May 23, 2013 at 7:11 pm #8381
Raúl Ilargi MeijerKeymaster
Last weekend, a group of influential British business people published a letter in the Independent which attempts to "make the economic case
[See the full post at: Is The EU A Tide That Lifts All Boats?]May 24, 2013 at 6:36 am #7609
So … praying for an asteroid, or at least that the Nips go mayan or rapa-nui first, and then they can be blamed for ruining the nice game for everybody,
U guys bugged out already? :blink:May 24, 2013 at 5:19 pm #7610
It all started with the ‘unification’ of of the coal and steel industries primarily of Germany and France, but then also as the nukes came on the scene it was seen as a way to develop Europe’s nuclear resources peacefully – and also of course to form a united ‘barrier’ against the soviet union – (but we don’t talk about that). Given that coal and steel have been ‘off-shored’, the soviet union has gone and Germany has disowned its nukes (like to see France try that!) just what is there to devolve to? Given that the wealthy landowning elite who run the show are creaming off vast sums (€50 billion) through the common agricultural policy (which Cameron has opposed the capping of) things are unlikely to change.
Not to mention the rising population:
With zero growth on the horizon for [strike]ever[/strike] the near future what is there going to be for them to do?
As for the SICPIG good luck to them – is that bacon I smell cooking? :sick:
Sid.May 24, 2013 at 11:57 pm #7612
The EU & EZ seemed doomed but is there any reasons that similar arguments couldn’t apply to the United States? Or is the idea of a sovereign Texas really too monstrous to contemplate?
More money not £€$$!May 25, 2013 at 2:26 am #7613
well I think that the U.S will be the reserve currency for some time but I don’t know If I was in one of these countries I would be scared to park my money in the United statesMay 25, 2013 at 5:27 am #7614
Hello to all,
I’m not going to address this article, although I do concur with it’s points.
I have been a reader of TAE for about a year now and saw Nicole speak recently in Adelaide. To my ongoing annoyance, I realize I should have asked for a bit more information about the strategy of putting your money into short term treasuries, or gov. bonds.
I’m afraid my financial nous can pretty well be encapsulated by, ‘Don’t spend more than you earn’, which is probably not such a bad maxim.
So, what I would like to know, is how do you go about buying these bonds?
Do I go to through my bank?
How do access that money from there?
In the event of a Cyprus type scenario, through what mechanism can those savings be accessed if the banks are exercising capital controls, or ‘bail ins’.
I want to know this information, both for myself and also to pass on to family and friends, who are generally as clueless as me.
One other point, I have a small, balance on my mortgage whuch is !00% offset and I plan on paying this off.
I know generally, banks hold the deed to the house for ‘safety’. I’m starting to think that by holding a person’s freehold deed documents, could they possibly use this in the future as some form of collateral, eg. if you want it, it will cost you some exhorbitant fee to obtain it.
Do you think it would be prudent to have the deed in your own possesion?
I would very much appreciate some responses to both questions.
Kind regards and all the best to everyone.May 26, 2013 at 6:47 am #7619
Hi South Ozzie, I understand your confusion and I had similar concerns here in Canada. I don’t know the definitive answer to your questions, but I can tell you what I have done – maybe some of it is applicable to your context. First, in Canada the government sells bonds once per year (in November and December). Bonds are sold through the banks here so, in November, I went to the bank and told them I wanted to buy bonds. I gave them money and a few weeks later they gave me the paper bonds. These I am keeping at home. I stand to be corrected, but I understand that these bonds can be cashed at any bank. In Canada, our federal bonds can be cashed at any time without penalty. As for mortgage deeds, there is a government registry in Canada that indicates who owns properties. In addition, I have a copy of the deed to my house that I keep in my possession in a safe box. As for where to keep your cash, TAE recommends keeping some of it “in your possession”. This is where you have to use your imagination and think about protection from fire and flood (and don’t put it inside an old fridge and then sell the fridge…). Good luck to you and hope this helps!May 26, 2013 at 10:14 am #7620
@ ozzie, perhaps of interest…
But my “thang” is get out of all debt first. Stash away 6 months food supply, and 6 months living expenses in cash in possession. Then look for hedges against economic dislocation with what money you have left.
Stoneleigh is a sharp cookie, and I give her high marks on her perceptions of all this, but no one can see the future, especially what arrogant ignorant governments might do.
Best to peruse sites like this, pouring over the archives and consider it an inexpensive economics education.
The bonds have been good, but I’ve been shortening duration since late ’09.
On deeds, I keep the original in my safe, and a copy in my safe deposit box. The County Recorders office also has documentation.
Above all, don’t take any wooden nickles!May 26, 2013 at 11:05 am #7621
“The EU was designed to lift all boats (or at least it was marketed to the European people that way).”
The road to hell is paved with marketing techniques depicting it as a path to a warmer cozier environment.
Central Planning in all it’s splendor. The boats are lifted, with the planners occupying the Promenade deck, while the proles man the oars below, knee deep in water. 👿May 26, 2013 at 5:21 pm #7622
This at ZH reminds me of an old advert for an airline where the hostess asks if the boarding passenger would like smoking or non-smoking; flying to the EU will now entail a request for ‘performing or non-performing?’:
It is not surprising that the periphery is exhibiting a rising pattern in terms of NPL ratios. What is worrying is the speed of increase, at 2.5% per year. Within the periphery, Greece is the outlier with a NPL ratio of 25%, and no signs of abating yet. Ireland follows with a NPL ratio of 19%. Italy (at 13.4%) is above Spain and Portugal (at close to 10%)…
The German divergence is making the task of the ECB very difficult both in terms of setting monetary policy for the whole region, but also in terms of dealing with an impaired transmission outside Germany. Draghi clarified in its latest press conference that it is not the ECB’s role to clean up banks’ balance sheets, meaning that the ECB is unlikely to deal itself with the €500bn large non-performing loan problem in periphery.
Two Tier Euro here we go… :ohmy:
Though when the rest of the worlds debt also starts to ‘non-perform’ what choices will there be then?
Sid.May 26, 2013 at 6:33 pm #7623
For the PIIGSC or SICPIG, what country is the ‘C’?
China, Cyprus, ?May 26, 2013 at 7:05 pm #7624
For the PIIGSC or SICPIG, what country is the ‘C’?
China, Cyprus, ?
Cyprus = 77.5 % of GDP, China = 16.1% of GDP (percent total public debt). China has other problems…
Besides, I don’t think China is in the EU (well it wasn’t last time I looked but who knows eh?), more likely to be in NAFTA. 😆
Sid.May 27, 2013 at 7:58 am #7626
To professor and carol,
Thanks for your interest and advice. I had a look at that link prof, one thing that concerns me about exchange traded gov bonds, having spent a number of years reading various website to do with ‘all this stuff’, one blogger mentioned the rise in ETFs, which he considered to be somewhat dubious in their makeup. From memory – I read the post a year or two ago – he explained that they were kind of sliced and diced parcels of shares, a bit like debt based derivatives in nature. Now as Ive explained previously, finance is all a bit of a foreign language to me and I struggle to understand most of it. Im just wondering, is buying gov bonds in the manner of exchange traded bonds a bit like buying ETFs, or say paper gold? Should i be doing as Carol and going into the bank and getting my tangible, physical certificates?
This is all such a new world to me, and being a single person, living on my own, with noone around who gets any of this, from whom I can obtain some advice, frankly its quite dispiriting.
Probably whats really bringing it home of late, is the ongoing disintegration of our manufacturing industries, the slow slide down of the mining boom and a report commissioned by the NRMA into Australia’s fuel security, or rather, lack of it. https://www.mynrma.com.au/media/Fuel_Security_Report.pdf
My gloominess grows…May 27, 2013 at 4:32 pm #7627
Raúl Ilargi MeijerKeymaster
Should I be doing as Carol and going into the bank and getting my tangible, physical certificates?
Absolutely. One should steer clear of all middlemen, whether they operate through funds or otherwise, as much as one can. Buy sovereign bonds as directly as you can and stash them away under your own control. You don’t need middlemen, and their very existence just raises the risk.
I asked Nicole to respond, but she’s stuck in a very full agenda of travel, interviews and lectures in New Zealand, with limted internet access and an injured shoulder to boot.
Still, all the more because we’ve been covering this very topic since we started TAE, my answers won’t be any different from hers. Get a few months worth of cash, get hard goods, and for any leftover wealth sovereign bonds are fine. Your own country’s bonds, that is; don’t dabble in foreign bonds unless you’re a trader, that’s just more risk than you need.
It’s really not that hard, when you think about it; pretty straightforward.June 4, 2013 at 4:47 am #7655
Ive been to the bank and paid off the mortgage. I asked about gov bonds, but apparently they haven’t sold them for about twenty years. Now to those with experience, maybe it is a straightforward exercise. I have absolutely none. I’m really stuck as to what to do now. Ive looked a bit on the net, but it’s all greek to me I’m afraid. Secondly, I’m still wondering, in the event of a banking collapse, through what mechanism are those bonds able to be made liquid, ie “cash in my hand”.
I think I would be speaking for the majority, whose financial experience would amount to savings in the bank and a far off managed super fund, of which I gave up ever seeing, years and years ago, even before the G.F.C. I always thought they were ponzi schemes, even when I wasn’t aware of the term. I long ago realized I would never retire, it being a product of a few decades of cheap energy and plenty of surplus.
Thanks in advance for any more ‘nuts & bolts’ info on aus bonds.
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