The Glorious Imbecility of War

Submitted by William Bonner, Chairman – Bonner & Partners

Napoleon Returns

Today, on the eve of the bicentennial of the Battle of Waterloo, we do not celebrate war. Only a fool would celebrate something so horrible. But we pay our respects to the glorious imbecility of it.

War may be dreadful, little more than a racket in many ways, but it is also a magnificent undertaking. It engages the heart and the brain at once and exposes both the genius of our race and its incredible stupidity.

But we are talking about real war. Not phony wars against enemies who pose no real threat. Phony wars earn real profits for the war industry, but only an ersatz glory for the warriors. Real soldiers take no pride in them. Instead, to a real hero, they are a source of shame and embarrassment.

Wars are not conducted to “Free the Holy Land.” Or “Make the World Safe for Democracy.” Or “Rid the World of Tyrants.” Or “Fight Terrorism.” Those are only the cover stories used by the jingoists to get the public to surrender its treasure… and its sons. Wars are fought to release the fighting spirit – that ghost of many millennia – in the scrap for survival.

And so it was that, 200 years ago tomorrow, one of the greatest military geniuses of all time, Napoleon Bonaparte, faced the armies of the Seventh Coalition – principally, the British, under the Duke of Wellington, and the Prussians, under Gebhard von Blücher.

NapoleonNapoleon Bonaparte, born in Ajaccio, Corsica, later emperor of France and famous (and usually victorious) general, and later still, pensioner on the island of St. Helena

Painting by Paul De La Roche, 1814

Napoleon had been run out of France, but he had come back. The veterans of the Napoleonic Wars rallied to his cause, and he soon had an army of 73,000 seasoned soldiers. Moving fast, he put his forces in his favored “central position” between Wellington and Blücher. Continue reading

Are We to Simply Ignore the Facts Telling Us the Euro, Not Greece, is to Blame? Have a Look.

Submitted by Thad Beversdorf, Chief Economist – ABX / Bullion Capital

Just to throw a little grease on that Saganaki…….  let’s have a look at some FACTS.  Now I know our global bankers just hate when we bring facts into the discussion but you know us, always having to rock the boat and all…..

It never ceases to amaze me how the sheeple simply accept the explanation as given by those ‘in charge’ in the face of blatantly obvious conflicting facts (think 9/11, Ukranian coup, Iraqi WMD, ISIS, etc.).  But as one doesn’t fight the Fed, one mustn’t fight the perceived reality for one quickly becomes the crazy-one.  But, understanding the risks, allow me to present some facts that conflict with the explanation given by those ‘in charge’.

Pre Euro Greek total production increased by some 600% between 1960 and 2001 while German total production increased by a mere 255%.  Now if we think about it in footballer (soccer) terms, Greece gave the German nationals a real thrashing.  However, throw in the Euro and the subsequent 15 years has German total production up 20% while Greece total production is down 26%.

Screen Shot 2015-06-18 at 6.22.53 AM

So a nation that had essentially 40 continuous years of production expansion suddenly goes into a tailspin upon changing up the monetary basis of trade suggesting that we can pinpoint the culprit.  A 5 year old could pick up on this actuality.  So how is it that these supposed omniscient academics at the ECB are simply incapable of seeing the blatantly obvious?

Well because the Euro is what provides them their perceived and weightless authority but we must all recognise these emporers have no clothes.  If the Euro goes so too does their political power of persuasion.  And this is why the negotiation is no longer between the ECB and Greece, Greece has made their intention clear, but between Germany and the ECB.  Germany is the nation currently funding the ECB’s false authority. Continue reading

Bonds and banks

Submitted by Alasdair Macleod –

This year has seen some big losses develop in the bond markets, though prices have stabilised in recent days.

US Treasury 10

The chart above is of the yield on the lowest investment risk in ten year maturities. Most other 10-year bonds have seen even sharper rises in yield (i.e. greater price falls). This matters because the banking system is heavily invested in sovereign bonds, not only in the short end of the market where it traditionally invests its liquidity, but also in longer maturities between five and ten years. Furthermore, central banks have become exposed to the same risk through their bond purchases with implications for currency stability, but that is a separate issue.

The primary reason for today’s excessive duration mismatch between short-term deposits and bonds of longer maturities is zero interest rates. Banks simply cannot make reasonable returns by buying shorter maturities, and they are encouraged by banking regulations to pick up a little more yield by buying longer-dated government bonds instead of lending money to customers who are categorised as riskier. The result is banks have suffered substantial losses in recent months, most of which have been in the current quarter.

The table below summarises the losses seen in the larger sovereign bond markets at the worst point last week, and it is noticeable how badly Eurozone government bonds were hit.

Selected bond market table

This is a separate but related issue from Greece, which is worrying enough in its own right, because the write-offs at the ECB from a Greek default will exceed the ECB’s shareholders’ capital. Continue reading

Greek Contagion Abyss Looms – Wealth Preservation Strategies

Submitted by Mark O’Byrne  –  GoldCore

  • Greece, EU and Banks Staring Into Abyss
  • Markets Are “Irrationally Exuberant” – Gods Punish Hubris
  • “Invisible Hand” Propping Up Sanguine Markets
  • Short Term Considerations
  • Long Term Considerations
  • Best Case Outcomes
  • Worst Case Outcomes
  • Wealth Preservation Strategies

We are here, staring into the abyss. The greatest monetary experiment of the modern world – the euro, encapsulating the largest middle class market of consumers ever assembled is about to face its greatest test to date.

To say anxieties are high is an understatement. Normally the broad markets will weigh up downside risk as the markets formulate and assimilate varying views on matters of importance, but not so in this case.


The markets are decidedly sanguine, as if an “invisible hand” is propping them up, guiding them, nudging them, buying any dips in stock and bond markets and maintaining calm.

The VIX measure of U.S. stock volatility, is languishing at 15 – not even whimpering. Gold, that other key barometer of risk, has only seen slight gains and languishes at $1,200 per ounce.

It is as if the fire alarms have been turned off despite the fire beginning to rage.

Is the Working Group on Financial Markets or Plunge Protection Team (PPT) working tirelessly through proxy Wall street banks to keep gold depressed and prop up leading benchmarks such as the S&P 500 and thus the wider markets?

There are many that believe that Wall Street banks and central banks work closely together and coordinate policy and market interventions. They are sometimes dismissed as “conspiracy theorists.” Despite much evidence showing that banks have manipulated and rigged markets frequently.

Ironically, those that dismiss this as conspiracy theory are the same people who would say that if the central banks and governments are not propping up and intervening in markets, they should be.

If central banks are not already “market makers of last resort” then it seems likely that they soon will be and indeed overnight the IMF has called for this.

Such interventions simply paper over the cracks for a period of time – meanwhile the fire is burning, the structure is crumbling and will ultimately collapse.


A Greek exit from the euro would change everything. The greatest change being simply – doubt and fear regarding the outlook for other vulnerable EU nations, EU banks and the EU banking and financial system.

From that day forward every statement from every EU official will have a risk premium attached to it.

They will say this and that, but the market will here “maybe” this, “maybe” that. As such the costs of participation in every financial transaction will alter, as the accounting for “what if” scenarios slowly gets priced in. Continue reading

The Daily Debt Rattle

Submitted by Raúl Ilargi Meijer  –  The Automatic Earth

• Are Surpluses Normal? (Steve Keen)
• Greece Is Literally Dying To Leave The Euro (Daily Mail)
• Eurozone Ministers Insist On ‘New Proposals’ For Greece Summit (AFP)
• Greece’s Proposals to End the Crisis: My Eurogroup Intervention (Varoufakis)
• ECB Meeting To Decide On €3.5 Billion Greek Emergency Funding (Guardian)
• Greece Faces Banking Crisis After Eurozone Meeting Breaks Down
• Why Greece Might Now Have The Upper Hand In Crunch Talks (Guardian)
• Grexit Would Be ‘Beginning Of End’ For Eurozone, Greek PM Tsipras Says (AFP)
• Euclid Tsakalotos: Greece’s Secret Weapon In Credit Negotiations (Guardian)
• Would An Argentina-Style Cure Work For Greece? Probably Not (Guardian)
• What Greece Can Learn From Iceland’s Banking Crisis (Independent)
• Leaving Greece To Its Own Devices Is Not An Option (FT)
• Portugal Says It Has Reserves to Face Financing Restrictions (Bloomberg)
• If Greece And Russia Feel Humiliated, Europe Cannot Ignore That (Guardian)
• Russia, Greece Sign Deal On Turkish Stream Gas Pipeline (RT)
• Moscow Threatens Retaliation Over Belgian Seizure Of State Assets (RT)
• ‘True Friend Of Ukraine’ Tony Blair Tapped To Join Kiev Advisory Council (RT)
• New Zealand Posts Weakest GDP Growth In Two Years (MarketWatch)
• Pope Francis’s Climate Encyclical Will Launch A Revolution (Paul B. Farrell
• The Green Pope: How Religion Can Do Economics A Favour (Guardian)