The European Bailout: Not a Very Promising Start

Many people have written insightful criticisms of the European bailout. For example, Tyler Durden, Joe Weisenthal and Gregory White point out that the French banks are the real winners of the bailout (but don't forget JP Morgan).

Ron Paul points out that the Fed opening its swap lines to Europe violated its promise to Congress not to do so. Paul also says the bailout will help lead to the destruction of all fiat paper currencies, ensuring that "gold will rule the roost".

And see Mish's roundup for more general criticisms of the bailout.

Many have predicted that it is only a short-term measure to kick the can down the road. But the numbers themselves show that the bailout might not even be having a sufficient short-term effect.

For example, as the following Euro to Dollar chart shows (courtesy of Finviz), the Euro rallied, and then sunk back almost all the way to it's pre-bailout level today:

(The Euro's rally against the Japanese Yen didn't last very long, either. And Morgan Stanley's Stephen Hull thinks any rally in the Euro will be short-lived, anyway.)

As Bloomberg notes, bank swap and libor rates show that the bailout might not be enough to stem the sovereign default crisis:

Money markets and the cost of protecting bank bonds from losses show investors are concerned the almost $1 trillion rescue plan announced by European leaders may not be enough to contain the region’s sovereign debt crisis.

A credit-default swaps index linked to European banks that usually trades tighter than an investment-grade benchmark is 30 basis points higher, according to CMA DataVision. A measure of banks’ reluctance to lend remained three times higher than it was in March.

***

The difference between [libor] and the overnight indexed swap rate, the so-called Libor-OIS spread that rises as a signal banks are less willing to lend, climbed yesterday even after the rescue announcement. The rate advanced to 18.83 basis points, from 18.11 at the end of last week and 6 basis points March 15.

Morgan Stanley emerging market strategist Rashique Rahman says that - even after the bailout - Europe's troubles are growing:

Liquidity provision or not, sovereign credit risk has not gone away. Our work suggests ongoing deterioration of DM sovereign creditworthiness going forward, manifested by further downward credit rating pressure. Additionally, the transference of periphery Europe indebtedness to that of core Europe via the stabilization fund – and further, via ECB purchases – bears very close monitoring. Contamination to the core (of DM) lies at the heart of contagion for EM – which again is manifested through DM funding market stresses.

Nouriel Roubini told Bloomberg that the bailout is not a cure-all:

The implications of the plan require fiscal austerity and higher taxes, damping growth and possibly extending economic hardship, Roubini said.

“In the short term, raising taxes and cutting spending is going to imply further recession and further deflationary pressures in the euro zone,” Roubini said.

Greece, Spain, Portugal, Italy, Ireland and other members of the euro zone may struggle to comply with the fiscal requirements and to restore competitiveness after years of an appreciating euro boosting growth, Roubini said. Euro zone countries’ ability to act may be hindered by divided governments such as the U.K.’s hung parliament, German Chancellor Angela Merkel's weakened clout, and the continuing protests in Greece, he said.

In the longer-term, Simon Johnson points out that the bailout creates huge moral hazard risks:

This is a whole new level of global moral hazard – the result of an alliance of convenience between troubled governments in the south of Europe and the north European banks (and implicitly, north American banks) who enabled their debt habit. The Europeans promise to unveil a mechanism this week that will “prevent abuse” by borrowing countries, but it is hard to see how this would really work in Europe today.

***

The European Central Bank intervention and this package raise enormous moral hazard issues. The ECB’s management was forced into this kicking and screaming. It was only when they realized that the whole euro zone financial system was at risk of collapse that they threw the kitchen sink at the problem. This can now go two ways: either they tighten fiscal policy across the eurozone, and introduce much more rigorous and enforced rules on deficits and profligate credit through banks, or, they let a system persist which is another “doomsday machine” that will live again to grow, and could one day topple them.

And Johnson notes that the bailout might for even more painful decisions in the long-run:

As Willem Buiter (formerly Bank of England, now at Citigroup) remarked last week, you have the greatest incentive to default when you are running a balanced primary budget (i.e., after substantial budget cuts) and still have a large government debt outstanding. His point is that the incentive structure of these programs means they will postpone a decision to default which would otherwise be rational now.

***

The underlying fiscal problems in Europe could fester – and the “rules” designed to limit moral hazard may turn out to be a complete paper tiger. In that case, the Europeans again have to make a fateful decision: Do they try to inflate out of the debt burdens of their weakest member countries; or do they instead try to manage selective default, keeping in mind that most Greek debt at that stage will be held by other eurozone governments.

As Yves Smith notes:

The real problem is that there appears to be no impetus towards a longer term solution. How do solve imbalances within the eurozone? Without a plan to develop a plan on that front, this simply rearranging the deck chairs on the Titanic.

Of course, the myriad fraudulent schemes (using derivatives and other means) to hide the problems of Greece, Italy and other countries are still continuing to some extent. And the size of the too big to fails means they can take down companies or nations using high-frequency trading, short-selling, credit default swaps and other means. Indeed, Jim Rickards argues that the bailout won't really help because "Goldman can create shorts faster than Europe can print money".

Therefore, without fundamental reform of the financial system, there can be no true and lasting European recovery.

The Greek spirit of resistance turns its guns on the IMF

Years of national denial about looming bankruptcy have turned to resentment as Greece is told how it must tackle its debt crisis

Riot police, Athens, 5 May 2010. Photograph: Louisa Gouliamaki/AFP/Getty Images

Deep inside the august halls of Athens University, the renowned political commentator Paschos Mandravelis will deliver a message this week that until very recently was lost on most Greeks.

His speech will focus on a single fact: that the country in the centre of the storm of Europe's worst crisis since the creation of the common market, missed the biggest story ever – its own looming bankruptcy. "Everyone," he says, "starting with the Greek media, was in an incredible state of denial."

Last week escapism was no longer an option as Greece's debt drama claimed its first lives and the nation, teetering on the brink of economic collapse, erupted into violent protests over unprecedented austerity measures.

The deaths on Wednesday of three Greeks, killed in a fire set off by hooded youths throwing petrol bombs into the bank in which they worked, has been the wake-up call – one more shocking than ever thought – to ask questions Greeks would have preferred never to ask.

Yesterday, as tributes continued to pour in for the victims – a man and two women, all recent British university graduates who had shown up for work despite a general strike for fear of losing their jobs – they were asking: "How could it come to this?"

"Greece," says Mandravelis, "is not only confronted with economic failure but a media failure and political failure, and that is what is so frightening."

The financial, and increasingly social, crisis gripping the country has, say analysts, brought the nation face to face with a myth: the myth of a democratic state that thrived not on meritocracy and progress but cronyism and corruption after the last chapter of its troubled history ended with the collapse of military rule in 1974.

As Athens prepares to receive the biggest bailout in history – up to €120bn dispensed from the EU and IMF over the next three years – the consensus is that Greece has reached rock bottom. A point so low that even Brigadier Stylianos Pattakos, the last of the dictators still alive, feels unabashedly vindicated. "In our time," he told the Observer in an interview, "there was no debt. Not one drachma went astray. The Greeks are not disciplined like the Germans or the British. They need authority."

Today the junta is embodied not by the likes of Pattakos, who at the age of 98 has no qualms about his role in quashing liberty in the birthplace of democracy, but the IMF. For the unions and tens of thousands who took to the streets last week – and are girding their loins for the "mother of all battles" in the weeks and months ahead – the Washington-based body is neither saint nor saviour.

Prime minister George Papandreou agreed to activate the emergency international aid after it became clear two weeks ago that Greece was heading for sovereign default, unable to refinance its staggering €300bn (£259bn) debt because of prohibitively high borrowing costs on international markets.

But for those on the left, leading the protests with flags emblazoned with the hammer and sickle, the intervention of the IMF has been the tipping point. The majority of Greeks not only see it as the harbinger of harsh economic reforms but the symbol of foreign occupation. For the abundance of conspiracy theorists on both the left and right, its involvement is part of a grander, but seemingly no less implausible, plan to subjugate Greece after draining the country of its resources.

"This has gone beyond economic matters to a battle for national independence," says Manolis Glezos, the leftist who shot to fame snatching the swastika from the Acropolis shortly after Hitler's forces streamed into Athens in 1941.

"Papandreou himself has admitted we had no say in the economic measures thrust upon us. They were decided by the EU and IMF. We are now under foreign supervision and that raises questions about our economic, military and political independence."

At approaching 88, Glezos embodies the Greek spirit of resistance – a leading light in the struggle against Nazi occupation, bloody civil war, authoritarian right-wing rule and the seven-year military dictatorship that ended with Pattakos sending a tank crashing through the gates of the Athens Polytechnic to crush the students' revolt that would pave the way to the regime's demise.

"We are," he says, "neither at the middle nor the end of political developments, of protesting what is happening in this country. We are at the beginning."

The Greeks' innate anti-authoritarianism, a legacy of 400 years of Ottoman rule, is also at the heart of the problem that has helped to push their country to what President Karolos Papoulias described last week as "the brink of the abyss".

More than any other European nation, the Greeks think nothing of taking to the streets in noisy outbursts of protests. But more than that, in a culture of cutting corners, they also have a problem with being told what to do. It is an attitude that could have profound consequences for Papandreou's ability to enforce policies that include painful wage and pension cuts – and the course of the crisis.

"The capriciousness of Ottoman rule and the weakness of the idea of the rule of law helped to shape the underlying values of Greek society and to determine attitudes to the state and to authorities that have persisted into the present," wrote Richard Clogg, Britain's pre-eminent historian of modern Greece.

Nothing encapsulates the strained relationship with authority more than the nation's predilection for avoiding the taxman – a hobby that has helped to push the public deficit to a European record – and Greeks' love-hate relationship with the state.

Assuming power after five years of scandal-plagued conservative rule last October, the Socialist government discovered that the tax inspectorate had virtually collapsed with revenue losses from tax evasion surpassing €20bn, more than any other eurozone nation.

It also emerged that fewer than 15,000 Greeks declare incomes of over €100,000, despite tens of thousands living in opulent wealth on the outskirts of the capital. A new drive by the Socialists to track down swimming pool owners by deploying Google Earth was met with a virulent response as Greeks invested in fake grass, camouflage and asphalt to hide the tax liabilities from the spies in space.

The country's black economy – estimated conservatively at 30% – has also helped to bring public finances to the point of meltdown.

"When the rest of Europe were living in dukedoms and refining democratic institutions, we were part of a huge empire living in an agrarian and feudal Balkan state," said Nikos Dimou, author of the best-selling book The Misfortune of Being Greek. "We had little relationship to our glorious past. Our institutions were imported or thrust upon us, our identity both eastern and western. It created a human being that feels very strange in his skin, culturally very different to other Europeans."

Dimou wrote the book in the latter years of the junta, but with ordinary Greeks now embroiled in the sort of soul-searching last seen at the end of the junta, the tome is selling like hotcakes. "Greeks want to know why they have got to this point, what went wrong," he says.

The austerity measures that have provoked such unrest aim to trim the budget of €30bn through 2012. Almost all are targeted at the country's dysfunctional and bloated public sector.

"Papandreou is paying for the sins of his father [former prime minister] Andreas, under whom Greece's debt soared," added Dimou. "The cuts he will have to make have never been made before. It is all very new."

But with poverty growing and the country's militant Communist party insisting that "the plutocracy pay" for the crisis, Greece could also be headed for a new class warfare the likes of which have never been seen before. Some commentators have not ruled out kidnappings and assassinations as Greek turns against Greek in the months ahead.

The conspiracy of silence that has marked Greece's troubles may be over, but the battle that could tear it apart has only just begun.

Unions warn of Greek-style riots in Britain against public sector cuts after court victory over capping of redundancies

Militant unions today sent a chilling warning of Greek-style strikes and protests after winning a major legal victory for civil servants made redundant.

The warning raises fears of months of chaos triggered by a furious public sector who refuse to accept painful changes to tackle Britain's financial crisis.

With one in five workers employed by the State, the scale of the crisis could be crippling with unions warning of a 'tidal wave' of strike action.

The Public and Commercial Services Union signalled the nightmare facing the future Prime Minister who tries to wield the axe.

Predicting a riot: Left-wing Labour MPs and trades unions said they would organise Greek-style resistance to what they called the 'incoming coalition neoliberal government'

The Cabinet Office had been trying to cut a gold-plated redundancy deal for civil servants which it described as 'out of date and more expensive than almost any other available.'

But a High Court judge ruled today that Labour had acted unlawfully, and that the cost-cutting changes to redundancy payments must be scrapped after failing to get the union's approval.

The terms of the old redundancy deal was extraordinarily generous, with some long-serving civil servants eligible to get about six years' pay if they joined before 1987.

More...

• World stock markets soar as investors welcome $1TRILLION EU bail-out... but lameduck Darling leaves Britain with £10bn bill

For example, a 46-year-old earning £24,000 who had been a civil servant for 25 years could enjoy a cash payment of about 6.2 years' salary, or about £150,000.

Under the new deal, the civil servant would still be eligible for a generous deal of £60,000.

By comparison, a private sector worker who earns the same money and has done the job for the same length of time would get just £8,360 under statutory redundancy rules.

Greek chaos: One of the survivors is pulled out of the fire-bombed Marfin Egnatia Bank by firefighters in Athens last week

General secretary Mark Serwotka said his 270,000 members, who staged three days of strike action in March, 'refused to sit back and watch their terms and conditions being ripped up.'

He said: 'We will now be knocking on the door of the next government to remind ministers they are legally obliged to reach an agreement with us.

'If they do not meet their obligations, the union will have to consider further industrial and legal action.'

It comes amid tough warnings from other unions that any cuts will be fiercely opposed by a public sector which employs a record 6.1million people.

Left-wing Labour MPs and trades unions said they would organise Greek-style resistance to what they called the 'incoming coalition neoliberal government'.

'There is no popular mandate for cuts and, as in Greece, any attempt to impose them will be firmly resisted,' they said.

John McDonnell: ' The left and trade unions will be forging a coalition to resist attacks on our communities'

Labour MP John McDonnell, chairman of the left-wing Labour Representation Committee, said: 'The public and private horse-trading masks the fact that whatever government emerges will be somewhere on the neoliberal spectrum, and will soon be driving through large scale cuts in public services, pensions and benefits.

'To face a neoliberal coalition government, the left and trade unions will be forging a coalition to resist attacks on our communities.'

Dave Prentis, general secretary of Unison, warned: 'Unison will fight tooth and nail to defend our public services, oppose more privatisation and any attempts by the new government to attack our members' pay.

'We will fight for the hundreds and thousands of jobs that are in imminent danger. We will support our members forced into taking action to protect services and jobs.'

The firefighters' union also warned that it will oppose any cuts and promised to fight 'as never before'.

Matt Wrack, general secretary of the Fire Brigades Union, said: 'We do not believe that people voted to see their emergency and other essential public services cut, to pay for the banks bail out.

'We will fight to stop our service from being cut to pieces. Local communities and workers in the public services will need to fight as never before to defend our vital public services.'

Yesterday the University and College Union said it is balloting its members over plans to change the gold-plated pension enjoyed by academics.

Under the changes, academics could be forced to pay more money into the scheme and work for an extra five years. Unions say the pension is 'deferred pay' for its poorly paid members.

General secretary Sally Hunt said: 'We cannot rule out the possibility of industrial action to protect our members’ pensions if the employers continue with their intransigent position.'

Bob Crow, general secretary of the Rail and Maritime Transport union said: 'When the British people realize just how seriously they have been misled by the political elite over the attacks on living standards and public services that have been kept under wraps, it will unleash a tidal wave of strikes and public protests that will mirror the growing resistance on the streets of Athens.

'Whatever deals are stitched together, the budget cuts will top the agenda of whoever grabs the levers of power.

'The billions in bankers' bail outs has been creamed off, chewed up and will be spat back in our faces in public spending cuts. There is no question there will be a fight back on a massive scale.

Tensions simmer as Greece readies pensions reform

Hundreds of protesters rallied in Athens on Sunday as the government sought to rein in social tensions while pressing ahead with drastic austerity measures aimed at avoiding a debt default.

"I feel angry that my right to dream has been denied and it's mainly the government's fault," said Penny, a 19-year-old student demonstrating on a square in front of the parliament building -- the scene of riots last week.

Greece is burdened by giant debts and a recession-mired economy and has appealed to the European Union and the International Monetary Fund for help as it ran out of options to borrow on the markets amid steeply rising costs.

The EU and the IMF have approved an emergency loan package of 110 billion euros (141 billion dollars) to bail out Greece but have demanded strict budget cuts in return, and some experts are warning the money may not be enough.

The IMF's executive board on Sunday gave final approval to its three-year 30-billion-euro portion of the loan package.

The government has called for consultations on Monday with all of Greece's main political movements to be hosted by President Carolos Papoulias but two far-left parties that have helped lead protests are boycotting the talks.

The cabinet is also set to give its approval to a radical plan to overhaul the pensions system, raising the retirement age for women to 65 and increasing the number of years that workers have to pay retirement contributions.

Fears of a Greek default have put a focus on the weakness of other European economies such as Portugal and Spain, hitting the euro.

EU finance chiefs met in Brussels on Sunday in a bid to stop the plunge in investor confidence linked to the Greek crisis from spreading to other eurozone nations as observers nervously awaited market reactions on Monday.

Following days of Greece-linked mayhem on world financial markets last week, US President Barack Obama also held separate phone talks with French President Nicolas Sarkozy and German Chancellor Angela Merkel on the crisis.

In an interview with To Vima daily issued on Sunday, Greek Finance Minister George Papaconstantinou warned of the catastrophic consequences if Greece were to default on its debts -- something the government is racing to avoid.

"The banking system would stop operating and businesses and households would automatically lose access to bank funds," Papaconstantinou said.

"We would enter an even deeper recession of around 10 percent, maybe more, which we would not exit for years," he added.

Violent protests in Athens, which led to the death of three bank employees last week after their office was firebombed, have added to the pressure on the government.

The country's main union that represents around a million private employees has pledged to mobilise to prevent the pension reform from passing.

But a poll showed Greeks grudgingly accepting the need for cuts.

The survey in To Vima daily showed that 55.2 percent of respondents would accept austerity measures, while 56.3 percent prefer wage cuts to national bankruptcy and 71.3 want squabbling Greek political parties to cooperate.

Food-stamp tally nears 40 million, sets record

WASHINGTON (Reuters) - Nearly 40 million Americans received food stamps -- the latest in an ever-higher string of record enrollment that dates from December 2008 and the U.S. recession, according to a government update.

Food stamps are the primary federal anti-hunger program, helping poor people buy food. Enrollment is highest during times of economic distress. The jobless rate was 9.9 percent, the government said on Friday.

The Agriculture Department said 39.68 million people, or 1 in 8 Americans, were enrolled for food stamps during February, an increase of 260,000 from January. USDA updated its figures on Wednesday.

"This is the highest share of the U.S. population on SNAP/food stamps," said the anti-hunger group Food Research and Action Center, using the new name for food stamps, Supplemental Nutrition Assistance Program (SNAP). "Research suggests that one in three eligible people are not receiving ... benefits."

Enrollment has set a record each month since reaching 31.78 million in December 2008. USDA estimates enrollment will average 40.5 million people this fiscal year, which ends Sept 30, at a cost of up to $59 billion. For fiscal 2011, average enrollment is forecast for 43.3 million people.

(Reporting by Charles Abbott; Editing by John Picinich)

Tea Party Clueless About U.S. Tax Dollars Funding Bailout Heist

As CNBC hosts Joe Kerne and Rick Santelli pointed out yesterday, the Tea Party movement seems largely clueless about the fact that a huge chunk of the $1 trillion dollar bailout heist being pushed through to save the face of global economic governance is being funded with dollars looted from American taxpayers.

Founded on the principle of keeping taxes low for the benefit of the economy, the Tea Party movement has seemingly ignored the biggest and most insidious stealth tax – inflation – which as Ron Paul highlighted yesterday, will only soar as a result of this latest bailout.

“Could you really tell the American taxpayer, you can connect the dots between them and Greece? I mean are they paying for some lavish benefits in Greece right now?” asked CNBC’s Kerne.

“Well there’s no connect-the-dots,” Santelli replied. “I mean it is a fact. We contribute a little less than 18 percent to the IMF. And the IMF is pretty much using its entire piggy bank, of course to pledge up to €250 billion, no matter how you slice it, Joe. Eighteen percent of that money, or more, because you know, if they go much beyond this, they’re going to have to replenish the coffers.”

And we know that “replenishing the coffers” means not only raising taxes on Americans but also inventing new ones out of thin air, which will then go straight to the IMF to bankroll the next phase of global governance. It’s not good enough for these people to impose inherently undemocratic centralized systems of economic planning that only they control which then result in lowering your living standards – you have to pay for the whole thing to begin with.

In addition to Americans picking up the tab for the IMF’s bailout of Europe, they will also be waving goodbye to further unknown billions in the form of Federal Reserve credit swaps, with the Fed directly sending U.S. dollars to European banks. And don’t believe for a second that you actually have a right to know to which foreign entities these untold billions are heading – because Ben Bernanke refuses to tell us.

“I don’t think the average Tea Partier knows we’re paying for lavish benefits in Greece for public employees over there, Rick,” Kerne said. “I think maybe you need to tell them.”

But it appears as if the Tea Party and the American public as a whole has “bailout fatigue” and has completely lost track of the trillions stolen from them and the consequences this will have in the not too distant future.

Perhaps when the government keeps increasing the retirement age out of their reach, or when they outright pillage their pension funds will Americans finally grasp what all this truly means. Perhaps the drastic cuts in public services, in policing, and further withdrawals from infrastructure and road maintenance funds will create the flash point that will lead to similar scenes we’ve seen in Greece unfolding on American streets.

But as it stands, Kerne and Santelli are right, the silence from the Tea Party in reaction to the bailouts is deafening, and if such a meek response is to continue then the entire momentum, purpose and relevance of the movement will quickly begin to dissipate.

Watch the clip below.

Porter Stansberry: The U.S. dollar is about to implode

Dear subscribers... we hope you pay special attention to today's Digest. The world has officially entered what we believe will be the final chapter of the U.S. dollar's reign as the world's reserve currency. The dollars in your wallet now not only back bankrupt U.S. money center banks and subprime home "owners"... they are also officially backing all of the economies of Europe. The world's monetary system has evolved into a new kind of global socialism. We don't think that can be bullish for long.

Here are the facts we've been told so far... The European Central Bank (the ECB) will spend $1 trillion (750 billion euro) bailing out Europe's sovereign borrowers (like Greece, Spain, and Portugal). It will also purchase billions of troubled assets from Europe's largest banks – like UniCredit. The mechanisms for these purchases will likely be convoluted. The EU treaties contain a no-bailout clause, forbidding any member to "be liable for or assume the commitments of" another EU country. And the European Central Bank cannot lend to countries or buy their debt directly. To get around the technicalities, the EU created an off-balance-sheet entity that will "borrow" the money and lend it to countries in trouble. Whether this matters to the EU's creditors or not, we can't say... but we certainly wouldn't lend to an off-balance-sheet entity of a central bank that's not represente d by any country. Buying euros used to be a game of "who owes me nothing." Now, it will be a game of "whose off-sheet entity owes me nothing." We doubt that will make Europe more creditworthy in the long term.

What does any of this have to do with the U.S. dollar? More than you'll ever hear anywhere else. On paper, the money is supposed to come from Europe's biggest governments and the IMF. But in reality, most of the money will be borrowed from the U.S. Federal Reserve, which just happened to re-open its trillion-dollar swap account with the ECB this weekend. Ironically, the Federal Reserve says these loans are risk-free because the counterparty is a central bank (or at least the off-balance-sheet entity of a central bank). But if the ECB is truly creditworthy, why couldn't Greece, Spain, Portugal, Italy, or Ireland raise the money for themselves?

At the beginning of the year, we declared rising interest rates in the U.S. as "the single most important trend in finance." We believe interest rates on long-term U.S. government bonds will rise to compensate investors for the increased risk of owning paper-backed sovereign debt. Our logic is simple: The more money the U.S. prints to bail out banks and other sovereign borrowers, the riskier the U.S. balance sheet becomes. By the first half of 2010, the Fed had already spent $2 trillion to bail out Wall Street's banks and the U.S. mortgage market. And as we reminded subscribers just last Friday, because the world's banking system uses the U.S. dollar as its reserve currency, the Fed would eventually be forced to bail out Europe's economy. Indeed, that's exactly what happened over the weekend. The U.S. Federal Reserve has officially become the world's lender of last resort. We would humbly suggest these policies will likely lead to a permanent loss of value for holders of U.S. dollars.

Why are we so concerned? Printing money to bail out borrowers around the world will not solve the problems of overleveraged governments or debt-ridden economies. It simply shifts the risks from private balance sheets to the U.S. government's. The U.S. dollar has assumed all of these risks. Our currency has become a ticking time bomb.

You can watch the dollar die, one day at a time, by keeping your eye on the growing spread between the value of long-term U.S. bonds and the price of gold. Over the last year – even as the U.S. economy apparently improved – the spread widened by about 35%.



Crux Note: A subscription to Porter Stansberry's Investment Advisory is one of the best and most affordable ways to learn exactly how to protect yourself and profit from the dollar's implosion. You can learn more here.