Nice posts, keep it going!
The negative interest on bonds proved that people who have fiat money are desperately buying any asset that they can get their hands on. I have not been able to imagine a possible event to trigger the collapse of fiat money, but I think it is coming from the shaken confidence, and it is getting close
Topic: Lyth0s' Economic Troubles Thread - page 4. (Read 7353 times)
News 2/5/15
It Will Now Cost You 0.75% To Save Money In Denmark: Danish Central Bank Cuts Rates For FOURTH Time In Three Weeks
--I imagine that Denmark will soon also have to unpeg themselves from the Euro and more countries will soon follow. You cant simply start printing 60 billion Euro a month for 2 years and just hope that other countries "buy" your inflation from you.....unless your currently the world reserve currency such as the USD, but who knows for much longer that will last. Also with the USD and Euro falling on hard times that gives the BRIC's (Brazil, russia, india, china and south africa's soon-to-be version of the IMF) to potentially come in and make some major changes.
Greece and Germany can’t even agree to disagree
--Time is ticking before Greece could default. Germany ~= ECB and neither wants to really work on keeping Greece from defaulting. I really wonder what Greece will end up doing under these circumstances...
Very weird: Corporate bond rates go negative
That's all I have for today. Maybe tomorrow will be more interesting.
It Will Now Cost You 0.75% To Save Money In Denmark: Danish Central Bank Cuts Rates For FOURTH Time In Three Weeks
Quote
It has become a weekly thing now. In its desperation to preserve the EURDKK peg, the Danish central banks has cut rates into negative, then cut them again, then again last week, and moments ago, just cut its deposit rate to negative one more time, pushing NIRP from -0.5% to -0.75%, its fourth "surprise" rate cut in the past 3 weeks!
--I imagine that Denmark will soon also have to unpeg themselves from the Euro and more countries will soon follow. You cant simply start printing 60 billion Euro a month for 2 years and just hope that other countries "buy" your inflation from you.....unless your currently the world reserve currency such as the USD, but who knows for much longer that will last. Also with the USD and Euro falling on hard times that gives the BRIC's (Brazil, russia, india, china and south africa's soon-to-be version of the IMF) to potentially come in and make some major changes.
Greece and Germany can’t even agree to disagree
Quote
...Schaeuble stressing that bailout promises must be kept if Greece is not to lose international trust and confidence and, lastly, Varoufakis pointing out that Greece will never recover under the weight of its current debt load.
Greece and its European partners — including Germany — have to come to an agreement before the current bailout program ends on Feb. 28 or Greece is at risk of running out of money. However, during Thursday’s press conference Varoufakis stepped up his push for a bridge loan to buy time for negotiations with the country’s creditors.
Greece and its European partners — including Germany — have to come to an agreement before the current bailout program ends on Feb. 28 or Greece is at risk of running out of money. However, during Thursday’s press conference Varoufakis stepped up his push for a bridge loan to buy time for negotiations with the country’s creditors.
--Time is ticking before Greece could default. Germany ~= ECB and neither wants to really work on keeping Greece from defaulting. I really wonder what Greece will end up doing under these circumstances...
Very weird: Corporate bond rates go negative
Quote
In an unprecedented event, the yield on Nestle's corporate debt went negative this week.
That means investors are essentially willing to pay for the right to park their cash in the safety of the Swiss chocolate company. The bonds might as well come with a note saying: "In Nestle we trust."
"You're looking at something that's never happened before. It's a brand-new phenomenon," said Richard Salditt, a credit analyst at Bloomberg Intelligence. "Strange things are going on in financial markets."
--Just found this. Even companies that are being considered as "safe havens" for money have a negative yield rate! WTH is going on in our financial world today. That means investors are essentially willing to pay for the right to park their cash in the safety of the Swiss chocolate company. The bonds might as well come with a note saying: "In Nestle we trust."
"You're looking at something that's never happened before. It's a brand-new phenomenon," said Richard Salditt, a credit analyst at Bloomberg Intelligence. "Strange things are going on in financial markets."
That's all I have for today. Maybe tomorrow will be more interesting.
thanks lythos! very interesting and I find your comments insightful.
Thank you stonerider, I appreciate the feedback
Not sure if OP is looking to moderate this thread, but I'll add this to the stack of news today
Denmark rates go negative on 4th cut in 3 weeks
http://www.zerohedge.com/news/2015-02-05/it-will-now-cost-you-075-save-money-denmark-danish-central-bank-cuts-rates-fourth-ti
Denmark rates go negative on 4th cut in 3 weeks
http://www.zerohedge.com/news/2015-02-05/it-will-now-cost-you-075-save-money-denmark-danish-central-bank-cuts-rates-fourth-ti
I kept the thread open to moderation in case discussion gets too off hand or if I get flooded with personal insults etc.
Great article find. I will add it to my list today
Not sure if OP is looking to moderate this thread, but I'll add this to the stack of news today
Denmark rates go negative on 4th cut in 3 weeks
http://www.zerohedge.com/news/2015-02-05/it-will-now-cost-you-075-save-money-denmark-danish-central-bank-cuts-rates-fourth-ti
Denmark rates go negative on 4th cut in 3 weeks
http://www.zerohedge.com/news/2015-02-05/it-will-now-cost-you-075-save-money-denmark-danish-central-bank-cuts-rates-fourth-ti
I'm liking the look of this thread. I'll definitely be keeping an eye of it over the next few weeks.
thanks lythos! very interesting and I find your comments insightful.
2/2/15 News
Australia cuts rates after long calm; Aussie dollar dives
Australia cuts rates after long calm; Aussie dollar dives
Quote
After almost a year and a half of holding its policy interest rate unchanged, the Reserve Bank of Australia cut by a quarter percentage point Tuesday, citing weak inflation and a stronger-than-desired currency. The move put the cash rate at a historic low of 2.25%. With the interbank market having priced in a 60% chance of a cut, according to Reuters, the Australian dollar fell sharply on the news, dropping to 76.72 U.S. cents from 78 U.S. cents just before the announcement. Stocks rose, meanwhile, with the S&P/ASX 200 up 1.1%, extending its pre-decision gain of 0.3%. In comments accompanying the move, RBA Gov. Glenn Stevens said that the consumer price index "recorded the lowest increase for several years in 2014," and " it appears likely that inflation will remain consistent with the target over the next one to two years," given weak growth in labor costs. Meanwhile, Stevens repeated the RBA view that the Australian dollar remained "above most estimates of its fundamental value, particularly given the significant declines in key commodity prices."
--I expect them to begin QE within the next 2-3 yearsAnd they have plenty of more room to cut. The RBA has been talking down their dollar for a while (it was over 1.05US for a while). As Asia slows it has finally descended with commodities tanking (and really without RBA intervention other than talking). So anyways, .65c is traditional levels and it will get there as the slowdown finally hits. If Aus joins the QE madness, things will be real bad elsewhere.
Interesting stuff thanks for sharing. The Euro/USD might have some real impact soon. Since I use USD hopefully they equalize 
2/4/15 News
Volatility in currencies nears highest level in two decades
U.S. stocks end lower as ECB reject Greek bonds as collateral
ECB blocks banks from using Greek debt as collateral
Euro/USD is slipping: https://www.google.com/finance?q=EURUSD&ei=_2TQVNnWH4uNrQGCpoHQBA will we reach parity this year?
Volatility in currencies nears highest level in two decades
Quote
Only after the Asian financial crisis in 1997 and the days following the collapse of Lehman Brothers in 2008, have currencies been more volatile, said Bank of America Merrill Lynch strategist David Woo
--Currency volatility is increasing without any graphical evidence of a return to stability.U.S. stocks end lower as ECB reject Greek bonds as collateral
Quote
Just when U.S. stocks were rebounding, late-day news that the European Central Bank is rejecting Greek bonds as collateral sent stocks south, with the S&P 500 finishing lower on Wednesday.
After a four-day rally, which sent oil price up more than 20% oil prices fell sharply Wednesday, with March WTI crude CLH5, +0.87% dropping nearly 9% to settle at $48.45 a barrel.
As a side note...looks like bitcoin volatility is almost lower than oil volatilityAfter a four-day rally, which sent oil price up more than 20% oil prices fell sharply Wednesday, with March WTI crude CLH5, +0.87% dropping nearly 9% to settle at $48.45 a barrel.
ECB blocks banks from using Greek debt as collateral
Quote
The European Central Bank said Wednesday it would suspend a waiver it had extended to Greek public securities used as collateral by the country’s financial institutions for central bank loans.
--Greece has less than 3 billion euro in reserve for government expenditures. Now without being able to raise additional funds through selling of there junk bonds (high chance of being unable to pay them back) they will have to borrow from the ECB's emergency lending program at higher interest rates which leads to even more debt. At this point if Greece was unable to find additional money to fuel their expenses their government will become bankrupt within the next 4 weeks (but creditors are almost always more willing to take restructurings to at least get some of their money back)Euro/USD is slipping: https://www.google.com/finance?q=EURUSD&ei=_2TQVNnWH4uNrQGCpoHQBA will we reach parity this year?
2/2/15 News
Australia cuts rates after long calm; Aussie dollar dives
China debt party nears the end of road
Demand for residential mortgages continues to soften
Euro Parity with Dollar by Year-End
Australia cuts rates after long calm; Aussie dollar dives
Quote
After almost a year and a half of holding its policy interest rate unchanged, the Reserve Bank of Australia cut by a quarter percentage point Tuesday, citing weak inflation and a stronger-than-desired currency. The move put the cash rate at a historic low of 2.25%. With the interbank market having priced in a 60% chance of a cut, according to Reuters, the Australian dollar fell sharply on the news, dropping to 76.72 U.S. cents from 78 U.S. cents just before the announcement. Stocks rose, meanwhile, with the S&P/ASX 200 up 1.1%, extending its pre-decision gain of 0.3%. In comments accompanying the move, RBA Gov. Glenn Stevens said that the consumer price index "recorded the lowest increase for several years in 2014," and " it appears likely that inflation will remain consistent with the target over the next one to two years," given weak growth in labor costs. Meanwhile, Stevens repeated the RBA view that the Australian dollar remained "above most estimates of its fundamental value, particularly given the significant declines in key commodity prices."
--I expect them to begin QE within the next 2-3 yearsChina debt party nears the end of road
Quote
As China enters its third year of slowing growth, there is growing concern the debt reckoning cannot be kicked down the road any longer, and the days of almost unlimited risk-free credit are coming to a close, writes Craig Stephen.
--China is much more fragile than most people thinkDemand for residential mortgages continues to soften
Quote
Demand for residential loans continued to weaken, despite the fact that banks have made it easier to get a mortgage, according to a survey released by the Federal Reserve Monday. “Weakening demand for residential loans...is broadly consistent with the weakening in home sales activity in recent months,” said Millan Mulraine, deputy head for U.S. research at TD Securities.
--I believe we've been in another housing market bubble for the past 1-2 years, it may pop this year alongside the stock market. IF the fed does decide to increase interest rates this year I would then expect housing prices to drop even further.Euro Parity with Dollar by Year-End
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A stronger-than-expected reaction to the European Central Bank’s asset-purchase program and increased risks of a crisis to the euro bloc have added to the pace of the common currency’s downward trajectory, says Barclays’ currency research group in a note to clients.
The bank predicts the euro will weaken to $1.08 by the end of June, and to $1.05 by the end of September. But Barclays anticipates that by the end of the year the euro will be trading at a 1-to-1 ratio with the dollar for the first time since 2002, the year it entered circulation as a physical currency. That forecast is down from Barclays’ earlier prediction that the euro would trade at $1.07 by the end of 2015
--But aiming for 2% inflation is good! Right? The bank predicts the euro will weaken to $1.08 by the end of June, and to $1.05 by the end of September. But Barclays anticipates that by the end of the year the euro will be trading at a 1-to-1 ratio with the dollar for the first time since 2002, the year it entered circulation as a physical currency. That forecast is down from Barclays’ earlier prediction that the euro would trade at $1.07 by the end of 2015
I'll try to keep this thread updated with the latest important economic troubles of the fiat world with small commentary and how it relates to bitcoin when appropriate.
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