continue to exchange the U.S. dollars that came into their possession -known as Eurodollars for decades--for gold and did so particularly when the U.S. dollar was devalued and then floated against the gold price in 1971.

Why?

The "why" is critical to our understanding of the current, global monetary system! There were two distinct phases to the process that began in 1933.

1. The U.S. monetary and banking system contributed to a large extent to the depression. As Mr. Ben Bernanke has aptly demonstrated by his Quantitative Easing, a reduction in the money supply shrinks economic activity significantly and breeds deflation. After four years of such shrinkage, it was realized that a huge increase in the money supply was needed to invigorate the U.S. economy and make assets preferable to cash. The monetary system was based on the Gold Standard, a system that set the gold price at a fixed level against the dollar and other currencies across the developed world..."

at http://www.marketoracle.co.uk/Article33375.html

Iran Embraces Gold as Real Money

"Federal Reserve Chairman Ben Bernanke was once confronted by Ron Paul with the now famous question, “Is gold money?” Bernanke replied “no” and said central banks hold the precious metal as “tradition.” However, the Central Bank of Iran appears to disagree with Bernanke and is substituting gold for U.S. dollars.
Due to sanctions placed on Iran by the United States and the European Union, Iran is relying more on gold for international trade. On Tuesday, Mahmoud Bahmani, the governor of Iran’s central bank, said the country is ready to receive payment for oil supplies in gold without hesitation. Iran has the world’s third-largest oil reserves. Furthermore, Iran recently used to gold in order to import food, since other financial assets were frozen. Earlier this month, one European trader said, “Grain deals are being paid for in gold bullion and barter deals are being offered. Some of the major trading houses are involved.” Another trader explained, “As the shipments of grain are so large, barter or gold payments are the quickest option.”
at http://www.marketoracle.co.uk/Article33379.html

James Koutoulas: MF Global Financial Collapse And the Shadow Banking System

"Here is James Koutoulas of Typhoon Capital Management, and the founder of the Commodity Customer Coalition, discussing what happened with MF Global on Russia Today.

What could be more alarming is if one realizes that the conditions that led to the loss of funds at MF Global have not been corrected, and it could be happening again even now. We just may not realize it because the loss has not yet been publicly disclosed..."

at http://jessescrossroadscafe.blogspot.com/2012/03/james-koutoulas-mf-global-financial.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+JessesCafeAmericain+%28Jesse%27s+Caf%C3%A9+Am%C3%A9ricain%29

Number of underwater homeowners grows: CoreLogic

"The number of underwater homeowners grew to 11.1 million, or 22.8% of all mortgaged properties, during the fourth quarter, CoreLogic said Thursday.
The real estate data firm said the number of borrowers in negative equity is back to third-quarter 2009 levels, suggesting more homeowners are struggling with loans that are worth more than their properties.
Comparatively, only 10.7 million properties, or 22.1%, of mortgage homes, were in negative equity in the third quarter of 2011..."

at http://www.housingwire.com/article/number-underwater-homeowners-grows-corelogic?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+housingwire%2FuOVI+%28HousingWire%29

John Taylor Warns Of A "Highly Disastrous, Totally Uncontrollable Inflationary Conflagration"

"A must read from FX Concept's John Taylor for anyone who has been following the global central bank's exponential balance sheet expansion over the past several months.

Forest Fires
March 1, 2012
By John R. Taylor, Jr.
Chief Investment Officer

During the past few years, the activist strain of central banking has spread around the world like wildfire, but the impact of this change on the future course of the global economy is very unclear. The number of countries involved now covers the developed world, the multitude of interventions in the financial market has expanded dramatically, and the amounts involved are exponentially higher than they were in 1979 when the Chrysler bailout began the process. Back then, the US Treasury guaranteed a $1.5 billion loan to the automaker, but the government demanded and received $2 billion in concessions from labor, the company, and other stakeholders. The star-crossed team of Treasury Secretary G. William Miller and President Jimmy Carter fell to Lee Iacocca’s political pressure 15 months before the 1980 election. This outcome differed dramatically from that of the Penn Central collapse, nine years before, as Congress had turned down its bailout request. By the mid-1980’s, the Chrysler rescue was seen as a great success, while everyone knew that the Penn Central refusal ended as a black hole, with many billions poured into Conrail and Amtrak just to keep the trains running.

With the arrival of Alan Greenspan activism took a big step forward, as he reversed the stock market crash of 1987, rescued Mexico with Bob Rubin in 1995, South East Asia in 1997, and then the global banking system, as it got in too deep with Long Term Capital (LTCM) in 1998. There were some failures, most notably Russia in 1998, but these interventions led directly to a feeling of complacency among investors as moral hazard, the Greenspan ‘put,’ and the President’s Working Group on Financial Markets became a widely perceived reality. Buy risk, you were safe, was the only way to go. Still, the monetary base, heart of the fractional reserve system, was largely untouched. Now, 14 years after LTCM, we know that the previous quarter century was just child’s play. The central banks have to pay a lot more for optimism today. Loans aren’t enough; now they must give the money away. Printing presses are running flat out (I know this is different than Zimbabwe, but…) and the developed world monetary base is almost three times higher than it was at the start of 2008.

All this money sloshing around is nothing but kindling. This is enough to start one hell of a large inflationary fire, but probably not until we have a deflationary panic first – which will add even more kindling to the pile..."

at http://www.zerohedge.com/news/john-taylor-warns-highly-disastrous-totally-uncontrollable-inflationary-conflagration

Next Leg Of The Ponzi Revealed - Foreign Central Banks To Begin Buying US Stocks Outright Starting Today

"We were speechless when we read this from Bloomberg.

The Bank of Israel will begin today a pilot program to invest a portion of its foreign currency reserves in U.S. equities.

The investment, which in the initial phase will amount to 2 percent of the $77 billion reserves, or about $1.5 billion, will be made through UBS AG and BlackRock Inc. (BLK), Bank of Israel spokesman Yossi Saadon said in a telephone interview today. At a later stage, the investment is expected to increase to 10 percent of the reserves.

A small number of central banks have started investing part of their reserves in equities. About 9 percent of the foreign- exchange reserves of Switzerland’s central bank were invested in shares at the end of the third quarter, the Swiss bank said on its website.

The investment will be made in equity index trackers and will include between 1,500 to 2,000 shares, among them stocks like Apple Inc. (AAPL), Saadon said..."

at  http://www.zerohedge.com/news/next-leg-ponzi-revealed-central-banks-begin-buying-us-stocks-outright-starting-today