Japan Raises Taxes, will Fail; Spanish Bailout Does not Solve Moral Hazard Problem

June 10, 2012

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US:

Currency Crisis: Axel Merk: What’s next for the U.S. Dollar? QE2 ~ Axel Merkone of the best Fed analysts on the planet.

America as a Safe Haven ~ Weekly StandardInflation risk, credit risk, political risk, extreme sentiment, plus 200 year low in yields. Clearly, this will end badly.

U.S. "disappointed" by Iran-IAEA atom talks failure ~ Reuters

Inventories were up 8.2% from April 2011, March was revised higher by $100 million to $480.5 billion ~ UPIit is not healthy when inventory growth propels GDP.

World:

Japan doubles national sales tax from 5% to 10%.. two steps: 8% in April 2014, then 10% Oct 2015 ~ Forbesweakening the economy os not the answer, cutting waste and transfer payments is the answer, thus, expect this to fail to attenuate the debt problem.  

Veronique de Rugy Talks Tax Hikes and False Promises of Spending Cuts ~ historysquared

"No economic or fiscal reforms are attached" to Spanish bailout ~ UK TelegraphGermany and the core gets more exposed by the day – equals money printing

Ireland Demands Renegotiation Of Its Bailout Terms To Match Spain ~ zerohedge – Italy next?

Steve Keen: Why 2012 is Shaping Up to be a Particularly Ugly Year ~ chrismartensonhe’s generally right on, except he absolves individuals and governments from all responsibility, merely shifting the moral hazard from banks to individuals: “run up as much debt as you want, destroy any obligation those borrowers had from paying back loans, then do it again.” This is not a solution.

Fluctuations Lie Ahead for the Australian Dollar ~ institutional investor mag

  • "There are potential weaknesses in two of the commodity markets in which Australian exporters are so strong: coal and iron ore" -Gas is displacing coal and China’s weakening bodes ill for ore and copper demand.

French diaspora: 200,000 and 400,000 French now live in London; they’re doing so for jobs ~ National Review

 

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