Sunday, May 20, 2012

Evening Update: Quakes And Economic Collapse

Deadly Northern Italy Earthquake Hits Heritage Sites

The magnitude-6.0 quake struck in the middle of the night, about 35km (22 miles) north of the city of Bologna.

The tremor caused "significant damage to the cultural heritage" of Emilia Romagna region, the government said.

Later on Sunday, a magnitude-5.1 aftershock hit the region, causing more buildings to collapse.

It was felt across a large swathe of northern Italy, including the cities of Bologna, Ferrara, Verona and Mantua and as far away as Milan and Venice.

The tremor forced many terrified residents into the streets.

More than 3,000 people were later evacuated from their homes amid fears of fresh tremors.







An Italian official told the Associated Press it was the worst quake the area had seen since the 1300s, leaving cracked bell towers, chunks of church facades lying in the streets and caved-in roofs.


Jim Cramer, a former hedge fund manager and the host of CNBC’s Mad Money, was on Meet the Press with David Gregory this morning, where the two discussed Europe’s economic woes and the worldwide ramifications of the disaster.

“I’m predicting bank runs [in] Spain and Italy within the next few weeks. Without a coordinated policy, there is going to be financial anarchy in Europe and [it's] going to cause a slowdown worldwide, China and here.”

Just a few days ago, Cramer was discussing the run on Greek banks and how it would become a “slippery slope.”

“This is not Argentina and Brazil in the 80′s,” he said, “these are big countries.”

The Street TV, which conducted the interview, summarized: “Our Banks Can’t Outrun European Banks.”



In the past, there certainly have been governments that have gotten into trouble with debt, but what we are experiencing now is the first truly global sovereign debt crisis.

There has never been a time in recorded history when virtually all of the governments of the world were drowning in debt all at the same time.

This sovereign debt crisis is never going to end until there is a major global financial collapse. There simply is no way to unwind the colossal web of debt that we have constructed in an orderly fashion.

Right now the EU and the IMF have been making "emergency loans" to nations such as Greece, Ireland and Portugal, but that is only going to buy those countries a few additional months. Giving more loans to nations that are already drowning in red ink may "kick the can down the road" for a little while but it isn't going to solve anything. Meanwhile, dozens more nations all over the globe are rapidly approaching a day of reckoning.

The financial collapse of Greece is inevitable. If they keep using the euro they will collapse. If they quit using the euro they will collapse. When the rest of Europe decides that it is tired of propping Greece up the game will be over.

As I wrote about yesterday, many of the nations around the world are only able to keep going because they are able to borrow huge amounts of money at low interest rates.

The other day, Moody's Investors Service slashed the credit rating on Portuguese government debt by four notches.

Portuguese debt is now considered to be "junk".

The downgrade of Portugal is having all kinds of consequences. The cost of insuring Portuguese government debt set a new record high on Wednesday, and yields on Portuguese bonds have gone haywire.

If you want to get an idea of just how badly Portuguese bonds have been crashing, just check out this chart.

But it is not just Portugal that is having problems.

Just recently, Moody's warned that it may downgrade Italy's Aa2 debt rating at some point within the next few months.

Spain is also on the verge of major problems and Ireland may need another bailout soon.

But Europe is not the only one facing a horrific debt crunch.

In Japan, the national debt is now up to about 226 percent of GDP. So far the Japanese government has been able to handle a debt load this massive because the citizens of Japan have been willing to lend the government gigantic mountains of money at interest rates so low that they are hard to believe.


The bottom line?

The combination of huge amounts of debt and huge amounts of leverage is incredibly toxic, and that is what we have all over the globe today. Almost every major nation is drowning in a sea of red ink and almost all of our major financial institutions are leveraged to the hilt.

There is only one way that the sovereign debt crisis can end.

Very, very badly.

I hope you are ready for what is coming.




The United States is in such a huge amount of financial trouble that it is hard to put into words. The days of easy borrowing for the U.S government are starting to come to an end. We have been living in the greatest debt bubble in the history of the world, and it has fueled a tremendous amount of "prosperity", but now the party is ending.

A whole lot of financial pain is on the horizon. Please prepare for the hard times that are coming.



9 comments:

Anonymous said...

And YET, stocks are moving higher
tonite in futures trading, dow up
almost 60 points. As stated earlier,
the market action is the final
judge of who is right or wrong in their predictions, and it WOULD SEEM
that BULLS are winning yet again.

Any further bulling toward 13,000
will be taken as a SIGN by me that
the END is to be delayed yet again.

Stephen >>>>>>>>>>>>>>>>>>

Caver said...

Sounds like the party's bout over and the hangover is gonna be a doozie

Mike said...

Scott, looks like Fukushima get worse. Please check on this:

Forty million Japanese in 'extreme danger' of life-threatening radiation poisoning, mass evacuations likely

http://www.naturalnews.com/035894_Fukushima_evacuation_radiation.html

Ally said...

I can not wait to meet you Caver and Mrs. Caver! You crack me up so hard sometimes! I hear your nails drumming on the kitchen table. Lol!
Can you say "close, real close?" Pentacost doesn't seem so far fetched now does it?
Look up look up look up!

Robin said...

Did anyone happen to see the spot 60 Minutes had tonight on Televiv? Very interesting . . .and illustrated quite well how secular it's become. Their acceptance of alternative lifestyles, how even the assistant mayor is out partying all night, every night. And quite honestly, even though there's decades long fighting going on on the West Bank . . .they truly seems completely oblivious to it. They're living as though they've not a care in the world . . .even with the wolf at their door . . .peace and security. It really was an amazing piece.

Cary said...

I saw the 60 minutes piece also Robin....parts of it left me stunned...

Cary

Robin said...

Ally, there does appear to be a strong correlation between the Jewish Feast Days and Christian events.

Passover - Jesus rode into Jerusalem on the back of a donkey (symbol of peace) and presented Himself as their King. (the next time he rides into Jerusalem on a horse, symbol of war)

Feast of unleavened bread - When Christ was placed in the tomb.

Feast of First Fruits - Christ rose from the grave

Pentecost - when the first Christians were filled with the Holy Spirit.

So there does appear to be a pattern. However, the three fall feast days have yet to be fulfilled. The next one will be The Feast of Trumpets. A verse describing the Rapture says this:

For the Lord himself will come down from heaven, with a loud command, with the voice of the archangel and with the trumpet call of God, and the dead in Christ will rise first. After that, we who are still alive and are left will be caught up together with them in the clouds to meet the Lord in the air. And so we will be with the Lord forever. (1.Thess 4:16-17)


So if God is using the Jewish Feast Days, it would seem the Feast of Trumpets (this year it begins at sunset on evening of Sept. 17) would be the next one we should be watching. But of course, the full number of Christians could be reached any time and only God knows when that time will be . . .but the above verse does seem to be offering a clue.

Caver said...

Ally-n-everyone...don't forget, pot luck at our mansion the second Friday after the Feast.

Dress: white robe-n-sandles

(no flip flops...the real thing)

GG said...

Hi Mr. C~

Invitation accepted on this end. Sign us up for 3 :) Any feet washin'required? Auh..that's right, purity at it's finest. Can't wait to meet you both and the family here on the blog.

God Bless!!

GG