US dollar will not survive 2015

Editor’s note: by ‘survive’ we are referring to the fact that the US dollar will soon lose major purchasing power. Just like it has lost over 98% since the Federal Reserve came into being in 1913.
By Jim Willie, GoldenJackass.com
In the closing months of 2014, on numerous occasions the position was put forth that as the days of January stacked up, toward the end of the month and going into February, that the global financial structures would show severe strain, widespread disruptions, and possible signs of cracks in breakdown.
The forecasts were clearly stated and repeated. Even the present flow of events has been shocking, despite the expectation.
The forecast certainly has proven correct.
The disruptive events and pace of systemic breakdown are surely going to continue. The year will go down in history as extremely messy, extremely chaotic, and extremely important in the demise of the USDollar.

Check the 7-year cycle for an amazing sequence that goes back to the 1973 Arab Oil Embargo, the 1980 Gold & Silver Hunt Brothers peak, the 1987 Black Monday, the 1994 Irrational Exuberance with ensuing Asian Meltdown, the 2001 Inside 9/11 Job, and the 2008 Lehman failure. The Year 2015 will be known for the USDollar demise with full fireworks, set up with Ukraine and the European repeat of Waterloo. A quickening pace of events is highly indicative in two natural types in nature, namely the lead up to a natural earthquake, and the lead up to a human childbirth.
KEY ACCELERANT EVENTS
The forecast about fast acceleration of events into the January month has occurred on schedule. Normally a very big event occurs every several weeks, or every few months. In just the last three weeks ten have taken place of significance. The pace has quickened in an alarming fashion. The Great Quickening has commenced. Something big ugly and nasty this way comes. The events are worth emphasis, since each has enormous implications and fallout.

1. Russia jumped off the Petro-Dollar recycle wagon. Their entire oil trade will not be kept in USDollars. Instead, it will be exchanged immediately into Rubles. Expect some to be converted into RMB for their bilateral trade with China. The Russian action is an integral part of the demise of the Petro-Dollar. They react to US-led boycott.

2. The Swiss removed the 120 Euro peg to their Franc currency. For over three years their central bank had maintained a hoard of paper mache Euro currencies that accumulated perhaps as much as 800 billion Euros. It became unsustainable. They ran a long USDollar trade with short Gold, which finally will go into reverse. The Langley crew had billions in SWFrancs stuffed in shrink wrapped palettes. They profited handsomely. The Swiss seem to have opened the gates of hell for the Gold market, and might have been slammed with a Gold margin call as leased gold bullion dried up.

3. The Greeks have prepared to exit the European Union and to default on debt. Their defiant Syriza party won a mandate, a clear leftist majority. Next comes some severe disruption. They might print money to pay off their external debt, which would be an ironic justice. Expect great repercussions within Greece into Europe, at the same time the Russians are passing a gas pipeline as carrot to Greece. With the pipeline will come valuable fees to the Greek nation. They will leave the European Union, with almost certainty. They will soon export food products to Russia, lifting the economy.

4. The Euro Central Bank announced details on their newest QE tampering. They are to pile on the bond and asset purchases, with a clever attempt to avoid it being corrosive unsterilized by means of cooperative gestures with member nations. Regardless of the details, the Germans are harsh critics of the Draghi procedures. The opposition has shaped up between the EuroCB and the Bundesbank. The Jackass is certain that Germany will leave the EU, leave the common Euro, and eventually leave NATO. The objection to the Draghi QE decision will lead to a major crisis in the European Union.

5. King Abdullah died and the transition for the royal family begins. He has been replaced by formerly crown prince Salman, who suffers from senile dementia, and will have a terrible time to hold power. The battle for succession has just begun, as rival tribes vie for power, after several decades of being excluded. The events inside Saudi boundaries will increase, turn more violent, and be highly disruptive. Pressure for reform will be fierce and unending.

6. Merkel has offered a trade union proposal to Russia, which discards the US-led TTIP trade pact. At the Davos Economic Summit, the German Chancellor actually offered a trade pact with Russia which implicitly rejected the US-led TransAtlantic Trade & Investment Partnership. The ironic part is that Merkel has proposed exactly what Russia & China have been developing for two years, known as the Eurasian Trade Zone. Germany is looking for a way out of the European Union.

7. The German watchdog financial cop BaFin found no improper manipulation in the gold market. They mean from the DeutscheBank perspective. This decision is a setback for the camp that opposes corrupt markets in bond values, currency exchange rates, bank accounting. The backlash could come from numerous flanks, all of which seek justice and fair markets. Market rigging seems never to cease as the climax nears. In Germany, two camps are divided. The politicians are dominated by the banker elite, although loud rumblings come from the ministers levels. The industrial captains manage commerce, and wish to avoid profound economic damage. The US alliance is no longer working toward German benefit. The industrial camp will prevail, but with a huge battle and many unknowns to come.

8. The Swiss have set up a major RMB trading center in Zurich. An interesting competition is certain to unfold as London, Zurich, and Frankfurt compete for Chinese financial flow in RMB terms. Refer to currency exchange, bond issuance, and direct investment (FDI). While London has the tradition and Zurich has the prestige, the Germans have been hand-picked by the Kremlin and Beijing to serve as the cradle and crucible for European linkage to Asia. The industrial ties to Russia and China extend from Germany, along with huge and growing trade and investment.

9. The details for Gazprom pipeline extension through Turkey have been revealed, by way of the Black Sea, with volume stated in the plans. In a brilliant stroke, Gazprom decided abruptly to cut off Ukraine on the pipeline construction. It will not pass through Eastern Europe, where USGovt bribery, threats, and corrupt business plans were taking place to block plans. Instead, the pipeline will pass through Turkey, with announced hub on the Greek border. It is being dubbed Turk Stream. The construction will take at least 18 months. In the meantime, the European nations will have to struggle to find a way to connect to its gas lines, and to avoid wreckage from their errant destructive US alliance.

10. The USEconomy had an enormous miss in expected Durable Good orders. The list of job cuts and project cutbacks in the US, Canadian, British, and European Economies was six pages in length for a recent work toward the January Hat Trick Letter. It was refined to a few pages. It is a veritable procession of business failure from failed monetary and economic policy failure. The USEconomy is stuck in a multi-year powerful recession. QE aggravates the economic deterioration. Numerous major name corporations are making utterly huge astonishing job cuts, the most recent being IBM. Big banks and energy related firms dominate in such news.

Events are flowing extremely rapidly, even at a dizzying pace. It is not remotely possibly to anticipate the next critical event, but one can surely expect something every two to three days recently, something of urgent important with extreme consequence.

In addition to the above events, the US & Canadian shale oil & gas sector is shutting down, without a single event to point to. The shale subprime debt implosion is imminent, already have triggered. The damage will be progressively worse over time.
The 2015 year is off with a very unstable bang, exactly as expected. Notice that none of the above events pertain to the BRICS Alliance.
Their movement will enforce the Global Paradigm Shift to bring about a return of the Gold Standard. Since the US-UK bankers control the financial sector in FOREX currencies and sovereign bonds and banking systems, the East will make steadfast progress in bring back the Gold Standard from the trade ramps. Details to above events, the universal disruption, and the BRICS initiatives are covered in the Hat Trick Letter.
KING DOLLAR PILLAR BREAKDOWN
With the acceleration of events in progress and in view, the pressures will grow against the entire King Dollar Court, the corrupt fortresses in Wall Street and London Centre, the crime syndicate hive. The USDollar will not survive the year. It might not vanish this year, but will surely show its eventual destination in the dustbin of  history.
The four legs of the Petro-Dollar might be described as being the banking system, the FOREX currencies, the sovereign bonds, and crude oil.

1. After the Lehman killjob crisis failure, the banking system turned insolvent. Thanks to the FASB accounting rules that were bent, the banks have continued as hollow reed pillars. They have been on the one side been settling law suits and investor claims, while on the other side been kept liquid by means of narco money laundering (confirmed by the United Nations). If one big Western bank enters failure, the entire set of big banks will risk failure simultaneously in direct contagion.
2. The major currencies are in a grand disruption right here right now. The rush into the USD for settling derivatives and as safe haven has rattled the FOREX worse than at any time in recent history, perhaps including the 1995 Asian Meltdown. The emerging market debt involves several $trillion in volume, all of which rose on the balance for the debt burden. Defaults lie directly ahead. The USEconomy will be greatly victimized by the higher USD valuation, with respect to stock and property investments, in addition to export trade.
3. The sovereign bonds are being supported by Quantitative Easing, the highly corrosive monetary policy by the US Federal Reserve. Other central banks had been well coordinated at the Bank of England, the European Central Bank, and the Bank of Japan. If not direct money printing, it is their usage of Dollar Swap Facilities. In the last couple months, evidence has grown that the major central banks are on their own, acting to preserve their economies, and taking action with local motive. The USGovt raided the Japanese $1.2 trillion pension fund. The Swiss ensured that all nations will break the coordinated monetary policy with the USFed.
4. The connection between the USDollar and Crude Oil price has been broken, in ways not described or reported in the press. A vast system of FOREX derivatives are being dissolved that connect to the Crude Oil price, resulting on lost control. The rising USD and falling oil price is evidence of the breakdown. The relationship between the USGovt and the Saudis has deteriorated to alarming levels, despite the photo ops on display to deceive. The Saudis have been working on monthly conferences with the Beijing leaders, in what could be called a lovefest for economic cooperation and financial joining at the oil hip. The Saudis and other Gulf Emirate nations will be working to convert their combined $2.2 trillion in sovereign wealth funds into diversified assets, led by Gold. These Arabs will work to replace their Gold bullion stolen in Swiss banks.

USDOLLAR DEATH FORETOLD

The high exchange rates seen to favor the USDollar does not mean it is strong. The global movement in fast clear trend is the wider usage of Chinese RMB. On at least 20 different bilateral conduits, the Chinese trade is almost exclusively done in RMB terms. The Yuan Swap Facility with numerous nations like Australia and New Zealand, lately Switzerland, Germany, and Canada, and several smaller Asian nations assures steadily higher RMB trade settlement. Even US corporations are fast converting USDollars to RMB which assure their import supply lines. The standard of USD trade settlement is going away.
The USDollar is dying like a rocket, shooting upward. Methinks the Petro-Dollar linkages are all broken. As a result, the USD rises, and correspondingly oil falls. Most people attach motive to the price movement. Doing so is erroneously. Instead, the price mechanisms are broken, predominantly a structural effect across most financial markets in an alarming development. The lost control is being manifested in a higher USDX index. It is paradoxically evidence of a dying King Dollar and a failure of its court.
Huge pressures are building. The year 2015 will be when the system openly breaks down, when steadfast US allies break ranks from the King Dollar Court, and work to enable their nations to survive. The year 2015 will be when the entire world (East & West) openly calls for the retirement of the USDollar in order to end the destruction, fraud, madness, war, and chaos. The USFed with its corrosive QE has hastened the major nations of the world to rush toward implementation of the Gold Standard. They must install it from the trade ramps, not the financial ramps. They are in race with time, since their economies are faltering.

Mahatma Gandhi was a sage. He has a famous quote best presented in summary form. “Seven Deadly Sins: Wealth without work, Pleasure without conscience, Science without humanity, Knowledge without character, Politics without principle, Commerce without morality, Worship without sacrifice.” Without any hesitation, equivocation, or doubt, all these important sins are growing trends and priorities in modern United States.

London Paul summarized well the current path of disruption and powerful change. “The so-called experts have thrived in a world which was all about obfuscation. As this paradigm collapses, they are desperately trying to hang onto a totally failed construct and refuse to accept the reality of what is coming. The alternative terrifies them to their very core. Greece was a clear indication that the masses are waking up in significant numbers to the insanity of a cabal agenda of death, destruction, and grand larceny all wrapped as being in our best interests. When I have spoken before about a time which will be savage and uncompromising, it was in my opinion a realistic assessment of what is coming. However, when we get through the other side, the world will transform out of recognition and in ways that would seem impossible from our current frame of reference. So we continue to accumulate Gold & Silver to protect ourselves against the financial carnage that is coming. Humanity is going to go through a very sharp learning curve and will have to work together for common goals and aspirations as it should always have been. Necessity is the mother of invention and we will all have to go through that process of total reinvention. The level of ruthless manipulation to divide and conquer humanity for decades and beyond will become clear and it will truly shock humanity.”
GOLD RALLY IN FOREIGN CURRENCY
The gold market is rallying in the Yen terms, in the Euro terms, and in the CanDollar terms. The Swiss have ignited a global gold rally. They very likely covered a short gold position in a complex arbitrage trade. Notice the gold price decline from the $1900/oz level began at about the same time the Swiss announced their Euro 120 peg in late 2011. Notice the gold reversal has begun exactly at the time of the Swiss de-peg decision. It might be easy to conclude that the Swiss National Bank financed their Euro peg by crushing the Gold market. In the three and a half years during their peg, the gold price lost one third of its value on the corrupt COMEX market. With the Swiss lit fuse, no turning back. The reversals are significant. In Switzerland, the people have been given a hefty gold price discount due to the rising SWFranc currency. The Gold price in USD terms will be the last event, the ultimate event in confirmation.
HUNGARY BOTH SMART & HOT SPOT
The Jackass has no problem admitting an error. They can be valuable learning opportunities. The last big error was made in expecting a higher USTreasury Bond yield in 2011. Big error indeed, as the learning curve featured forced comprehension of the powerful Interest Rate Swap derivatives. With Morgan Stanley putting on $8.5 trillion in IRSwaps in a mere six months time going into end 2010, the USTreasurys rallied with rising price and falling yield. This contrary event occurred despite greater USGovt debt, fewer USTBond investors, and a debt rating downgrade. The paradox is explained with the vast IRSwap machinery. Thanks to Rob Kirby, the Jackass learned more about the derivatives and the fabricated bond demand from computers, managed by JPMorguen. Too bad Bill Gross of PIMCO did not hire Kirby as a consultant.
The latest error is minor, but interesting. The Jackass had stated recently in reports that Poland, Hungary, and other Eastern European nations were all exposed to home mortgages in Swiss Franc denomination. With a rising SWFranc exchange rate, their aggregate mortgage debt balances will be damaged from having risen in amount. They will have a higher debt burden suddenly. The Polish are exposed. However, in a three step process, the Hungarians side stepped the risk in a very clever adept maneuver. The Orban Admin forced the banks to convert all foreign currency denominated property mortgages into Hungarian Forint (HUF) mortgages. Note that the switcharoo took place just a couple of months before the Swiss central bank de-peg. The HUF is not pegged to any currency including the USDollar or Euro. The correction was given by a sharp Hungarian Hat Trick Letter client, who has been valuable not only with respect to matters pertaining to his country like the South Stream Gazprom pipeline project, but also to events in nearby Ukraine. Prime Minister Viktor Orban might be at risk. He has fended off the USGovt fascist pressures to block the Gazprom pipeline. He has gone on an independent path. He might be a Langley target. Maybe Budapest will be treated to some public shootings or explosions by yet more lone gunmen, like in Paris following the President Hollande comments in opposition to continued Russian sanctions.
CONCLUSION
People had better prepare themselves for some conclusion events, certain to occur with fireworks. The USDollar is soon to go away, put to rest, killed off. Its rise signals its demise. The hidden dismantle of the Petro-Dollar mechanism has been eerie, mysterious, and full of intrigue. The Gold Standard will return, but through the trade window. The solution to the untreated Global Financial Crisis is the gold route. The Eurasian Trade Zone will be built upon the gold route, and see a revival of the Silk Road. It cannot be stopped, not even by war. The safe haven is not the USDollar, but rather Gold & Silver bars & coins, otherwise defined as money.
The crisis is better described as the Global Monetary War. Any nation wishing to establish trade or a monetary system centered upon gold is branded a rogue nation, subject to extreme propaganda. This is precisely why Russia is being vilified, since they want no more USDollar in trade or banking, and lead a global movement to discard the USD as global reserve currency. The solution is with precious metals as the core to banking, trade, and currency, even wealth preservation. The new 2015 year will be exciting. As the Jackass forecasted, 2014 did indeed end much differently from the way it began. The agents of change are working at hyper-speed now. The USDollar is doomed, and its captains are running for their lives. They are not worth bargaining with in magnanimous cut deals. Better to treat them like fire ants and bothersome fleas and diseased rodents and rabid dogs. The return of Gold to its primacy is long overdue.
SOURCE

Will Puerto Rico Cause An Inadvertent “Black Swan” Derivatives Melt-Down?

I really had not been paying much attention to the Puerto Rico debt situation.  After all, $72 billion in debt that might go bad – big deal.  The Fed can print up $72 billion in credit lines with the push of a button.
But a friend of mine happened to mention to me today (Monday) that MBIA’s stock was down over 23% and Assured Guaranty’s stock was down over 13%.  That woke me up.
MBI guarantees $4.5 billion in par amount of Puerto Rico muni paper.  As of it’s latest 10-Q (March 31, 2015), MBI showed a book value of $3.9 billion. Puerto Rico alone could more than wipe out MBI’s net worth.  But that’s only a portion of the story. The bigger part of the story is buried off-balance sheet in the footnotes in opaque financial structures called Variable Interest Entities (VIE’s). Remember those from 2008?  I remember them vividly.
The VIEs are the off-balance sheet vehicles that triggered the massive chain of counterparty defaults which de facto collapsed the U.S. financial system in 2008.  The VIEs are where the credit default swaps and other nebulous forms of OTC derivatives bet slither around.
Companies like MBI and AMBAC underwrite  credit “enhancement” guarantees on these massive cesspools of debt – and the associated derivatives that are “wrapped around” the debt structures – and stick them in VIEs.  MBI’s 10-K has several pages of footnotes which vaguely describe the contents of its VIEs.   The problem is that MBI and its ilk are thinly capitalized relative to the potential size of the liabilities they face if the credit markets become volatile to the downside.

Toxicity plus toxicity does not equal purification.  But VIEs that contain off-balance sheet debt and derivative guaranteed equals toxicity cubed, at least.   In other words, whatever MBI lists as its “net” credit exposure in its financials, take that number and, at the very least, triple it.
But wait, the story gets even better.  As it turns out Warburg Pincus, one of the loftiest private equity firms on Wall Street,  is by far MBI’s largest shareholder.  Warburg announced a little over five weeks ago that it was going to unload 60% of its stake via over the counter negotiated sales – LINK.   The firm has been unloading these shares since May 18th.  We won’t know how successful this effort has been until the selling is completed.
Does Warburg Pincus sound recently familiar?   It’s the firm that hired “Turbo Tax” Tim Geithner shortly after he left his post as Treasury Secretary.   Remember, Geithner was head of the NY Fed at the time of the 2008 financial collapse.  In other words, he knows where a lot of the bodies in the financial system are buried.  I have no doubt that Geithner has played a significant role in advising Warburg on the need to unload its exposure to MBIA.  Anyone who takes the other side of this trade is a complete idiot.  
But this story isn’t just about MBI.  It’s about the companies that, along with MBIA, provide “insurance” for bonds and derivatives.  These firms have assumed potential liabilities that dwarf their ability to cover them.  Not just in the worst case scenario.  I believe Puerto Rico’s financial demise could trigger the dreaded financial nuclear daisy chain of counterparty defaults.
The problem with creating “actuarial” payout models for insurance guarantees on financial assets, and this especially true for derivatives, is that the outcome is pretty much binomial.  Either the assets pay off or they become worthless or near worthless.  Furthermore, with the extreme degree of Central Bank intervention, which has enabled literal financial zombies to continue living and has enveloped the entire financial system with opacity, it’s impossible to model in expectations on, and potential sources of, counterparty default risk.  It’s like lightening.  It can unexpectedly strike anywhere – just ask Hank Paulson and Goldman Sachs…
This is exactly what occurred in 2008.  Only this time around the problem is significantly greater than it was in 2008.  Global debt and gross derivatives outstanding are much bigger than in 2008.   And, except for the Plan B hyperinflation of the money supply, Central Banks are out of bullets.
I believe it is highly probable that the crashing stocks of MBIA, AMBAC and AGO are the alarm bells of a black swan landing.  And, of course, no one has been talking about them until today.  Although these firms are somewhat obscure and small compared to the size of the majority of financial companies, they are highly leveraged with massive off-balance-sheet liabilities for which they have zero hope of covering in the event of even relatively small bond defaults.   In other words, these firms are the ones most likely to set off the next financial collapse triggered by their counterparty defaults.

Eurogroup refuses to extend bailout program to Greece

http://rt.com/business/270742-greece-new-bailout-default/
The Eurogroup has refused to extend the bailout program to Greece, rejecting PM Alexis Tsipras’ latest request for a new bailout, Finnish Finance Minister Alexander Stubb said at Tuesday’s teleconference.
The Eurogroup rejected two of the three terms proposed by the Greek prime minister Alexis Tsipras, Stubb added.
A third request, for a credit from the ESM, could be considered separately from the emergency procedures currently being used, he said in a tweet.
"Eurogroup ends. Letter of Tsipras includes three requests. Extension of programme or haircut not possible," Stubb tweeted. "Request for ESM-programme is always dealt with through normal procedures."
The Greek government on Tuesday asked for a new bailout program from the European Stability Mechanism (ESM), that would cover all the country’s financial needs for the next two years, according to the government statement.
The request included a restructuring plan for Greek debt to the European Financial Stability Facility that accounts for about 63 percent of the Greece's total debt.

A gang of wolves comes for Greece

The election of an anti-austerity Syriza government in Greece signalled trouble for the powers-that-be in the European Union. Principally Germany which has no interest in rethinking how the EU operates, since it serves German interests so well, but also the most powerful European institution: the European Central Bank (ECB).
As of Saturday, June 27, it is clear what Syriza was up against. As Greek Finance Minister Yanis Varoufakis explained, the Eurogroup (finance ministers from the 19 countries that use the euro -- collectively, the Eurozone) was never prepared to discuss the anti-austerity proposals put forward by Syriza and provide debt relief for Greece.
All that the Eurogroup membership intended was to extract from Greece a commitment to continue to practice austerity under the terms set out in existing agreements with the Troika (the EU Commission, the ECB, and the International Monetary Fund), and continue to pay down debt at the cost of shrinking the Greek economy -- already smaller by 25 per cent thanks to austerity -- further.
Led by German Finance Minister Wolfgang Schäuble, the European finance ministers ignored the two basic principles of public finance. One, if debts are too large to be repaid, they will not be. Two, any agreement with a debtor country must be acceptable to the citizens of that country.
Greek debts amount to some 320 billion euros, of which over 60 per cent is in bilateral loans (or contributions to the European Financial Stability Facility or EFSF) from Eurozone countries to Greece. The German share of these loans and contributions is 56.4 billion euros.
The Eurogroup ministers were unwilling to go back to national governments and parliaments for authority to aid Greece further.
Instead, the Eurozone finance ministers were using the threat of calling these debts due to goad Greece into reducing pensions, de-regulating its labour market, and privatizing public infrastructure and services.

The Greek government refused to buckle under.
Recognizing that in order to implement an austerity program -- when it had been elected to implement an anti-austerity program -- the Greek government needed a mandate from its people, Syriza announced it would hold a referendum July 5, on the terms of the Eurogroup proposals.
At this point the Eurogroup withdrew its proposals, and announced the end of negotiations with Greece.
On Sunday, June 28, the European Central Bank decided to cap its lending to Greek banks, forcing Syriza to shut down the Greek banking system for a week.
The Eurozone debt holders have yet to explain why they pushed Greece to the wall, and now risk seeing the money owed them disappear in a Greek default.
Greece can default on its loan repayments to the IMF and the EFSF, and still remain in the Eurozone. In fact there is no legal mechanism or procedure for excluding a member country from the Eurozone.
In order for the wolves of the Eurogroup to make Greece drop out of the Eurozone, Greece would have to be expelled from the European Union itself, a course of action that European leaders (other than the German finance minister) have not envisaged taking to this date.
The Greek crisis reveals the political weakness of the EU, as well as the obvious shortcomings of its economic model.
The only European institution with any clout is the central bank. It has the power to reverse the Greek debt situation by buying up Greek debt and replacing every euro leaving Greece. It also has the power to force Greece to adopt a parallel currency, if it refuses to backstop the Greek banking system.
ECB President Mario Draghi famously said he would do "whatever it takes to preserve the euro."
Bets are on whether the ECB will be forced by Germany and the Eurogroup wolves to abdicate its role as the lender of last resort to Greece, and end effective participation by Greece in the Eurozone.
The ECB, from its German headquarters, acting alone, has the power to decide if Greece leaves the euro, but not the political authority to do anything more than preserve the Eurozone intact.
The sovereign nations that make up the European Union have failed to provide for an authority that can overrule national interests. Though it is in the obvious interest of all Eurozone members not to put Greece into default, neither the European Parliament or the European Commission have the means to act on behalf of the Eurozone.
The French, long the inspiration for European integration, have under Socialist President François Hollande as with his Conservative predecessor Nicholas Sarkozy, ceded the moral leadership of the EU to Germany.
The German economy runs large surpluses with the rest of the Eurozone. German banks lend the money back so that other countries can continue to keep Germany in surplus. This works for Germany but causes stagnation across Europe.
Greece and other deficit countries are being asked to undertake economic adjustments that should be undertaken by Germany and the other surplus nations.
At the heart of the Greek crisis is Germany being obstinate in defence of the European economic model which works for it, but not for the EU as a whole, and no other country or group of countries being able to lead Europe in another direction.
Syriza represented a challenge to the prevailing model, so it had to be stopped. The German grand coalition government has decided to teach Greece a lesson.
This crisis is to be continued.
Duncan Cameron is the president of rabble.ca and writes a weekly column on politics and current affairs.

Canary in the coal mine Puerto Rico defaults on $72 Billion in bonds

http://www.washingtonpost.com/busines…
Puerto Rico’s governor on need to postpone debt payments for years: ‘It’s about math’
The governor of Puerto Rico said in a televised address Monday that the island cannot pay back more than $70 billion in debt, setting up an unprecedented financial crisis that could rock the municipal bond market and lead to higher borrowing costs for governments across the United States.
“This is not about politics,” said Puerto Rico’s governor, Alejandro Garcia Padilla. “It’s about math.”
Garcia Padilla said the country needed to postpone for several years its debt payments.

Greece is becoming more expensive by the minute: Italy’s 5Yr funding cost rises to highest since June 2014 auction.

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#Greece is becoming more expensive by the minute: #Italy's 5Yr funding cost rises to highest since June 2014 auction.

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Greece is Hours from Crashing, they Have until 6pm Washington Time to Avoid Default