Everyone recalls the good robber lore of Robin Hood, the guy who led a band of 'merry men' in robbing from the rich to give to the poor. Seems now, Robin and his posse have branched out, leaving Nottingham's Sherwood Forest for anywhere there's a central bank.
For instance, the European Central Bank is using negative interest rates to siphon off funds from northern banks like Germany in favor of the southern banks like Italy and Spain who are in desperate need of liquidity. Needless to say bankers in Italy and Spain are thrilled with Mr. Draghi's actions, while German bankers are accusing him of harming individual depositors and their pension funds. Mr. Draghi has been depicted in editorial cartoons lighting his cigar with a 100 euro note with the caption: 'Whatever it takes.' And by that, according to WSJ, he meant whatever it takes to save the euro. Defaulting EU members are bad for ECB business.
Meanwhile, Beijing, takes it's lesson from the US housing bubble, by keeping zombie companies afloat to help Chinese banks shed bad loans. The loans are being' re-packaged as securities and transferred to special asset management companies that handle distressed debt,' according to Lingling Wei, writing for WSJ. Wei continues, 'Senior executives at China's big four state-owned banks say regulators are also exploring ways for banks to exchange bad loans for equity in certain too-big-to-fail companies --a potentially controversial step that they say could saddle banks with near-worthless stock and squeeze their liquidity. This is only a 'potentially controversial step' because a similar move in the US with subprime housing loans blew up, but that won't happen in China because the big four banks have a broader customer list? Robin Hood thinking at his level best.
Also in the news, Germany is also repackaging subprime loans to sell as securities. Moving off bad housing loans, Germany is using bad auto loans as grist for its money mill. There's a new twist, Robin Hood would be proud of. This bubble has the potential to skip the banks and investment firms and splatter all over the common citizenry. The car manufacturers and their employees, the dealerships and their employees, the merchants to sell goods and services to these individuals, and finally, the smaller banks which issued mortgages which will go unpaid due to this trickle-down unemployment.
But hey, never mind all this. The real news is the stock markets are up! The STOXX rose a full one-tenth of one per cent. The NASDAQ inched up seven tenths of one percent, while the DJIA climbed 1.2%. Never you mind the market isn't where it used to be because this is the fourth consecutive week there's been any increase at all. This amount of progress has to make up for the yield of 10-year treasury bonds dropping nearly 2%, doesn't it? With Robin Hood in charge we have to focus on the big picture, not the fine print concerns from Morgan Stanley consultants who whisper, 'Not so fast.' After all, what does Morgan Stanley know about anything going wrong with selling bad debts as securities?
Is it okay with you that I suggest that if any portion of the world financial news causes you to stop and think that you think about the solidity of gold as part of your defense against Robin Hood? It isn't you the central bankers are concerned with saving; it's their currencies they want to save and to control. Gold removes you from their power. Please watch these videos and learn how gold can save your future security. The move to gold is a simple process and I'm here to help you through it.
No comments:
Post a Comment