Debt-based monetary systems are inherently unstable. Money is created out of thin air by the banks and lent to government, consumers and businesses. In order to service and replay those debts, the borrowers take on more debts. Asset prices are inflated, and the vicious cycle continues until the debtors are unable to borrow or the banks are unwilling to lend. At that point the system snaps, everything is sold off, and we have a financial crisis at hand. In this paper we examine what happens to equity and currency markets in the aftermath of financial crisis.

1998 Russia

Declining productivity, an artificially high fixed exchange rate between the ruble and foreign currencies to avoid public turmoil, and a chronic fiscal deficit were the background to Russia ’s financial meltdown in 1998. The economic cost of the first war in Chechnya that …

Donald Coxe, Global Portfolio Strategist, BMO Financial Group By ROBIN GOLDWYN BLUMENTHAL AN INTERVIEW WITH DONALD COXE: He's convinced that we are in the midst of the greatest commodities bull market of all time. His hunger: food. ONCE A WEEK, LOADS OF INSTITUTIONAL INVESTORS DROP whatever they're doing to tune in to Donald Coxe's strategy conference calls. Small wonder. With a keen sense of history and wry sense of humor, Coxe has helped his followers anticipate some of the biggest shifts in markets, be they in stocks or commodities. As global portfolio strategist for BMO Financial Group, a Toronto-based bank that is among Canada's largest, he now sees real hope for two sectors that have been taking poundings: banks and commodities. Though he launched the Coxe Commodity Strategy Fund this past summer, right before commodities took a nose dive, Coxe remains convinced ...

In general, we consider it a good thing to save money and to "owe no man anything save love." But what happens when a debt-happy society wakes up and decides that saving is a good thing for everybody? What happens when banks and hedge funds decide (or are forced) to reduce their debt? What happens when businesses of all sizes find it harder to get loans to operate? In this week's letter we discuss "The Great Unwind," that process of deleveraging that we are now in the midst of. We also explore some recent economic data on the economy. It's a lot of ground to cover, so let's jump right in. 1.2 Million Jobs and Counting The unemployment numbers came out today and they were ugly. October showed a loss of 240,000 jobs. But the really bad part was the negative revision to ...

Here is the latest commentary from John Browne, senior market advisor for Euro Pacific Capital Having received 62.5 million votes, Barack Obama has earned a spectacular personal victory and a clear mandate to bring some form of change to the United States . Obama's decisive and masterly election campaign, where he first had to outmaneuver the formidable Clinton machine, may bode well for his ability to implement a government response of unprecedented magnitude. Time will tell if this is a blessing or a curse. In the short term, markets may likely rally on the grounds that election uncertainty is over and that Obama and a Democratic Congress may institute massive infrastructure spending along the lines of Roosevelt 's New Deal. The larger question for investors will be whether Government spending will make any difference to long term performance, or whether the ...

"...The ideal hedge-fund manager was only just out of college when the Asian Crisis hit. He was smoking blunts behind the school bike-shed on Black Monday 1987. He was still in diapers when the S&P lost half its value in '73-74..." The INVESTMENT TRUST MANUAL for 1928 "was a little book," reports Robert L.Smitley in his Popular Financial Delusions . As the Dow Jones then doubled by mid-'29, the trusts themselves were allowed to float as equity investments on the New York Stock Exchange, and so the next issue "was a big book. The issue for 1930 was a very big one. But "that for 1931 was quite a bit smaller. For 1932 it was smaller than for 1928, and in 1933 it did not even go through the printer's hands." The pace of this growth, and the horrors of its collapse, stood as a ...

History of Zinc (from International Zinc Association, (http://www.iza.com/uses.html) Centuries before zinc was discovered in the metallic form, its ores were used for making brass and zinc compounds, its ores were used for healing wounds and sore eyes. It is believed that the Romans first made brass in the time of Augustus (20 B.C. - 14 A.D.). In the 13th century Marco Polo described the manufacture of zinc oxide in Persia. At Zawar, India, both zinc metal and zinc oxide were produced from the 12th to the 16th century. From India, zinc manufacturing moved to China in the 17th century where it developed as an industry to supply the needs of the brass industry. In 1743, the first European zinc smelter was established in Bristol in the United Kingdom. A major technological improvement was achieved in Germany which led to the erection of ...

"You can't blame the king of Persia for printing up money no one could trust. His neighbors in China were doing the same, after all, and with the same inevitable consequences, too..." CREATING MONEY from nothing to try and keep the economy stoked is far from a modern invention. Mistaking extra money for value is a common enough event throughout history, in fact, right from the 99% debasement of Roman coins in the second and third centuries A.D. to the paper hyper-inflation of Weimar Germany in the 1920s. The horrors which excessive money then spawns are a regular feature as well. Yet politicians and potentates still believe they can out-do the ancients...somehow plucking wealth from thin air with better success than everyone else. Most often in history, this futile attempt meant inking a state-decreed value onto the pulp of dead trees. Nine-hundred and ...

It has been long understood that our federal government is going deeper into debt, consistently raising the debt ceiling and demonstrating no fiscal restraint. In recent years, debt ceiling increases have been placed in "must pass" legislation as a means to guarantee that Republicans as well as Democrats would vote for them when Congress was under Republican control. We also know our nation's "negative savings rate" reflects the habits of private citizens, showing those habits to be not tremendously different than the habits of the public sector. Yet, the signs of decline are becoming ever more apparent. So apparent, in fact, that it seems unlikely that bailouts or other gimmicks will have even short term success. More inflation, and creating moral hazard by bailing out egregious offenders, is a recipe for disaster. These activities can seem to provide some short ...

SPOT GOLD PRICES slid from an overnight rally as the US opening drew near on Tuesday, trading 3% lower against most major currencies from this time last week while world stock markets continued to leap thanks to the promise of almost $2 trillion in tax-payers' money. The Japanese Nikkei index leapt a record 14% on the day, recovering just over half of last week's huge losses. Germany 's Dax and France 's Cac40 index both added to Monday's 11% record bounces, meantime, while one newspaper claimed that "[Chancellor] Angela Merkel saves Germany " and President Sarkozy was praised for arranging a pan-Eurozone bail-out costing €300 billion. The Frankfurt and Paris bourses remained 8% below last week's opening levels, however. "There's relief that banks probably won't go bankrupt thanks to the capital injection plans," says Koichi Ogawa at Daiwa SB Investments in Tokyo ...

SPOT GOLD PRICES leapt once again in London trade on Wednesday, reaching $915 an ounce for US investors as the US Federal Reserve led a co-ordinated cut of 0.5% to major world interest rates. br>br>a href="http://new.goldmau.com/article.php?id=820">Continue reading/a>