Greece’s Finance Minister, Evangelos Venizelos, rejected the German idea of imposing a eurozone “overseer” as part of the agreement to keep bailout funds flowing to his country.
A combination of several factors, including a declining dollar and the Federal Reserve’s announcement that it would keep interest rates at virtually zero until late 2014, helped to send gold and silver prices soaring to multi-week highs. Analysts expect the upward trend to continue as paper currencies founder and gloomy news continues to dominate the economic headlines.
Imagine this scenario: Your neighbor comes to you asking for money. He confesses to having gone on a lottery-winner spending spree year after year, to buying his kids everything without making them work for anything, and to knowingly and profligately living well above his means for so long he can’t remember.
Mainstream economist Robert Samuelson admitted last week that the case for the ending of the economic boom in China has some substance. Keynesian economist Paul Krugman also confirmed that China is in trouble and questioned its ability to avoid a hard landing.
As an industrialist, I’ve taken an interest in President Barack Obama’s insourcing kick which has occurred over the past few weeks, highlighted by his weekly radio and Internet address on January 14 and a speech delivered in the East Room of the White House a few days earlier (I’m certain that he’ll talk about it during this week’s State of the Union Address, too). By "insourcing," the President refers to a reversal of the outsourcing trend by American manufacturers. Some of them, though few in number, are bringing jobs back to the United States.
JBS CEO Art Thompson's weekly video news update for January 23-29, 2012.
The European Commission (EC) on Tuesday threatened to take legal action against Hungary unless it revised its brand new constitution to allow the country’s central bank to operate without interference from the Hungarian government. The EC’s threat requires a response within 30 days.
U.S. credit ratings giant Standard & Poor's (S&P) lowered its rating on the credit-worthiness of nine European nations January 13. "It's not the cut in the rating that is historic," BNP Paribas economist Dominique Barbet told the Wall Street Journal. "It's the depth of the euro crisis that is historic."
Central banks are often justified on the basis that a complex, modern economy requires top-down management by experts. These people, it is said, can study the markets and then “fine-tune” the economy to keep it humming along.
As if the last few years haven’t provided evidence enough that such notions are pure folly, newly released transcripts of 2006 Federal Reserve meetings offer further proof. The transcripts show that the “experts” — members of the Federal Open Market Committee (FOMC) — were so clueless that even as late as December, when the housing market was displaying serious signs of decline, most showed little concern that the bursting bubble could take down the entire economy.
One of the unintended consequences of the ongoing and accelerating crisis in the eurozone is that ordinary citizens are taking their money out of the banks and burying it. Lack of both confidence in the stability of the European economy and credible solutions to the crisis have led to the exit of currency from banks in Greece, Italy, and other European countries.