Anti EU sentiment increasing.

Even before Greece’s landslide “no” vote yesterday, anti-euro forces were gaining momentum all over Europe …

In Austria, more than 260,000 citizens signed a petition urging their government to leave the European Union and dump the euro currency, exceeding by more than double the legal threshold required for the first steps toward a referendum.

In Italy, the anti-euro front did the same, presenting over 200,000 signatures to the Senate. “We're sick of this Europe of the bureaucrats, we're tired of this German Europe,” said an anti-euro spokesperson.

In Spain, the much-strengthened Podemos party vowed to persuade Spaniards to exit the euro, announcing that the disaster “isn't Greek, it’s European.”

In France, a founder of the Left Party denounced the “methodical, systematic strangulation of Greece by the Eurogroup to make it an example so people fear financial catastrophe in their own countries.”

Even in Germany, anti-euro forces were gaining remarkable strength.

Everywhere around Europe, both left- and right-wing parties have rallied to the cause …

“Greece has been impoverished by euro membership for too long,” said a prominent right-wing politician in support of the Greek leftist party. “This crisis has now become an opportunity. The Greek people need freedom to prosper."

“This Europe is a disaster,” said another. “The European rules are disastrous, the European treaties should be reviewed one by one, the single currency is a mistake. So, before dying of starvation and unemployment, we'd be better off stopping and reviewing it all, start again from the beginning.”

And everywhere on the continent, what we’ve been saying all along is now becoming obvious: The entire euro experiment was built for failure.

It’s a cockamamie system in which the purse strings are controlled by individual states but the currency is controlled by the central government in Brussels.

Imagine the chaos if Albany, Sacramento, Tallahassee and every other state capital in the Union decided independently on what to spend on its Social Security or military, while Washington continued to impose its will on what to do with the U.S. dollar, the nation’s money supply and interest rates!

Yet, that’s how it’s done in the eurozone. That’s why we’ve said, from day one, that the euro experiment would fail. And that’s exactly what’s beginning to happen right now.

Now, can you see why I say trillions of dollars in flight capital is headed this way? Many wealthy individuals and institutions on the continent now have only one objective: To get themselves and their money away from the fallout. And America, despite its own problems, is perceived as the safest “safe haven” on the planet.
This is why the U.S. dollar is soaring against just about every other currency on the planet: Frightened investors are in a dead panic to get their money to safety. Initially, they will rush to the safety of U.S. Treasuries as equities suffer a correction.

From the recs of an advisor.

Greece - the day after.

Al the lurid descriptions of chaos if Greece voted 'NO' have failed to describe the well - calm that descended on the country. Varoufakis is gone as Finance Minister of Greece and that reduced the decibel by itself.

But, the problems remain. Greece has to either cut spending or earn more. It is that simple. Negotiations might resume but the basic equation does not change. Socialism in Greece failed and they ran out of European money. The EU is proud that its prescriptions have worked in Spain, Portugal and Ireland - if you call reducing living standards a success.

It all depends on Greece now. Contrary to opinions circulated, the NO vote did not increase their clout at negotiating. Greece still can not pay its bills and its debt can not be paid back. Where do they go from there? Can facts be papered over? I highly doubt it.

Why the fear of debt contagion.

Some of you wonder why the default by Greece threatens the European house of cards and beyond. The problem is due to the existence of a fractional reserve banking system. Basically, the central bank of a country loans money to the banks and in turn the banks are allowed to make loans to various people. This process multiplies the money the banks are loaned. Banks are required to keep on reserve a fraction of the money that people have deposited with them. Hence the name 'fractional reserve.' You can get a more detailed explanation here:
http://fee.org/freeman/detail/fractional-reserve-banking-part-ii


What happens if a big client defaults on a loan? It reduces the bank's assets, i. e, its reserve.  value of the default must be covered. Eventually, this leads to hyperinflation.

Will the FED bail out Greece?

Contra News and Views, Stockman's Corner

Swindle Alert: How To Spot The Fed’s Impending Bailout Of Europe

by Menger Center • June 30, 2015

by Paul-Martin Foss at the Menger Center

The Greek crisis is dominating headlines this week, and promises to be the most important economic and financial topic of conversation through the weekend and into Monday. Neither the Greek government nor the European Central Bank (ECB) seem to be prepared to give an inch, and there’s every indication that things could come to head next week. If Greece does default, and if there is a resulting crisis in European markets, will the Federal Reserve get involved? To quote Sarah Palin, “You betcha!” How would the Fed do this? Read on to find out.
Although the euro is the dominant currency in Europe, a lot of debt in Europe is still denominated in dollars. The dollar being the world’s reserve currency and dollar markets being incredibly liquid, it just makes sense for a lot of companies to do business in dollars. But when a crisis hits and those businesses need dollars, they have to get a hold of dollars somehow. Banks in Europe have a limited supply, and once those dollars are gone, there is no dollar-printing central bank in Europe that can step in. Enter the Federal Reserve.
The Fed sets up liquidity swap lines with the ECB. These swap lines were, for many years, not highly publicized, and not even broken out as a separate category on the Fed’s balance sheet. That is, until the financial crisis hit and the swap lines rose to close to $600 billion. Even since the financial crisis they remain open, are periodically renewed, and occasionally still used, without much publicity.
A swap line is an agreement between the Fed and a foreign central bank to swap currency. For instance, the Fed creates new dollars, the ECB creates new euros, and they agree to exchange them. For the period of the swap, the Fed holds those newly-created euros as an asset, and the ECB loans those dollars out to firms that need dollars to make dollar-denominated payments. Presumably those firms are only in need of short-term dollar financing, and can pay those loans back. When the swap unwinds, the ECB then sends those dollars back to the Fed, the Fed returns the euros to the ECB, and the swap lines are drawn back down to zero. Sounds nice and easy, until there’s a problem.
Of course, there are many problems with swap lines. The inflationary effects of creating that new money and loaning it temporarily, the deflationary effects as it gets sucked back out of the system, and of course the fact that the central bank is picking winners and losers by determining which companies get to borrow those dollars. And those are just the problems when it is individual companies that are in danger of failing. Now we have an entire nation (Greece) that is in danger of failure, a nation that is in a currency union with all the other Eurozone countries. So what happens when (or if?) Greece implodes?
This drama has been going on for months, so maybe the big players have already minimized their exposure to Greece. Fed Chairman Janet Yellen seemed to downplay the importance of Greece when she was asked about it at her press conference on Wednesday. But what if this is a bigger problem than anyone realizes? I still remember getting called to a staff briefing in mid-2007, almost exactly eight years ago now, where committee staff on the House Financial Services Committee informed us that a little-known unit of Bear Stearns had gotten itself into a little bit of difficulty. Nobody seemed to think it was a terribly important issue, but they were going to monitor things. Little did we know that that incident was the harbinger of the financial crisis. Over the next year things went from bad, to worse, to catastrophic. It started small, but snowballed tremendously.
Now back to the swap lines. If you want to get a sense of the Fed’s involvement in Europe, watch the swap lines. Swap line data is published every Thursday afternoon on the Fed’s balance sheet, the H.4.1 release. If you look at the St. Louis Fed’s charts and data on swap lines, you’ll see the huge amount of swaps during the financial crisis, and then a smaller but still significant increase in swap lines during the first iteration of the Greek financial crisis back in 2012. While swaps have been relatively non-existent this year, there was a small blip back in April, likely Greek-related, and more importantly, another blip this week. While the amount, $114 million, is a drop in the bucket compared to what it has been in the past, this number needs to be watched. It could very well be an indicator of the Fed getting involved in Europe again. And if the doomsday scenario ends up taking place next week, expect that $114 million figure to skyrocket. The Fed seems to want the conversation to revolve around a possible upcoming interest rate hike, so it’s been relatively silent on the topic of Greece and its involvement in bailing out Europe. But even if the Fed doesn’t say anything about Greece, its money-printing to pump up the swap lines will do plenty of talking.
Source: If Greece Defaults, Will the Fed Bailout Europe? | Carl Menger Center for the Study of Money and Banking

Pensioins and bonds.

Dead beat cities are discovering that they can go into Chapter 9 bankruptcy and get to write the conditions of how to survive the affair. The cities choose to default on their bonds and do so with the aid of Judges. Here are the four bankruptcies that had gone to these courts and what happened:

In each case the bondholders took huge haircuts while pensioners kept their pensions. This does not happen  by chance. The Liberals running these cities want to bankrupt the bondholders until the Federal govt will be left holding the bag for pensions as they do in Europe. Obamacare is organized for the same reason: eventually all the insurers will go bankrupt and the Federal govt will inherit the same thing. The problem is that "our" govt will run out of money as is haoppening in Europe.

What is embedded in the Greek tragedy.

Ever since the Troika forced Greece to accept "austerity," the Greek economy has contracted by 27%.
Is there a way out? Here is what the Russians offered:

1. Greece defaults on its Troika loans and reinstitute its own currency;
2. It leaves NATO;
3. Rnssia and China will help with current financing;
4. Russia will build a pipeline through Greece, which should help over the years.

If Greece left NATO, it would encourage others to leave and stop the Western powers from unleashing WWIII in order to stimulate their economies.

Greek politicians are afraid that if they act in the interests of their citizens they will face attacks from the West, possibly from Turkey.

Adios America.

Iran's Majlis no longer has to shout "DEATH TO AMERICA." America as we knew it had died yesterday. We had it good while it lasted. A Constitutional Republic where Congress made the Law, the President carried it out and the Supreme Court interpreted it. That had changed as of yesterday and officially.

Now, Congress may vote for a law and the President interprets it. He may disregard the law if he does not like it and if Congress refuses to pass a law, the President rules by decree (executive memos). The Supreme Court may also invalidate laws.

Using the S Carolina massacre as a pretext, the Left is staging an  attack on the South, the last bastion of the Republican Party. Once gay marriage is in place (in a few minutes) the attacks on Christianity will surge. King George smiles.