Wednesday, May 26, 2010

Jay Taylor: Turning Hard Times Into Good Times

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Hugo Salinas-Price on the Nature of Money and Why Silver Should Be Legal Mexican Currency

The Daily Bell is pleased to present an exclusive interview with Hugo Salinas-Price (left).

Introduction: Hugo Salinas Price, 75, is a successful, retired businessman who lives in Mexico. He has been a follower of the Austrian School of Economics since his youth. He has written three books in Spanish on how and why silver should be instituted as money in Mexico, in parallel with paper money, and numerous related articles in English and Spanish, posted at his website. His organization, the Mexican Civic Association Pro Silver, is actively lobbying the Mexican Congress to approve legislation, which will institute the pure silver "Libertad" ounce as money.

Daily Bell: What is your campaign in Mexico for sound financial policy?

Hugo Salinas-Price: I actually avoid discussing "sound financial policy" because one can argue about that till the cows come home. During the last fifteen years I have devoted my efforts to one single aim, and that is to achieve the monetization of a silver ounce coin currently minted by our Central Bank. This coin has no engraved monetary value and is called the "Libertad" coin; it can very easily be turned into a monetary coin, that is to say, a coin with a monetary value. As such, anyone owning such a coin could, if he or she wished, be able to pay any bill or debt denominated in Mexican pesos. (more)

Money Manager Manduca: Buy Euro, Pound Now Amid the Global Panic

Panic among investors has pushed the euro and pound to oversold levels, says Philip Manduca, head of investment for The ECU Group currency managers in London.

With the euro having dropped to a four-year low beneath $1.23, that area is a good spot to buy the currency, he says.

“The news is overblown to the downside,” Manduca said.

“We don’t think that the euro is going to fall apart. The political will in Europe remains paramount and is being discounted by foreign exchange operators,” he told Bloomberg. (more)

Marc Faber: Greece Is Just a Write-off

The Global Economic Crisis, The Great Depression of the XXI Century

In all major regions of the world, the economic recession is deep-seated, resulting in mass unemployment, the collapse of state social programs and the impoverishment of millions of people. The economic crisis is accompanied by a worldwide process of militarization, a "war without borders" led by the United States of America and its NATO allies. The conduct of the Pentagon’s "long war" is intimately related to the restructuring of the global economy.

We are not dealing with a narrowly defined economic crisis or recession. The global financial architecture sustains strategic and national security objectives. In turn, the U.S.-NATO military agenda serves to endorse a powerful business elite which relentlessly overshadows and undermines the functions of civilian government. (more)

Volatility Index 20 Year Chart

Given today’s volatility — we gapped down 2.5%, now are climbing to minus 1.5% – today’s lunchtime chart is this fascinating look at the long term history of the VIX, below

As you can see, the Volatility Index is now above the levels it hit during the Bear Stearns collapse, Fannie & Freddie’s Fall, and Morgan Stanley’s wobble. It is near levels reached during the Asian Contagion, LTCM, and 9/11. The VIX remains far below the Lehman/AIG collapse.

Why silver could soon take off

Silver remains the preserve of relatively few contrarian investors. The media and financial press rarely covers it, and yet it is in the intermediate stage of a bull market that may rival that of the 1970s.

The primary reason for this is the continuing and increasing global macroeconomic, currency and geopolitical risks; silver’s historic role as money and a store of value; its declining and very small supply; significant industrial demand and - perhaps most importantly - significant and increasing investment demand. (more)

Going Long, Going Deep, Going Broke: ZIRP and the Imploding Speculative Economy

A slow-growth real economy has been replaced with a credit-based speculative financial economy dependent on low interest rates and systemic fraud to survive. It is now imploding on a global scale.

Governments around the world have attempted to replace the real economy of value produced with a financial model based on credit growth and speculation. They have failed, and their constructs are imploding before our eyes.

I am going to cover a lot of ground here so load up on your stimulus of choice (ginseng, coffee, lime juice, etc.) and stay sharp. (more)

Peter Schiff on CNBC - is US The Next Greece or Japan? 24 May 2010