Catalunya Employs Classic Democracy as Oregon Taxes Weed

11/9/2014 Portland, Oregon - Pop in your mints…

For those among our readership who do not follow Spanish Politics, Catalunya, the region of Spain most easily recognized by its leading city, Barcelona, held a vote on two matters of the utmost importance to the Catalans.  The questions were posed in the following manner:

1) Do you want Catalunya to be a State?

2) Do you want that State be Independent?

The vote today in Catalunya, of which 80.72% voted "yea" on both questions, was not sanctioned or recognized by the Spanish government in Madrid, other than to say it was nothing more than propaganda.

According to The Guardian, roughly 2 million of the 5.4 million persons who were eligible to vote cast a ballot today, a roughly 37% turnout, which means that today, roughly 32.3% of those living in Catalunya took the time to submit a symbolic ballot in favor of their Independence from Spain.  For a quick comparison of this figure, 68.9% of eligible voters cast a ballot in Spain's last General Election in November of 2011.

While voter turnout today in Catalunya may not seem impressive on the surface, it takes on more meaning when one considers that, as it was unsanctioned by the Spanish Government, over 40,000 volunteers took it upon themselves to receive and count the ballots.

The Catalans have employed what we call Classic, or Grass-roots, Democracy in an effort to allow their citizens to determine in a civilized manner the most basic of questions with regards to self governance:  Shall we, as a region, be Independent?

Admittedly, Catalunya is in a unique position to do so.  Most regions, for which Independence is more a romantic idea than a practical one (the most recent example being Scotland's referendum to break ties with the UK), have much to lose and little to gain by declaring Independence.  Catalunya, on the other hand, is essentially self-sufficient and for them, remaining part of Spain has little upside.

For a time, the argument could be made that Spain provided Catalunya access to markets that it otherwise could not have sold into.  Today, this is a non-issue, as the EU trade agreements would continue to cover an Independent Catalan State.

The Spanish Government has a big problem.  While Spanish officials are swiftly and publicly denouncing the Catalans for holding what, in their mind, had already been declared an "illegal" vote, the Catalans have cleverly and very publicly made a mockery of what passes today as "Democracy" in the Sovereign States of the world who embrace this model of governance.

For what is Democracy if not the people's right to self determination?  Yet modern democracy for most boils down to questions of which hand picked candidate will occupy an embedded power structures, and whether or not to increase the existing tax and regulatory burdens imposed by this power structure.

With today's actions, the Catalans struck at the heart of the existing system.  Our guess is that one day, they and many other regions in similar situations will enjoy sovereign status as peers to their former oppressors in the EU. 

Throwing off the EU's chains, however, would be a matter settled by arms, as the French, American, and every other successful revolution against the clutches of Empire have shown.  It is not the nature of Empire to negotiate or put to vote matters of self-determination.

Oregon Taxes Weed

In our local elections, our fellow Oregonians chose to decriminalize marijuana. Joining them were the people of Washington, DC, making a total of four jurisdictions in the US that have changed the innocuous plant from a huge drain on tax revenue to a potential source of revenue with the stroke of a pen.

Weed:  It got your parents kicked out of school, now it can pay for yours.

Which way did The Mint vote on the issue?  We didn't.  You can read our reasons for abstaining from voting on State and Federal Matters in the links below:

Ballot Burning, Our Breaking Point, and Why the Next Gold Rush Just Began (notice the reference to Catalunya's Independence preparations)

Three Reasons Why We've Stopped Voting, The Trail of Tears

The Silent Majority, Why No One Will Win the 2012 Presidential Election

As the Catalans have seen in the case of the Spanish, government, once it exceeds a certain size, ceases to serve the people who created it and becomes at best parasitic and at worst, antagonistic and violent as it increasingly resorts to the use of force in an effort to advance a failed system.

Can Catalunya peacefully remove the yoke?

Stay tuned and Trust Jesus.

Stay Fresh!

David Mint

Key Indicators for November 9, 2014

Copper Price per Lb: $3.07
Oil Price per Barrel (WTI):  $79.02

Corn Price per Bushel:  $3.67
10 Yr US Treasury Bond:  2.31%
Bitcoin price in US:  $361.80
FED Target Rate:  0.09%
Gold Price Per Ounce:  $1,179

MINT Perceived Target Rate*:  0.25%
Unemployment Rate:  5.8%
Inflation Rate (CPI):   0.1%
Dow Jones Industrial Average:  17,574
M1 Monetary Base:  $2,939,700,000,000

M2 Monetary Base:  $11,485,000,000,000

Adios Pesetas: A look back at adoption of the Euro in Spain

3/18/2013 Portland, Oregon – Pop in your mints…

The following is an essay written by a dear friend of ours, Tom Baker, in February of 2002 . Tom and his wife have lived in the region of Catalunya for a number of years. His observations regarding the currency transition which was about to take place in Spain from pesetas to the full adoption of the Euro may prove timely if and when a similar event takes place in your local. Enjoy!

Adios pesetas

A major milestone has come to Europe with the introduction of the common currency known as euros. Actually the Economic Union of 12 countries (Trivia question–can you name the 12 countries? answer below) has been on the euro standard for the last 2 years, with exchange rates fixed permanently between the currencies of the member countries. Everyone was really using euros, but they just looked different in each country.

Now in the last month, the last major hurdle has been addressed with the withdrawal of all local currencies from circulation, and their replacement with euro coins and bills. Think of the problems involved in changing the currency of 12 countries (approximately the size of the US) with 12 different monetary systems simultaneously.

Prices for goods have been posted in both pesetas and euros in the larger stores for the last year to accustom people to thinking in euros. It isn’t easy-we have gotten used to valuing items in pesetas, and even though the euro is close to a dollar in value, that hasn’t helped much. So it must be worse for those that have lived with pesetas all their lives.

The schedule is for 2 months of dual circulation, with only euros after that. Now for some details of the tactics used. Most cash registers are electronic and have been reprogrammed to handle both currencies. Banks had kits of euro coins available in December for their customers so people could start getting used to the feel and appearance, but they could not be used until Jan 1.

The big change-over day (Jan 1) was of course very quiet, the major change being that most cash machines only dispensed euro bills. Then the tactic to force the change-over was that customers could pay in either currency, but always received their change in euros. So all the stores were sucking pesetas out of circulation.

It was a bit chaotic in the first week, with small merchants having to do the conversions on calculators. Lots of mistakes were made, lots of people were confused, but the pesetas were disappearing briskly. A few operations had problems with machines that accept coins, especially the toll roads. So they decided to shut down the automatic coin machines until the conversion period is over, giving them time to convert them to euros. If you want to pay cash, you have to give it to a human operator, otherwise use a credit card for automatic payment.

The use of credit cards in general was encouraged to reduce the demand for change initially. There were some shortages of coins, especially when the big traditional sales kicked in on Jan 8. Now after a month of usage, the euros are seeming more natural and the prices are starting to make sense. Pesetas have disappeared-all transactions are in euros now.

[A cartoon that I saw showed a bank robber at the counter, and the cashier asked if the transaction would be in pesetas or euros].

In our house, and I’m sure in most others, there was a sweep to collect all the pesetas and get them spent. Then you find another coat pocket with a handful of coins, plus an envelope with French francs, another with Italian lira, etc. There are cans with slots in all the banks for those last few stray pesetas to help children around the world. We’re going to haul our francs to France for one last meal there before the pumpkin-hour. The lira we sent with friends that are visiting Italy.

If you are holding on to European currency, send it to me immediately . No, just kidding, but you do need to change it. Bills you should be able to change at major banks until March 1 when all local currencies will disappear; after that you will have to change the money at the state bank in the country of the currency. They predict that at least a third of the currencies will never be turned in. That is pure gravy for the governments.

A side effect of the change-over is its effect on black money. Spain and other areas of Europe have a sizeable underground economy, with all transactions in cash, not reported to the government for tax purposes. Now some people are stuck with bundles of currency that will soon be unusable. So the sales of luxury items skyrocketed in December, especially expensive cars.

Also there seemed to be a lot of money being poured into new construction, and housing prices have risen dramatically in the last year. We will see if they subside in the coming year. The government has promised to look into suspicious purchases of luxury items. There were reports of Germans hauling carloads of marks into Switzerland.

On your next trip to Europe, you will find things much easier, with only one currency to carry unless you visit England, Switzerland, Denmark, Sweden, or Norway. I wonder how much this will affect tourism into these countries?

The last thought is the number of colloquial sayings that will disappear from the language. “No vale ni un peseta” = “It’s not worth even a peseta”. The common words used for money were duros (5 pesetas, or like a nickel), and pelas (1 peseta). These will disappear.

Euro coins:

1, 2, 5 Cents, Centims, Centimos-Copper colored

10, 20, 50 Cents-Gold colored

1, 2 Euros-Gold outer band, silver inner section

The “front” side of each coin is unique to each country, while the “back” side is common to all.
Euro Bills: 5, 10, 20, 50, 100, 200, 500

Euro countries: Spain, Portugal, Ireland, France, Germany, Austria, Italy, Greece, Holland, Luxemburg, Belgium, Finland

We wish to thank Tom for allowing us to share his essay with you, our fellow taxpayers. It is both an interesting, first hand look at a significant event in the history of world currencies as well as an instructive guide as to how one may prepare and what to expect should the monetary authorities in your locale choose to swap their existing national currencies for some flavor of supranational currency, such as the Euro.

At the time the Euro was adopted, it appeared to have a number of benefits for the adherents despite the minor inconveniences and sometimes painful price adjustments (we are told that the typical café, which before the Euro went for 100 pelas (see above) was immediately repriced up to a round 1 Euro (roughly 162 pesetas), an instant 62% increase) that were experienced in its adoption.

Now, some eleven years later, five of the countries on the above list have experienced significant economic distress, while others teeter on the fine line between growth and solvency.

It is important to note, however, that the countries that are now in distress experienced substantial economic booms related to the Euro adoption. Their governments were allowed to borrow at rates which were aided by the strength of their European neighbor’s finances and, as Tom pointed out, the Central Banks made a windfall profit on the quasi confiscation of nearly 1/3 of the currency in circulation.

Was it worth it? In terms of currency history, 11 years is a bit too soon to make a call, but either way, we have a feeling that a similar sort of currency “consolidation” awaits many in the not too distant future. It will not be some sort of conspiracy, as many believe, but simply an attempt by the desperate governments of the world to shore up their ailing finances.

It will ultimately fail, but that time may be farther off than it seems.

Stay tuned and Trust Jesus.

Stay Fresh!

David Mint

Email: davidminteconomics@gmail.com

Key Indicators for March 18, 2013

Copper Price per Lb: $3.51
Oil Price per Barrel: $93.21
Corn Price per Bushel: $7.16
10 Yr US Treasury Bond: 2.01%
FED Target Rate: 0.14% ON AUTOPILOT, THE FED IS DEAD!
Gold Price Per Ounce: $1,596 THE GOLD RUSH IS STILL ON!
MINT Perceived Target Rate*: 0.25%
Unemployment Rate: 7.7%
Inflation Rate (CPI): 0.7%
Dow Jones Industrial Average: 14,496
M1 Monetary Base: $2,466,100,000,000 LOTS OF DOUGH ON THE STREET!
M2 Monetary Base: $10,499,300,000,000

Cyprus – The Waterloo of Eurocratic management or the ultimate catalyst for Euro zone growth?

3/18/2013 Portland, Oregon – Pop in your mints…

While the management of the ongoing banking crises on this side of the Atlantic has been dishonest, the management on the other side of the pond, or in today’s case, sea, has been an unmitigated disaster. Or so it would seem.

We are talking about Cyprus. For those who have yet to hear about Cyprus, it is an island nation located in the far eastern Mediterranean Sea, just below Turkey. It is currently inhabited by a fiery mix of Greeks and Turks, who have lived in an uneasy peace with each other for some 40 years after the events that took place during the summer of 1974.

Like many island nations, Cyprus has been able to find common ground with those who have been unable to find common ground on the mainland. It has found that it can leverage its sovereignty and willingness to bend the rules to offer banking services without the nagging regulations which increasingly plague banks and their clients in the Western nations on the mainland.

Now that the government of Cyprus is bankrupt and in need of a bailout, showing that even a tax and banking paradise can be poisoned by a bad currency, they have gone hat in hand to Belgium, a strange country in the north with absolutely nothing in common with Cyprus, save the currency in question.

The Eurocratic apparatus in Belgium, either on its own or at the behest of the global banking giants in Cyprus, has decided that the terms of the bailout, or “bail in”, which is the Euro friendly way to say “Corralito,” {Editor’s Note: Corralito is the Argentinean term for when the Government decides to unilaterally make use of the funds in its country’s banks to fund the government because there is literally no one willing to lend them currency on any terms}, would be the direct confiscation of funds from depositors bank accounts in the form of a tax, in this case between 3 and 9.9% (because 10% just looks bad in print) to ultimately pay back the countries who have been generous enough to provide the funds, which, despite the technicalities involved, for most Europeans means Germany.

Predictably, the people of Cyprus, who caught wind of the confirmation of the rumors on Friday and awoke Monday to find that their government had declared what is, at this writing, an indefinite banking holiday (meaning banks and ATMs are closed) to prevent anyone who did not want to participate in the bail in from withdrawing their funds from the country’s banks, are channeling their anger at the German Embassy, quite naturally:

Henry Blodget has written a decent analysis on the details of the Cyprus bail in over at the Daily Ticker. Blodget does a good job of analyzing the events up until the point where He presumes:

“…the moment depositors think that there is risk to their savings, they rush to banks to yank their money out.

That’s called a run on the bank.

And since no bank anywhere has enough cash on hand to pay off all its depositors at once, runs on the bank cause banks to go bust.

That’s what happened to hundreds of banks in the Great Depression.

And it’s what happened to Bear Stearns, Lehman Brothers, and other huge banks during the financial crisis (though, with Bear and Lehman, the folks who yanked their money out weren’t mom and pop depositors but other big financial institutions). It’s what threatened to bring the entire U.S. financial system to its knees. And it’s why the U.S. and European governments have been frantically bailing out banks ever since.

But now, thanks to the eurozone’s bizarre decision in Cyprus, the illusion that depositors don’t need to yank their money out of threatened banks because they’ll be protected has been shattered.”

What Blodget presumes is that a bank run is bad for the bank. Here at The Mint, we postulate that this tax on depositors is taken precisely for the benefit of the Cypriot banks. Further, it has been taken not only for the benefit of the banks in Cypriot, but to serve as the catalyst for the Euro zone to return to growth, or the activities which pass as economic growth circa 2013.

How can this be? To understand this will take a basic understanding of the banking revenue model.

Ever since 2008, the Federal Reserve and the ECB have been underwriting the banking sector by providing cheap cash to banks and, indirectly, the governments and people’s of their respective countries. This is where Blodget’s parallel of today’s bank runs and those that occurred during the Great Depression falls apart. For all of the mistakes that Ben Bernanke has made, the unconditional guarantee of liquidity in the banking system is the one that he will never relinquish, despite appeals to reason, for he mysteriously sees it as his life’s calling.

However, in an effort to stem the fall in asset prices, which is largely a product of the insane “jack the rate 25 basis points every month or so” policy that the Greenspan and Bernanke Fed followed from June 2004 until June 2006, the policy that caused markets to seize up like a car engine losing oil as they accelerated to record speeds, the Feds and the ECB have largely ignited an increase not in economic growth, but in bank deposits.

Bank deposits, far from being a boon to the receiving bank, are a huge problem when market conditions force them to reinvest (read lend out) those funds for rates that are unconscionably low (3.75% to consumers for 30 years, in a fiat currency system, are you out of your mind?). Making matters worse, the consumers have been slow to take the bait, resulting in a big time squeeze on the traditional banking revenue model.

Enter Cyprus, an island that holds a disproportionate amount of bank deposits. As a thinking Eurocrat, of which we suspect there are few, save Nile Farage, who is hunting for a way to both ensure that the banking revenue model continues to function, the government of Cyprus retains legitimacy, and that economic activity in the Euro zone will increase, the pile of Euros in Cypriot banks looks like a great target not to loot, as most analysis of the situation will paint this move as, but to force billions of Euros out of the digital vaults of the banking system to wash from the shores of Cyprus outwards into the other Euro zone countries in search of real goods, not simply another cash warehouse.

One sees the Eurocratic genius in the move at the moment one (again, that is you and I, fellow taxpayer) understands that the mere threat of a unilateral tax on deposits as a condition for a Euro zone bailout is causing lines to form at ATMs from Andalu to Cataluña, across the border into Torino and down to the lonely parts of Sicily.

Will the Cyprus Misadventure by the catalyst for elusive economic growth in the Euro zone?

Within a matter of days, billions of Euros which were locked up in the accounts of villainous savers and otherwise useless to the European economy will be running around the Spanish and Italian streets in a desperate attempt to purchase anything real in which to hold said savings.

With what appears to have been a typically boneheaded Eurocratic move, the Eurocrats may have managed to do what Ben Bernanke and all of the helicopters in the world could not have done to the club Med economies: Shower them with foolishly spent cash while at the same time bailing out both the banks and the governments as a grotesque side effect.

To be sure, it is a short term fix and will leave the Euro zone further down the scorched ear

The Mint’s Euro 2012 prediction – Germany loses on all fronts

6/25/2012 Portland, Oregon – Pop in your mints…

After defeating Greece in the quarterfinals, Germany will now face Italy in the Euro semifinals and, if they are victorious in there, either Spain or Portugal in the finals.  If the 2012 Euro plays out according to the most recent soveriegn credit ratings, according to Moody’s, we should expect the following outcomes from the aforementioned teams:

Germany (Aaa) defeats Greece (Ca), which already occurred on Friday.  Spain (A3) would defeat Portugal (Ba3) on Wednesday, and Germany (Aaa) would come out a hair ahead of Italy (A3).

The Germany would then come out victorious after handling Spain on July 1.

However, as Italy showed England yesterday, poor credit ratings can be overcome on the pitch.  Therefore, we are speculating that Spain will defy Moody’s and take the cup.

Spain to defy Moody’s on the pitch

Ironically, a similar scenario is set to play out at the latest emergency EU summit (we have lost track but believe that there have been at least 14 prior to this one) where the Germans are set to capitulate on not only austerity measures but also restraint on monetary policy.

As unemployment in Europe’s club med regions rises, Germans and Europe in general will be keen to avoid a repeat of the rise of the Third Reich in their neighbors to the south.

Stay tuned and Trust Jesus.

Stay Fresh!

David Mint

Email: davidminteconomics@gmail.com

Key Indicators for June 25, 2012

Copper Price per Lb: $3.36
Oil Price per Barrel:  $79.31
Corn Price per Bushel:  $6.31
10 Yr US Treasury Bond:  1.61%
FED Target Rate:  0.16%  ON AUTOPILOT, THE FED IS DEAD!
Gold Price Per Ounce:  $1,585 PERMANENT UNCERTAINTY
MINT Perceived Target Rate*:  0.25%
Unemployment Rate:  8.2%
Inflation Rate (CPI):  -0.3%
Dow Jones Industrial Average:  12,503
M1 Monetary Base:  $2,192,300,000,000
M2 Monetary Base:  $9,933,900,000,000

Spain, Inc., the latest proof of Anarchy in action, an impromptu Manifesto

6/11/2012 Portland, Oregon - Pop in your mints…

When we attended graduate school in Spain, we were the first North American student in our course.  It was late 2003 and the Eurozone was full of optimism.  This optimism lead some of the professors to use a portion of their class time taunt the US model as failed and the European model as the obvious way forward.

As proof of European supremacy, our Finance professor often made a point of mentioning to us that the yields on the Spanish 10yr bond were almost the equivalent to the yields on the US 10yr bond.

What a difference nine years and 500 basis points make.

Circa 2012, Spain dominates the financial headlines as the latest casualty of the European debt crisis.  Apparently Spain now is in need of a bailout.  The bailout strategy which will be employed by Spain, Inc. is a hybrid of the prior bailouts accepted by their counterparts, Greece, Inc. and Ireland, Inc.

Greece, Inc. required a bailout because its government was broke.  Ireland, Inc. was slightly more ingenious in that it made a good faith effort to backstop its banks, only to find that it was now the entity which required a backstop.  Spain, Inc, theoretically learning from both experiences, forced its banks to accept the backstop directly so that the Spanish government could save face and be spared the humiliation of the Irish scenario.

Unfortunately, the markets have seen through the charade and are now putting pressure on all bonds, bank or sovereign, which hail from the Iberian Peninsula.

What a difference nine years and 500 basis points make!

Spain's strategy has failed before it was even implemented for lack of collateral and credibility, both of which are in desperately short supply amongst the EU leadership.

How did once proud Europe end up in this situation?  They decided to force a debt based currency integration by integrating only the currency part of the equation and leaving the debt and fiscal matters to chance.

As if choosing to use a debt based currency weren't bad enough, choosing only to implement the currency is like handing the nations foolish enough to engage in such a gamble the revolver in a game of Russian roulette where the revolver is fully loaded.

Now, the revolver is being passed and it is Spain's turn.  Once Spain slumps to the floor, it is Italy's turn, the Belgium, France, etc. until the European Currency Union, doomed from its outset, breathes its last.

At some point in the process, possibly as Spain pulls the trigger, USA, Inc. will be forced to step in with the "ultimate" backstop, the final hope of the failed, insane "debt is money" currency regime.  As the US throws its sovereign credit rating in front of the runaway freight train of Europe's soveriegns, it will quickly find itself in the very situation that it is trying to save the European Sovereigns from.

For in this debt crisis, the unwritten rule of quality holds.  When one adds wine to sewage, one gets sewage.  When one adds sewage to wine, one gets sewage.  The sovereign vats have long since been polluted.  It might make sense to check one's portfolio and remove as much sewage as possible.

Beyond that, we will present two unsolicited yet practical bits of advice.  First, US Bonds will ultimately slide as USA, Inc. wades across the pond to aid Europe.  The Euro currency will rally as the run on European banks by the citizens and the wholesale dumping of any bond denominated in the currency begins.  Quite simply, demand for the Euro will exceed supply in the short term.

Plan accordingly.

We submit to you that the Spain, Inc. debacle is further evidence of one of The Mint's central themes, that Anarchy is man’s reality, it is an ultimate given, it simply is, and all understanding of the current political and social structures is greatly facilitated by one’s acceptance of this fact.

In fact, one’s ability to act and react to the unfolding changes in the current political and social structures depends upon accepting and embracing Anarchy as the basis for reality and learning to operate in the Truly Capitalistic system which organically emerges as men learn anew that mutual trust and cooperation are in their rightly understood self interests, and that he who is to lead must truly become the servant of all.

To truly embrace this fact, we must understand the nature of mankind.  Man, left to his own devices, is completely devoid of the ability to do the right thing.  He doesn’t have it in him.  He is lazy, self-serving, and completely evil.  He needs God and his fellow man to be able to do anything productive, altruistic, or what may be considered remotely good.  A full defense of this statement is a subject for another day (although the evidence is all around us), we mention it here only to underscore the necessity of a framework which presupposes this fact within which mankind can use this weakness to avoid both self and mutual destruction.

The only reliable framework which has emerged out of natural Anarchy which not only addresses the problem of human nature, but also turn man’s weaknesses into strengths is what we call True Capitalism.  Ironically, by allowing market forces to work with as little hindrance as possible, mankind can insulate itself from descending into chaos and catastrophe.

In fact, to fight the workings of True Capitalism is, by default, to submit oneself to chaos and misery.  Yet every nation on the planet is devoted to some degree in the fight against True capitalism.  Why?  Because the nation state sells itself as the most perfect expression of man’s good intentions, which we presuppose do not exist.  In other words, the dream of the nation state is built on a false pretense that is usually attributed to socialism: That man is inherently good and wants to do good to others.

Given their presuppositions, is it clear that the nation state and a truly capitalistic society are, in fact, the antithesis of one another.  Where a nation state regulates by edict,  truly capitalistic society regulates by example.  Where a nation state is rigid, where  truly capitalistic society is pliable.  Hence, where  truly capitalistic society will bend but not break, the nation state is repeatedly smashed to pieces when faced with change.

For the more a nation state tries to force men to do good, the more mankind's character flaws will overtake these good intentions until the nation state becomes an expression of mankind's evil nature.

The truly capitalistic society allows each mans evil nature to be corrected by allowing him to experience the consequences of his inherently poor behavior, paradoxically and naturally improving the behavior and norms of all.

Moving to a less philosophical level, how can we be sure that Anarchy is the basis of man’s current existence?  The evidence can be found in that the institutions which supposedly offer the best option to Anarchy, the nation states if the world, are beginning to succumb to the punishments they have built up in their losing fight against natural law.

Greece, Ireland, Portugal, Italy, and now Spain, Inc. are now succumbing to the inevitable.  The member of club med which turns from the failure of the Euro currency to go it alone and embrace the much feared "Anarchy," as it were, paradoxically stands to be richly rewarded by the flocks of tourists who can suddenly afford a European vacation without the Euro.

We conclude with a brief manifesto for your perusal and enjoyment.  What does the future hold?

Out of Anarchy, a Truly Capitalistic System will ORGANICALLY emerge, and with it a new dawn for humanity, built on mutual interest and almost endless capital formation which will engender a spontaneous and dynamic social order, a society without borders that would enjoy freedom and prosperity that we cannot even imagine under current conditions.

Believe.

Stay tuned and Trust Jesus.

Stay Fresh!

David Mint

Email: davidminteconomics@gmail.com

Key Indicators for June 11, 2012

Copper Price per Lb: $3.35
Oil Price per Barrel:  $81.49

Corn Price per Bushel:  $5.92
10 Yr US Treasury Bond:  1.60%
FED Target Rate:  0.16%  ON AUTOPILOT, THE FED IS DEAD!

Gold Price Per Ounce:  $1,596 PERMANENT UNCERTAINTY

MINT Perceived Target Rate*:  0.25%
Unemployment Rate:  8.2%
Inflation Rate (CPI):  0.0%
Dow Jones Industrial Average:  12,411

M1 Monetary Base:  $2,306,000,000,000
M2 Monetary Base:  $9,790,100,000,000

The Euro zone cobbles together a 2 trillion Euro rescue package – Is this the ultimate panacea?

Editor’s Note: Please welcome our guest contributor here at The Mint, Mr. Jason Holmes.  Mr. Holmes is a regular contributer at Debt Consolidaton Care and various other financial websites and has authored several e-books.  Without further adeiu, Mr. Holmes:

Euro zone cobbles together a 2 trillion Euro rescue package – Is this the ultimate panacea?

As international pressure swells on Europe to forestall the Greek debt crisis from undermining the banks and economies around the world, the European leaders are busy cobbling together a rescue package that would quickly hit the economy with 2 trillion Euros of firepower.  According to the International Monetary Fund (IMF), the plans for an ambitious rescue package are coming together in order to enable banks to write-off a large potion (probably 50%) of Greek bonds. The latest talks about the launch of this particular package calmed down the European markets on September 26^th, but there are still substantial doubts as to when this plan will be approved and in what form.

There is already doubt about the plan as without the support of the European Central Bank and the German parliament, which has already been hesitant in expanding its involvement, there is meager chance of the plans gaining approval. The larger bailout package has already run into opposition as the new President of the German central bank has suddenly emerged as a powerful critic of the entire rescue package. He has spoken against the expansion of the rescue mission by the ECB by purchasing the sovereign bonds of Greece, Italy and the remaining countries with spiraling sovereign debt crises.

Markets seize due to the Euro zone rescue package – Does this hold true?

As the rumors spread that the European leaders are planning a mammoth rescue package to avert the Euro zone debt crisis from wreaking havoc on the global economy, the US and the European markets have risen overnight.  The particular fund that is being provided for as part of the rescue package would be utilized when problem economies like Italy and Spain are in trouble. Though the European governments will take at least 5-6 weeks to put this entire plan in place, investors have collectively pinned their hopes on this impending rescue plan’s eventual passage.

Will the Euro zone rescue operation boost the FTSE?

The blue-chip shares of Britain were sharply higher across the board on Tuesday, 27th September and experts have also tracked gains on the Wall Street and in Asia. This was a result of the hope of the European leaders to take a purposeful action to assuage the debt problems within the region. While there were good recovery signs in commodity prices, energy stocks and miners spearheaded the entire rally. Though there was an alarm about the entire state of the global economy, this counteracted with the optimism of the euro zone debt situation. The US markets even felt a positive effect with the Standard & Poor’s 500 Index and the Dow Jones Industrial average ending at more than 2% higher on the 26th of September.

The effect of the EFSF – Is it going to fade out?

Though the officials in Brussels agreed to shore up the EFSF (European Financial Stability Facility) and provide Greece with some new and lucrative financing options, there are still too many questions that still remain unanswered. Will the rescue package, seen as a huge leap for the European politicians, be to small for the markets?  The Euro Stoxx 50 index, a yardstick of blue chips in almost 17 countries that share the Euro has been on a winning streak since the 18th of July, but it slipped to 0.11% on Tuesday. Both the Italian and the Spanish Treasury are paying more for funds and their debt auctions are meeting with weakened demand.

The Chairman of the Federal Reserve, Ben S. Bernanke is of the opinion that the Euro region’s $2 trillion rescue package is not the ultimate panacea as the measures are all “temporary”. According to Bernanke, without fundamental, long term changes in the economies of Greece, Spain, and Italy, it is unlikely that they will emerge from their grave financial situation.

Jason Holmes is a regular writer with http://www.debtconsolidationcare.com/debt-relief.html and is also a contributor to other financial sites. His expertise is woven around various aspects of the debt industry and through his e-books he tries to impart to people the different situations and simple solutions to get out of difficult situations. Some of his works include e-books like 'Credit Score The Quintessential Therapy for a Happy Pocket', ‘Take Creditors and Collection Agencies to Small Claims Court' and, ‘My Story- From Depression To a Smile'.

Waiting on Armageddon in the Bond Markets, A Freaky Chart form the BIS

7/18/2011 Portland, Oregon – Pop in your mints…

We are taking the week off here at The Mint. As the world observes the pitched battle between default and inflation, we will be roaming the cornfields of Northeastern Nebraska waiting to attend a cousin's wedding.

To default or not to default, that is the question. The financial world is on the edge of its seats waiting for the answer. What will congress do?

Regular Mint readers know that once QE started, the US essentially defaulted. Everything that is happening now is a mere attempt to avoid openly admitting it.

There has been a startling graph from Bank of International Settlements that has been circling the internet and is worth a look. You may want to ask the children to leave the room, it is downright scary.

"AAA" Government dominates the market and it is beginning to smell funny!"

Do you now understand why what happens in Greece, Ireland, Portugal, Spain, Italy and the US in the coming weeks is of the utmost importance for the bond markets? In a very short period of time, sovereign debt issues have become predominant. The scary part of the chart is that any sane person can tell you that there simply ain't that much AAA rated paper out there, no matter who issues it or who rates is.

With what is sure to be an action packed week as the financial world braces for the next of its many brushes with Armageddon. Not matter what happens, the only clear winner promises to be the volatility index (which you can conveniently trade as VIX). If there truly is the threat of a default, try TBT, the Ultrashort US Treasuries EFT.

Better yet, head down to your local coin shop, load up on physical Gold and Silver, and come roam the cornfields with us, worry free!

Stay Fresh,

David Mint

Email: davidminteconomics@gmail.com

P.S. If you enjoy or at least tolerate The Mint, please share us using the buttons at the top of this post. If you feel that you can’t go another day and risk missing The Mint, please register by clicking here. Thank you!

Key Indicators for July 18, 2011

Copper Price per Lb: $4.39
Oil Price per Barrel: $97.12
Corn Price per Bushel: $7.01
10 Yr US Treasury Bond: 2.91%
FED Target Rate: 0.06% JAPAN HERE WE COME!
Gold Price Per Ounce: $1,594 PERMANENT UNCERTAINTY
MINT Perceived Target Rate*: 2.00%
Unemployment Rate: 9.2%
Inflation Rate (CPI): 0.2%
Dow Jones Industrial Average: 12,479 TO THE MOON!!!
M1 Monetary Base: $2,027,500,000,000 RED ALERT!!!
M2 Monetary Base: $9,265,600,000,000 YIKES!!!!!!!

*See the MINT Perceived target Rate Chart. This rate is the FED Target rate with a 39 month lag, representing the time it takes for the FED Target rate changes to affect the real economy. This is a 39 months head start that the FED member banks have on the rest of us on using the new money that is created.

Italians to join Europe’s needy, the parable of the Chiropractor

7/11/2011 Portland, Oregon - Pop in your mints…

Investors woke up today and wasted little time in marking down Italian sovereign debt, along with Spanish and Portuguese debt issues.  Why?  The story of the Italians is eerily similar to that of the Greeks, the Portuguese, and the Spanish.  Their government spends more than it takes in.

At this point, all readers of The Mint know that it is impossible for any Government to produce value.  Yet somehow, in our upside down, insane monetary system, it has become acceptable for the western governments to run a reasonable deficit to help pay for their role as the Robin Hood in the current welfare state model.  The European Union even went so far as to attempt to define what constitutes a reasonable deficit as 3% of a nation’s GDP per year.

Now if the government takes in 25% of national income in the form of taxes, which is not an unheard of (if anything it is a low estimate) and then borrows an additional 3% (which has proved an elusive target), then 28% of the welfare state’s economy is devoted to income “redistribution.”

While the term “income redistribution” does not fly well with most voters, the Government’s "investment" decisions are cleverly disguised as Social Security, Health Care, Defense, and Education.  Most will recognize that these are important investments, which leads us to the logical question:
Why leave these investment decisions up to the Government?

This question is rarely asked, and most seem content to let the Government continue in their collective role as Robin Hood.  It should come as no surprise, then, that a great deal of time and what would otherwise be productive energy goes into influencing Robin Hood’s decisions as to whom the poor are at the moment.  Bill Bonner at The Daily Reckoning calls this outsized effect of Government in the economy a “Zombie Takeover.”

With the Zombies creatively destroying a minimum of 28% of GDP in a modern welfare state, perhaps it is a testament to the resilience and productivity of the citizenry that any real progress can be made under such circumstances.

Fortunately (or unfortunately for those in the zombie class) the insanity is coming to an end.  As the government’s destruction of wealth accelerates, even elected officials will have to admit that the bad decisions that all of this accumulated debt represents do not go away just because one denies that they exist.

In fact, attempts to solve the problem of too much debt by creating more currency are futile, as each unit of currency creates a unit of debt which must be dealt with at a later date.  This is the glory of modern monetary theory.  It binds the world together in slavery.  It is also its Achilles heel, which is now exposed, waiting to be stricken.

How and when will this finally occur?  It will be like the man with back pain who finally goes to visit the chiropractor.  The gradual spinal realignment that he had hoped to achieve by doing simple stretching exercises (austerity) is not taking place, in fact, his back problems have gotten worse.  Once in the exam room, he will be laid down swiftly on the chiropractor’s table.

Then chiropractor will move into place, interest rates will rise, and a series of pops will go off in the patient’s spine.  Naturally, the popping sounds are the troubled EU nations defaulting on their sovereign debt in unison, which is what is about to occur.

Will the patient then get up and go on his way, sore but better off for the treatment?  Or perhaps the better question is; do zombies even use chiropractors?

Meanwhile in the US, the political theater that is the debt ceiling negotiations may be the catalyst that sends the US Treasury market into a much deserved tailspin.  We have speculated about this almost incessantly and still cannot believe that it may happen.

But while the EU goes to the chiropractor, the US may prefer to rely on the prescription drugs of fiscal and monetary stimulus for as long as they appear to work in a futile attempt to reassure the zombies that all is well.

The US will simply destroy the value of the currency, completely and irreversibly.  Why else would they pick a fight with Iran at this point?

That makes each dollar that one holds like holding an M80 firecracker with a lit fuse.

How long will you hang on?

Stay Fresh!

David Mint

Email: davidminteconomics@gmail.com

P.S.  For more ideas and commentary please check out The Mint at www.davidmint.com 

Key Indicators for July 11, 2011

Copper Price per Lb: $4.32
Oil Price per Barrel:  $94.99
Corn Price per Bushel:  $6.81
10 Yr US Treasury Bond:  2.92%
FED Target Rate:  0.07% JAPAN HERE WE COME!
Gold Price Per Ounce:  $1,554 PERMANENT UNCERTAINTY
MINT Perceived Target Rate*:  2.00%
Unemployment Rate:  9.2%
Inflation Rate (CPI):  0.2%
Dow Jones Industrial Average:  12,506 TO THE MOON!!!
M1 Monetary Base:  $2,020,000,000,000 RED ALERT!!!
M2 Monetary Base:  $9,112,300,000,000 YIKES!!!!!!!


*See the MINT Perceived target Rate Chart.  This rate is the FED Target rate with a 39 month lag, representing the time it takes for the FED Target rate changes to affect the real economy.  This is a 39 months head start that the FED member banks have on the rest of us on using the new money that is created.