By Edward Hugh: Barcelonabr /br /blockquote"As long as excessive debt is not digested, both monetary and fiscal policies are inefficient. There is not much of an alternative. Either to let the economy collapse, in order to reduce debts, and then use fiscal policy to revive it, or inundate the insolvent economy with public credit, to avoid the collapse, and loose the ability of fiscal policy to pull it out of a prolonged lethargy. Either a horrible end or an endless horror."br /a href="http://blogs.ft.com/maverecon/2009/06/after-the-crisis-macro-imbalance-credibility-and-reserve-currency/"After the Crisis: Macro Imbalance, Credibility and Reserve-Currency/a: André Lara Resende/blockquotebr /Well, I think the title to this post makes my view on the high-profile shenanigans we are currently witnessing on the part of two widely respected contemporary intellectuals clear enough, even if Paul would probably respond that he is perfectly well able to take care of himself, thank you very much. Nonetheless, looking at the way the ...

The United Kingdom’s mounting pile of government IOUs toppled it from the list of countries holding the highest-rated credit today (Thursday), which resulted in Standard & Poor’s lowering its outlook on the United Kingdom’s debt to “negative” from “stable.”

The downgrade has both financial and political ramifications.  It is sure to increase the country’s cost of borrowing and may even boost the out-of-favor Conservative Party to victory in the next election, which may come as early as next year.

Even though the agency reaffirmed its ‘AAA’ long-term and ‘A-1+’ short-term credit ratings for the United Kingdom, the downgrade may be cause for alarm among its debt holders and citizens.

“We have revised the outlook on the U.K. to negative due to our view that, even assuming additional fiscal tightening, the net general government debt burden could approach 100% of GDP and remain near

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Alex’s Notes: Had a funny thing happen to me last week.

There is currently this scam going around the internet where people are trying to buy and sell gold at a discount to the spot price.

This is really kind of funny, but because there are so many amatuers in the bullion markets who haven’t bothered studying the supply demand fundamentals and what really occurs in the bullion industry, some actually believe it (funny…there is a saying that you cannot con an honest man, but a dishonest one who wants to believe the con because its something for nothing always get caught in it).

Anyway, one of these situations pops up where this person is claiming they can buy gold in quantity and have it fabricated as well at .5% under the gold price at the Perth Mint.

I laughed.

You see, we hold contracts with the Perth Mint, among other large LBMA certified refineries.

Every

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Concerned about the recent decline in stock prices, French President Nicolas Sarkozy, yesterday (Tuesday) called for the creation of European sovereign wealth funds. The funds would be virtual carbon copies of the state-owned investment vehicles that have sprung up from Beijing to Abu Dhabi to disperse their respective nations’ cash reserves in foreign assets.

Addressing the European Parliament, President Sarkozy implored his European contemporaries to embrace the current period of economic upheaval as an opportunity to restructure the global financial system. According to the Daily Telegraph, he also articulated the concern of many Western authorities that sovereign wealth funds, located primarily in Asia and the Middle East, could use their massive cash reserves to scoop up key foreign assets at extraordinarily low valuations.

“Stock markets are at historic lows. I do not want European citizens to wake up a few months from now and discover that European companies belong to

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There is a lovely article in the Daily Telegraph about Barclays being in denial about the size of the losses that it needs to take. One thing that caught my eye was the following: It has even been suggested that Barclays chose not to offload its Alliance Boots debt, when others in the banking syndicate took a 10 per cent valuation cut to get the assets off their books, because Varley and Diamond wanted to protect the minimal writedowns on leverage loans. Well you might say that. I couldn't possibly comment. Anybody looked lately at their consumer lender exposure in Japan? I couldn't possibly comment. How about just the almost total absence of losing trading days in the investment bank. I couldn't possibly comment. Anyone you know carried an 800 billion pound investment bank portfolio and not lost money on at least some days... I couldn't possibly comment. How about the ...