Perspectives on the global economic changes

[Neshant]

There are way too many people in the useless middleman industry called banking spending all their time dreaming up schemes & scams to separate people from their earnings.

These guys need real jobs.

As India develops, it really needs to avoid the mistakes made by western countries by cutting down the number of useless bank 'professionals', economists and other wealth destroying positions. Failure to do so will result in a cancerous growth of these useless professions advocating robbery of wealth from productive society.

_____________

The IMF Wants You To Pay 71% Income Tax
Submitted by Simon Black of Sovereign Man blog,

The IMF just dropped another bombshell.

After it recently suggested a “one-off capital levy” – a one-time tax on private wealth as an exceptional measure to restore debt sustainability across insolvent countries – it has now called for “revenue-maximizing top income tax rates”.

The IMF’s team of monkeys has been working around the clock on this one, figuring that developed nations can increase their overall tax revenue by increasing tax rates.

They’ve singled out the US, suggesting that the US government could maximize its tax revenue by increasing tax brackets to as high as 71%.

Coming from one of the grand wizards of the global financial system, this might be the clearest sign yet that the whole house of cards is dangerously close to being swept away.

Think about it– solvent governments with healthy economies don’t go looking to steal 71% of people’s wealth. They’re raising this point because these governments are desperate. And flat broke.

The ratio of public debt to GDP across advanced economies will reach a historic peak of 110% next year, compared to 75% in 2007.

That’s a staggering increase. Most of the ‘wealithest’ nations in the West now have to borrow money just to pay interest on the money they’ve already borrowed.

This is why we can only expect more financial repression from desperate governments and established institutions.

This means more onerous taxation. More regulation. More controls over credit and capital flows.

And that’s only the financial aspect; the deterioration of our freedom and liberty will continue at an accelerated pace.

Can a person still be considered “free” when 71% of what s/he earns is taken away at the point of a gun by a bankrupt, bullying government? Or are you merely a serf then, existing only to feed the system?

This is why we often stress having a global outlook and considering all options that are on the table.

Because the other side of the coin is that while some countries are tightening the screws and making life more difficult, others are taking a different approach.

Whether out of necessity or because they recognize the trend, many nations around the world are launching new programs to attract international talent and capital.

I’ve mentioned a few of these already– economic citizenship programs in places like Cyprus, Malta, and Antigua (I met a lot of these programs’ principals at a recent global citizenship conference that I spoke at in Miami).

Then there are places like Chile and Colombia which have great programs for entrepreneurs and investors. Other places like Georgia and Panama have opened their doors to nearly all foreigners for residency.

Bottom line– there are options. Some countries are really great places to hold money. Others are great to do business. Others are great places to reside.

The era we’re living in– that of global communications and modern transport– means that you can live in one place, your money can live somewhere else, and you can generate your income in a third location.

Your savings and livelihood need not be enslaved by corrupt politicians bent on stealing your wealth… all to keep their destructive party going just a little bit longer.

The world can truly be your playground. You just need to know the rules of the game.

http://www.zerohedge.com/news/2013-12-1 ... income-tax

[TSJones]

.....more fretting about possible indicators...

Shares frozen in fed headlights, yen hits the skids:

http://finance.yahoo.com/news/shares-fr ... 23333.html

"From a U.S. dollar perspective this is at best only a mild positive, best played through yen and the usual emerging market suspects," added Ruskin. "The muted market reactions suggest nobody would be terribly surprised with a December taper, even if the street has yet to reach a consensus on timing."

[panduranghari]

The IMF Wants You To Pay 71% Income Tax

The way I see it is the big fish have already moved their assets off the radar. Penalising the small investors was neither feasible nor possible, so the easy targets are the depositors in the banks. The inflation has eaten into the savings of the small fish. This plan to make people pay 71% income tax is funny. Because I think I already pay a high amount of tax just like many of you.

40% on every penny I earn above 44000GBP. Then 20% on everything below it. Then there is a 20% VAT. There is the hidden inflation running at close to 12 % for the past 4 years when MSM reports it at 3%. Thus the 9% difference in the reported inflation and actual one is loosing me more money when my income last year from business went up by just 23k still not enough to compensate for the loss due to inflation. Whisky Tango Foxtrot.

[paramu]

http://www.theguardian.com/business/201 ... agarde-imf

the managing director of the International Monetary Fund, has warned that long-term prospects for eurozone growth look bleak unless politicians act urgently to stoke domestic demand and tackle youth unemployment.

After months of relative calm in financial markets, and with Ireland due to end its painful bailout programme and its reliance on the IMF this weekend, some European politicians have declared the worst to be over for the 17-member single currency zone.

But speaking at the European Economic and Social Committee in Brussels, Lagarde warned against prematurely declaring an end to the economic crisis.

[TSJones]

http://www.theguardian.com/business/201 ... agarde-imf

the managing director of the International Monetary Fund, has warned that long-term prospects for eurozone growth look bleak unless politicians act urgently to stoke domestic demand and tackle youth unemployment.

After months of relative calm in financial markets, and with Ireland due to end its painful bailout programme and its reliance on the IMF this weekend, some European politicians have declared the worst to be over for the 17-member single currency zone.

But speaking at the European Economic and Social Committee in Brussels, Lagarde warned against prematurely declaring an end to the economic crisis.

What Lagarde is talking about is endless high youth unemployment and sub optimal GDP growth. A lot of which is sparked by the welfare state that a lot of euros have wrapped themselves up in.

Contrast that with the US Congress that just passed a budget bill that kicked 1.5 million people and their familes off of extended unemployment benefits. I'm not proud of this mind you, I am just contrasting that with the euros.

[paramu]

Latvia will become the Eurozone’s 18th member on 1 January 2014 and we expect it to be followed in 2015 by Lithuania.
Joining the Eurozone remains an attractive prospect for eastern European economies, because many already send a large chunk of their exports to the single currency area, so membership removes the exchange rate risk. There is also a perception that they are more likely to attract foreign direct investment as the cost of doing business with other Eurozone countries would fall.
The loss of control over monetary policy in joining a currency area is a potential risk to small and open economies. However, taking into account earlier substantial internal devaluation and structural reforms, we think that both Latvia and Lithuania are well placed to adapt to Eurozone membership.
The Eurozone continues along the road to recovery …
Ahead of Latvia’s accession, the Eurozone is on course for recovery, having achieved a second successive quarter of expansion in Q3 2013.
After falling by an expected 0.5% in 2013 as a whole, we forecast Eurozone GDP will grow by 0.9% in 2014 and then by about 1.6% a year in 2015-17.
… and now looks less vulnerable to external shocks
The resilience of financial markets in the face of political turmoil in Italy and fiscal issues in the US has been a pleasant surprise. This reflects faith in the European Central Bank (ECB) as a backstop for Eurozone bond markets and greater confidence in the outlook now that the economy has returned to growth.
But this resilience cannot be taken for granted. The next big test is the ECB’s asset quality review and the subsequent restructuring of the banking sector. Policy-makers must ensure that – at the very minimum – the relatively modest expectations of the markets are met so as not to threaten the current stability of the region.
The ECB will also have a key role to play in 2014 in setting policy to counter any tightening in credit conditions imported from the US once the Federal Reserve starts tapering. The surprise rate cut in November is unlikely to be enough to head off concerns about possible deflation.

http://www.ey.com/GL/en/Issues/Business ... e-Forecast


U.S. Congress budget deal would trim federal worker pensions - New budget cut options include military pay, veterans

[Theo_Fidel]

TSJ, USA youth unemployment is 17% IIRC.
Just a smidgen and a nudge below France.

I wouldn't be proud of the USA performance there.

[TSJones]

TSJ, USA youth unemployment is 17% IIRC.
Just a smidgen and a nudge below France.

I wouldn't be proud of the USA performance there.

I'm not proud of it. The point being is why aren't Euros stimulating their economies like the Fed Rerve? One of the reasons why is their welfare system and government benefits. They can wait around for things to pick up (usually for the good ol' USA to start pumping) with out their citizens rioting in the streets. Greece being the notable exception. But their welfare system was so corrupt, it couldn't hold up.

[chanakyaa]

http://goo.gl/H15YN

Rise of a New Currency Order

For years now, the collapse of the dollar has been in the cards. Recent developments show mounting pressure on the dollar’s reserve currency status. With a major international deflation going on, the threat of inflation through money printing is unreal. However, should the dollar’s reserve currency status end, the repatriation of trillions of petro- and eurodollars could lead to a strongly inflationary scenario.

The roles of a reserve currency are to finance international trade and to function as a store of value for Governments. Until the second world war it used to be the British pound, but with the demise of the British Empire, the pound lost its international relevance and was overtaken by the dollar. This was formalized in the 1944 Bretton Woods system. All other currencies were fiat currencies, but pegged to the dollar, which in turn was pegged to Gold at 40 dollars an ounce and redeemable for international trading partners.

The Eurodollar
With the dollar as the reserve currency, the US had to export dollars. In the early years after the war especially for Europe, the famous Eurodollars. This sounds great: print money and buy whatever you like. But with the Gold window it was also risky: overprinting could mean excess dollars would be exchanged back to Gold, depleting US Gold reserves.

This was also a weakness that those annoyed with American Hegemony could exploit. In 1967 the leftist press mogul Jean-Jacques Servan-Schreiber penned a famous screed called ‘le défi Américain’ (the American challenge’), arguing Europe was being colonized economically by superior American competition.

France, at the time, was run by de Gaulle, who never was impressed with Anglo-American supremacy. He made a point of exchanging every dollar he could lay his hands on as a means to undermine it.

In the late sixties the situation got badly out of hand because of the Great Society and the Vietnam war, very costly projects that were deficit financed, leading to serious inflationary pressures. Inflation that the US tried to export, leading to an excess of dollars abroad. Especially the resurging Deutschmark’s appreciation became untenable. The Europeans started pressuring the US to fix its deficits, provoking the US Treasury Secretary John Connally famous cry ‘the dollar is our currency and your problem’.

But the situation had become unsustainable and Nixon was forced to close the Gold window to stop the depletion of US gold. This was the end of the Bretton Woods system and from then on the major currencies were floated freely in the international currency markets.

The Petrodollar
But it did not end the dollar reserve currency status, as the Empire had been found another basis for it: they reached an agreement with the House of Saud, to accept only dollars for its oil. The Sauds agreed to invest their dollar wealth on Wall Street, making the deal even more powerful for the Empire. Saudi Arabia controlled OPEC and the dollar was saved: international oil trading is financed with dollar only. Since then we have been on an informal Black Gold standard, known as the petrodollar.

This situation was better than before, because overprinting of the dollar for international trade or to finance all sorts Empire projects could no longer be punished by depleting Gold reserves and would result only in rising prices.

In the last decade the problem of over printing was solved by artificially raising oil prices through the Peak Oil hoax, and ending Iraqi oil production. It must be understood that the Empire is not looking for more oil production. There is so much oil in the world that should it be drilled for freely, it would end the Money Power’s energy monopoly. The Iraq invasion and the quest for control of the Middle-East is to keep a lid on oil production. Saddam’s suicidal decision to accept euro for his oil only hastened his demise.

Even today Iraqi oil production is not even half of what it was before 1991. With the Western Oil companies now in charge, it will most likely never fully recover.
By raising the price for oil, the oil market has mopped up excess dollar supplies, which are now needed for the oil trade. As a result, the dollar has remained relatively stable in its value. Of course, it fits well with the agenda of decapitating the middle classes and under this agreement higher oil prices also means ever more oil profits invested in Wall Street.

Of course, the great boon of this for the Empire is that it can pay with worthless paper for real goods. It can eternally finance a major trade deficit.

Trade deficits are incorrectly understood as problematic.
From a nation’s point of view, the goal of trade is not to export, but to import. We export to give back for what we need from others. If you run the reserve currency, you don’t need to export as much as you import, because you can partially finance your imports with money printing. For all other nations this is impossible and trade deficits are lethal in the long run, as it leads to net capital outflow.

But the US Empire is in trouble. Its infrastructure is crumbling, its manufacturing base gone, it’s badly over extended. It needs ever more virulent threats to coerce the nations into dollar submission and just like Connally failed in 1971, the US is failing today. The Money Power is done with the Empire and the dollar and it is moving to the next phase. The dollar will have to step back and we are seeing a realignment.

The new currency order
China is moving towards a Gold backed yuan that will be very powerful in the international arena. Recently Australia, which is already completely dependent on China, with 30% of its exports going there, is preparing direct convertibility between the yuan and the Australian dollar, meaning they will no longer use US dollar to finance bilateral trade. This means less US dollars are needed in its reserve currency role.

In 2001 Goldman Sachs executive Jim O’Neill invented the BRIC’s. South Africa was later added, representing Africa and emphasizing its globalist agenda. Russia and China, as two powerful neighbors, obviously have long standing and important bilateral relations. But equally obviously, have little in common with Brazil, India and South Africa. India and China are actually sworn enemies. However, in 2009 they organized a first summit. Just a week ago we all of the sudden hear the BRICS are planning to open up a competitor to the IMF. They’re still working out the details and it’s not a done deal yet, but the move looks very serious.

And there is of course the euro, which, make no mistake, is in great shape. True, Eurocrat legitimacy is suffering because of the euro crisis, even in Germany the currency is losing support. But the euro crisis is purely for internal consumption, to sucker the nations into surrendering budget responsibility to Brussels. This is the final frontier for a full blown EU federalist Super State. While the euro is deeply hated, this is not really a problem for the Money Power: it isn’t in this business to make friends and it does not mind a big fight. It only fears real alternatives and these are nowhere to be seen. There is nobody proposing anything real, people are just letting off steam. Once they get their fiscal union, the crisis will quickly end. People have a short memory.

The euro was designed to be eventually backed by Gold and the ECB has enough of the stuff to be ready for the coming transition.

Conclusion
We are seeing the advent of the new currency order. There will be a number of more or less equal blocks: a dollar zone, a Yuan/BRICS zone and the euro, with the Yen and the Pound as lesser entities. These will later be able to converge to even more ‘cooperation’, in the Money Power’s relentless march towards World Currency.

These units will be at least partially Gold backed, implying long term deflationary pressures. Central Banks are buying Gold in major quantities, creating the interesting question why Gold prices have not risen in the last 18 months.

The problem for the United States will be to manage the transition. Trillions of dollars that will no longer be needed will have to be repatriated and this will lead to very strong inflationary pressures at home. It is unclear how the Fed is going to deal with that. It probably can’t. Furthermore, the US is probably in the worst of positions to deal with a new Gold standard. They claim to have 8,000 tonnes of Gold in Fort Knox, but nobody really believes that.

The hyperinflation scare that the Austrians have been promoting because of ‘money printing’ is ridiculous: we are in a stagflationary depression and prices are rising because of speculation, not because of excess money. But when the dollar loses its current status, long term price rises will become the norm.

The Greatest Depression has only just started.

[TSJones]

Problems with Euro banks?

http://finance.yahoo.com/news/europe-fa ... 56672.html

[paramu]

http://relooney.fatcow.com/0_New_8536.pdf


A close relationship exists between monetary policy and international trade

[Suraj]

xpost from PRC economy thread:

So much for the nuclear option and any other reserve currency today. Everyone still runs to US treasuries whenever there's volatility:
China, Russia flocked to treasurys during month of debt ceiling scare

Despite concerns that the rancorous debt-ceiling debate in October would dislodge the Treasury market as a haven for investors, foreign buyers continued to pile into the U.S. government debt market that month.

Foreign investors bought net of $194.90 billion securities in October, the most in five years, according to Treasury International Capital data released Monday. That number includes all categories of stocks and bonds, but $39.71 billion of that was just long-term Treasury securities.

The U.S. government was partly shutdown for half of October as lawmakers debated a spending bill. Congress was also unable to come to an agreement to raise the borrowing limit until just before the deadline, stoking fears about a U.S. default. As the debate raged, some market participants questioned whether the U.S. government debt market was losing its status as a haven for investors.

[Neshant]

they were buying treasuries just to flip it shortly thereafter.

they already knew the debt cealing would be raised.

it will always be raised as the bankers are making good profits off the money borrowing racket at the expense of the national exchequer and future tax levies.

the only reason for a debt cealing debate is to decide how to offset the rise in debt (aka transfer of money to private banking crooks) by stealing more wealth from the productive economy.

[TSJones]

Bitcoin price plunges below 600.

http://www.nbcnews.com/business/bitcoin ... 2D11765766

....what goes up .......... can also go down...

[Neshant]

600 is way above what it was a few months ago (200)

And way above what I was intending to buy it at in 2011 at $8..... But didn't

[Suraj]

The Fed finally announces its excuse for a taper - it lowers the monthly purchases from $85 billion to.... $75 billion.

[TSJones]

I think we just got a warning indicator telling us that the Fed will move....be it slowly.

http://money.cnn.com/2013/12/18/news/ec ... ?hpt=hp_t2

The pending US budget deal was key for the Fed in my humble opinion.

[Austin]

Housing Market Setting Up for Another Crash

[Austin]

Fed’s Ballooning $4 Trillion Balance Sheet Bodes Well For Gold In 2014

[biswas]

Bitcoin price plunges below 600.

http://www.nbcnews.com/business/bitcoin ... 2D11765766

....what goes up .......... can also go down...

This is disturbing.

A collective group of friends including me just bought a $6000 ASIC mining machine.

I hope the investment pans out.

[Neshant]

No matter what they claim, they will continue to print money behind the scenes just as they will continue rigging the US stock market.

However the belief that they are fooling the markets will end as abruptly just as it did in 2008.

[Austin]

^^ Neshant what do you think about the Housing Bubble mentioned in the report posted above ?

Also cranky as he may sound but Max Keiser keeps stating the collapse of US/UK Economy is inevitable and recession would be worse than 2008 ..........what happens then to countries like India , China , Russia or Brazil will they also collapse ?

[TSJones]

Bitcoin price plunges below 600.

http://www.nbcnews.com/business/bitcoin ... 2D11765766

....what goes up .......... can also go down...

This is disturbing.

A collective group of friends including me just bought a $6000 ASIC mining machine.

I hope the investment pans out.

you need to understand and grok the following

from wiki

Integral to Bitcoin is a public transaction ledger and log known as the blockchain, which shows who owns how many bitcoins currently and records the participants in all prior transactions as well. By keeping a record of all transactions, the blockchain prevents double-spending (copying one bitcoin and spending it in multiple places) because the record shows that once a bitcoin has been spent, the previous owner no longer controls it.[19] The blockchain is maintained not by a central body but by a distributed network of computers that run a program to solve cryptographic puzzles relating to information in the blockchain.[19] Users who devote computing power to maintaining the blockchain this way are called "miners" because they are awarded in bitcoin when they are the first to solve such puzzles. This mining is how new bitcoins are generated.[19] The mathematical calculations performed by miners' computers serve to verify that each transaction is valid and add the information to the blockchain.[20] As more bitcoins come into circulation, the puzzles involved in mining them become increasingly difficult, and the rewards are halved at regular intervals, until 21 million bitcoins have been created and production stops.[19] As Bitcoin achieves wider recognition and more people compete to mine the coins, competition for the limited number of bitcoins awarded for solving the cryptographic puzzles becomes more steep and more powerful computers are needed in order to compete–a fact which has spawned a technology boom in sales of Bitcoin mining technology.[20]

In another year or so your reward for mining will. be. halved. (emphasis mine)

As with any such schemes, the people who get in first are the ones who are rewarded.

[Austin]

Russian GDP to grow 1.4%-1.5% this year – Putin ( via RT )

Russian GDP will grow 1.4 percent-1.5 percent this year, President Vladimir Putin said at a news conference Thursday. “The latest figures are that real GDP is up 1.4 percent from last year. We'll probably have 1.5 percent [for the year], or 1.4 percent,” Interfax quoted Putin as saying. Inflation has been 6.1 percent since the start of the year, he added. “This is a little less than last year. Last year it was 6.6 percent,” he said, adding that it was “not bad.”

Germany firmly opposes use of Eurozone money for troubled banks scheme

Germany's finance minister has said no money from the Eurozone's rescue fund will be available directly to pay for bank clean-ups, Reuters reported. The only way to the 500-billion-euro European Stability Mechanism (ESM) is “through the nation states,” Wolfgang Schaeuble said. He reiterated the long-held German view that such help can be given only to governments and not directly to banks. That deals a blow to hopes that the bloc will unite behind lenders in difficulty.

[Austin]

World’s biggest earner: Warren Buffet made $37 million a day in 2013

[TSJones]

Gold may be heading lower....

http://blogs.wsj.com/moneybeat/2013/12/ ... d=yahoo_hs

[Austin]

^^ That should be good news for country that are buying gold and hopefully even for end customer

[Austin]

In this episode of the Keiser Report, Max and Stacy discuss the warty sea walnuts that are the populations floating through credit space seeking to soak up more debt to feed the pool of derivatives and fraud in which they live and breathe. In the second half, Max interviews coder, hacker and author, Andreas Antonopoulos about bitcoin. While, at the moment, bitcoin is a shallow pool of volatility, it cannot be uninvented and is a way of achieving consensus on a distributed ledger of assets without the ability to cheat. Its role as a currency is just the first ‘app’ on the bitcoin network; other applications could be stock exchanges and peer-to-peer lending.

http://rt.com/shows/keiser-report/episo ... eiser-566/

[Neshant]

cartoon-documentary from 1979 (the last gold bubble)

[Neshant]

^^ Neshant what do you think about the Housing Bubble mentioned in the report posted above ?

Also cranky as he may sound but Max Keiser keeps stating the collapse of US/UK Economy is inevitable and recession would be worse than 2008 ..........what happens then to countries like India , China , Russia or Brazil will they also collapse ?

The UK economy to me looks like it's built on nothing other than financial chicanery. The profits from the LIEbor scandal alone must be staggering. How long this scamming will continue is anyone's guess.

The only thing apparent to me is that tax rates are going to be astronomically high in the west in the coming future. That along with capital controls will close the doors on the movement of capital out of those wealth destroying govt-banker kleptocracies which the west has become. Act accordingly ahead of this trend.

I also predict America will return to being a manufacturing nation at least partly - after destroying the purchasing power of the working class to "create jobs" and transferring their wealth to banking goons that is. This logic suites the parasitic central banking cartel which seeks to keep the vast majority working as bonded serfs.

[Neshant]

When you’re one step ahead of the crowd you’re a genius.

When you’re two steps ahead, you’re a crackpot.

–Rabbi Shlomo Riskin

[chanakyaa]

Could the next crisis country be Japan?

Japan Unveils Record 2014 Budget Draft as Debt Burden Mounts
http://www.bloomberg.com/news/2013-12-2 ... sales.html

Japan unveiled a record budget for the next fiscal year, as Prime Minister Shinzo Abe boosts spending on social security, defense and public works while trying to contain the growth of the world’s biggest debt burden.

Government ministers and the ruling coalition adopted the 95.88 trillion yen ($921 billion) budget proposal for the fiscal year starting April 1 at a meeting yesterday in Tokyo, Finance Minister Taro Aso told reporters. Japan will issue 41.25 trillion yen of new revenue bonds, Aso said, less than the 42.9 trillion yen earmarked in this year’s initial budget.

[TSJones]

Could the next crisis country be Japan?

Japan Unveils Record 2014 Budget Draft as Debt Burden Mounts
http://www.bloomberg.com/news/2013-12-2 ... sales.html

Japan unveiled a record budget for the next fiscal year, as Prime Minister Shinzo Abe boosts spending on social security, defense and public works while trying to contain the growth of the world’s biggest debt burden.

Government ministers and the ruling coalition adopted the 95.88 trillion yen ($921 billion) budget proposal for the fiscal year starting April 1 at a meeting yesterday in Tokyo, Finance Minister Taro Aso told reporters. Japan will issue 41.25 trillion yen of new revenue bonds, Aso said, less than the 42.9 trillion yen earmarked in this year’s initial budget.

The Japanese are huge savers. They mostly owe it to themselves. The individual Japanese doesn't borrow. They are like the Germans in that regard.

[chanakyaa]

Could the next crisis country be Japan?

Japan Unveils Record 2014 Budget Draft as Debt Burden Mounts
http://www.bloomberg.com/news/2013-12-2 ... sales.html

Japan unveiled a record budget for the next fiscal year, as Prime Minister Shinzo Abe boosts spending on social security, defense and public works while trying to contain the growth of the world’s biggest debt burden.

Government ministers and the ruling coalition adopted the 95.88 trillion yen ($921 billion) budget proposal for the fiscal year starting April 1 at a meeting yesterday in Tokyo, Finance Minister Taro Aso told reporters. Japan will issue 41.25 trillion yen of new revenue bonds, Aso said, less than the 42.9 trillion yen earmarked in this year’s initial budget.

The Japanese are huge savers. They mostly owe it to themselves. The individual Japanese doesn't borrow. They are like the Germans in that regard.

Kyle Bass - Coming Crisis in Japan (sorry, long video)

[Neshant]

China is trying to push Japan over the economic cliff by forcing it to spend more on its military.

Its finances are already strained and what better way to break the camel's back by adding the burden of increased defence expenditure.

Hence all the hub bub about islands in the stream.

[Neshant]

Venezuela devalues its currency by 44% overnight (with still more to come)

http://mobile.bloomberg.com/news/2013-1 ... erves.html

[Austin]

^^ Since Oil Markets are on the high it would help them sell their Oil at competitive rates.

[TSJones]

^^ Since Oil Markets are on the high it would help them sell their Oil at competitive rates.

Ven. is a founding member of Opec. Anything they sell is usually to Opec guidelines. However, Cuba as a matter of politics gets oil from Ven at reduced price up to free. Also when Ven wants to make a gandstand play they will promise cheap heating oil to poor people in the US. I don't know if they ever followed through on it though.

[Christopher Sidor]

The beauty of Japanese debt is that 95% of its debt is domestically held. Unlike the PIIGS countries which actually depended on non-sovereign creditors like US Money Market Funds or non-PIIGS banks. Further Japanese save a lot. Massively would be a better word. Added to this is the fact that they have run a current account surplus. And finally unlike PIIGS they have very little short term borrowing, again unlike PIIGS. Consider the fact that debt servicing in Japan is around 30% of its budget as of today. So Japan still has some leeway. Having said that, Japan's sovereign Debt is truly astronomical. No doubting that.
The beauty is that we can expect PRC to follow in Japan's footsteps. Consider the sheer size of PRC's bank lending or shall I say binge, after 2008. PRC sovereign debt might not be that high, buts its banking lending is truly monstrous.

At the end of the day it does not matter where the debt reside, with the sovereign or with its quasi-sovereign banks. It still has to be paid or written off or partially-paid-partially-written-off, i.e. a haircut.

[Neshant]

The beauty of Japanese debt is that 95% of its debt is domestically held.

I don't see how that's a beauty.

At some point, the local pension funds are going to sell their govt bonds.

That would turn into a stampede if there was even a hint that the govt was going to cheat them somehow by not making good on those bonds through devaluation or default.

Nobody would ever trust govt bond debt in Japan or anywhere else in the developed world. This no matter how much govts would swear up and down that they would not defraud the citizenry for the benefit of banking goons.