Nice shot Sergio:
For the few who missed it, Spain handily defeated Italy yesterday, proving Moody’s wrong once again and making us 1-0 on Euro cup calls here at The Mint. The Spanish national team, which has won each Euro and World Cup since 2008, will now go down as one of the greatest national teams of all time.
The continent will now turn its weary eyes to the Olympic games, while those who can afford it prepare for their constitutionally guaranteed summer vacation (no kidding, the EU high court has held it as such).
Unfortunately for footballers and vacationers alike, Europe is operating in a perpetual crisis mode, and it is possible that vacationers will return to a Europe that is quite different than the one they left just 30 days before. One in which their options are limited and their ATM card doesn’t work.
Yes, what started as a minor Hellenic financial problem has predictibly mushroomed into a political crisis at the highest level of the EU. Voters, fed up with the bailout/austerity approach to banker welfare, increasingly exercise what is left of their sovereign right to vote out relative conservatives and/or moderates and vote in technocrats and/or populists as their fearless leaders.
Here is another prediction, for what its worth, the populists take Germany in the fall of 2013, Europe’s version of Mega Maid will have turned all the way from suck to blow. The path of austerity that they are currently on will be but a faint memory as the ECB and policy makers move from bailing out the bankers to bailing out any and every political ally.
{Editor’s note: A populist, for our purposes, is a socialist who no longer masquerades as a conservative or moderate, they are out of the closet, as it were.}
Yet for all the drama and human suffering that is unfolding, we can’t help but think that this is all simply a high priced publicity stunt to get the doomed Euro currency some air time.
For many of the European peoples, the Euro currency has served as nothing more than an unwanted crash course in math and an agent of larceny on the grandest of scales. The average Jacque, Giorgos, Jorge, or Giovanni would have been better off in the long run had the Euro never been dreamed up.
However, the continued use of the Euro is an extremely high priority to for a select few with addreses on Wall Street, in The City, and anywhere in Germany. As such, the current tack for the doomed Euroship is for it to be spoken of in the same context as climate change or terrorism, which invariably involves an increasingly illogical and alarmist rhetoric.
The question of whether or not something should be done is glossed over in favor of handing supreme power to a body who demands that something be done. The only rhetoric that is allowed beyond fear mongering is a discussion of what the supreme power should do.
And so it is with the Euro.
There will be a number of elections over the coming months in the Eurozone, and not one of them will matter. The tone in Europe is turning decidedly populist, as George Friedman eloquently describes in his recent Geopolitcal Weekly report via Stratfor:
The Futility of European Elections
The only question that remains is whether or not the ECB will accomodate the populist agenda with an accomodative monetary policy.
Our guess is that they will, for populism has never been bound by fiscal restraint.
6/27/2012 Portland, Oregon – Pop in your mints…
We are emotionally drained here after Spain’s victory over neighboring Portugal in the Euro 2012 semifinal which took place in the Ukraine. From what we could tell, soveriegn credit quality was not mentioned nor did it have an impact on the match. As such, the correlation between a country’s sovereign credit quality and Euro cup performance is still being tested.
If Germany downs Italy tomorrow, the hypothesis will hold, at least as far as the semifinals are concerned. We are predicting that Spain will disprove the hypothesis in the final and take the cup home.
Yet the Euro 2012, as are the Olympic games, which commence in just one tender month, are large scale distractions from the disease that ails the world and is threatening to rip it apart. Yes, fellow taxpayer, the insane “debt is currency” monetary experiment of the past 40 to 100 years is beginning to disintegrate.
Someday the historians will write about our times and lament: “They used debt as money, and corn as fuel,” or something to that effect.
While modern life is full of such contradictions, there are few with the potential to wreak such havok as the one where debt is forced into the role as money, which is akin to water being forced into service as oil.
But what is so bad about debt based currency? Doesn’t the ability to create money at will buffer everyone from suffering another depression?
On the contrary, the fickle nature of electronically created debts masquerading as money is economic suicide. This demands an explanation that we will not unduely withhold, for it about to burst out of us.
Capitalism is man’s only productive reaction to his Anarchic surroundings. It is inevitable that man would choose an increasingly free and capitalistic society as he gains a deeper understanding of natural law and his rightly understood self interests.
The expansion of the capitalistic system relies upon the division of labor in which men (we include women as we use the term “men” to define all of mankind) increasingly abandon self reliance and begin to trust their fellow men to provide them with life’s essentials.
This process is good, for it inspires and encourages widespread effeciencies in all spheres as man’s natural tendency to economize is rewarded as his actions align with what we refer to as the demands of anarchy and the natural economic law of supply and demand.
While this process is good, it is dependant upon capitalistic principles to operate in all spheres without exception. Any part of the system which succombs to hegemony (what we refer to as ‘Might makes right“) by one party causes all of those who mistakenly rely upon that part of the system to become vulnerable to its collapse.
The hegemonic parts of the system are prone to collapse because their existence is no longer owed to willing participation, but the use of force.
At the risk of oversimplifying a complicated issue, the more an organization encourages willing participation, the more it must adapt to the wants and needs of its clients. The process of adaptation makes the organization extremely strong and stable. It becomes a rock.
A hegemonic system, where organizations rely upon force to maintain thier positions, has already failed, for the organizations cease to adapt in a vain attempt to force others to adapt to them. The organizations in turn become weak and prone to collapse.
The largest hegemonic system operating today is the world’s monetary system, and it is on the verge of collapse. This debt based monetary system is especially dangerous because it has the effect of stimulating economic interdependence in much the same way that a healthy capitalistic system would while at the same time rendering useless or destroying the capital upon which a healthy capitalistic system relies upon to operate.
While the more perceptive members of society see it coming, the inevitable collapse causes the interdepence on which all rely to suddenly cease to operate. The result is chaos and suffering for the unprepared.
While there are many ways to prepare for this, there is only one way to start. It requires large amounts of humility, faith, and courage.
For now is the time to walk humbly with God and others. It is time to step, on the right with faith, which is provided by God, and the left with courage, which comes from within.
Faith…courage…faith…courage…faith…courage as we work together to pick up the pieces of the failed experiment to build something new, something reliable, something that will last.
For walking humbly in faith and courage is to live in the Kingdom of God.
Stay tuned and Trust Jesus.
Stay Fresh!
Email: davidminteconomics@gmail.com
Key Indicators for June 27, 2012
Copper Price per Lb: $3.36
Oil Price per Barrel: $80.42
Corn Price per Bushel: $6.42
10 Yr US Treasury Bond: 1.62%
FED Target Rate: 0.16% ON AUTOPILOT, THE FED IS DEAD!
Gold Price Per Ounce: $1,585 PERMANENT UNCERTAINTY
MINT Perceived Target Rate*: 0.25%
Unemployment Rate: 8.2%
Inflation Rate (CPI): -0.3%
Dow Jones Industrial Average: 12,627
M1 Monetary Base: $2,192,300,000,000
M2 Monetary Base: $9,933,900,000,000
6/25/2012 Portland, Oregon – Pop in your mints…
After defeating Greece in the quarterfinals, Germany will now face Italy in the Euro semifinals and, if they are victorious in there, either Spain or Portugal in the finals. If the 2012 Euro plays out according to the most recent soveriegn credit ratings, according to Moody’s, we should expect the following outcomes from the aforementioned teams:
Germany (Aaa) defeats Greece (Ca), which already occurred on Friday. Spain (A3) would defeat Portugal (Ba3) on Wednesday, and Germany (Aaa) would come out a hair ahead of Italy (A3).
The Germany would then come out victorious after handling Spain on July 1.
However, as Italy showed England yesterday, poor credit ratings can be overcome on the pitch. Therefore, we are speculating that Spain will defy Moody’s and take the cup.
Ironically, a similar scenario is set to play out at the latest emergency EU summit (we have lost track but believe that there have been at least 14 prior to this one) where the Germans are set to capitulate on not only austerity measures but also restraint on monetary policy.
As unemployment in Europe’s club med regions rises, Germans and Europe in general will be keen to avoid a repeat of the rise of the Third Reich in their neighbors to the south.
Stay tuned and Trust Jesus.
Stay Fresh!
Email: davidminteconomics@gmail.com
Key Indicators for June 25, 2012
Copper Price per Lb: $3.36
Oil Price per Barrel: $79.31
Corn Price per Bushel: $6.31
10 Yr US Treasury Bond: 1.61%
FED Target Rate: 0.16% ON AUTOPILOT, THE FED IS DEAD!
Gold Price Per Ounce: $1,585 PERMANENT UNCERTAINTY
MINT Perceived Target Rate*: 0.25%
Unemployment Rate: 8.2%
Inflation Rate (CPI): -0.3%
Dow Jones Industrial Average: 12,503
M1 Monetary Base: $2,192,300,000,000
M2 Monetary Base: $9,933,900,000,000
8/26/2011 Portland, Oregon – Pop in your mints…
We will continue our Ode to the Auto Feo next week. The week appears to be ending anti-climactically. Ben Bernanke said nothing of consequence at the economic conference in Jackson Hole, Wyoming today. As we have stated here at The Mint previously, the FED has essentially shot its last round of lethal ammunition, announcing that rates will stay near 0% until at least 2013.
Anything further would make the FED look like more of a laughing stock than it already is. At this point, they are giving away money because no one will take it. Unwittingly, the FED’s taking this most recent stance will spur a spending spree that will certainly be labeled “economic recovery” by the politicians who have become accustomed to identifying capital consumption as “growth” and capital accumulation as something to be severely punished.
Fortunately, the currency regime will end long before it can further scorch the earth. Our only advice is to not hold dollars or bonds when it does end, for those assets are the ones that will burn.
It appears that the debt crisis in Europe is spreading to the football clubs of Spain and Italy. Allegedly some of the clubs can’t pay salaries and the players are striking in the off the field sense. This is probably why the great Samuel Eto’o went to Moscow to become the highest paid player, of any sport, mind you, in the world.
Samuel, opting for liquidity over fame, must figure that Russian billionaires are more likely than Europeans to pay their bills over the next three years. Not a bad bet.
We will leave you with some footage of Eto’o’s goals which should tide you over in case La Liga and La Nazionale don’t play for a time:
Shabbat Shalom!
Stay tuned and Trust Jesus.
Stay Fresh!
Email: davidminteconomics@gmail.com
Key Indicators for August 26, 2011
Copper Price per Lb: $4.08
Oil Price per Barrel: $85.52
Corn Price per Bushel: $7.52
10 Yr US Treasury Bond: 2.19%
FED Target Rate: 0.08% ON AUTOPILOT, THE FED IS DEAD!
Gold Price Per Ounce: $1,828 PERMANENT UNCERTAINTY
MINT Perceived Target Rate*: 2.00%
Unemployment Rate: 9.1%
Inflation Rate (CPI): 0.5%!!! UP 0.7% IN ONE MONTH, 8.4% ANNUALLY AT THIS PACE!!!
Dow Jones Industrial Average: 11,285 TO THE MOON!!!
M1 Monetary Base: $2,040,500,000,000 RED ALERT!!!
M2 Monetary Base: $9,498,800,000,000 YIKES!!!!!!!
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