Greece forced to tap emergency fund

Greece has been forced to activate an obscure emergency fund for its banks because they are running short of collateral that is acceptable to the European Central Bank (ECB).

Professor Mundell, euro, and 'pessimal currency areas'

“We’re in very serious danger. The world is in a depression in the Big Three of America, Europe and Japan, a mini-depression that we have not seen since the 1930s,” he said, speaking at the Lindau conference, where half the world’s Nobel economist are gathered on one tiny island with cobbled streets looking across Lake Constance to the Alps.

Market crash 'could hit within weeks', warn bankers

A more severe crash than the one triggered by the collapse of Lehman Brothers could be on the way, according to alarm signals in the credit markets.

The Next Banking Crisis Starts Here

Fears of a banking crisis and rolling contagion are making global stock and bond markets extraordinarily volatile - and with good reason. Another financial meltdown, on par with what we saw in 2008, is looming large on the horizon. One of two potential triggers could ignite a new banking crisis, a rapid contagion, and a second financial meltdown: One or more of the troubled European countries could default outright. Or a major money center bank could be turned away from the interbank borrowing market by its peers. The panic resulting from either catalyst could start at any time.

How to invest in the age of stagnation

Economists (specifically the US National Bureau of Economic Research) claim that the US Great Recession began in December 2007 and ended in July 2009. But as far as I'm concerned, the Great Recession is still rumbling on. I'm far from alone. Nearly a third of Americans surveyed in a Gallup poll in April reckoned the economy was in a depression. Small wonder Americans feel that way. 14 million of them are out of work. More than one in four homeowners are in negative equity, according to research firm Zillow. US house prices have fallen by nearly 50% in numerous states, including Florida, California and Nevada. Britain's hardly any better off. The International Monetary Fund has cast doubt on the chancellor's deficit reduction plan, and manufacturing growth has all but ground to a halt. Cutting the deficit might well be the right thing to do – we can't keep spending wildly – but the process will not be comfortable. In short, the challenges are immense. So what's an investor to do?

Nobel gurus warn Britain on fiscal overkill and Fed on monetary overkill

A leading Nobel economist has backed Labour's warnings that the UK is slashing spending too fast and risks tipping a fragile economy into another downward leg.

Gold and Economic Freedom - By Alan Greenspan

Editor's note - It may surprise more than a few gold devotees to learn they have an ideological friend in none other than Federal Reserve Board chairman Alan Greenspan. Starting in the 1950s, in fact, Greenspan was a stalwart member of Ayn Rand's intellectual inner circle. A self-designated "objectivist", Rand preached a strongly libertarian view, applying it to politics and economics, as well as to religion and popular culture. Under her influence, Greenspan wrote for the first issue of what was to become the widely-circulated Objectivist Newsletter. When Gerald Ford appointed him to the Council of Economic Advisors, Greenspan invited Rand to his swearing-in ceremony. He even attended her funeral in 1982. In 1967, Rand published her non-fiction book, Capitalism, the Unknown Ideal. In it, she included Gold and Economic Freedom, the essay by Alan Greenspan which appears below. Drawing heavily from Murray Rothbard's much longer The Mystery of Banking, Greenspan argues persuasively in favor of a gold standard and against the concept of a central bank. Can this be the same Alan Greenspan who today chairs the most important central bank of them all? Again, you might be surprised. R.W. Bradford writes in Liberty magazine that, as Fed chairman, "Greenspan (once) recommended to a Senate committee that all economic regulations should have fixed lifespans. Senator Paul Sarbanes (D-Md.) accused him of 'playing with fire, or indeed throwing gasoline on the fire,' and asked him whether he favored a similar provision in the Fed's authorization. Greenspan coolly answered that he did. Do you actually mean, demanded the senator, that the Fed 'should cease to function unless affirmatively continued?' 'That is correct, sir,' Greenspan responded." Bradford continues, "The Senator could scarcely believe his ears. 'Now my next question is, is it your intention that the report of this hearing should be that Greenspan recommends a return to the gold standard? Greenspan responded, 'I've been recommending that for years, there's nothing new about that. It would probably mean there is only one vote in the Federal Open Market Committee for that, but it is mine.'"

Greenspan Says Euro ‘Breaking Down’

Former Federal Reserve Chairman Alan Greenspan said fissures in Europe’s common currency may lead to slowing in the U.S. economy. “The euro is breaking down and the process of its breaking down is creating very considerable difficulties in the European banking system,” Greenspan said today in Washington.

Merkel rejects ally's call to use gold as bailout loan collateral

GERMAN CHANCELLOR Angela Merkel last night gave short shrift to a political ally’s call for the use of gold as collateral for all future euro zone bailout loans. Labour minister Ursula von der Leyen’s suggestion yesterday caused ructions in Berlin and prompted an immediate denial that it represented government policy. The solo run appeared a calculated effort by the minister to boost her domestic profile ahead of an emergency Bundestag sitting of the ruling Christian Democratic Union (CDU) last night. Dr Merkel, without mentioning her minister by name, said making new ideas via the media was “not the way to get things done” in the euro zone crisis.

Tie Central Bankers' Hands, Return to Gold Standard: Grant

Central bankers are in the business of "currency manipulation," James Grant, editor of Grant's Interest Rate Observer, told CNBC Thursday. He wants a "modernized, 21st century gold standard that checks the capacity of central banks to print money." "I am for more rope in regard to the government’s hands and less rope around the hands of people in enterprise," he said. The problems in the U.S. economy come from an "accumulation of government initiatives and the sum total gets you to $14.3 trillion in the debt crisis." The fact the U.S. can pay its bills in dollars, the reserve currency, and that it can print more as needed, creates "a world of immense distortions" and is one reason why the price of gold has skyrocketed and stocks have been volatile.

Moody's downgrades Japan, blames fractured leadership

Moody's, the credit ratings agency, has downgraded Japan's sovereign debt rating by one notch on Wednesday, saying weak political leadership has hampered growth.

Gold and Silver Aren't the Only Precious Metals Making a Killing

Even while gold, silver, and platinum steal most of the headlines, there are stealth bull markets advancing in other precious metals. Take palladium for instance. Indeed, while platinum may have the prestige, palladium has the profits. Palladium has seriously outperformed its sister metal over the past year: Its price has soared 57%, compared to a mere 23% increase in platinum prices. Platinum is still trading 24% below its 10-year high, which was set at $2,273 an ounce in early 2008. But palladium just this past February established its own 10-year peak at $858 an ounce - and at about $743 per ounce now, it's just 15% shy of that mark. And that's despite the massive sell-off we've seen in precious metals over the past few days. Furthermore, the outlook for palladium - from both fundamental and technical aspects - is decidedly positive. All that's left is for palladium to take out the $858 an ounce target it set earlier this year. Once that happens we could be looking at a blue-sky breakout for the unsung metal. So let's take a closer look.

The European Banking System is Finally on the Verge of Collapse

I hate to sound alarmist, but it looks as though the European banking system - and consequently the global banking system - is edging its way towards another epic collapse. That means in just a few short months, stocks could be back at their 2009 lows while gold prices travel north of $2,500 an ounce. This is the worst-case scenario that's been bandied about ever since Europe's debt problems first came to light. How do we know that this is what's happening?

Why Brazil will be a buy again

Do you remember that old chestnut about emerging markets? The theory was that their fast growing economies would suffer less in a stock market downturn than old-fashioned ones such as Britain and the US. It certainly hasn't worked out that way. Indian, Russian and Chinese shares have plunged just as fast in the recent falls. And as they started dropping earlier than 'Anglo Saxon' stocks, they're all now officially in bear market territory. But about the worst of the lot has been Brazil. Has it now become a busted flush?

Steve Jobs: his 10 most inspirational quotes

Steve Jobs, who has quit as the CEO of Apple, the firm behind the iPhone, is an inspirational speaker and a revolutionary innovator. Here are some of the best things he's said. I challenge you not to read them and feel a response.

Germany fires cannon shot across Europe's bows

German President Christian Wulff has accused the European Central Bank of violating its treaty mandate with the mass purchase of southern European bonds.

GDP Is a Lie – It’s Time for a New Measure of Economic Growth

Gross domestic product (GDP) is the most commonly used measure of economic growth. But GDP isn't just inaccurate and misleading - it's the contrivance of Keynesian economists seeking to push their own, big-government agenda. That's right. GDP is a financial ruse - the biggest of the past half-century. And it's time to move past it to another, more accurate measure of economic growth. Keynesian economist Simon Kuznets designed GDP at the height of the New Deal era. Kuznets first revealed the measure in a report to Congress in 1934. GDP takes into account consumption, investment and government expenditure to create a measure of economic growth. But the Keynesians employed some chicanery, or sleight-of-hand, to generate this statistic. A close look reveals the dirty little secret about GDP: It intentionally overplays the importance of government spending - and in doing so inflates the role that Washington plays in each of our lives. And it's been doing this for 77 years ...

Do share price falls signal a 'double-dip' recession?

Shares don't operate in a vacuum. Sure, sometimes stocks seem to have a mind of their own, partly because automated computer trading plays a far bigger part in price moves nowadays. But stock markets are actually much smarter at forecasting the future than many of their critics think. And when equity prices fall a long way fast – and economic surveys go very bearish – it generally means something serious is about to hit the 'real' world.

Should you sell your gold now?

Gold this morning is at $1,890 an ounce. It began July at $1,480. That's a move of over $400, or nearly 28%, in barely seven weeks. A number of wiser heads than mine observe that that's a parabolic move and that parabolic moves barely end well.

Bundesbank questions legality of EU bail-outs

Germany's Bundesbank has issued a blistering critique of EU bail-out policies, warning that the eurozone is drifting towards a debt union without "democratic legitimacy" or treaty backing.

Relax, central banks can still save us

Our situation is desperate but not serious, as the Viennese say.

The Greatest Trade of All Time

On its way to becoming the world’s greatest superpower, the United States pulled off some truly remarkable trades. Two notable transactions come to mind and were both outstanding bargains. • The Louisiana Purchase (purchased from the French) • Alaska (purchased from the Russians) For a mere $15 million, America instantly doubled its size with the 1803 purchase of the Louisiana territory.1 Sixty-four years later, oil-and mineral-rich Alaska was obtained for a paltry $7.2 million.2 Even adjusting for inflation, the combined value of these deals in today’s dollars would be very small.

Markets are freaking out again – here's how to survive

After a short break, the eurozone has gone back to its job of spooking stock markets. Yesterday, the FTSE 100 fell 4.5%. And the Euro Stoxx 50 index – made up of the continent's top 50 shares – took another 5%-plus tumble. That wiped out much of the last few days' rally. In fact, this blue chip index is now over 25% lower than it was six months ago. Yet all the while we are being reassured by Europe's politicians that the single currency crisis has been sorted. Clearly it hasn't. Here's what this means for investors.

Chavez Preparing Government Takeover of Venezuela’s Gold Mining Industry

Venezuelan President Hugo Chavez ordered his government to repatriate $11 billion in gold held in banks abroad to safeguard the country from the economic crisis and said he’ll nationalize the local gold industry.

It's Time to Bail on Bank Stocks

There was a time when bank stocks actually looked like good investments. And many, having racked up big gains over the past two years, proved to be just that. But sadly, U.S. banks no longer offer the value and profit-making potential they did immediately following the financial collapse. In fact, they're actually heading for what could be a catastrophic decline. Let me explain.

Recession fears mean shares aren't cheap

It was another bloody day for equity markets with £62bn wiped off the value of the FTSE 100.

Bond markets signal 'Japanese' slump for US and Europe

The global credit markets are braced for deflation and perhaps depression.

EMU crisis deepens as slump reaches Europe's AAA core

The German economy slowed drastically over the early summer and may be on the cusp of a double-dip recession, dashing hopes that Europe's industrial engine would eventually lift EMU's southern bloc out of slump.

Germany's Angela Merkel faces eurobond mutiny

German Chancellor Angela Merkel's coalition partners are threatening a withdrawal from government if she agrees to eurobonds or any form of fiscal union to prop up southern Europe.

ECB is euroland's last hope as bail-out machinery fails to resolve crisis

The leaders of Germany and France have three bad choices as they decide whether to save EMU this week, or pretend to do so.

Is There Enough Money on Earth to Save the Banks?: Jonathan Weil

Forget free-market fundamentals. What matters most to the capital markets now is whether the governments of the U.S. and western Europe have the will and the wherewithal to save the global financial system from disaster yet again.

US directors are snapping up stocks – should you follow?

Stock markets around the globe have been having a dreadful time. Both the FTSE 100 and the S&P 500 index have seen double-digit percentage falls since the start of August. OK, yesterday they both rallied. But with share prices moving around more in three hours yesterday than we've been used to seeing them change over three months, there's just no way of knowing how long that will last. But is this actually a great buying opportunity? One group of Americans – who probably ought to know what's what – seems to think so. Should you follow their example?

Surprise fall in eurozone production raises growth fears

Eurozone industrial production fell unexpectedly in June, raising fears that nation in the currency bloc will face slower growth as they struggle to half an escalating debt crisis.

Desperate Swiss eye euro peg to repel safe-haven flood

Switzerland is mulling drastic measures to fend off safe-haven flows from Euroland and stop the relentless rise of the Swiss franc crippling large parts of the country's economic base.

AAA Crisis Drives Biggest Trade in History: William Pesek

Timothy Geithner says U.S. debt is the safest anywhere even after Standard & Poor’s yanked away its AAA credit rating. America’s bankers in Asia may have a very different take on things.

The eurozone crisis won't go away - that's bad news for stocks

Well, that didn't take long. Markets rebounded on Tuesday night after the Federal Reserve promised to keep interest rates low for two years. Yesterday they lost practically all the rebound gains, as panic in the eurozone switched to France, and banks in general. Even although all three major credit ratings agencies said they had no plans to downgrade France's AAA rating, worried investors just kept selling, with the Dow Jones ending the session losing another 500-odd points. So what's the problem?

Central Bankers Race to Protect Growth in 72 Hours of Crisis

Central bankers are racing to shield their economies from fiscal tightening and lopsided currency swings that threaten a new global recession.

Italy, EMU and the Evil Eye

For those in Euroland convinced that Anglo-Saxon hedge funds and speculators are responsible for the sorry state of the Italian bond market (seemingly the view of EMU’s entire governing class), here is a nugget from a Swiss blue chip investment house.

The Real Bank Crisis

European bank depositors all face a tough decision today – to withdraw their deposits, or not withdraw and take their chances. Their response to that decision may determine the financial future of the Eurozone.

Alan Greenspan: WE CAN ALWAYS PRINT MORE MONEY

US can always print more money

What does the US downgrade mean for you?

The asset class generally seen as the least risky in the world – US Treasuries - just got a bit riskier. On Friday night our time, credit rating agency S&P did what its peers Moody's and Fitch didn't dare to do. It downgraded the US. Not by much, of course. The country's credit rating was shifted down a notch, from the perfect AAA, to the very slightly less perfect AA+. But it does mean that US government debt – generally viewed by the market to be the ultimate in risk-free assets – now has an official question mark hanging over it. So what does this mean for you?

Nicolas Sarkozy pledges drastic austerity measures as French bank shares crash

French president Nicolas Sarkozy has ordered a "general mobilization" to slash France's budget deficit in a frantic effort to safeguard the country's AAA rating and head off a downgrade by Standard & Poor's.

Bail-outs chip away at France and Germany too

Investors have begun to question whether France and Germany can credibly underwrite the debts of southern Europe without losing their AAA ratings and succumbing to the crisis themselves.

The West's horrible fiscal choice

The US, Britain, and Europe are together embarking on a sudden and severe tightening of fiscal policy, in unison, before economic recovery has reached safe take-off speed. The experiment was last tried in the 1930s.

Europe's money markets freeze as crisis escalates in Italy and Spain

The European money markets have begun to seize up as pressure mounts on the Italian and Spanish banking systems, tracking the pattern seen during the build-up towards the financial crisis in 2008.

Italy in eye of the storm as cash runs low

Fears of a double-dip downturn on both sides of the Atlantic have set off fresh mayhem in Southern European bond markets, dashing hopes that Europe's summit deal in late July would contain the escalating crisis.

America is merely wounded, Europe risks death

We have a glimmer of hope. The key indicators of the US money supply are at last firing on all cylinders, a dramatic turn for the better that would normally signal recovery or even a mini-boom within the next six to 12 months.

Europe's hot summer as Italy and Cyprus join sick list

Fears of recession in Italy and the Germans' reluctance to back the EU's bail-out fund with real muscle have set off fresh eurozone tremors, pushing yields on Southern European bonds back to levels seen before last week's emergency summit.

Angela Merkel faces revolt in Germany over rescue deal

German Chancellor Angela Merkel is facing a storm of protest at home after yielding to EU calls for radical action to shore up Spain and Italy, raising doubts over her ability to implement the package.

Europe's ideologues took the whole world to the brink of disaster

Champions of the European Project can claim a dubious vindication.

Europe steps up to the plate

Europe's leaders have grasped the nettle. Faced with a spiralling bond crisis in Italy and Spain and the greatest threat to the EU project for 50 years, they have ripped up their bail-out strategy and taken a large stride towards a "liability union".

Franco-German axis loses its wheels

French President Nicolas Sarkozy has swooped into Berlin to secure a “clear, clean and precise response” from Chancellor Angela Merkel to the dramatic crisis engulfing the eurozone. He is unlikely to get one.

Only Germany can save EMU as contagion turns systemic

Europe's leaders have finally run out of time. If they fail to agree on some form of debt pooling and shared fiscal destiny at Thursday's emergency summit, they risk a full-fledged run on South Europe's bond markets and a disorderly collapse of monetary union.