Have nothing to do with the [evil] things that people do, things that belong to the darkness. Instead, bring them out to the light... [For] when all things are brought out into the light, then their true nature is clearly revealed...

-Ephesians 5:11-13

Tag Archives: Eurozone

Greece Passes into History as a Sovereign Nation

This article was published by The McAlvany Intelligence Advisor on Wednesday, July 15, 2015:

Coat of arms of Greece since 7 June 1975.

Coat of arms of Greece since 7 June 1975.

From Genesis 25 one finds this:

Once when Jacob was cooking some stew, Esau came in from the open country, famished. He said to Jacob, “Quick, let me have some of that red stew! I’m famished!” (That is why he was also called Edom.)


Jacob replied, “First sell me your birthright.”


“Look, I am about to die,” Esau said. “What good is the birthright to me?”


But Jacob said, “Swear to me first.” So he swore an oath to him, selling his birthright to Jacob.


Then Jacob gave Esau some bread and some lentil stew. He ate and drank, and then got up and left.


So Esau despised his birthright.

After suffering through some 17 hours of haranguing and browbeating last weekend, Greece’s Prime Minister Alexis Tsipras gave away Greece’s national sovereignty for some bread and a bowl of lentil stew.

And the stew smelled to high heaven.

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The Great Greek Yard Sale

This article appeared online at TheNewAmerican.com on Tuesday, July 14, 2015:  

The great capitulation by Greece’s Prime Minister Alexis Tsipras last weekend will shortly be followed by the great Greek yard sale. Calling it an agreement rather than an ultimatum, the Eurozone statement from its ministers spelled out in painful detail the degree to which Greece will have lost its sovereign powers if the country’s parliament agrees to it.

First, Greece must accomplish the following no later than midnight Wednesday, July 15:

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The Root Cause of Greece’s Problems: Socialism

This article was published online at TheNewAmerican.com on Monday, July 13, 2015:  

English: Alexis Tsipras in a press conference ...

Alexis Tsipras

Returning to Brussels with an austerity program eerily similar to that just rejected by Greek citizens a week ago, Prime Minister Alex Tsipras hoped to obtain another bailout in exchange for debt forgiveness by the European Central Bank (ECB). Tsipras is desperate: His government must make a $7.8 billion payment to the ECB next Monday, and another $13 billion by the middle of August.

Instead, following marathon sessions lasting into the wee hours, those EU officials upped the ante, passing even more stringent demands before granting Tsipras his lifeline. It told Tsipras, in essence, either to paint or get off the ladder:

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Fracking Is Boosting Reshoring of American Jobs

This article appeared online at TheNewAmerican.com on Thursday, July 9, 2015:  


In its latest report on American competitiveness, the Boston Consulting Group (BCG) estimates that the average cost to make goods in the United States is now only five-percent higher than in China, and between 10 and 20 percent lower when compared to the major European economies such as Germany and France. In less than three years, BCG projects China’s advantage to disappear altogether.

While part of the reason is rising wages in China and in the Eurozone and American companies improving their productivity faster than their competitors abroad, the primary reason, says BCG, is fracking — the technology that has driven energy costs to a fraction of what they were just a few years ago.

Back in August 2013, Harold Sirkin, a senior partner at BCG, predicted the U-turn that would result in “reshoring” of millions of jobs, starting in 2015:

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Greek Vote the Death Knell for the EU?

This article was published by The McAlvany Intelligence Advisor on Wednesday, July 8, 2015:  

English: Nigel Farage at Lord's cricket ground...

Nigel Farage

Nigel Farage, named “Briton of the Year” in 2014 by the London Times, has finally found his voice. He noisily departed the Conservative Party in 1992 after the signing of the treaty that created the European Union to start his own UK Independence Party (UKIP). His criticism of the EU has been steady ever since, culminating in his eulogy on Monday: “The European Union is Dying Before our Eyes.”

According to Farage, Sunday’s referendum in Greece sealed its death warrant, even if somehow the Greek PM Alexis Tsipras is able to come to terms with the troika and have them turn on the financial spigot once again: “It [was] a crushing defeat for those Eurocrats who believe that you can simply bulldoze public opinion.” He added,

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Greeks Shout “NO!”

This article was published by The McAlvany Intelligence Advisor on Monday, July 6, 2015:  

Greek citizens shouted “No!” to further austerity measures for the hapless country in exchange for more of what got it into trouble in the first place: other people’s money. The lopsided 60-40 vote astonished telephone pollsters, who predicted a much narrower victory for Greek Prime Minister Alexis Tsipras of the far-left Syriza party. Although the issues were far more complicated than the referendum made it appear, the 68-word ballot question made it easy: do you want more increases in taxes, more cuts in pension benefits, another increase in the VAT … or not?  Translated into English, the ballot read:

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Greece to the EU: NO!

This article was published online at TheNewAmerican.com on Monday, July 6, 2015:  

In an astonishing blow to the European Union’s credibility, Greek voters, fed up with five years of austerity, continuing recession, 25-percent unemployment, and severe cuts in pension payouts, strongly said “No!” at the ballot box Sunday. The 68-word ballot question, rejected by 61 percent of the voters, reads (translated into English):

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Greece: Capital Controls Threat Increases as Deadline Approaches

This article first appeared online at TheNewAmerican.com on Monday, June 22, 2015:

The announcement last week by Greece’s central bank that it may be forced to start implementing capital controls — eliminating the ability of Greeks who still have any money in the bank to withdraw it or send it to another country for safekeeping — may just be a ploy to bring more pressure on the Troika (European Central Bank, IMF, and eurozone countries) to release the last batch of funds from Bailout Number Three.

Withdrawals by nervous Greeks began last fall as Bailouts Number One, Two, and Three were only pushing the country further into recession. Withdrawal from the eurozone itself became increasingly likely, with the result that the euro would be replaced in Greece with a new currency with much less purchasing power.

Ever since Greece joined the European Community, later to be called the European Union, it has enjoyed far better credit ratings than it deserved. Assured that default was now no longer an option, central banks and other international financial institutions were more than willing to

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Do Negative Interest Rates Portend a Negative Economy?

This article first appeared online at TheNewAmerican.com on Monday, May 4, 2015:

Last Thursday the London Daily Telegraph’s assistant editor, Jeremy Warner, reported an astonishing statistic: Almost a third of all government debt in the eurozone is paying negative interest rates. That’s more than $2 trillion in government bonds, and, it appears, investors are happy that they aren’t paying even more.

Fifty percent of French bonds now trade with a negative yield, while 70 percent of Germany’s bonds trade at a negative yield. More remarkably, in Spain, which was on the verge of insolvency just a few years ago, 17 percent of its government bonds now trade with a negative yield.

This is counterintuitive, which explains why Keynesians, those who believe that “demand” in an economy can be artificially increased by manipulating taxes and the money supply, have no explanation for it. In theory,

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More Keynesian Insanity: Negative Interest Rates

This article first appeared at The McAlvany Intelligence Advisor on Monday, May 4, 2015:

There’s a corollary to the insanity rule. It’s called the Keynesian Corollary: When something doesn’t work, do more of it. When history is written about the coming Second Great Recession, historians will likely note July 2012 as the turning point. That was when Mario Draghi, head of the European Central Bank (ECB) said during a panel discussion that the ECB “is ready to do whatever it takes to preserve the euro. And believe me, it will be enough.”

Other historians might list that as one of the top ten “famous last words” ever issued by a human being. Since that moment bond yields across the world have dropped, and dropped, and dropped. On Thursday Jeremy Warner, the London Daily Telegraph’s assistant editor, announced that

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Swiss Issue an Unequivocal Buy Signal for Gold

This article first appeared at The McAlvany Intelligence Advisor on Friday, December 5, 2014:

Rarely do the precious markets receive such an unequivocal, unblemished, unalloyed buy signal as the one issued by the Swiss when they voted down, 3-to-1, a referendum that would have modestly restricted the activities of its central bank.

Months earlier, polls showed that the “Save Our Swiss Gold” initiative was likely to pass, but massive publicity campaigns and moves by Citigroup to cash in on it caused a huge shift in public sentiment, with the final vote on Sunday, November 30 defeating it by a 78-22% margin.

The Swiss, being a direct democracy, are known for referendums, voting on an average of five of them every year, with most of them failing. But this one caused rejoicing among observers and Swiss National Bank (SNB) officials that likely put in a bottom in the gold market. Had it passed, the referendum would have required the SNB to

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Crude Oil Price Declines Reveal Who’s Swimming Naked

This article first appeared at The McAlvany Intelligence Advisor on Wednesday, December 3, 2014: 

Ali Al Naimi

Ali Al Naimi

One of the most famous homespun quotes Warren Buffett ever uttered is this: “Only when the tide goes out do you discover who’s been swimming naked.” With the decline in crude oil prices of nearly 50 percent since June, more and more people are finding themselves swimming naked, or they’re about to.

Consider the formerly invincible oil cartel, OPEC, which seems to be suffering from delusions of its former glory by taking on oil producers in America. Instead of cutting production in order to “stabilize” oil prices, the cartel, led by the aging big kahuna, Saudi Arabia, has decided to

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Lower Crude Oil Prices Already Pinching Producers

This article first appeared online at TheNewAmerican.com on Tuesday, December 2, 2014:

Coat of Arms of Saudi Arabia

Coat of Arms of Saudi Arabia

As crude oil prices continued their breathtaking drop, the CEO of Canadian Natural Resources, Canada’s largest oil company, Murray Edwards (the 14th wealthiest Canadian) was asked on Friday just how much further crude oil prices could decline. His response:

On a given day you can have market fluctuations where prices fluctuate far more than the underlying economic value of the unit. Prices could spike down to $30, $40. It got down to $35 in 2008, for a very short period of time.

On Monday crude oil prices briefly stabilized and then dropped further on Tuesday, hitting new four-year lows.

This pronouncement is at odds with an oil production estimate by the seemingly eternal oil optimist and economist Mark Perry, who rejoiced on Monday that

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Thanks to America’s Fracking Boom and Skilled Labor Force, Re-shoring of Jobs is Accelerating

More than half of 200 US companies with sales greater than $1 billion are moving jobs back to the US, or are planning to, within the next two years. The announcement by Boston Consulting Group (BCG) on Tuesday confirms a subterranean paradigm shift that’s been underway for at least

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Staff Report from the IMF Blames the European Union for Mishandling the Greek Crisis

The report from the International Monetary Fund is remarkable in its candor: efforts to bail out Greece were fumbled as the IMF, the European Commission and the European Central Bank all tried to promote their own agendas with little regard for the lowly Greek citizen.

Happily the disclaimer appeared on the front page:

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Pro-Euro German Finance Minister Now Having Second Thoughts?

This, at least, is the gist of the headline from the AP: “German who helped start euro now calls for its end.” The AP article that backed it up was just four paragraphs long and led me to think: this guy has awakened to reality! He’s been converted to free market principles! Hallelujah!

Even Ambrose Evans-Pritchard, the conservative writer for the liberal Telegraph, seemed to buy the line, saying

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The Modern German Economic Model is a Myth

Dessau, a small and steadily shrinking town in the German state of Saxony-Anhalt in what used to be East Germany, is doing the best it can. Ten years after the fall of the Berlin Wall the anticipated “miracle” enjoyed by West Germany following World War II failed to materialize for Dessau and so it is in the process of

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The coming Tobin Tax and Wall Street

I have watched in utter amazement as the stock market continues inexorably to climb to new highs nearly on a daily basis. I have wondered aloud and in writing how such an upward march could be justified. I have looked in vain. There is nothing going on in the economy that, in my opinion, justifies this. Smarter people than I have failed to find justification for it either. The markets don’t care, it seems. They just continue to move higher.

But perhaps Wall Street is watching something that is about to happen in Europe

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Bank of Cyprus Expands Robbery of Depositors’ Money

Outrage upon outrage. Audacity upon audacity. In an email to its depositors last week, the wonderful amazing Bank of Cyprus informed its trusting depositors that it was going to take more of their money. Instead of limiting the theft of amounts over $130,000 to 40% the BOC is raising the amount of the robbery to 60%!

But there’s good news!  37.5% of the theft will be converted into ownership in the wonderful amazing bank with – ready? – full voting rights! And, in addition – wait for it! – they will receive any dividends the bank might declare in the future accruing to that ownership!

Oh, but there’s bad news as well. Sorry. The wonderful amazing BOC is going to withhold “temporarily” an additional 22.5% to “ensure” that the bank can meet the terms imposed by its new true real owners: the Eurozone commission, the International Monetary Fund and the European Central Bank.

It gets even better. The BOC is setting up a commission (always good to hear that) to study 1) just how long that “temporary” hold will be, and 2) the possibility that that additional amount will also be converted into ownership of the wonderful amazing bank. Here’s how Bloomberg phrased it:

The Central Bank of Cyprus will appoint an independent valuer for the commercial lender and all or part of the 22.5 percent additional haircut may also be converted into shares within 90 days of that process being completed, according to the statement. Any remaining amount will be returned to customers with interest, the central bank said.

But not everyone gets to participate in this wonderful amazing opportunity to own a part of a wonderful amazing bank. Only if you have more than $130,000 in your account do you get to participate. If you have less than that, well, too bad, you’ll just have to muddle through without being offered this grand opportunity:

The so-called bail-in won’t apply to Bank of Cyprus account holders whose debts to the lender bring their net balance below the 100,000-euro threshold, according to the statement. Holders of accounts at other banks on the Mediterranean island aren’t being touched.

Well, shoot! It must mean that only depositors at the wonderful etc. BOC will be able to participate. This is discrimination! This is unfair! There ought to be a law!

The message being sent via email by the BOC is being received by every bank depositor in the world: your bank can take your money and keep it. That’s just how things are these days. Get used to it.




Cyprus Deal Turns Bank Depositors into Lenders, Abolishes National Sovereignty

Late Sunday night the president of Cyprus, Nicos Anastasiades, was officially informed of the deal the unelected Eurogroup had come up with in order for Cyprus to receive its bailout from the European Central Bank. Anastasiades flew to Brussels on Sunday to meet with Mario Draghi, the president of the European Central Bank (ECB), Christine Lagarde, the managing director of the International Monetary Fund (IMF), and Jose Barroso, the president of the European commission. The meeting was run by Herman Van Rompuy, the president of the European Council. On his way to the meeting, Anastasiades admitted that

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Many of the articles on Light from the Right first appeared on either The New American or the McAlvany Intelligence Advisor.

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