Germany has announced that they will ban naked short selling of CDS as of midnight (that is in about 4 hours for US).
Click here. From zerohedge.com (Note sometimes during these news bombs, zerohedge gets hit with huge volume, cuz they are on top of everything short-term financial, unlike F-TV. Try back later if it is down.)
It will be interesting how the markets read this.
US stock markets down
Update: here is a better explanation of why Germany is doing this and how it might/might not effect markets. (From Jesse’s Cafe Americain.)
The European trend report from GEAB N45 is out.
Groovygirl really likes this report because it gives people in the US, the real situation in Europe, not US financial TV’s version.
The nations of Europe have just committed to a new Euroland through the latest crisis. The Euro will rebound to $1.45 in the coming months. Although the people may not be that trilled since no one asked them about committing billions of Euros and their future tax dollars to the new United Euroland. (We in the US understand and sympathize).
Britain is next on the chopping block, as they declined to join in this latest Euro plan. They are on their own and it doesn’t look pretty at all.
More of the same….waves of economic crisis (as this new plan takes effect) and citizen violence (as people realize their government reps just made major decisions without them on May 9th).
Now moving toward GB and US.
National Inflation Association has a new documentary video called Melt-up online now.
Move past the dramatics and learn what is really going on, lots of good stats. Talks a lot about Obama wrongdoing, groovygirl says, same outcome with Republicans, don’t be fooled. We are past political parties making a difference.
About 27 minutes they start talking about the JP Morgan silver short manipulation and the silver market in general. Very important information. SLV (the ETF) comments at 31 minutes.
Greece crisis at 33 minutes.
Impact of unsustainable debt at 36 minutes.
Reason you should store food and grow a garden: 41 minutes.
At 43 minutes: there will probably be enough food, but not enough money to buy it.
At 45 minutes you hear Nixon’s speech where he announces the “temporary” suspension of gold conversion of the USDollar. Be aware that something soon may be announced as “temporary”, but will be morphed into permanent. Assume it will be for forever and adjust your investments accordingly.
At 49 minutes they talk about how every creation of dollar of debt creates a lower and lower amount of GDP. This is discussed in-depth in yesterday’s and the day before’s posts. This is called debt saturation and it is when currencies breakdown and the “waterfall effect” happens (as Martin Armstrong would describe it).
20% of the people think for themselves. Are you part of the 20%?
The takeaway here:
Silver is cheap, debt is unsustainable, hyperinflation is inevitable.
Don’t panic. Be prepared.
Martin Armstrong’s latest letter dated May 6, 2010 entitled, Greek Debt Crisis: The Preview of What Is To Come (5 pages). Excellent summary.
Martin Armstrong states what all who read this blog regularly already know, selling debt or printing money is inflationary and does not solve the debt problem. He states that the vast amount of capital bonds will be wiped out. He has a charts showing this same wave in the Great Depression.
Martin states that what made the Great Depression so great was not the falling stock market, but the complete wipeout of capital on a global scale.(groovygirl: it took 10 years to rebuild capital just in the US, so to move on in economic development (for other countries it was longer).
With the crisis overseas capital will fly to the safety of gold, and also USDollar and USDebt (for the moment).
If you are in international business, get out of the US as capital controls/laws will drive your customers elsewhere.
He comments on the 1000 point drop on May 6th.
Martin’s parting words: “Hang on. It’s going to get nuts.” I think that says it all.
totallygroovygirl says: you are hunkered down and your capital is protected in physical gold and silver?
Warren Pollock comments on Martin Armstrong’s Greece letter. Good perspective. Click here.
Side musing: click here for a non-media view of the oil spill. This is the worst environmental disaster in history. Check websites, not mainstream media for updates on the impact. This will cause major problems for the United States and Mexico. If they do not stop this and it hits a main oceanic current, the effects will be worldwide. There is no acknowledgment from anyone of the impact this will have.
Side-side musing: 4 banks down so far.
Gold hit new highs in overnight trading ($1250). When gold rises, it is a sign that confidence is being lost in fiat currencies. It is the ultimate currency.
When global governments refuse to act responsibly toward their currency, the people will create their own currency. Click here for more info on European run on gold coins.
Click here. Continued extreme stress on the liquidity markets….worldwide.
Gold high today in NYC trading…$1249. Here is a chart from Jim Sinclair’s site with some new support/resistance numbers.
Two letters released:
Click here for Sometimes the Lunatic Fringe Does Get It Right (11 pages). Excellent paper describing historical hyperinflation and the ideas of the fringe. Martin brings in the idea that printing money is not directly related to inflation. Which is true. It must have the match of loss of confidence and thus velocity to translate that extra paper money into the fire of hyperinflation in prices.
Groovygirl doesn’t unusually expand on this point because it is very hard for someone who has not lived through a hyperinflation to understand how a nation can lose confidence in a currency and try to get rid of it as quickly as possible (very high velocity of money). People in the US just can’t get their arms around that concept. To them the dollar is something to be saved if the economy is unstable, not spent.
People can’t imagine losing confidence in the dollar, what would we use for money? They do not understand how money will seem worthless and any tangible assets (gold, silver, food, water, household items, liquor, survival gear) would be preferable. Or if you need to get a service, you would use whatever cash available to do it now for fear the price would be double the next week/month and you could not afford it. We will witness this.
Martin is not confident that the “out of the box” solutions needed for this currency crisis will be understood, discovered, and put in place before disaster, because the current power wants to keep the status quo. Groovygirl wholeheartedly agrees.
Click here for The Money dated 5-4-10 (6 pages). Talks about inflation and deflation and how these terms and debt and taxes are relics from the days of the gold standard. Martins says we need a whole new currency system based on the new global conditions. He also states all sovereign debt will default.
Side musing: gold hit an all time high of $1235.