Cyprus and Spain agreed with the troika to steal 40% of deposits in Cyprus (from deposits larger than 100K Euros) and at least that much in Spain. The thefts are profoundly disturbing on several levels. First, the thefts are justified on the grounds that this is not a tax and, therefore, no authorization is needed other than the OK of the governments involved. The moves bring into question the contracts between Depositors and the banks. You simply can not trust them. Only gold and silver in the hand can be regarded as safe from govt confiscation.
While, the stock markets of Europe are reacting positively for now, the moves are inherently deflationary and disruptive. What next? More of the same in Italy and eventually in the United States?
This blog will deal with large things and little things: spiritual truths, politics and economy, news, comment, food and the State of Texas. Oh, and my poetry and pictures. Enjoy.
Monday, March 25, 2013
Saturday, March 23, 2013
Cyprus: what is a Depositor?
Debate is raging within the EU and the IMF as to the definition of "Depositor." The question came to the fore in connection with the attempted bank robbery in Cyprus.
For centuries a Depositor was understood to mean an owner of money on deposit (meaning safe keeping). Deposits below a certain limit were insured, so if the bank failed, the Depositor would have the money returned.
The EU and the IMF had attempted to redefine a "Depositor" as an "Investor" in the bank. Under this new definition if the bank encountered difficulties due to losses, the losses would be made whole from the deposits of Depositors being treated as Investors.
The new definition does away with the concept of insured deposits. Will this lead to bank runs? Too early to tell.
For centuries a Depositor was understood to mean an owner of money on deposit (meaning safe keeping). Deposits below a certain limit were insured, so if the bank failed, the Depositor would have the money returned.
The EU and the IMF had attempted to redefine a "Depositor" as an "Investor" in the bank. Under this new definition if the bank encountered difficulties due to losses, the losses would be made whole from the deposits of Depositors being treated as Investors.
The new definition does away with the concept of insured deposits. Will this lead to bank runs? Too early to tell.
Cyprus: an example of Contagion.
Cyprus is a small country, its economy totals roughly E18B/year. The Country has two major banks: The Bank of Cyprus and Cyprus Popular Bank. Cyprus Popular Bank, founded in 1901 as a small savings bank, operates in Cyprus, Greece, the U.K., Ukraine, Russia, Romania, Serbia, Malta and China through 439 branches, servicing 1.35 million customers, according to information on its website. The total bank deposits in these two banks totaled E126B, of which the E31B was Russian money(some people put the Russian deposits at E120B).
So, what is the problem? Cyprus Popular posted a net loss of E3.65B for 2011 and E1.56B for the first 9 months of 2012. (I have not seen the figures on the Bank of Cyprus). What happened? Well, remember the "haircut" depositors in Greek banks had to take to avoid Greek defaults? While European banks were allowed to avoid the haircut, Cypriot banks took the brunt. Thus, we can truly say that the Cypriot banking crisis is due to the decisions of the EU robbing the Cypriot banks while sparing the EU banks . To add insult to injury, Michael Meister, deputy parliamentary leader of Merkel’s CDU, told BBC Radio 4’sToday program: "Cyprus is living in an illusion,”. “They have to restructure the whole economy, restructure the banking sector and until now I don’t see the Cyprus people and politicians agreeing on this.”
That's why you see Cypriots demonstrating.
Cypriot legislators are rushing to comply with EU orders. Part of the orders will spread the contagion further down the line. Deposits larger that E100,00 at Cyprus Popular will be frozen untill the govt decides how much of a haircut they will have take to satisfy the EU.
So, the Greek crisis will leave its footprint far and wide.
So, what is the problem? Cyprus Popular posted a net loss of E3.65B for 2011 and E1.56B for the first 9 months of 2012. (I have not seen the figures on the Bank of Cyprus). What happened? Well, remember the "haircut" depositors in Greek banks had to take to avoid Greek defaults? While European banks were allowed to avoid the haircut, Cypriot banks took the brunt. Thus, we can truly say that the Cypriot banking crisis is due to the decisions of the EU robbing the Cypriot banks while sparing the EU banks . To add insult to injury, Michael Meister, deputy parliamentary leader of Merkel’s CDU, told BBC Radio 4’sToday program: "Cyprus is living in an illusion,”. “They have to restructure the whole economy, restructure the banking sector and until now I don’t see the Cyprus people and politicians agreeing on this.”
That's why you see Cypriots demonstrating.
Cypriot legislators are rushing to comply with EU orders. Part of the orders will spread the contagion further down the line. Deposits larger that E100,00 at Cyprus Popular will be frozen untill the govt decides how much of a haircut they will have take to satisfy the EU.
So, the Greek crisis will leave its footprint far and wide.
Thursday, March 21, 2013
Update on Cyprus. What is extend and pretend?
European and other banks are propped up by the "extend and pretend" strategy. Bad loans are carried as if they were good(and credit is extended to the bank) and that's the pretend part. The day comes when the bank needs to make a payment and it can't. That's where the Cypriot banks are today.
The troika extended the time the banks need to come up with the funds. This usually requires a banking holiday. The two banks were supposed to open this last Tuesday, then today and the holiday is extended to next Monday. There is also talk of even further extension.
The contagion works like this. Banks owe depositors, who in turn owe other depositors and creditors. When the flow from a bank is interrupted, everyone if the flow suffers losses. Consequences can be severe as well as unexpected. For example, before unification a West German bank (Herstatt) went bankrupt and the interaction in the flow made the Franklin National Bank in America insolvent. That is the contagion part.
The troika extended the time the banks need to come up with the funds. This usually requires a banking holiday. The two banks were supposed to open this last Tuesday, then today and the holiday is extended to next Monday. There is also talk of even further extension.
The contagion works like this. Banks owe depositors, who in turn owe other depositors and creditors. When the flow from a bank is interrupted, everyone if the flow suffers losses. Consequences can be severe as well as unexpected. For example, before unification a West German bank (Herstatt) went bankrupt and the interaction in the flow made the Franklin National Bank in America insolvent. That is the contagion part.
Is there a point in correcting the Drive-by-Media?
Today's headlines are about the "improving" economic indicators. It is pointed out that new applications for unemployment are nearly flat, but the two improvements have to do with housing and the Stock Market. In other words, all that pumping is buoying the Stock Market and pushing house sales. Thirty year mortgage interest has dropped now to 3.54% and anyone with money is buying homes.
Is that a good thing? Not really. Today's low interest loans will show up as "problem loans" in the banks' ledgers in years to come.
How about manufacturing and consumer sentiment? Nope, not those.And that is why the FED keeps pumping.
Is that a good thing? Not really. Today's low interest loans will show up as "problem loans" in the banks' ledgers in years to come.
How about manufacturing and consumer sentiment? Nope, not those.And that is why the FED keeps pumping.
Cyprus options: Nothing good.
The nature of the problem:
The two main Cypriot banks are insolvent and need E17B to continue. They appealed to the 'troika' (the IMF, the ECB and the EU) to get the money. The troika replied that they are willing to lend E10B, but Cyprus has to come up with E7B.
The original solution:
To clip every deposit a certain percentage as a 'tax.'
Status: Voted down by Cypriot Parliament. Bank holiday freezes accounts.
Options left now:
1. Try to clip unsecured accounts. Only raises E200M.
2. Try to mortgage gas fields in Mediterranean. Difficult to gage how much these are worth. Takes too much time.
3. Try to get a direct loan from Russia. Very problematic. The Russians are not keen to do this and the Europrans aren't either.
4. Raid Cyprus' pension funds as done in Ireland. Doable, but may not be enough.
Consequences: If this can't be papered over, Cyprus will melt down financially. At stake are almost $500B (the contagion) or E30B in accounts
The two main Cypriot banks are insolvent and need E17B to continue. They appealed to the 'troika' (the IMF, the ECB and the EU) to get the money. The troika replied that they are willing to lend E10B, but Cyprus has to come up with E7B.
The original solution:
To clip every deposit a certain percentage as a 'tax.'
Status: Voted down by Cypriot Parliament. Bank holiday freezes accounts.
Options left now:
1. Try to clip unsecured accounts. Only raises E200M.
2. Try to mortgage gas fields in Mediterranean. Difficult to gage how much these are worth. Takes too much time.
3. Try to get a direct loan from Russia. Very problematic. The Russians are not keen to do this and the Europrans aren't either.
4. Raid Cyprus' pension funds as done in Ireland. Doable, but may not be enough.
Consequences: If this can't be papered over, Cyprus will melt down financially. At stake are almost $500B (the contagion) or E30B in accounts
Wednesday, March 20, 2013
Cyprus: has the IMF made a huge mistake?
IMHO, YES and YES.
Mistake #1.
In spite of the false reports of the Drive-by-Media (also known as 'Lame Stream') there was more money at stake than the E5B - much more. Cyprus is used by the Russians as their own Switzerland and between 100-500B Euros are stashed there by former and current Security Apparat officials, plus whatever the Russians want to spend off budget. It is one thing to shout imprecations at the Russian Bear (from a safe distance), it is not so safe to try to swipe their pocket book. The IMF, and by implication Washington, created this confrontation with Russia and Putin and the Cypriot Parliament voted it down. No doubt, the Cypriots were told what would happen to them if they went along with the proposed theft.
Mistake #2.
The IMF (and by implication the FED) was trying to change the practice of how the bailouts were done. To suddenly confiscate a portion of people's money as a requirement challenged not only procedures used to conduct the bailouts, but undermined the integrity of the banking system. The moves the IMF wanted went against all the agreements and promises made about the banks. Furthermore, the IMF proposal puts Europe one step away from a bank run.
Mistake #3.
By defying the IMF and the EU, Cyprus puts the question to the EU: you want us IN or OUT? A default by Cyprus will start the contagion and possible bank runs and the unraveling of the EU.
We live in interesting times.
Mistake #1.
In spite of the false reports of the Drive-by-Media (also known as 'Lame Stream') there was more money at stake than the E5B - much more. Cyprus is used by the Russians as their own Switzerland and between 100-500B Euros are stashed there by former and current Security Apparat officials, plus whatever the Russians want to spend off budget. It is one thing to shout imprecations at the Russian Bear (from a safe distance), it is not so safe to try to swipe their pocket book. The IMF, and by implication Washington, created this confrontation with Russia and Putin and the Cypriot Parliament voted it down. No doubt, the Cypriots were told what would happen to them if they went along with the proposed theft.
Mistake #2.
The IMF (and by implication the FED) was trying to change the practice of how the bailouts were done. To suddenly confiscate a portion of people's money as a requirement challenged not only procedures used to conduct the bailouts, but undermined the integrity of the banking system. The moves the IMF wanted went against all the agreements and promises made about the banks. Furthermore, the IMF proposal puts Europe one step away from a bank run.
Mistake #3.
By defying the IMF and the EU, Cyprus puts the question to the EU: you want us IN or OUT? A default by Cyprus will start the contagion and possible bank runs and the unraveling of the EU.
We live in interesting times.
Tuesday, March 19, 2013
The question of the gold price.
As is obvious from my recent posts, I have given up attempts to predict when the Bull Market rally in gold will resume. And resume it will, because the FED is printing money (mostly to monetize debt, but also to stimulate the economy) and has been joined by the Bank of Japan and the Bank of England.
Developments in regions of the world are uneven, for example while China is trying to encourage gold ownership by the population, India is doing the reverse by a 6% import tax. The deflationary wave of real estate prices has now reached Ireland and Denmark, while it eased in the US. US inflation has reached a critical point, where food and gasoline are rising, but durable goods are rising much slower. And forecasters are just as chaotic: KWN forecasts $11k/oz, while Larry Edelson still talks about $1,450. Gorge Soros has reduced his gold exposure by 55%, while JP Morgan is forecasting the end of the gold Bull Market. See what I mean?
It is obvious that gold price is controlled, but the logic of why and how is not clear. If gold prices were allowed to rise, central banks would have better balances and countries might have some inflation and economic stimulation instead of the deflation and stagnation. If gold prices drop as Larry forecasts, there will be a run on supplies.
The financial imbalance continues to build. Gold shorts have reached record highs and JP Morgan's silver shorting is mind boggling. The bank's exposure to derivatives is larger than the GDP of the whole world. How will this be unwound? Can it be unwound?
Developments in regions of the world are uneven, for example while China is trying to encourage gold ownership by the population, India is doing the reverse by a 6% import tax. The deflationary wave of real estate prices has now reached Ireland and Denmark, while it eased in the US. US inflation has reached a critical point, where food and gasoline are rising, but durable goods are rising much slower. And forecasters are just as chaotic: KWN forecasts $11k/oz, while Larry Edelson still talks about $1,450. Gorge Soros has reduced his gold exposure by 55%, while JP Morgan is forecasting the end of the gold Bull Market. See what I mean?
It is obvious that gold price is controlled, but the logic of why and how is not clear. If gold prices were allowed to rise, central banks would have better balances and countries might have some inflation and economic stimulation instead of the deflation and stagnation. If gold prices drop as Larry forecasts, there will be a run on supplies.
The financial imbalance continues to build. Gold shorts have reached record highs and JP Morgan's silver shorting is mind boggling. The bank's exposure to derivatives is larger than the GDP of the whole world. How will this be unwound? Can it be unwound?
Monday, March 18, 2013
Cyprus: Attack of the Jack Boots.
Cyprus is a small, island nation. It has two big problems: 1. it has Turks as neighbors and 2. it is bankrupt. Social Democracy ran its full course on Cyprus and bankruptcy can no longer be avoided by papering over the debts of the government. So, how did the EU respond? By ordering the government of Cyprus to seize 10% of the bank accounts of Cyprus and finance a bailout out of the proceeds of this robbery.
Profligate governments, having bankrupted their nations by ruining the economy through government meddling, will resort to either printing money or seizing the property of the industrious. Cypriots are learning the truth about Social Democracy the hard way. A government strong enough to give you things is strong enough to take them away.
Profligate governments, having bankrupted their nations by ruining the economy through government meddling, will resort to either printing money or seizing the property of the industrious. Cypriots are learning the truth about Social Democracy the hard way. A government strong enough to give you things is strong enough to take them away.
Thursday, March 14, 2013
Italy in serious trouble.
After my first article on Beppe Grillo, Anonymous had written to me that I did not know anything about Grillo. Here is an article from the SPECTATOR with more details. Italy's fate now is in the hands of former Communists.
Beppe Grillo: Italy's new Mussolini
Beppe Grillo has much in common with Mussolini
The stand-up comedian Beppe Grillo, like the fascist dictator Benito Mussolini before him, has a craving to take over the piazza and mesmerise the crowd. Where once young Italians chanted the mantra ‘Du-ce! Du-ce!’ now they chant ‘Bep-pe! Bep-pe!’. But it is not just a shared need to rant and rave at large numbers of complete strangers that hirsute Beppe and bald Benito have in common. Worryingly, for Italy and also for Europe (where democracy seems incapable of solving the existential crisis), there is a lot more to it than that.
Beppe Grillo founded the MoVimento 5 Stelle (M5S) in Milan on 4 October 2009. The capital ‘V’ stands for his signature slogan ‘Vaffa!’ which roughly speaking means ‘Fuck off!’ — in his case, to everything more or less, except wind farms. ‘Surrender! You’re surrounded!’ he bellowed over and over again at his rallies. The phrase was traditionally very popular with Italian fascists. He was referring to all Italy’s politicians, except his lot.
Now, less than four years after its foundation, his movement is the largest single party in the Chamber of Deputies, the lower house, after it secured 26 per cent of the poll at this week’s inconclusive Italian general elections. It is not, insists this fascist of the forest, a party. It is a movement. Parties, he is adamant, are the problem, not the solution.
Mussolini founded his Fasci di Combattimento in Milan on 23 March 1919 and less than four years later he was prime minister. Fascism was not, he insisted, a party but a movement. Parties, he was adamant, were the problem, not the solution. Fascism would be an ‘anti-party’ of free spirits who refused to be tied down by the straitjacket of parties with their dogmas and doctrines. This is precisely what Grillo says about his own movement.
Mussolini was the rising star in Italy’s Marxist party until his expulsion in 1914 because he — like the French and German Marxists but unlike the Italian ones — was in favour of Italian intervention in the first world war. He looked destined for the scrapheap.
Grillo, a former communist, was banned from national television in the late 1980s as a result of his defamatory performances. Things did not look rosy for him either. Forced to perform in piazzas and theatres, he took to ridiculing and demonising politicians, and then in 2005 he founded a blog that quickly became the most popular in Italy and a forum for the angry and the disaffected, mostly young, for all those whose state of mind is defined by the word ‘Vaffa!’. He duly began a national ‘Vaffa! Day’ or ‘V Day’ in 2007.
Shortly before he founded his movement, he tried to become leader of Italy’s main left-wing party — the ex-communist Partito democratico (PD) — but it would not let him stand in its leadership elections. At this week’s elections, the PD’s coalition was a winner of sorts with a majority of the seats in the lower house, thanks to the latest Italian electoral law that gives the majority of seats to the party with the most votes, however few. The PD’s coalition polled just 29.6 per cent of the vote compared with the 29.1 per cent of Silvio Berlusconi’s centre-right coalition. But despite that, the PD grouping gets 340 seats to his 121. In the senate, though, where different rules apply, no one has a majority.
If, however, the PD had allowed Grillo to stand in its leadership contest, he would no doubt have led it to overwhelming victory. Instead it chose the monumentally smug and tedious former communist Pier Luigi Bersani. But we haven’t seen the last of Beppe.
What gave Mussolini popular traction is what gives Grillo traction: a virulent hatred of parliament and the politicians who infest it. The dictator famously said he could have moved his bivouacs into ‘this deaf and grey chamber’ but had chosen not to. The comedian uses the same language. Whereas Mussolini spread the word through his own mass daily newspaper Il Popolo d’Italia, and enforced it by means of his blackshirts, Grillo does so through his website, Il Blog di Beppe Grillo, and violent verbal abuse and ostracism of opponents. Whereas Mussolini travelled by train to his rallies, Grillo travels to his by camper van.
‘I did not invent fascism,’ said Mussolini, ‘I extracted it from the Italian people.’ Grillo did not invent his movement, he says, he merely provided the humus — the internet forum — in which it grew. During the election campaign, he did not give one television or newspaper interview, because journalists, like politicians, are the enemy. Both Mussolini and Grillo appeal to the spirit and soul rather than the wallet and mind of Italians. Fascism was a civic religion and the Duce its god. The MoVimento 5 Stelle is a sect, with Grillo its guru, and like all good sects it does not have an office. Its HQ is not real, but virtual: Beppe’s blog.
Italian fascism, even though no one is allowed to say so, was a left-wing revolutionary movement which Mussolini founded because the first world war had made him realise that the proletariat is more loyal to its nation than its class. At the May 1921 general election, the fascisti won their first seats in the Italian parliament (only 35). Yet just 18 months later, after the March on Rome in October 1922, King Vittorio Emanuele III had appointed Mussolini prime minister.
At this week’s elections, no coalition, let alone party, got more than 30 per cent of the vote. Any government that somehow emerges from the debacle is bound to be short-lived. History repeats itself first as tragedy, wrote Karl Marx, then as farce: the comedian Grillo’s version of Mussolini’s March on Rome could be only a matter of months away.
Fascism was able to flourish thanks to the impotence and corruption of Italian democracy, especially in the first two decades of the 20th century, which made it incapable of dealing with an existential crisis — the threat of communist revolution. In 1945, with the fall of fascism and the monarchy, Italy returned to an updated form of the same impotent and corrupt democracy. Through fear of dictators, the new constitution severely limited the powers of prime minister, cabinet and president, and complex versions of proportional representation made it impossible for any one party to obtain a majority of the seats.
This was fine, more or less, in the boom times. Not any more. Italy has the third highest sovereign debt in the world as a proportion of GDP, its economy is in permanent recession, its tax burden and red-tape suffocating businesses, and its labour market paralysed by a forest of laws that make it virtually impossible to be taken on full-time or fired.
As with fascism, Grillo and his movement have flourished thanks to the impotence and corruption of the Italian parliament in the face of the current economic crisis — the threat of meltdown caused by the euro.
The unelected economics professor Mario Monti, who replaced Berlusconi as premier in a palace coup in November 2011, merely raised taxes and invented new ones.
But austerity is not just raising taxes; it’s cutting spending. Monti did nothing to hack back the monstrous debt (it rose from 120 per cent to 129 per cent). He did nothing to stimulate growth. Youth unemployment is at 35 per cent, and unemployment in total is much higher than the official 12 per cent if you count the hundreds of thousands still technically employed but paid by the state not to work.
Like fascism, Grillo’s movement is essentially left-wing and in favour of the state sorting things out — the Italian state. But it is against the euro and Europe — and Germany in particular.
Mussolini wrote soon after founding fascism that it is ‘difficult to define’. Fascism does not have ‘statutes’ or ‘transcending programmes’. Therefore ‘it is natural’ that it should attract ‘the young’ rather than the old who are likely to refuse its ‘freshness’.
Grillo’s manifesto is called ‘Il non statuto’. On his blog he says, ‘We’re all young … We’re a movement of many people who are uniting from the bottom up. We don’t have structures, hierarchies, bosses, secretaries … No one gives us orders.’
Welcome to the new fascist future.
Beppe Grillo founded the MoVimento 5 Stelle (M5S) in Milan on 4 October 2009. The capital ‘V’ stands for his signature slogan ‘Vaffa!’ which roughly speaking means ‘Fuck off!’ — in his case, to everything more or less, except wind farms. ‘Surrender! You’re surrounded!’ he bellowed over and over again at his rallies. The phrase was traditionally very popular with Italian fascists. He was referring to all Italy’s politicians, except his lot.
Now, less than four years after its foundation, his movement is the largest single party in the Chamber of Deputies, the lower house, after it secured 26 per cent of the poll at this week’s inconclusive Italian general elections. It is not, insists this fascist of the forest, a party. It is a movement. Parties, he is adamant, are the problem, not the solution.
Mussolini founded his Fasci di Combattimento in Milan on 23 March 1919 and less than four years later he was prime minister. Fascism was not, he insisted, a party but a movement. Parties, he was adamant, were the problem, not the solution. Fascism would be an ‘anti-party’ of free spirits who refused to be tied down by the straitjacket of parties with their dogmas and doctrines. This is precisely what Grillo says about his own movement.
Mussolini was the rising star in Italy’s Marxist party until his expulsion in 1914 because he — like the French and German Marxists but unlike the Italian ones — was in favour of Italian intervention in the first world war. He looked destined for the scrapheap.
Grillo, a former communist, was banned from national television in the late 1980s as a result of his defamatory performances. Things did not look rosy for him either. Forced to perform in piazzas and theatres, he took to ridiculing and demonising politicians, and then in 2005 he founded a blog that quickly became the most popular in Italy and a forum for the angry and the disaffected, mostly young, for all those whose state of mind is defined by the word ‘Vaffa!’. He duly began a national ‘Vaffa! Day’ or ‘V Day’ in 2007.
Shortly before he founded his movement, he tried to become leader of Italy’s main left-wing party — the ex-communist Partito democratico (PD) — but it would not let him stand in its leadership elections. At this week’s elections, the PD’s coalition was a winner of sorts with a majority of the seats in the lower house, thanks to the latest Italian electoral law that gives the majority of seats to the party with the most votes, however few. The PD’s coalition polled just 29.6 per cent of the vote compared with the 29.1 per cent of Silvio Berlusconi’s centre-right coalition. But despite that, the PD grouping gets 340 seats to his 121. In the senate, though, where different rules apply, no one has a majority.
If, however, the PD had allowed Grillo to stand in its leadership contest, he would no doubt have led it to overwhelming victory. Instead it chose the monumentally smug and tedious former communist Pier Luigi Bersani. But we haven’t seen the last of Beppe.
What gave Mussolini popular traction is what gives Grillo traction: a virulent hatred of parliament and the politicians who infest it. The dictator famously said he could have moved his bivouacs into ‘this deaf and grey chamber’ but had chosen not to. The comedian uses the same language. Whereas Mussolini spread the word through his own mass daily newspaper Il Popolo d’Italia, and enforced it by means of his blackshirts, Grillo does so through his website, Il Blog di Beppe Grillo, and violent verbal abuse and ostracism of opponents. Whereas Mussolini travelled by train to his rallies, Grillo travels to his by camper van.
‘I did not invent fascism,’ said Mussolini, ‘I extracted it from the Italian people.’ Grillo did not invent his movement, he says, he merely provided the humus — the internet forum — in which it grew. During the election campaign, he did not give one television or newspaper interview, because journalists, like politicians, are the enemy. Both Mussolini and Grillo appeal to the spirit and soul rather than the wallet and mind of Italians. Fascism was a civic religion and the Duce its god. The MoVimento 5 Stelle is a sect, with Grillo its guru, and like all good sects it does not have an office. Its HQ is not real, but virtual: Beppe’s blog.
Italian fascism, even though no one is allowed to say so, was a left-wing revolutionary movement which Mussolini founded because the first world war had made him realise that the proletariat is more loyal to its nation than its class. At the May 1921 general election, the fascisti won their first seats in the Italian parliament (only 35). Yet just 18 months later, after the March on Rome in October 1922, King Vittorio Emanuele III had appointed Mussolini prime minister.
At this week’s elections, no coalition, let alone party, got more than 30 per cent of the vote. Any government that somehow emerges from the debacle is bound to be short-lived. History repeats itself first as tragedy, wrote Karl Marx, then as farce: the comedian Grillo’s version of Mussolini’s March on Rome could be only a matter of months away.
Fascism was able to flourish thanks to the impotence and corruption of Italian democracy, especially in the first two decades of the 20th century, which made it incapable of dealing with an existential crisis — the threat of communist revolution. In 1945, with the fall of fascism and the monarchy, Italy returned to an updated form of the same impotent and corrupt democracy. Through fear of dictators, the new constitution severely limited the powers of prime minister, cabinet and president, and complex versions of proportional representation made it impossible for any one party to obtain a majority of the seats.
This was fine, more or less, in the boom times. Not any more. Italy has the third highest sovereign debt in the world as a proportion of GDP, its economy is in permanent recession, its tax burden and red-tape suffocating businesses, and its labour market paralysed by a forest of laws that make it virtually impossible to be taken on full-time or fired.
As with fascism, Grillo and his movement have flourished thanks to the impotence and corruption of the Italian parliament in the face of the current economic crisis — the threat of meltdown caused by the euro.
The unelected economics professor Mario Monti, who replaced Berlusconi as premier in a palace coup in November 2011, merely raised taxes and invented new ones.
But austerity is not just raising taxes; it’s cutting spending. Monti did nothing to hack back the monstrous debt (it rose from 120 per cent to 129 per cent). He did nothing to stimulate growth. Youth unemployment is at 35 per cent, and unemployment in total is much higher than the official 12 per cent if you count the hundreds of thousands still technically employed but paid by the state not to work.
Like fascism, Grillo’s movement is essentially left-wing and in favour of the state sorting things out — the Italian state. But it is against the euro and Europe — and Germany in particular.
Mussolini wrote soon after founding fascism that it is ‘difficult to define’. Fascism does not have ‘statutes’ or ‘transcending programmes’. Therefore ‘it is natural’ that it should attract ‘the young’ rather than the old who are likely to refuse its ‘freshness’.
Grillo’s manifesto is called ‘Il non statuto’. On his blog he says, ‘We’re all young … We’re a movement of many people who are uniting from the bottom up. We don’t have structures, hierarchies, bosses, secretaries … No one gives us orders.’
Welcome to the new fascist future.
This article first appeared in the print edition of The Spectator magazine, dated 2 March 2013
Wednesday, March 13, 2013
A dangerous environment.
Krugman has been suggesting (demanding even) that the FED stimulate more and print more money to buy up Treasuries. Well, Bernanke obliged. The Nation's debt is now being moneytized to the point that almost all of the Treasuries are bought by the FED. The FED is also buying the mortgage bonds and talk once again abounds about a new housing bubble. In addition, the Stock Market is hitting new highs and some people expect the wealth effect to push the economy.
So, why the talk of a dangerous envitonment? First, the DJI and DTI confirm the breakout. Second, stocks and profits are soaring, not because the economy is soaring, but because excess liquidity is being pumped into the system while incomes are stagnant and banks aren't lending and that's why their profits are soaring. Krugman is getting his wish and the pumping is increasing. The money has nowhere to go but into the Stock Market. Sooner or later the money will start getting out of the anks and then inflation will rear its ugly head. Now the imbalance grows. The FED can't withdraw the stimulus without crushing the Stock Market and it can not continue to inflate without inflation. It's a no win - no win situation. But for now the Market parties like there is no tomorrow. Well, there isn't.
So, why the talk of a dangerous envitonment? First, the DJI and DTI confirm the breakout. Second, stocks and profits are soaring, not because the economy is soaring, but because excess liquidity is being pumped into the system while incomes are stagnant and banks aren't lending and that's why their profits are soaring. Krugman is getting his wish and the pumping is increasing. The money has nowhere to go but into the Stock Market. Sooner or later the money will start getting out of the anks and then inflation will rear its ugly head. Now the imbalance grows. The FED can't withdraw the stimulus without crushing the Stock Market and it can not continue to inflate without inflation. It's a no win - no win situation. But for now the Market parties like there is no tomorrow. Well, there isn't.
Monday, March 11, 2013
US Dollar: Rally over?
Larry Edelson predicted that before the gold correction is over, we should see a rally in the US Dollar. Then a crack in the 30 year US Treasuries.
Well, we had seen the rally in the US Dollar and we also saw the crack in the Treasuries. Then we saw a rally in US Treasuries. Then, last week, the Treasuries closed below 142 again. Here is the graphic:
We see a sharp drop in Treasury price again.So, this is unsettled. Every time there is new anxiety in Europe, the Dollar goes up in value.
Wall Street Sunrise writes that:
"It's the Yuan's world and the West is just living in it.
It's no coincidence that Yuan settled trade jumped 41.3% to nearly 3 trillion Yuan in 2012-- - after it increased by more than 300% in 2011.
In fact, since June 2005 the Chinese Yuan has risen 24.66% against the US dollar backed in part by 1.3 billion consumers and real assets.
To borrow a tech term, the Yuan is the world's new "killer app."
Whoah! The Yuan is still a fiat currency. Untill it is backed by gold...
Euroskepticism: Germany's turn.
Eoroskepticism is gaining in Europe. That is, people are beginning to see that the EU and the Euro are weighing on the economies of Europe. Those on the Left do not want to live with the "austerity" imposed on their countries. The Left wants the governments to own the 'means of production' which implies heavy government taxation at first. The Right (or what passes for the Right these days in Europe) want to get away from Internationalism. That is why the formation of an Euroskeptic party in Germany is so significant.
http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/9920666/Germanys-anti-euro-party-is-a-nasty-shock-for-Angela-Merkel.html
The "Alternative for Germany" Party is more an Euro skeptic Party than a party opposed to the EU. The Party's core consists of economists who see the Euro as a millstone. The Euro institutionalized a 30% imbalance in currency in favor of Germany. In addition, the raising of the German VAT from 16% to 19% increased this imbalance, just as Gopinath would predict. The consequence is that Southern Europe has fallen way behind the German economic machine and Eastern Europe has been impoverished. Why don't the rest of Europe follow the German example and raise the VAT? Because they are TEA parties in one sense: Taxed Enough Already.
Why would German economists want to rally against German economic supremacy? Because the debts of Southern Europe are underwritten by Germany. Should Italy default, Germany picks up the tab.
There are questions about the new party's viability, but just its existence sent shock waves through Europe:
http://en.haberler.com/german-party-says-no-to-the-euro-yes-to-the-eu-264969/
http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/9920666/Germanys-anti-euro-party-is-a-nasty-shock-for-Angela-Merkel.html
The "Alternative for Germany" Party is more an Euro skeptic Party than a party opposed to the EU. The Party's core consists of economists who see the Euro as a millstone. The Euro institutionalized a 30% imbalance in currency in favor of Germany. In addition, the raising of the German VAT from 16% to 19% increased this imbalance, just as Gopinath would predict. The consequence is that Southern Europe has fallen way behind the German economic machine and Eastern Europe has been impoverished. Why don't the rest of Europe follow the German example and raise the VAT? Because they are TEA parties in one sense: Taxed Enough Already.
Why would German economists want to rally against German economic supremacy? Because the debts of Southern Europe are underwritten by Germany. Should Italy default, Germany picks up the tab.
There are questions about the new party's viability, but just its existence sent shock waves through Europe:
http://en.haberler.com/german-party-says-no-to-the-euro-yes-to-the-eu-264969/
Saturday, March 9, 2013
Who is Beppe Grillo?
Thanks to the efforts of our Muslim President, the Western Mediterranean and Notrth Africa are once again in the hands of Islamic radicals and so Italy is again a defensive bulwark against them. How good a defensive bulwark? That depends on how strong a government Italy manages to form.
I have already described the difficulty of Italy forming a coalition government. In fact, some people are already looking to a second election in June to resolve the current impasse. In order to do that successfully, Italy must come to grips with who Beppe Grillo is and what he represents.
Eastern Europe and Southern Europe suffers under "Social Democracy" and the cure for that, "austerity." This had given rise to various Fascist movements, including Grillo's Five Star Party. What does Grillo represent?
According to Grillo, AIDS doesn't exist, vaccines will kill you, and the Holocaust never happened.
Big Pharma is out to get you with chemotherapy, and natural treatments (like bloodletting) are better than that awful scientific medicine. The world is run by Jewish bankers like the Rockefellers and the Rothschilds, and those blessed Islamic banks give out free money. Not like the usurious Jews, who want to kill off all their customers. Grillo's Iranian wife has high-level connections in Tehran, where making trouble in Italy is high on the priority list. Grillo has said that "everything I know about the Middle East I learned from my father-in-law," the Iranian bigshot. (Nasratollah Tajik just died in Tehran at the age of 83.) Grillo is threatening "violence in the streets" unless he gets what he wants. What does he want? "We want 100% of the Parliament, not 20% or 25% or 30%. When the movement reaches 100%, when the citizens become the State, the movement will no longer need to exist.
It sounds eerily like another time, does it not? Unlike Benito Mussolini (who was trim, prim and narcissistic) Beppo is a fat slob, but dangerous just the same.
I have already described the difficulty of Italy forming a coalition government. In fact, some people are already looking to a second election in June to resolve the current impasse. In order to do that successfully, Italy must come to grips with who Beppe Grillo is and what he represents.
Eastern Europe and Southern Europe suffers under "Social Democracy" and the cure for that, "austerity." This had given rise to various Fascist movements, including Grillo's Five Star Party. What does Grillo represent?
According to Grillo, AIDS doesn't exist, vaccines will kill you, and the Holocaust never happened.
Big Pharma is out to get you with chemotherapy, and natural treatments (like bloodletting) are better than that awful scientific medicine. The world is run by Jewish bankers like the Rockefellers and the Rothschilds, and those blessed Islamic banks give out free money. Not like the usurious Jews, who want to kill off all their customers. Grillo's Iranian wife has high-level connections in Tehran, where making trouble in Italy is high on the priority list. Grillo has said that "everything I know about the Middle East I learned from my father-in-law," the Iranian bigshot. (Nasratollah Tajik just died in Tehran at the age of 83.) Grillo is threatening "violence in the streets" unless he gets what he wants. What does he want? "We want 100% of the Parliament, not 20% or 25% or 30%. When the movement reaches 100%, when the citizens become the State, the movement will no longer need to exist.
It sounds eerily like another time, does it not? Unlike Benito Mussolini (who was trim, prim and narcissistic) Beppo is a fat slob, but dangerous just the same.
Wednesday, March 6, 2013
A tidal wave of news.
Julius Caesar was warned about the "Ides of March" and Austria and Hungary had revolutions in March. The currents of human affairs start to speed up in March. So, here is a report.
1. Vatican City.
We are waiting for the election of a new Pope. The previous Pope has resigned and is in seclusion. The College of Cardinals will begin its procedures on March 15, but a formal vote may not take place till later. Ireland's Cardinal is not in attendance, because he was caught in prohibited sexual contact with other men.
2. Rome, Italy.
Formation of a new government is proving difficult.
Pier Louigi Bersani of the Democratic Party is trying to form a coalition government. His platform is to "get out of the austerity cage" and grren industries. Typical Left wing politics in other words, not having learned from the example of Spain. So, whatsa problem? Well, Monti's Party IS committed to austerity, Grillo does not want an Italian government headed by a politician and that leaves the center right. Stalemate.
3. Caracas, Venezuela.
The expected death of Hugo Chavez puts Venezuela in the spotlight. Succession will not be easy and will be contested. Chavez built a communist state with 30 of the 33 Governors being former military officers like Chavez. There is also a militia of 125,000 Chavez loyalists, of whom 30,000 can be considered combat ready troops. Vipe President Maduro is the likely successor, basing his power structure on leftist officers and Venezuela's low information voters, the Indians. Maduro is accusing the opposition to have sabotaged the power grid. Though Venezuela is an oil exporting nation, it has the second highest inflation in the world. As you would expect in a Communist run country, milk, food and toilet paper are in short supply.
4. Back in the USA.
Obama has given orders to make the sequester as painful as possible. He, of course, pretends that it has nothing to do with him.
1. Vatican City.
We are waiting for the election of a new Pope. The previous Pope has resigned and is in seclusion. The College of Cardinals will begin its procedures on March 15, but a formal vote may not take place till later. Ireland's Cardinal is not in attendance, because he was caught in prohibited sexual contact with other men.
2. Rome, Italy.
Formation of a new government is proving difficult.
Pier Louigi Bersani of the Democratic Party is trying to form a coalition government. His platform is to "get out of the austerity cage" and grren industries. Typical Left wing politics in other words, not having learned from the example of Spain. So, whatsa problem? Well, Monti's Party IS committed to austerity, Grillo does not want an Italian government headed by a politician and that leaves the center right. Stalemate.
3. Caracas, Venezuela.
The expected death of Hugo Chavez puts Venezuela in the spotlight. Succession will not be easy and will be contested. Chavez built a communist state with 30 of the 33 Governors being former military officers like Chavez. There is also a militia of 125,000 Chavez loyalists, of whom 30,000 can be considered combat ready troops. Vipe President Maduro is the likely successor, basing his power structure on leftist officers and Venezuela's low information voters, the Indians. Maduro is accusing the opposition to have sabotaged the power grid. Though Venezuela is an oil exporting nation, it has the second highest inflation in the world. As you would expect in a Communist run country, milk, food and toilet paper are in short supply.
4. Back in the USA.
Obama has given orders to make the sequester as painful as possible. He, of course, pretends that it has nothing to do with him.
Tuesday, March 5, 2013
The biggest bargains out there.
The DOW is close to its high and I have no doubt that it will set that new high before dropping in anticipation of a recession here. The slowdown is best seen in the announced closing of mainline American stores. Sears, Pennys, Best Buys and others are closing nearly a 1,000 stores nationwide because of the dropoff in people's income (which has dropped to a 25 year low). So, the DOW stocks will be no bargains in the near future.
There is one set of stocks that are suffering a bear market: gold and silver miners. Here is the ETF that represents over a dozen of miners:
This is even more evident when XAU is looked at in terms of gold prices:
The XAU/Gold is at its lowest level since XAU was initiated.
There is one set of stocks that are suffering a bear market: gold and silver miners. Here is the ETF that represents over a dozen of miners:
This is even more evident when XAU is looked at in terms of gold prices:
The XAU/Gold is at its lowest level since XAU was initiated.
Budding Dictatorships.
Social Democracy (Soft Socialism) is imploding in Europe and the United States. The process is slow in Europe, because the Security Apparatus being employed can still handle the situation. But it is getting iffier every day. Many Greeks have been literally thrown into the streets and people are getting desparate. That is why the Greek govt has started recruting foreigners. The Greek Army will not fire on its own citizens, but foreigners will do.
Here in the United States the Obama regime is taking a more indirect(I should say sneakier) approach. The Federal govt has bid for 3.5 Billion hollow point bullets twice. Other things on the Federal shopping lists: 1,800 lightly armored APCs, and drone bases to stage surveillance and attacks against American citizens. How can the FEDs do that? Isn't there a Posse Comitatus Act that forbids the use of American troops against the population? Yes, there was but it had been repealed. And ObamaCare authorizes the hiring of 16,000 new IRS agents. Have you seen Obama replying to questions that "I am not a Dictator?" He is trying to plant the idea with his followers that he should be.
Here in the United States the Obama regime is taking a more indirect(I should say sneakier) approach. The Federal govt has bid for 3.5 Billion hollow point bullets twice. Other things on the Federal shopping lists: 1,800 lightly armored APCs, and drone bases to stage surveillance and attacks against American citizens. How can the FEDs do that? Isn't there a Posse Comitatus Act that forbids the use of American troops against the population? Yes, there was but it had been repealed. And ObamaCare authorizes the hiring of 16,000 new IRS agents. Have you seen Obama replying to questions that "I am not a Dictator?" He is trying to plant the idea with his followers that he should be.
Monday, March 4, 2013
The outlook for Treasuries.
One consequence of low interest rates is low returns on Treasuries. The 10 year Treasury note, for example, yields a 2% return. The CBO predicts that in two years the yield on new Treasuries will rise to 3.1%. Larry Edelson predicts that Treasuries will "crack" in the near future and start losing value. How come?
Allen Sloan of CNNMoney puts it this way: " If you buy a 10-year Treasury today at face value, the interest you receive over its life will total 20% of what you put up: 2% a year for 10 years. But if the yield is 3.2 % two years from now, you would be better off doing nothing for two years, buying the note at well below face value, and collecting 3.2% for 8 years. That would produce 25.6% over 8 years (8 times 3.2), a heckuva lot better than 20% over 10 years.
If the CBO is right and you wait three years to buy the note -- at a steep discount -- you would collect 4.1 % for seven years, or a total of 28.7 % on your money.
Unlike stock prices, which are often ruled by emotion, market prices of Treasury debt securities are ruled strictly by arithmetic. Consult a handy-dandy bond calculator and you'll see that if you pay 100 cents on the dollar for a 10-year, 2% Treasury today, and yields rise to 3.2% in two years, your note would be selling at only 91.65% of face value. In other words, your capital loss would more than offset the interest you had already collected, plus two more years worth. Your choice would be to take the loss all at once by selling, or taking it over time by collecting only 2% while other investors are collecting 3.2%."
And that is why Treasuries will "crack" and soon. That's why the FED can not let go of the interest rate tiger any time soon, at least not untill the economy improves.
There is another problem that arises out of artificially low interest rates: CURRENCY WARS. China is telling us that they are ready. KWN tells us that China has reserves that are equal to twice the value of the gold reserves of the whole world. If China moves, it can drive the price of gold sky high and drive all currencies into the gutter; all currencies that are not covered by gold. We live in interesting times.
Allen Sloan of CNNMoney puts it this way: " If you buy a 10-year Treasury today at face value, the interest you receive over its life will total 20% of what you put up: 2% a year for 10 years. But if the yield is 3.2 % two years from now, you would be better off doing nothing for two years, buying the note at well below face value, and collecting 3.2% for 8 years. That would produce 25.6% over 8 years (8 times 3.2), a heckuva lot better than 20% over 10 years.
If the CBO is right and you wait three years to buy the note -- at a steep discount -- you would collect 4.1 % for seven years, or a total of 28.7 % on your money.
Unlike stock prices, which are often ruled by emotion, market prices of Treasury debt securities are ruled strictly by arithmetic. Consult a handy-dandy bond calculator and you'll see that if you pay 100 cents on the dollar for a 10-year, 2% Treasury today, and yields rise to 3.2% in two years, your note would be selling at only 91.65% of face value. In other words, your capital loss would more than offset the interest you had already collected, plus two more years worth. Your choice would be to take the loss all at once by selling, or taking it over time by collecting only 2% while other investors are collecting 3.2%."
And that is why Treasuries will "crack" and soon. That's why the FED can not let go of the interest rate tiger any time soon, at least not untill the economy improves.
There is another problem that arises out of artificially low interest rates: CURRENCY WARS. China is telling us that they are ready. KWN tells us that China has reserves that are equal to twice the value of the gold reserves of the whole world. If China moves, it can drive the price of gold sky high and drive all currencies into the gutter; all currencies that are not covered by gold. We live in interesting times.
Sunday, March 3, 2013
Chaos builds in Europe and US.
Chaos in Europe is due to three elements hitting together: 1. fierce cold; 2. continued economic troubles and the Beppe Grillo phenomenon.
Ever since the January thaw was over, Europe has been getting hit with one cold wave after another. The Dutch are getting ready for a 200 kilometer skating marathon on the frozen canals, England has been hit by cold and snow so that their roads are like ice skating rinks and you can get some nice pictures of the Grand Canal in Venice sporting some nice ice flows. At least one hundred people died from the cold. The environmentalist whackoes still drone on about global warming and the necessity of using high-priced energy sources other than oil and gas.
Southern Europe is sliding into even more economic troubles and so is England. Portugal is having big demonstrations against austerity and the people do not understand that they can not solve their problems by having more of what ails them. There is no better example of this than the Beppe Grillo phenomenon:
http://www.telegraph.co.uk/news/worldnews/europe/italy/9904979/Italy-paralysed-as-Grillo-plots-exit-route-from-euro.html
Grillo and his followers understand that Italy's path of more govt spending is not sustainable. They understand that Italy's political class is corrupt. But they offer a mixed bag of tax cuts, "renegotiating" Italy's debt and re-instituting th Lire.
//N.B. Larry predicts that the Euro will disappear along with the EU//
Grillo's followers are young and bets are that they will be co-opted into the Old Left and like in the US, they will simply add to the Nation's woes.
And that takes us back to the US. Here, Obama is busy trying to recreate the Rooseveltian era of economic Depression, putting people on the dole and crushing the opposition via lies parroted by the Media. The entire Liberal Media is jumping on Bob Woodward because he tells the truth about sequestration being Obama's idea and labeling how the budget "cut"is implemented as "madness."
Ever since the January thaw was over, Europe has been getting hit with one cold wave after another. The Dutch are getting ready for a 200 kilometer skating marathon on the frozen canals, England has been hit by cold and snow so that their roads are like ice skating rinks and you can get some nice pictures of the Grand Canal in Venice sporting some nice ice flows. At least one hundred people died from the cold. The environmentalist whackoes still drone on about global warming and the necessity of using high-priced energy sources other than oil and gas.
Southern Europe is sliding into even more economic troubles and so is England. Portugal is having big demonstrations against austerity and the people do not understand that they can not solve their problems by having more of what ails them. There is no better example of this than the Beppe Grillo phenomenon:
http://www.telegraph.co.uk/news/worldnews/europe/italy/9904979/Italy-paralysed-as-Grillo-plots-exit-route-from-euro.html
Grillo and his followers understand that Italy's path of more govt spending is not sustainable. They understand that Italy's political class is corrupt. But they offer a mixed bag of tax cuts, "renegotiating" Italy's debt and re-instituting th Lire.
//N.B. Larry predicts that the Euro will disappear along with the EU//
Grillo's followers are young and bets are that they will be co-opted into the Old Left and like in the US, they will simply add to the Nation's woes.
And that takes us back to the US. Here, Obama is busy trying to recreate the Rooseveltian era of economic Depression, putting people on the dole and crushing the opposition via lies parroted by the Media. The entire Liberal Media is jumping on Bob Woodward because he tells the truth about sequestration being Obama's idea and labeling how the budget "cut"is implemented as "madness."
Saturday, March 2, 2013
Shepherd's pie, Geezer's style.
Foreword.
Shepherd's pie is a staple of the English pub. It even has the two spices of English cooking; salt and pepper.All kidding aside, Shepherd's pie is a work of genius, because it is simple, good tasting and filling.
Ingredients.
1/2 lb ground beef (called mince in England)
1/2 lb spicy sausage (I use Jimmy Dean's Maple Sausage)
one can (10 3/4 oz) Campbell's Cream of Mushroom Soup
one half onion, chopped
1/2 poblano or other pepper sliced
----------------------------------------
one TBSP ketchup
one cup frozen peas+carrots or one cup frozen corn
----------------------------------------
2 and 1/2 cups of milk
2 cups instant potato
1/2 cup grated cheddar
Method.
1. Preheat oven to 400F.
2. Saute the beef and sausage.
3. Saute the onion and pepper separately then add to the meat.
4. Add the can of soup, ketchup and frozen veg and stir together.
5. Add this mix to a large pie plate or ceramic dish.
6. Bring the milk to boil and add the potatoes and cheese, mix.
7. Add potatoes on top of meat mix.
8. Bake at 400F tor 15 minutes or untill potatoes are slightly browned.
Disposition.
The Geezerette and I finished one half and put the rest if the refrigerator.
Nuked it for another meal.
Mexican version
No sausage just 1 lb beef. And 1 packet taco seasoning and frozen corn.
Shepherd's pie is a staple of the English pub. It even has the two spices of English cooking; salt and pepper.All kidding aside, Shepherd's pie is a work of genius, because it is simple, good tasting and filling.
Ingredients.
1/2 lb ground beef (called mince in England)
1/2 lb spicy sausage (I use Jimmy Dean's Maple Sausage)
one can (10 3/4 oz) Campbell's Cream of Mushroom Soup
one half onion, chopped
1/2 poblano or other pepper sliced
----------------------------------------
one TBSP ketchup
one cup frozen peas+carrots or one cup frozen corn
----------------------------------------
2 and 1/2 cups of milk
2 cups instant potato
1/2 cup grated cheddar
Method.
1. Preheat oven to 400F.
2. Saute the beef and sausage.
3. Saute the onion and pepper separately then add to the meat.
4. Add the can of soup, ketchup and frozen veg and stir together.
5. Add this mix to a large pie plate or ceramic dish.
6. Bring the milk to boil and add the potatoes and cheese, mix.
7. Add potatoes on top of meat mix.
8. Bake at 400F tor 15 minutes or untill potatoes are slightly browned.
Disposition.
The Geezerette and I finished one half and put the rest if the refrigerator.
Nuked it for another meal.
Mexican version
No sausage just 1 lb beef. And 1 packet taco seasoning and frozen corn.