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"Greek authorities say at least three people have died in central Athens in a fire during huge street demonstrations against harsh new government austerity measures.
Early reports say the victims died in a burning bank building apparently set on fire by the protesters.
Across much of the central city Wednesday, riot police armed with stun grenades and tear gas fought running street battles with rock-throwing protesters angered by the looming spending cuts.
Television footage showed police using tear gas to prevent some 50 protesters from storming the parliament building. Violence also erupted in the northern city of Salonika.
The strike halted flights, trains and ferry services across much of the country. Schools and private offices were shut and hospitals worked with limited staffs."
Voice of America
Keep your eyes on Greece. This is coming our way. The unions are driving this unrest in Europe and they intend to do it here. Look at the marches on Wall Street and the immigration marches last weekend. It's just a matter of time now.
It's just a matter of time now. Sure, Germany will make overtures and promises to bail Greece out but it won't happen. The German people are against it and why set a precedent that will lead to their own collapse? The EU is coming apart; our turn is coming up shortly.
"Greece’s credit rating was cut three steps to junk by Standard and Poor’s, the first time a euro member has lost its investment grade since the currency’s 1999 debut. The euro weakened and stock markets throughout the region plunged.
Greece was lowered to BB+ from BBB+ by S&P, which also warned that bondholders could recover as little as 30 percent of their initial investment if the country restructures its debt. The move, which puts Greek debt on a par with bonds issued by Azerbaijan and Egypt, came minutes after the rating company reduced Portugal by two steps to A- from A+."
Bloomberg
"When ratings agencies downgrade the country's credit rating - it means they think it is now a riskier place to invest. If it reaches junk status, a country loses its investment grade status. Some financial institutions have rules prohibiting them from investing in "junk" bonds.
Greece's 2-year government bond yield surged to almost 15% on Tuesday, making it highly expensive for the country to borrow from the debt market.
Greek 5-year yields hit 10.6%, higher than many emerging market economies, including Ecuador at 10.5% and Ukraine at 7.1%.
The 2-year Portuguese bond yield jumped to 5.23% from 4.16%."
BBC
"Greece was pushed to the brink of a financial abyss and started dragging another eurozone country - Portugal - down with it Tuesday, fueling fears of a continent-wide debt meltdown.
Stocks around the world tanked when ratings agency Standard & Poor's downgraded Greek bonds to junk status and downgraded Portugese bonds two notches, showing investors that Greece's financial contagion is spreading.
Major European exchanges fell more than 2.5 percent, and on Wall Street, the Dow Jones industrial average finished down more than 200 points. The euro slid more than 1 percent to nearly an eight-month low.
"We have the makings of a market crisis here," said Neil Mackinnon, global macro strategist at VTB Capital."
Washington Post
"April 22 (Bloomberg) -- Greek bond yields surged to the highest since 1998 as the country’s worsening budget outlook put pressure on the government to accept a European Union bailout and ignore street protests against its austerity measures.
Greece’s benchmark 10-year bond yield rose to 8.564 percent, more than twice the rate on bunds. As a civil servant strike closed hospitals and shut the 2,500-year-old Parthenon temple, the EU said today that Greece’s deficit in 2009 was worse than previously forecast. EU officials lifted their estimate to 13.6 percent of gross domestic product from 12.7 percent and said it could top 14 percent.
Prime Minister George Papandreou is under fire from voters who say his budget cuts have gone too far and from investors who argue that further action is needed to reduce a deficit that is four times bigger than European Union rules allow. As Greek lawmakers meet EU and International Monetary Fund officials to negotiate loan conditions, the premium investors demand to hold Greek debt over German bonds reached 522 basis points.
“Papandreou is caught between a rock and a hard place,” said Jacques Cailloux, chief European Economist at Royal Bank of Scotland Group Plc. “The market has zero confidence in what the Greeks are saying, and any further austerity measures pushed for by the IMF could be the ones that break the camel’s back if they are deemed unfair by the population. He doesn’t have any option though.”
Bloomberg
But, I thought that everything was all worked out and the world could breathe a sigh of relief. As the civil unrest increases and Greece loses its sovereignty to the world bankers watch it carefully. Greece is a preview of things to come. Europe is unraveling and we're next. Don't let the next few months of "good" economic news here in America fool you. We're benefiting from what's happening elsewhere, for now, but that will be short lived. That, and the government, at some point, has to stop printing money.
"What does it all mean? It means the government must continue to spend or the private sector will fall back into a debt-laden slump. As we previously mentioned, the private sector is not yet ready to run with the baton and likely won’t be ready to run with it for several years. If the government cuts back on spending and stops effectively crediting private sector bank accounts the likelihood for a double dip or an all-out new recession increases substantially in 2011 and 2012:
“Discontinuation of fiscal stimulus could trigger another slump. The impact of the Obama administration’s $787 billion fiscal stimulus, unveiled last February, is now peaking. That reported improvements in economic conditions are still so modest naturally leads to concerns about what will happen when the stimulus winds down. The stimulus is scheduled to have its greatest impact in Q2 and Q3 this year, so I do not expect the economy to lurch backwards in the near future. Nevertheless, the economy could stall again once the stimulus ends unless private demand picks up in the next few months. The economy may rapidly improve in the coming months. However, the fact that the Fed is retraining bank inspectors in an effort to address the credit crunch suggests that central bank officials do not see the recovery as having firm underpinnings.”
...In March of 2009 we began referring to the rally as “the government run rally“. The rally started on government interventions and continues to this day with a massive and continuing stimulus plan that props up the economy.
In summary, enjoy the continuing appearance of an economic recovery into the back half of this year (and what will likely be higher equity prices), but don’t get your hopes up for a sustained recovery. The likelihood of spending cuts and higher taxes will put a damper on the recovery in 2011 just when things are starting to look so good. And that’s assuming that Ben Bernanke’s cattle prodding of prudent savers into risk assets doesn’t result in extreme malinvestment and destructive asset bubbles before that."
Business Insider
All of the news stories below come from the Drudge Report today. I didn't have to search through obscure blogs or boring financial pages. This is all right out in the open. Yet, if you only base your view of the current economy on government talking points and financial services professionals you would think everything's coming up roses. Well, it's not.
So what do the stories below tell us? Americans have benefited from massive government interference in the market place over a long period of time. We have come to expect government to provide a myriad of services while at the same time we have avoided paying for them. We've let money that was supposed to be set aside for social security and other government programs be replaced with I.O.U.'s so the government could offer us more programs while hiding the true cost, thus allowing politicians to buy votes with our money.
Because of this we have reached a tipping point. The Fed is all but admitting that we cannot fund our obligations and to do so will require massive new taxes or huge cuts in entitlement programs such as Social Security. Where will the taxes come from? The tax code has shifted most taxes to the wealthiest already yet they are being expected to pay more. The middle class is just about tapped out and most of the working class doesn't pay taxes and couldn't afford them anyway. Well, they don't pay federal income tax but they are caught up in the rising taxes in every other sector, siphoning off money that would otherwise go into savings or purchases which would drive growth in the economy. Now, it just gets sucked into the black hole of government waste.
Now as city and state governments begin to either go bankrupt or contract at an incredible rate services that we've already "paid" for through taxation will begin to disappear or carry a use cost. Not only will we pay for fire and police protection through our property tax but now we'll be billed if we use the service. More and more of our meager income, if we're fortunate enough to have a job, and which has fallen in real terms since the early 1970's, will be taken by government to try to maintain programs. Special interest will fight to keep these programs in place because they have become dependent on them, like crack addicts, and most politicians won't have the courage to stand up against them.
This isn't just an American problem. Greece is poised to collapse; the first of many European Union states to do so but not the last, and they will they take the E.U. with them. They are much farther down the socialist road than we are and will go first. This is going to make America the last safe haven so money will flow our way, temporarily propping us up. This, along with the trillions of dollars printed out of nothing and injected into our economy is causing the markets to rise even though consumer activity is way down and the real unemployment rate is over 20%. This false economic growth will probably get a lot of people to start to reinvest in the markets with the money they've held out because they are going to be afraid if they don't they'll miss out. This will cause further rises in the markets fueling additional investment. Because this growth is based on pure speculation, government debt and fear it will, at some point, collapse. A house built on a foundation of sand will not stand.
So what do these stories tell us. They tell us that contrary to all of the happy talk from the governments and the investor class nearly every government in the Western World, whether city, county, state or national that has traveled down the socialist path is going under. They have all reached the end of their ability to fund this Utopian dream. Most Western governments are now faced with a singular reality; contract or die. Since most won't be able to contract without massive social unrest because they have conditioned their citizens to welfare, they are going to die a violent death. And, because of the interconnectedness of the world, they will take it all down with them.
Or, maybe I'm just reading too much into it.
"A senior U.S. Federal Reserve official said on Wednesday that interest rates kept too low for too long encourage risky financial behavior and recommended raising borrowing costs to prevent another boom and bust.
"I am confident that holding rates down at artificially low levels over extended periods encourages bubbles, because it encourages debt over equity and consumption over savings," Kansas City Federal Reserve Bank President Thomas Hoenig told a group of business people.
"While we may not know where the bubble will emerge, these conditions left unchanged will invite a credit boom and, inevitably, a bust," he said."
CNBC
"Federal Reserve Chairman Ben S. Bernanke warned Wednesday that Americans may have to accept higher taxes or changes in cherished entitlements such as Medicare and Social Security if the nation is to avoid staggering budget deficits that threaten to choke off economic growth.
"These choices are difficult, and it always seems easier to put them off -- until the day they cannot be put off anymore," Bernanke said in a speech. "But unless we as a nation demonstrate a strong commitment to fiscal responsibility, in the longer run we will have neither financial stability nor healthy economic growth."
Washington Post
Mayor Antonio Villaraigosa backed down from his hardline stance over the budget crisis Wednesday, admitting he cannot shut down city services without the City Council's approval and requesting $20 million from the power utility to keep the city solvent.
The mayor's plan to shut down services that don't make money, such as parks and libraries, for two days a week starting Monday is a "plan of last resort," said his deputy chief of staff, Matt Szabo."
Yahoo
"If you get into a car accident and 911 is called, you may get billed for the emergency response. Cash-strapped communities are sending out bills to cover the costs of fire trucks responding to crashes. As CBS 2 Investigator Dave Savini reports, often times it does not matter whether you caused the accident or are the victim."
CBS 2
"About 47 percent will pay no federal income taxes at all for 2009. Either their incomes were too low, or they qualified for enough credits, deductions and exemptions to eliminate their liability. That's according to projections by the Tax Policy Center, a Washington research organization.
...The vast majority of people who escape federal income taxes still pay other taxes, including federal payroll taxes that fund Social Security and Medicare, and excise taxes on gasoline, aviation, alcohol and cigarettes. Many also pay state or local taxes on sales, income and property."
Yahoo Finance
"World markets slid Thursday amid mounting worries about a potential Greek debt default as the country's borrowing costs continue to go through the roof.
...Wall Street was also poised to open lower after sizable falls Wednesday in the wake of disappointing data showing that consumer credit in the U.S. fell by $11.5 billion in February and a suggestion from Thomas Hoenig, a rate-setter at the U.S. Federal Reserve, that borrowing costs should start rising soon - Dow futures were down 43 points, or 0.4 percent, at 10,806 while the broader Standard & Poor's 500 futures fell 5.5 points, or 0.5 percent, at 1,173.50."
AP
"Financial markets turned on Greece again on Thursday, driving up its borrowing costs to record levels on rising doubt that the EU will provide a debt rescue, and the euro plunged further.
The yield on Greece's 10-year sovereign bond soared to 7.423 percent Thursday, the highest since the country adopted the euro in 2001, amid mounting fears it might be unable to repay huge debts falling due soon."
Yahoo
What happens when the real cuts and layoffs begin, when Social Security and Medicare get slashed? What happens when salaries of government workers are cut across the board? Look to Greece. These college campuses are just a taste of what is coming our way.
"UC Berkeley—where the idea of the March 4 Day of Action incubated last October—erupted into a riot of noise and colors Thursday afternoon, when more than 1,000 people marched from Sproul Plaza to Frank Ogawa Plaza in Oakland.
Students, faculty, staff and workers protested the budget cuts, fee hikes and furloughs in public education, chanting slogans, waving signs and playing loud music as they walked down Telegraph Avenue.
Interstate-880 in downtown Oakland was temporarily shut down when a small group broke off from the marchers and a little after 5 p.m. walked into the highway where they were chased away by police in riot gear. The California Highway Patrol said lanes was reopened around 5:30 p.m., but the incident backed up traffic in all directions.
In Berkeley, rally organizers estimated the crowd to be around 2,500, although the Berkeley Police Department said it was closer to 1,000."
Daily Planet
"Greek drivers lined up for gas at the few stations still open Friday as a customs strike against government austerity measures left many pumps running dry.
The fuel shortage was the first serious consequence of growing labor protests against the Socialist government's emergency spending cuts program, aimed at easing the debt crisis in Greece and shoring up market confidence.
Customs workers have extended their strike against salary freezes and bonus cuts through next Wednesday, when unions across Greece will hold a general strike that is set to bring the country to a standstill."
Yahoo Finance
This is what is coming to America. We are going to see the same sort of protests from unions and others as it finally becomes apparent to all that the country cannot pay its bills and will be forced to cut spending. When people laugh at those of us that are called "preppers" they need to understand that this is what we are preparing for. How long do you think it will take for the food to disappear from the shelves and the fuel from the gas station when the trucks aren't running? In some cases only a day.
So start to prepare for what is probably not all that far off. In the last week the government has started to put out news stories to the major media about spending cuts and tax increases, even going as far as to include Social Security and Medicare. The President is busy creating commissions and study groups to try and distract us from the inevitable. The Fed is showing the first signs of raising interest rates. Producer prices are on the rise while the cost of goods sold has been deflating. More jobs are being lost everyday. The Euro is on the verge of collapse. And to top it all off, it sure seems like the Obama administration is doing all they can to justify a war with Iran, most likely in hopes of saving the economy.
Ugly, ugly times are right around the corner. Start to prepare yourselves and your families while there is still some time left. When we start to collapse I think it will happen quickly and will come as a complete surprise to most. Try not to be caught in the wreck.
Remember, Greece is our future.
The states here in America need to pay attention to what happens to Greece. When they refuse to cut spending and go bankrupt, then turn to Uncle Sam for help, they can kiss their sovereignty goodbye. Europe is a preview of our future. We are all about to become slaves to the state; just another brick in the wall.
"The council of EU finance ministers said Athens must comply with austerity demands by March 16 or lose control over its own tax and spend policies altogether. It if fails to do so, the EU will itself impose cuts under the draconian Article 126.9 of the Lisbon Treaty in what would amount to economic suzerainty.
While the symbolic move to suspend Greece of its voting rights at one meeting makes no practical difference, it marks a constitutional watershed and represents a crushing loss of sovereignty."
The Telegraph
Read "Where Liberalism is Headed" at Commentarius de Prognosticis.
At the end of his post Ioannes had this to say:
"From this discussion it is readily apparent that there is no longer enough capitol around to build any new nuclear power plants. Such is the legacy of Obamolech and his supporters."
As much as I hate to say it, my guess is that the limited capital available will be used to fund the military to allow the government to keep the people in check as the entire system collapses.
Math doesn't lie. We have created an unsustainable debt and it is going to destroy us. So we're left with two options; we can try to print so much money that we can inflate away the debt or we can default. Either way, we are facing the end of life as we've known it.
Personally I'd rather we man up, admit we can't keep up the charade and default. This would require us to remove ourselves from the world stage, concentrate on the space inside our borders and live within the limits established by the Constitution.
There is no reason we can't survive on our own. It won't be easy, at first. We'll have to learn to accept limits on consumption and become individually much more self sufficient. We'll have to learn to live locally. By this I mean we need to start looking to our neighbors for the goods we can't produce ourselves. As far as transportation goes, the railroads are still here and they can move goods quite efficiently, even using steam. The people will have to go back to walking, riding a bike or using horses for the most part. We will need some local means of exchange, some form of currency and barter, something that we produce ourselves. All currency should be created through labor, not debt as we've done for the last century.
We need to return to a more Jeffersonian model of existence, every man responsible for himself and his family. Government will be mostly at a local level, too, with a good deal more citizen control and interaction. Our lives will revolve around an area that is basically walkable. We won't have to concern ourselves with anything else.
Because that's been the problem; the explosion in central government control begun by Lincoln saw its logical conclusion when Teddy Roosevelt turned us into an Empire. We lost our internal and naturally local focus and started concentrating on the world. Our founders never intended this and in fact warned against it.
By the grace of God the American people will recognize the path we're on and choose to collapse in an orderly fashion. The problem is our political leadership needs to step up and take the lead. We are at one of those pivotal moments in history where a leader can come forward and take us to the promised land. Of course, just like the Exodus, we are going to have to suffer our forty years in the desert.
The sooner we embrace voluntary devolution of our economic system and a return to the American Republic of sovereign states as designed by the Founders the better off we'll be. Unfortunately, instead of Moses we seem to be led by mostly self serving opportunists with no capacity for truth or hardship. Our leaders are not speaking the truth to the people so most are not aware of what's coming and will not accept it if they are told. We've squandered the time we should have used to prepare the people and now it's too late. Greece is us. Everything that is happening in Europe is coming our way, sooner rather than later.
So buckle up and read your history. Go back and look at America in the period 1870-1890. Pay attention to how people lived. There was some hint of modern technology, such as electricity in cities, natural gas and telephones. None of this was widespread but it was available. Most long distance transportation of goods was accomplished through steam powered trains. Most people produced some or all of their own food and most of the daily chores were done by hand. Urban life was segregated clearly between those few with a lot of money and everyone else. Money could buy a significant level of comfort. If you worked in an industrial environment the work was hard and dangerous and didn't pay well. If you lived in a city the chances are that you rented. Homeownership among the common people was not widespread. A middle class existed but nowhere near what we see today.
Rural life was just as hard. Most jobs were done by hand so farms were small and supported the family at a subsistence level. If things went well a farmer might produce a tiny surplus to sell. Rural people lived apart from each other and what social life they had revolved around churches and civic organizations. Many would live their entire lives without traveling more than twenty miles from the place they were born.
If we can manage to retain the knowledge that we have acquired over the last hundred years or so we can quickly better our standard of living over our fore fathers. Just our understanding of germs and disease alone puts us miles ahead. No one understood the importance of cleaning their hands back then. Just that simple change could have added years to their lives and reduced the number of diseases that were suffered.
If we collapse our economy in an orderly fashion I believe that this is the life we are returning to. That is, if everything goes really, really well. With a chaotic collapse we stand a very good chance of slipping all the way back to the dark ages.
The people of America and the world need to wake up to what is coming. I think we're starting to but it may be happening too late.
Pray for guidance, understanding and strength. And pray especially for the safety of us all. There will be a lot of death and suffering in our near future and it will affect the good and the bad alike.
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