Financial Market report for Friday June 22, 2012; this is the twelfth week of entry into the Second Great Depression.
1) … UK, US and Swiss banks were downgraded this week as the world slid into depression.
UK banks downgraded included Royal Bank of Scotland, RBS, Barclays, BCS, and HSBC, HBC. US banks downgraded included Bank of America, BAC, Citigroup, C, Goldman Sachs, GS, and JPMorgan, JPM, Morgan Stanley, MS. Swiss Banks include UBS AG and Credit Suisse, CS, Elaine Meinel Supkis writes The top 5 banks, all of which were degraded by Moody’s, hold by far and away, the lion’s share of the Derivatives Beast. This is both intolerable (any disaster with the sale of derivative contracts will instantly crash these stupid banks) and impossible to continue forwards; (These banks are JPM, C, BAC, GS, MS).
Andre Damon of WSWS rites A global slide into depression. The events of the past several months underscore two fundamental features of the crisis that emerged out of the 2008 financial collapse: 1) that it is systemic, not temporary; and 2) that it is global, effecting every country in the world
World stocks, VT, traded unchanged this week as Commodities, DBC, traded 1.9% lower as BNO, -8%, OIL, 7.5%, USO, 7.1%, SLV, -6.1%, GLD, -3.6%, DBB, -3.5%, and RJA, rose 2.9%. Of significant note Jack Chan of JC’s Buy and Sell Signals, gave a sell signal on gold , GLD, on Thursday June 21, 2012.
Mortgage REIT Annaly Capital Management, NLY, rose to new high as Mortgage rates hit new lows
2) … We are witnessing the fulfillment of bible prophecy with the establishment of the Guido Westerwelle’s Future Of Europe Group, The Manifesto for a New Europe will be announced in September.
Open Europe reported this week that France to join Guido Westerwelle’s Future Of Europe group next month. The Times reports that, from next month, France will join German Foreign Minister Guido Westerwelle’s ‘Future of Europe’ group – a group of ten EU member states, excluding the UK, that has been meeting to discuss the future political architecture of the EU, including the prospect of creating a European finance minister, a beefed up European border police force and a European army. In an interview with Le Figaro, Westerwelle said, “We need to discuss without taboos the ways to strengthen Europe and make it more effective and capable to act.”
On March 2, 2012, Valentine Pop of EUObserver reported German ‘future of Europe’ meeting irks partners. German foreign minister Guido Westerwelle has irked some of his EU colleagues by inviting only a select few to a dinner on Tuesday (20 March) to discuss the ‘future of Europe’ after the economic crisis.
The meeting does not appear on the official website of the German foreign ministry as it is meant to be an informal event at the Villa Borsig, north of Berlin. Invited were the foreign ministers of France, Italy, Belgium, Luxembourg, Netherlands, Austria, Denmark, Poland, Portugal and Spain. But by leaving out 17 of the EU’s 27 states, Westerwelle has stepped on the toes of some of his colleagues.
A diplomat from Sweden, one of the non-invitees, told Spiegel magazine that the German foreign minister was not contributing to EU co-operation by leaving some countries out.
The Danish foreign minister was invited, but refused to participate. “We have a government meeting that evening. Of course I am willing to discuss EU topics. But us ministers have to weigh which meetings are important and which are not,” Villy Sovndal said in Copenhagen last weekend when asked by German Radio about Westerwelle’s event.
The German minister also faces criticism in Ireland, another country not on his guest list
From Dublin’s perspective, Westerwelle’s debate on the future of Europe is seen as unhelpful at this moment in time, as the government is preparing a referendum on the Germany-inspired treaty on fiscal discipline, the Irish Times reports.
A recently ousted leader of the German Liberal Party, Westerwelle is struggling to maintain his credibility both internally and on the European stage. His idea to set up a “Future Group” to discuss issues ranging from the EU’s democratic deficit to immigration and Schengen is aimed at bolstering his status.
“We have to open a new chapter in EU politics. We cannot limit ourselves to crisis management, but we have to show that Europe can also offer political perspectives,” Westerwelle said last Friday when arriving in Copenhagen for an informal meeting of foreign affairs ministers.
There can be abandonment of the road to serfdom, God ordained a United States Of Europe in eternity past, and revealed it by the Prophet Daniel in Daniel 2:30-33, and the Apostle John in Revelation 13:1-4.
Today, June 22, 2012, Stephen Evans of The BBC reports More Europe, Germany’s battle-cry for the Euro zone. Chancellor Angela Merkel and her Foreign Minister Guido Westerwelle say the crisis needs “more Europe”.
“More Europe means that we must give up more powers to Europe,” Mrs Merkel says. She said it again after meeting the leaders of Spain, France and Italy in Rome: “The lesson of this crisis is more Europe, not less Europe.”
But is Berlin’s ceding power to Brussels also the route to a United States of Europe?
A picture of the German conception of Europe’s future is emerging from the utterances of the German foreign minister, Guido Westerwelle, and through the newly published interim report of what is known as the Future Group, which he set up.
The proposals are:
• More European power to determine the economic and tax policies of the member states. There should be a “transfer of sovereignty” to the European centre
• A strengthening of the EU’s “foreign office”, with a common European foreign and security policy
• A smaller European Commission able to make decisions faster
• A bigger role for the European Parliament to make “stronger democratic legitimacy”
• A directly elected President of Europe
• A European army
Is it a United States of Europe? There are certainly similarities with the USA – with its central power over economics and common foreign policy. Without saying United States of Europe, Mr Westerwelle justifies the move to “more Europe” by citing the current crisis in the eurozone.
Disconnect: Prime Minister Cameron sees too much integration as harmful. “It is the worst crisis that Europe has ever faced. We have to learn the right lessons from it. Decision-making in Europe is often too slow,” he says. “Unfortunately, a cold wind of repatriation is sweeping through the European Union. The grand idea of Europe is in danger.” He goes on: “But the truth is that we need more Europe, not less. Europe must stand up for itself, for the idea of cultural unity. Steps towards a genuine political union would make a tangible contribution to ending the crisis.”
Mr Westerwelle has some weight behind him. A Future of Europe Group that he set up is made up of fellow foreign ministers from Belgium, the Netherlands, Luxembourg, Austria, Spain, Portugal, Italy and Poland; 17 of the 27 countries in the European Union were left out, including Britain and Sweden which are both sceptical about more power going to Brussels.
More power for Europe or was it too far too fast?
One Swedish diplomat was quoted by Spiegel magazine as saying that the German foreign minister was not contributing to EU co-operation by leaving some countries out.
And it should be said that what Mr Westerwelle thinks is not always what Mrs Merkel thinks. He may be the foreign minister but he comes from a different party in the coalition. But “more Europe” is their shared desire.
In Britain there is a view, certainly within the Conservative Party which dominates the coalition government, that the lesson to be drawn from the crisis is that European integration went too fast and too far.
In the Eurosceptic view, European integration was ill-advised because the peoples of Europe were not ready for it. They would baulk, so the argument runs, at being pushed and jostled towards a single identity.
In the German view, pushing towards a unified identity is precisely what now needs to be done.
And today, June 23, 2012, Roger Boyes of The Australian reports Germany plans for beefed-up Europe. Germany wants to propel Europe towards greater political union and has started to discuss with other EU states the prospect of creating a European finance minister, a beefed-up European border police force and a European army. Britain, it seems, is not part of the conversation.
German Foreign Minister Guido Westerwelle told London’s The Times newspaper he was not making demands but rather putting ideas on the table to boost international confidence in the future of Europe.
“The discussion about the future of the EU has to begin,” he said. “One of the consequences of the situation is that we have to accelerate integration in Europe. No investor in the world will invest in Europe if he doesn’t have the feeling that Europe believes in itself and is working on its future.”
Mr Westerwelle was speaking after the latest meeting of the so-called Future of Europe group, which pulls together his counterparts from Belgium, Denmark, Luxembourg, Austria, The Netherlands, Poland, Portugal, Spain and, from next month, France.
“Changing the treaty is not on today’s agenda, but many things can be done short of treaty change,” Mr Westerwelle said.
3) … Financial sovereignty is simply good common sense and moral stewardship of one’s financial assets.
The Sovereign Man asks Are You Sovereign?
I believe that the greatest risk we all face is sovereign risk, having everything in a single country (i.e. holding all your eggs in a single sovereign basket). Simply put, if you live, work, own property, store gold, bank, invest, structure a business, hold retirement funds, etc. in a single country, then all your assets and interests are at great risk when something happens in that country..
And the list of things that could go wrong is long: Your assets can be frozen or seized at the whim of any judge, bureaucrat, or police agency and you are “guilty until proven innocent.” Politicians routinely change laws effective immediately (or even worse retroactively) meaning capital gains taxes and income taxes can rise dramatically overnight or NEW taxes can be imposed. Considering the alarming rate at which local, state, and federal governments are going broke, these threats become more realistic every day and in fact are already happening.
Capital controls and currency debasement are also major issues. Desperate governments have historically tried to control their money supplies by restricting the free flow of capital across borders, preventing businesses and citizens from moving money out of the country, holding it captive to inflationary policies, senseless regulation, and higher taxes.
Sovereign risk threatens everyone’s livelihood, and not diversifying this risk is putting all of your eggs in one very frail little sovereign basket. Your livelihood depends on being able to properly diversify this risk. For those who are well prepared, this is a time not of fear, but of once in a century opportunity.
During this rough period, the die shall be cast for generations. Fortunately, we can clearly see this coming and there is still a bit of time to act…but diversifying Sovereign Risk requires a NEW, more global principle of diversification.
The new global principle of diversification.
The old principle of diversification is commonly applied to financial assets. You put some money in stocks, bonds, real estate, maybe even precious metals like gold and silver.
Holding all your assets in the US Dollar (or any single fiat currency) is financial suicide. Unless you take measures to protect yourself your dollar-denominated assets are going to collapse in value and your standard of living will be painfully lower.
So how do you diversify sovereign risk?
If this sounds like a hopeless situation, don’t worry because it’s entirely possible to manage all these risks. In fact, thousands of smart people just like you are already doing it. It goes back to the NEW Global Principal of Diversification and what I call planting multiple flags.
Simply put, if you don’t have all your assets under the control of a single government you have diversified your sovereign risk because no single government has control over your assets. It’s a simple concept and it’s perfectly legal.
Think about how things work under the old system – people are effectively given pre-packaged options for the major decisions in their lives. There are pre-defined career paths for becoming a doctor, a lawyer, a pilot, a nurse, and almost any other profession you can imagine.
When it comes to retirement planning, you just answer a menu of questions to define your risk profile and instantly you have a model portfolio to follow. There’s little thinking involved…and little choice either considering the limited number of mutual funds available in most retirement accounts.
Reject limiting choices
I call these “limiting choices” and they are deeply ingrained in our modern society. Our realities are defined not by us, but by people and regulations that govern our thinking, restrict our options, and constrain our creativity.
When you walk into a bank, for example, no one is going to sit down with you and say:
“Hey, I think you should protect yourself from a depreciating currency. Let’s talk about precious metals like gold and silver
4) … Europe’s 27 heads of state will meet next Thursday and Friday.
5) … In Today’s News
Bloomberg reports Manufacturing slump deepens from euro area to China
Business Insider reports Why Russia is extremely protective of Syria
Anthony Torres and Alex Lantier of WSWS report France’s New Anti-capitalist Party backs pro-imperialist guerrillas in Syria The 15-month-long conflict in Syria between the Syrian army and the pro-imperialist “rebel” forces has intensified over the last weeks.
Paper Money Collapse The death of banks, and the future of money.