I have never been one to yell fire in a crowded movie. But
this is getting absolutely ridiculous.
The global economy is in such a tailspin and there is nobody
with a solution no less even a hint of what is developing so rapidly before
everyone’s eyes, it appears just hopeless to save society.
The HYPERINFLATIONISTS, presume that government will
continue to just print, for they cannot see that government is turning
aggressive against the people for the bondholders will not tolerate such a policy
and demand austerity with higher taxes.
This is a Monmouth battle that is being waged and then they
fail to grasp that state and local governments cannot print money and are
becoming very Draconian raising taxes and prosecuting anything they can to
raise money.
The federal governments are not coming to the rescue of
state and local because they know they cannot. There are always counter-forces
at work that must be balanced.
There is a substantial difference in trend between national governments
worldwide and state as well as local municipalities.
This can only end in real profound collapse. This is the
reason to buy gold – to survive the future.
Copyright Martin Armstrong All
Rights Reserved August 4th, 2012
From the CNBC show Squawk
Box – August 10, 2012 http://video.cnbc.com/gallery/?video=3000108212
Read the full transcript below:
Joe Kernen: We’re just seconds away
from import price data for July, and Kevin Ferry is standing by at the CME in
Chicago.
(To Kevin Ferry) Don’t screw
this up because you don’t normally do it. Usually it’s Santelli. So whatever
you do, don’t screw this up, Kevin.
Kevin Ferry: No pressure. Import
prices down 0.6. that’s actually weak. We were looking for it to come back on
to the high side after a big oil moved down last time. Small revision the Dow
2.4 from 2.7.
Year over year you’re still looking
at prices falling out of bed, Joe, down 3.2%, year over year. Wow.
JK: Also, when we were corresponding
earlier, Kevin, you wanted me to ask you something that I didn’t really
understand, that was compelling. What was that?
KF: Oh, well I was just noticing
that there are Libor subpoenas raining down on the New York branches of these
foreign banks today.
So I think you really have to watch
it. The BBA is now saying they are going to go into ‘overhaul’ mode. So as if
we don’t have enough things going on, you’re going to start opening up a
Pandora’s Box here in the Libor sector of the market.
JK: I see. So what would the
implications be for Libor, do you think?
KF: Well, I think what they’re going
to do, Joe, is basically put the old system in a coma, and work to devise
something that’s a little bit better, and it’s going to be tricky.
So ah, hey, I’m a Merck guy. I cut
my teeth in the euro/dollar pit, but watch the new general collateral futures
at the New York stock exchange. I think that’s where the interest is going to
go.
Co-host Doug Dachille joins in:
DD: So what are they going to do
with the euro/dollar futures and all the outstanding notion of principal of
contracts linked to Libor?
I mean is everybody going to convert
their Libor interest rate swaps to cost of fund funds or Fed fund basis swaps
or some other index?
KF: Are you asking me? I’ve asked
that question as high as I could ask it and I get blank stares. So I don’t
think you can violate the open interest in the contracts of over two decades.
DD: What I find fascinating is, we
had somebody talking about oil earlier today.
And everybody uniformly agrees that
there’s market manipulation by a fairly strong cartel of people that have – in
that case, that cartel has the exact same directional exposure to know that
when prices go up, they all make money and when prices go down, they all lose
money.
But in the Libor space it’s not
clear that every bank has exactly the same Libor exposure. so it’s not clear
that that cartel in setting Libor and manipulating it, actually is as powerful
as the cartel that manages oil prices.
Yet I don’t hear any outrage of
people routinely trading commodity derivatives and commodity futures, as much
as I hear the outrage over euro/dollar futures and Libor-based interest rate
swaps.
Maybe it’s a perception thing,
Everybody assumes that’s what goes on when you trade commodity futures, but
nobody ever really thought that was going on when you were trading euro/dollar
futures.
KF: Right, well let’s go out for a
drink sometime. Laughs.
JK: I knew you guys would be, you’re
like soul mates. I just got you started. Thank you, Kevin, Doug.
KF: Thank you, have a good weekend.
JK: OK, you, too.
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