Economist Michael Darda of MKM Partners with three charts that show that the ECB will need a much more accommodating monetary policy.
See the graphs here.Comments »
A new research paper about Gold yields some interesting conclusions:
We show that new mined supply is surprisingly unresponsive to prices. In addition, authoritative estimates suggest that about three quarters of the achievable world supply of gold has already been mined. On the demand side, we focus on the official gold holdings of many countries. If prominent emerging markets increase their gold holdings to average per capita or per GDP holdings of developed countries, the real price of gold may rise even further from today’s elevated levels.
Read the paper here.
Great review of the European crisis, how it got there, and how past history is still influencing the present.
The Merkel government is not ruling out eurozone bonds or EU deposit insurance for ever. It is arguing that any such moves can come only as part of a bigger project – the formation of a political union. Anything else will feel like giving southern Europe a German credit card, without setting a credit limit.
Read the article here.Comments »
A Republican senator challenged the Pentagon on Monday over its contract with a Russian export firm that is “arming the Assad regime” in Syria, calling for an audit of the contract amid fresh warnings about a new wave of Syrian violence.
Sen. John Cornyn, R-Texas, expressed “grave concerns” about the contract in a letter Monday to Defense Secretary Leon Panetta. He was referring to an Army contract with Russian firm Rosoboronexport for Mi-17 helicopters to equip the Afghan military.
Cornyn wrote that the Defense Department awarded a no-bid contract to the company last June, though he was told months later by the Pentagon that the firm “continues to supply weapons and ammunition” to the regime of Bashar al-Assad.
“I remain deeply troubled that the (Defense Department) would knowingly do business with a firm that has enabled mass atrocities in Syria,” Cornyn wrote, suggesting sanctions against Rosoboronexport would be more appropriate than a contract.
A Pentagon spokeswoman, though, defended the contract.
Spokeswoman Tara Rigler said in an email to FoxNews.com that it is “the only legal method to purchase the military version of the Mi-17 and to provide an appropriate measure of flight safety and airworthiness.”
“As we have noted before, these aircraft remain crucial to the development of Afghanistan’s Air Force capability and therefore important to our mission of ensuring that Afghan forces can ultimately defend their own sovereignty,” Rigler said.
She said Panetta has received Cornyn’s letter and would respond to the senator “promptly” about his concerns.
On Monday, Russia’s Deputy Prime Minister Dmitry Rogozin also defended his country’s arms sales to Syria.
“Under no circumstances can the arms supplied to Syria be used against the civilian population,” Rogozin was quoted as saying by the ITAR-Tass news agency.
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“The U.S. economy will grow this year but a soft pace and if it can overcome risks from a potential European implosion as well as hefty fiscal alterations due to hit at the end of year, according to the Economic Advisory Committee of the American Bankers Association.
The economy should grow 2.2 percent in 2012 compared with 1.6 percent in 2011, the committee finds.
The European debt crisis could flare up, while in the U.S., tax cuts are set to expire at the end of the year at the same time automatic spending cuts are set to kick in, a combination often referred to as “a fiscal cliff” that could derail recovery if not addressed today.”Comments »
“Demand for safe haven currencies surged in May when investors were panicked about the Greek elections and weak economic data coming from the US, UK, eurozone, China and India.
Then stronger-than-expected Australian and UK economic data, increased hope of Spanish bank bailouts, China’s first interest rate cut since 2008, and expectations of QE3 gave foreign exchange markets some relief.
But UBS analyst Syed Mansoor Mohi-uddin says that the current calm in the forex markets will be short-lived. ”Comments »
“As few details on the Spanish bank bailout. The only information released is the amount – Euro 100B. This is a nice round number.
Last week the IMF suggested that Euro 40B might be the right number. Now we get a deal for 2+Xs that. I think this was orchestrated to leave the markets with the impression that massive firepower has been garnered, and therefore the problem is now contained. Rubbish. “
All European indices have reversed sharply off their highs, none as much as Italy, however.Comments »
[youtube://http://www.youtube.com/watch?v=OxgwI-0Sozg 450 300]Comments »