Daily Archives: 27 May 2012

Europe’s worst fear: Spain and Greece spiral down together

open quoteIn a season of nightmare projections for Europe, this one could be the scariest: Greece leaves the euro currency union at the same time that Spain’s banking system is collapsing.

In many ways, the market convulsion last week was a test run for those crises, as political deadlock in Greece and mounting fears over the health of Bankia, one of the largest consumer banks in Spain, converged. . . .

The money available to Europe within its main bailout fund, about 780 billion euros ($997 billion) would not be enough to handle the twin calamities of a Greek euro exit and a Spanish banking implosion.

And despite recent statements from Germany and leaders of the Group of Eight industrialized nations to encourage economic growth in the eurozone, Europeans may have little desire to continue financing the debt disasters of other countries.

“When you have Greece and Spain happening at the same time, the problem becomes exponential and very, very dangerous,” said Stephen Jen, a former economist at the International Monetary Fund who runs a hedge fund in London. “So far, the policy has been to buy time and build a firewall – but that just makes the cost bigger. There is just no good ending here.”

The numbers do look dire.close quote (Read more)

Let the banks who made bad loans fail!!!!

Danger lies in that they made the bad loans to governments, and government have a lot of guns.

An undergraduate takes-down Paul Krugman

open quotePaul Krugman gave up being an honest economist a long time ago – shortly after he learned that the cool crowd gave him more attention when he conjured up economic-like arguments to support the left’s irrational view of the world.

His most recent piece of propaganda claims that increased national debt causes economic growth. He supports his claim by looking at 5 countries and showing that the countries with higher debt levels grew faster over the last 3 months. Thousands of Krugman zombies must have been elated to finally see hard evidence that the 1% aren’t any smarter or harder working: All you have to do is take on a lot of credit card debt.

But an economic Jedi — an undergraduate from the University of Illinois — uncovered the subtle flaw in Krugman’s logic: The earth has more than 5 countries, and the world wasn’t created 3 months ago. The student used a graph posted on his Facebook page to show that if you look at the 21 largest countries over the past year, you see a strong, clear relationship: Economies with higher debt grow less.
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Feds Steals $70,000 from Small Farms Bank Accounts

open quoteOver the last couple of months, we have detailed numerous examples of how the government seems to be targeting small family farmers. From Michigan raiding small family farms and making it a crime to breed free range pigs, to the federal governments attempts to make it illegal for kids to work on farms, the attacks on farmers seem to be escalating.

In the governments latest assault on the small family farm, we learned about a family who is fighting the federal government after it seized their bank account and stole $70,000 of their hard earned money.

It seems the Sower family, who owns the South Mountain Creamery in Middletown, Maryland, is being prosecuted by the Department of Justice under the post-9/11 “Bank Secrecy Act”. The act makes it illegal to deposit less than $10,000 if you have deposits totaling more than that. Never mind the fact that it’s your money, the feds can literally freeze and seize your account if you don’t deposit your money in accordance with the federal governments new rules.close quote (Read more)