Spanish Bankia - a new bank+government perpetuum mobile

Today Spain announced it will nationalize its 3rd largest bank - Bankia. The government is preparing an injection of public funds (4,5 billion Euros = $5,8 billion) into the banking group in an effort to revive the confidence in banking system. In exchange it will get a 45% stake in the bank that holds 38 billions of euros of home estate loans. Half of them are problematic after the real estate bubble burst. It is expected the all money that is to be injected to reach 10 billion euros.


If the Gold fall was real, why is the Swiss Franc stable?

As from Monday the Gold has lost $60 per troy ounce or about 3,7% of its value. Measured in Euro the loss is smaller as one of the main reasons of the decline at Gold is strengthening the dollar. Some analysts has already started to talk about the "gold bubble burst". But let us be honest. A gold bubble has never existed. There is just a bubble of newly printed paper-money. In fact the gold price rise even lags the increase in global money supply. Of course there will always be manipulations especially having in mind that the most of the trade is with "paper-gold", while the real gold market is something much different. Manipulations can not last long, as the market always wins. But it is normal to manipulate. In all inflation times the government tried to manipulate the gold. In 1933 in USA they even confiscated the gold.


Spain and Italy will be the first victims of France's left gamble

With Hollande crushing Sarkozy in France and with a new chaotic parliament in Greece, two more destabilizing factors are added to the deeply troubled European Union. It is not clear how real were the promises of Hollande in France and if he will really turn the country left. It is possible a socialist government to be pressed to make austerity reforms, just as this happened with PASOK government of Papandreou in Greece. Anyway electing a left president that promises to re-negotiate the EU fiscal pact and dreams of ECB printing more money, is a choice that will at least frighten the markets. There will be also parliamentary elections in June. As France is a semi-presidential republic where Parliament can remove the government from power, this can create additional uncertainty. Up to now Sarkozy was strong because he has also a majority in Parliament.


A spectre of John Galt is haunting USA

No it is not a chapter of Ayn Rand's "Atlas Shrugged". It is a real news by a reliable source. More and more Americans are giving up their citizenship. This absurd situation looks like in a comedy movie as millions of people all over the world are dreaming of coming to America and the Green Card lottery does not lack applicants... But if we open the Rand's unique book we will see exactly the same. The active, rich and entrepreneurial people are running away from the Socialist USA, while common people - workers and government officers are staying. The Rand's scenario is very close to current situation with citizenship throwing. And this means a serious danger for USA.


Another Mogul is leaving the Euro-cause

Today the leader of the Eurogroup Jean-Claude Juncker (also prime minister of Luxembourg) resigned - unexpectedly and before the end of its term in June. The formal reason of the resignation is his discontent of German-French domination in Euro decision making. But I think this resignation means much more. I think the Euro is close to its end and the weighty officials are leaving the cause, this way saving their own authority.


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