Paul Craig Roberts’ Address to the International Conference on the European/Russian Crisis Created by Washington

http://www.paulcraigroberts.org/2015/06/19/paul-craig-roberts-address-international-conference-europeanrussian-crisis-created-washington/

No More Foreplay: Russia Threatens European Gas Supply Disruptions

Speaking of global warming, El Nino should make this a cold winter, and Russia is threatening to do exactly what many feared:  cutting off Europe's gas pipeline.  And so it goes, and why Putin is holding all the cards.

http://www.zerohedge.com/news/2014-09-25/no-more-foreplay-russia-threatens-european-gas-supply-disruptions

'Europe's Citizens Now Have to Fear for Their Money'

This guy Bofinger has a lot of balls.  I'll leave it at that.

http://www.spiegel.de/international/europe/interview-with-german-economist-peter-bofinger-on-perils-of-cyprus-bailout-a-889594.html

Deposit Flight From Europe Banks Eroding Common Currency

http://www.bloomberg.com/news/2012-09-18/deposit-flight-from-europe-banks-eroding-common-currency.html

Xtranormal Explains The European Non-Bailout Best - With A Cartoon

http://www.xtranormal.com/watch/12611732/the-european-bailout-explained

Computers Will Soon Take Orders at European McDonald’s

Here comes the inverse effect of the recent 62,000 minimum-wage hiring spree in the US by McDonald's.  Workers in Europe are about to be "outsourced", this time by a credit card swiper.

http://www.foxbusiness.com/industries/2011/05/16/computers-soon-orders-european-mcdonalds/#ixzz1Mdd3M3no

Portugal next

Like clockwork, the "P" in the "PIIG" European countries--Portugal, is about to roll over due to sovereign debt problems. This is like watching a developing train wreck in slow motion.

http://www.businessweek.com/news/2010-03-24/asian-stocks-rise-on-strengthening-global-economy-euro-falls.html

The perils of vendor financing

China is financing the US, while Germany is financing European consumption. With economies from the developed world tanking, and the consumer flat on its back, this game is unwinding.

http://dollarcollapse.com/articles/china-and-germany-the-perils-of-vendor-financing/

China lends money directly to the U.S. by using the dollars it receives from us to buy Treasury paper. This lowers U.S. interest rates and supports the dollar, which allows us to continue to buy Chinese stuff.

Germany, on the other hand, has lent its credit rating to the whole Euro Zone, allowing countries like Greece and Spain to borrow more and at lower rates than they could have otherwise. The borrowers use some of this money to buy cars, pharmaceuticals, and solar panels from Germany.

Now both China and Germany have discovered that their surpluses were based in part on bad loans to weak borrowers, and that some of the assets they thought they owned are 1) not really theirs or 2) worth way less than face value.

China has a lot of dollars, but can’t unload them without destroying the value of the dollars it retains. It’s trying to move out slowly, scaling back its purchases of U.S. debt and buying gold and oil resources, but it has to walk a fine line because spooking the markets would defeat its purpose. So it’s stuck with big dollar balances for the foreseeable future, while the U.S. is actively destroying the currency’s value.

More Unthinkables

The proverbial "other shoe" is dropping. Citigroup shares dipped below $2 and Bank of America shares are headed toward $3 amongst fears of bank nationalization, which completely wipes out shareholders (instead of just essentially wiping out shareholders). As financials are leading indicators, this does not bode well for the broader averages. The Dow Jones Industrial Average dipped and closed below November 20, 2008 lows, which means that support level now serves as resistance. The charts are basically breaking down toward their 2002 levels, as the technicals are deteriorating faster than you can say "Ponzi".

Gold touched above $1000 an ounce for the 2nd time in history since last spring, before retreating. Gold mining shares have essentially doubled since their November lows and still surging. I've been expecting pullbacks, looking for opportunities to add to my current positions, but the market just hasn't allowed me to. I'll just hold on and see if we penetrate the $1030 all-time high. If that occurs, then all bets are off and we could see a buying mania which would signal an opportunity to take some profits off the table. Long-term, the chart for gold still looks bullish, but locking in some profits just seems prudent to me, considering last year's stunning rise and subsequent collapse in gold.

Eastern European defaults are a huge concern, which would cascade toward western European banks with heavy exposure to the emerging countries in the Baltics. And with European banks even more leveraged than their US counterparts, this is analogous to the US subprime mortgage crisis--only worse and much larger in scope.

Unemployment is soaring with no end in sight, corporate earnings eroding, and consumer confidence shattered, markets are braced for the next shock, with the realization that this is not your garden-variety recession--this is an outright worldwide Depression, with no country spared.

The Dow/Gold ratio is at 7.5 and dropping, and that ratio usually dips below 5 and all the way to 2 at extreme recessionary lows. Hypothetically, gold at $1200 an ounce, and the Dow Jones Industrials at 6000 would yield a DJIA/gold ratio of 5. This is another indicator which has scary implications going forward.

The Volatility Index is climbing once again above 50, so hold on to your hat.