Secret Bankers’ Meeting
Stocks had a major rebound (up 150 points) when rumors of the EU bailing out Greece were floated. Bonds moved sideways.
The Dollar lost value against the Euro, and gold, oil and gasoline all climbed up a little.
In the news today……
Secret Central Banker’s Meeting – in Australia for two days starting today. Why are the world’s bankers meeting in secret? Even Bernanke is rumored to be attending. Trichet, the head of the European Central Bank, left one day early – creating rumors and a rally in the Euro. Well, I am sorry to tell you that the world is in crisis. And by crisis, I mean that the sovereign debt problems of Greece (now spilling over into Portugal and Spain) have shaken the world’s financial systems, and stock markets appear on the brink of collapsing again. So, the world’s bankers are meeting to figure out what to do. That’s my guess, and that’s why it’s secret – it’s a BIG problem going on right now.
Euro shorts – now stand at $8B by hedge funds as they are betting that the Euro will continue to decline from the mess in Greece, etc.
Greek Solution to Debt Problem – can be seen here. It includes higher taxes, and reduced spending. However, look through the list as what the US might do when our debt crisis hits the fan.
- 40% tax rate on incomes above 60,000 Euros (40% tax for $80,000/year – think “no tax increases for the middle class.”)
- Tax bracket increased to 7 from 3 prior
- Repatriated funds will pay only 5% tax (I’ve never heard anyone suggest this one yet.)
- Tax Dividends as personal income (already being predicted in US)
- Freezes public sector pension above 2,000 euros a month (Think Social Security)
- Will cut all public sector salary supplements in 2010 by 10% (this takes real guts in the US political system)
UBS in trouble – as wealthy clients are taking their money out of this Swiss giant. Last quarter 46B Swiss Francs were withdrawn, and 26B the previous quarter. This withdrawal is expected to continue as UBS continues to be mired in trouble. Warning to readers – anyone with money in the US branch of UBS should consider moving their money to another company, and avoid future inconveniences that appear inevitable.
Dollar/Gold Relationship – for those of you interested in gold, here is an interesting relationships that shows how gold is inversely related to the Dollar. The weaker the Dollar gets, the stronger Gold will be. While these relationships don’t last forever, it is true right now; so the Dollar holds the future of gold in its hands.
Dollar Gold Relationship
Tonight’s Dinner Conversation……
Conservatism – What does that mean? What do you think it means? Well, here is my definition of conservatism.
- Smaller government, rather than bigger government.
- Respect to follow the Constitution with all its amendments which have fixed many of the original problems not addressed when it was written.
- Personal responsibility – each individual being responsible for his/her actions and government employees being responsible for his/her actions as well.
- Respect for life – and this goes beyond Pro Life, but also a general respect for each other as individuals.
I thought you might like to talk about this over dinner. I kept those definitions positive by not including what is really going on in the US right now, but you can add that aspect if you wish.
Here are the last numbers for today:
Dow Jones 30 Industrial – 10,059 (up 150)
10 Year Treasury Bond – 3.63% (up 0.04%)
Euro – $1.3788
Gold – $1078 (up $12)
Oil – $73.79 (up $1.89)
Gasoline – $1.93 (up $0.04)
