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Back-Door Bank Runs in Europe in 2012

Written by Gary North on November 21, 2011

The modern bank run is not where depositors line up to pull their meager funds out. It is when hedge funds and large investment funds refuse to roll over credit lines to banks. That takes place behind closed doors. In 2012, European banks must refinance $660 billion of loans. The banks are in hock to […]

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MF Global Collapse Threatens Commody Futrures Market

Written by Gary North on November 21, 2011

The bankruptcy if MF Global is creating ripples. The outfit was high leveraged, using commoidity futures. The managers used customers’ money — cash basis, no debt — to cover losses in its own speculations. The customers cannot get their money back. They must wait. They may suffer 50% losses. Always before, the clearing house assured […]

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Price Inflation Remains Low

Written by Gary North on November 18, 2011

I prefer to use the Median Consumer Price Index to the regular CPI. In October, prices rose 0.2%. They have been in this range for months. The more common index, the CPI, reveals a comparable low rate. As I have been saying for two years, price inflation is low because banks have stashed $1.6 trillion […]

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Europe Is on the Knife’s Edge

Written by Gary North on November 16, 2011

There is a bank run going on. The targets are Italian banks. Rich people are selling Italian bonds and buying other assets. Italy’s debt is huge. Its bonds constitute a quarter of bonds held by European banks. Only Germany has issued more bonds — just barely. Italy has issued more bonds than France. You can […]

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Wall Street Journal Opposes the Flat Tax

Written by Gary North on November 16, 2011

The Wall Street Journal published an article opposing the flat tax. The author is Alan Blinder, a former Vice President of the Board of Governors of the Federal Reserve System. Blinder was a big supporter of the “cash for clunkers” program, which destroyed used cars at government expense. He teaches at Princeton University, where Bernanke […]

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Will Italy Default? Yes. Will This Affect You? Yes.

Written by Gary North on November 16, 2011

The idea that Italy’s government is not insolvent is silly. It is going to default. It may take a few months. It may take a year. The fact is, it is so far in the debt hole that it cannot maintain paying interest much longer. Word is slowly getting out, but just barely. Idiot bankers […]

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The Pain in Spain: Bond Prices Fall Sharply

Written by Gary North on November 16, 2011

We have read about Greece. It is obviously gong to default on its loans. The Eurocrats are pouring hundreds of billions down a rat hole to provide the Greek government with money to pay interest on its huge debt. They will pour lots more. Italy is heading in the same direction. Its bond prices are […]

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Why We Will NOT Get Hyperinflation, Unless. . . .

Written by Gary North on November 15, 2011

Hyperinflation is triple-digit annual price inflation. I think it’s anything above 25%. Mass inflation is anything above 15% but below 25%. We are going to get mass inflation. We are not going to get hyperinflation. Why am I so “optimistic”? Because I see that the Federal Reserve Chairman Ben Bernanke is now caught in a […]

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Small Businessmen Remain Grimly Pessimistic.

Written by Gary North on November 15, 2011

The National Federation of Independent Business reports on business sentiment. It is bad. With 1986 as 100, October’s sentiment was 90.2. In January 2009, almost three years ago, it was 89.1. That was in the recession. This recovery is the weakest in post-Word War II history. Sentiment is a little better than in August, but […]

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