Marc Faber on Coming Sovereign Debt Crisis: Next Countries to Default are the US, Japan and the ‘PIIGS’

Listen to what Marc Faber exactly says in the beginning of the video.

See also:

Experts: Dollar Crisis Looms if US Doesn’t Curb Debt (Reuters)

Fitch: US Must Cut Spending To Save AAA Rating; US December Deficit Nearly Doubles (Telegraph)

The Coming Sovereign Debt Crisis (Forbes)

A global fiasco: Japan is about to blow up (Telegraph)



After every financial crisis there’s a sovereign debt crisis, Marc Faber says. Countries that borrowed too much during the boom times start struggling to pay their competitors back, and eventually some of them default.

The countries most likely to blow up this time around are the “PIIGS”: Portugal, Ireland, Italy, Greece, and Spain.  One ore more of them, Faber says, will likely default in the next couple of years. And, that could result in the death of the Euro currency.

Longer-term, Faber says, Japan and the US are in line for the same fate.

The US crisis won’t hit us this year or next year.  But within 5-10 years, the United States will be forced to quietly default on its debt, most likely by printing money and destroying the value of the currency.

The main problem comes down to two things: 1) ballooning debts and 2) future interest costs.

As these charts from Faber’s Gloom, Boom, And Doom Report show, in the past decade, the U.S. government’s total debt and liabilities have gone through the roof, especially when Fannie, Freddie, Medicare, and Social Security are taken into account.  This trend is unsustainable, and it will correct itself only through a rapid acceleration of economic growth and tax revenues, a new-found financial discipline, or a crisis–or a combination of all three.

Read moreMarc Faber on Coming Sovereign Debt Crisis: Next Countries to Default are the US, Japan and the ‘PIIGS’

Winter Chaos Around The World

winter-chaos-shangdu-inner-mongolia
A train stranded in Shangdu, Inner Mongolia

World:

Now that really IS the wrong type of snow on the line! Winter brings travel chaos around the world (Daily Mail)

US:

Midwest bracing for heavy snow, wind chills of -50; South freezes too (AP)

Colorado Becomes Country’s Cold Spot (ABC News)

South struggles with record-setting freeze (USA Today)

Europe:

Airport chaos as icy weather grips northern Europe (BBC News)

Temperatures across Europe plunge to near record lows (CNN)

Europe shivers as Britain braces for brutal winter (AFP)

With the UK being hit hard:

Weather-related death toll rises to 22 as Britain braces for coldest night yet (Times):

The death toll from Britain’s biggest freeze for decades reached 22 today as the country prepared for its coldest night so far, bringing the promise of even more treacherous conditions.

UK gas supply dwindles as country experiences sub-zero weather (Electric):

The UK faces the possibility of gas supply crisis as the worst cold season in 30 years hit the country.

UK’s only got enough gas to last eight days, say Tories (Daily Mail)

U.K. Gas Market No Laughing Matter (Wall Street Journal)

UK’s only got enough gas to last eight days, say Tories (Daily Mail)

Some parts of the country have just ONE day’s supply of grit left (Daily Mail)

Panic buying at supermarkets as Britain braces itself for the big freeze (Daily Mail)

As a sidenote: Met Office chief receives 25 pc pay rise (Telegraph):

The head of the Met Office, the national weather service which has been heavily criticised for getting its forecasts wrong, is now paid more than the Prime Minister, after receiving a 25 per cent pay rise.

China:

China freeze to continue as power use, food prices rise (AFP)

Chinese cities not ready for harsh winter (Xinhua)

China tells factories to cut power use amid cold (BusinessWeek)

Central China power supply in jeopardy on coal,weather (Reuters)

Cold wave in India:

Cold waves in northern India claim 195 lives (Indian Express)



Army rescues 1,000 drivers stranded in cars for 12 HOURS as UK is paralysed by heavy snow

winter-chaos
Going nowhere: The A3 in Horndean, Hampshire was closed this morning after 1,000 motorists were stuck in their cars overnight and hundreds of vehicles were abandoned

Up to 1,000 stranded motorists had to be rescued by the Army today after some of the heaviest snowfalls in 20 years left drivers trapped in their cars overnight.
Among those stranded without food and water on the A3 in Hampshire was a heavily-pregnant woman and her baby daughter.

Millions of people across Britain were unable to get to work this morning as snowstorms caused massive disruptions on the roads and railways.

Thousands of schools remain closed, while major airports have been forced to ground flights as snow ploughs try desperately to clear runways of snow and ice.

More than 16 inches (40cm) of snow has fallen in the hills of north east England and the Scottish borders, while 12 inches (30.5cm) was recorded in Berkshire. Parts of the Northern Highlands recorded 18.5 inches (47cm).

The Met Office said southern England could see another six inches (15cm) this afternoon, with the ‘treacherous’ weather lasting for up to ten more days.

The Army, drafted in to save 1,000 drivers stranded on the A3, used military trucks and Land Rovers to rescue those trapped in a ten-mile jam on the trunk road at Waterlooville.

But some of the trapped motorists claimed they received no help at all and that ‘no one knew what was going on’.

Carla Holt said she and her 13-month-old daughter Lily-May were stuck for 12 hours in the freezing conditions. She said she received no support from the police overnight and was only able to leave the road when it was partially cleared at 6.30am today.

The 23-year-old said: ‘We went through hell. I am eight months pregnant, I couldn’t go to the toilet all night, I couldn’t warm the bottle up for my baby daughter. It was very frightening.

Read moreWinter Chaos Around The World

New World Order Gordon Brown wants to police the entire world – how controlling can a freak get?

Related information:

new-world-order-london-summit-2009
Barack Obama, Silvio Berlusconi and Dmitri Medvedev celebrate after agreeing a set of measures designed to haul the world out of recession. Gordon Brown, who hosted the summit, said the deal heralded a “new world order”.
Source: The First Post

British Prime Minister Gordon Brown himself announced that the G20  heralded the creation of a “new world order” which would involve increased global regulation of economic markets.

Still think that the ‘New World Order’ is a conspiracy theory?

Now here is an interesting article from the Telegraph.


Quasimodo in Number 10, hunched, scowling over his desk, has devised yet another plan to police, to increase surveillance, to indulge his obsession with extending his short-lived control over as many people as possible. Gordon Brown, who now seems to have lost his last tenuous grip on reality, wants the European Union to police the carbon emissions of the whole world. That is the leitmotif of New Labour – and, by extension, all Westminster – government: control, bans, observation, intrusion, diktat.

Balked of a legal agreement on imaginary manmade global warming at Copenhagen, Quasimodo and Nicolas Sarkozy are working on plans to create a “European monitoring organisation” to oversee different countries’ actions on carbon emissions. Barack Obama – the leading control freak in the liberal pantheon – has suggested spy satellites could be used.

Quasimodo told reporters: “We’re in favour of transparency; we’re in favour of looking at what’s happening not just in our country and our own continent, but around the world.” That isn’t transparency: that is snooping. “We’re in favour of transparency” – from a New Labour Prime Minister! Goebbels, who always favoured the Big Lie, would have loved it.

Were Quasimodo and his colleagues in favour of transparency about weapons of mass destruction? Even now, are they in favour of transparency at the Iraq inquiry, where Tony Blair will give evidence in secret? Were they in favour of transparency when they voted to keep MPs’ expenses under wraps, until the courts overruled them?

The one fear the enforcers entertain is that their spy-in-the-sky snooping on carbon emissions might antagonise China, which resists surveillance (all those covert coal mines and other eco-naughties). When Red China begins to seem like an apostle of laissez-faire, relaxed freedom, we know that the lunatics have taken over the asylum.

Read moreNew World Order Gordon Brown wants to police the entire world – how controlling can a freak get?

Blizzard Blasts Eastern US: Hundreds of Thousands of Homes Without Power

And how about Europe?

Cold snap strands thousands of European travellers (AFP):
PARIS — Tens of thousands of European travellers were stranded Sunday in rail stations, traffic jams and airports as heavy snow and ice caused massive disruption at the start of the Christmas holiday season.

Arctic-like cold snap wreaks havoc across parts of Europe (Deutsche Welle):
Temperatures in parts of Germany fell to below minus 33 degrees Celsius overnight, as parts of Western and Northern Europe from Portugal in the south to Poland in the east were hit by heavy snowfall.

In Eastern Europe, snow as deep as 2.5 meters has been reported, while temperatures in Mediterranean regions such as Spain dropped to around minus 20 degrees overnight.

Poland reports 29 deaths in deep-freeze weather – Summary (DPA)

Cold snap death toll rises to eight in Czech Republic (Roundup (DPA)

Eurostar Suspends Service Indefinitely (New York Times):
LONDON — Eurostar suspended all its rail links between London, Paris and Brussels on Sunday as cold weather caused chaos on the high-speed passenger line for a third day, with no relief in sight.


white-house
A man makes his way towards the White House. Americans pining for a white Christmas got more than they bargained for as a record-breaking snowstorm closed airports and roadways across the northeastern United States, putting a damper on the holiday’s biggest shopping weekend. (AFP)

WASHINGTON (AFP) – A ferocious snow storm blanketed much of the eastern United States Sunday, cutting power to hundreds of thousands of homes, paralyzing air traffic and stranding motorists.

The governors of Virginia, Maryland, West Virginia and Delaware declared states of emergency in advance of the storm, the worst to hit the region in decades.

Three people died on Virginia roads Saturday as some 3,000 accidents shut down interstates for several hours, according to the state’s department of emergency management. The Virginia Department of Health confirmed one other weather-related death.

Hundreds of thousands of customers lost power in West Virginia, Tennessee, Kentucky, Virginia and North Carolina.

The worst of the storm was over for Washington as it swept northeastward, but a lot of roads were still unplowed in the city unused to so much snow so early in the year.

Only scattered flurries remained after snowfall shattered a 1932 December snowfall record, with 16 inches (40 centimeters) covering streets and homes. It was also one of the biggest snowstorms to hit the capital since records began in 1885.

Read moreBlizzard Blasts Eastern US: Hundreds of Thousands of Homes Without Power

Europe overtakes US as the world’s wealthiest region

LONDON (MarketWatch) — A year after the Lehman Bros. collapse and subsequent credit crisis comes new confirmation that America is falling behind.

A report by the Boston Consulting Group finds that the U.S. is no longer home to the greatest chunk of the world’s wealth. That honor now belongs to Europe. See related story.

Of course, it’s not like anybody is really getting ahead. Global wealth fell nearly 12% in the past year to $92.4 trillion. It’s just that America’s share is falling faster than Europe’s, where total wealth declined a mere 5.8%.

Read moreEurope overtakes US as the world’s wealthiest region

Russia may arm Baltic fleet with nuclear warheads, says report

New Russian threat comes in response to war in Caucasus, US-Poland deal for missile defense shield in Europe. According to Sunday Times, nuclear warheads could be supplied to submarines, cruisers and fighter bombers of Russia’s Baltic fleet based between Poland and Lithuania

Cold War warming up? Russia is considering arming its Baltic fleet with nuclear warheads for the first time since the cold war, the London-based Sunday Times has reported, quoting senior military sources.

Read moreRussia may arm Baltic fleet with nuclear warheads, says report

Iran dumps U.S. dollars in oil transactions

TEHRAN – Iran had totally removed U.S. dollars in the country’s oil transactions, an Oil Ministry official said on Wednesday.

“The dollar has completely been removed from our oil trade….Crude oil customers have agreed with us to use other currencies (in the trade),” Oil Ministry official Hojjatollah Ghanimifard was quoted as saying by the state television.

“We make our transactions with euros in Europe, but yen in Asia,” he added.

Due to the tensions with Washington in the past years over the nuclear disputes and the latest depreciation of dollars, Iran has vowed to decrease the greenback in its foreign trade. Iran central bank also has reduced dollars in the country’s foreign reserves. In last November’s summit of the Organization of Petroleum Exporting Countries (OPEC) in Saudi Arabia, Iran proposed that it was necessary to replace the U.S. dollar with other major hard currencies in oil trading.

(In the past such actions were enough for the U.S. to start a war. – The Infinite Unknown)

Read moreIran dumps U.S. dollars in oil transactions

Gasoline May Soon Cost $10 a Gallon.

Big New Shock at the Pump Forecast by Two Analysts

Get ready for another economic shock of major proportions — a virtual doubling of prices at the gas pump to as much as $10 a gallon.

That’s the message from a couple of analytical energy industry trackers, both of whom, based on the surging oil prices, see considerably more pain at the pump than most drivers realize.

Gasoline nationally is in an accelerated upswing, having jumped to $3.58 a gallon from $3.50 in just the past week. In some parts of the country, including New York City and the West Coast, gas is already sporting a price tag above $4 a gallon. There was a pray-in at a Chevron station in San Francisco on Friday led by a minister asking God for cheaper gas, and an Arco gas station in San Mateo, Calif., has already raised its price to a sky-high $4.62.

Read moreGasoline May Soon Cost $10 a Gallon.

The food crisis begins to bite

Rioting in Haiti. Rationing in America. Queues in Egypt. Protests in Afghanistan. As the price of food continues to soar, the impact is being felt by people around the globe

CHINA

The roaring economy and an ever expanding middle class have had a particularly profound effect on food prices, particularly rice and wheat. Because of industrialisation, rice planting fell from 33 million hectares in 1983 to 29 million by 2006 and China now imports more than ever, placing a major strain on international supplies. Despite freezing prices, rampant inflation means the cost of food has risen by 21 per cent this year.

USA

In a land where supposedly the rich are thin and the poor are overweight, one of the largest cash and carry stores, Sam’s Club, announced this week it would limit customers to take home a maximum of four bags of rice. The move came a day after Costco Wholesale Corp, the biggest US warehouse-club operator, limited bulk rice purchases in some stores and warned that customers had begun stockpiling certain goods.

NORTH KOREA

Even during times of relative stability, North Korea has shown itself to be inept at feeding its population. During the 1990s a famine caused by poor harvests killed an estimated two to three million people. On Wednesday the World Food Programme warned that the country could again be plunged into famine because of the spiralling cost of rice and there was an estimated shortfall of 1.6 million tons of rice and wheat.

EGYPT

Up to 50 million Egyptians rely on subsidised bread and this year Cairo has estimated it will cost $2.5bn. But with the price of wheat rocketing in the past year there are fears the country has plunged into a “bread crisis”. Queues are now double the length they were a year ago. Inflation hit 12.1 per cent in February with prices for dairy goods up 20 per cent and cooking oils 40 per cent

VENEZUELA

Latin American countries were some of the first nations to voice their concern at rising wheat prices, particularly after thousands of people in Mexico took to the streets at the beginning of 2007 to take part in the so-called “Tortilla Protests”. This week the presidents of Bolivia, Nicaragua and Cuba’s vice-president flew to Caracas to announce a joint $100m scheme to combat the impact of rising food prices on the region’s poor.

BRAZIL

On Wednesday Brazil became the latest major rice producer to temporarily suspend exports because of soaring costs and domestic shortages. In recent weeks Latin American countries and African nations have asked for up to 500,000 tons of rice from Brazil which will now not be delivered. Brazil’s agricultural ministry has said it has to ensure that the country has at least enough rice reserves to last the next six to eight months.

IVORY COAST

Some of the worst instability resulting from high food prices has been felt in West Africa. One person was killed and dozens were injured last month as riots tore through Ivory Coast after the prices of meat and wheat increased by 50 per cent within a week. Ivorian President Laurent Gbagbo was forced to cut taxes to halt the disorder. Violent protests have also broken out in Cameroon, Burkina Faso and Senegal.

AFGHANISTAN

There have been street protests about the soaring cost of food in a country almost entirely reliant on imports of wheat. Already utterly impoverished, the plight of Afghans has worsened because Pakistan has cut its regular flour supply. The government has sought to assure citizens that there is sufficient food and has set aside $50m for additional imports. The price of wheat has risen by around 60 per cent in the last year.

THAILAND

The price of rice in the world’s largest exporter rose to $1,000 a ton yesterday and experts warned that it will continue to rise. This is because of the massive demand from the Philippines which is struggling to secure supplies after India and several other producers halted exports. The government has said it can meet the export requests. Indonesia has said it is withholding purchases for a year because prices are so high.

EAST AFRICA

Hundreds of thousands of poor Africans in Uganda and Sudan are to lose out on a vital source of food after one of the world’s largest humanitarian organisations said it was cutting aid to 1.5m people. Dave Toycen, president of World Vision Canada, blamed soaring costs and countries failing to live up to aid commitments for the fact that the number of people the charity can help will fall by almost a quarter.

INDIA

The country as added to the problems facing many countries in the region by halting its export of rice, except for its premium basmati product. This has left countries normally reliant on Indian exports, such as the Philippines, searching for alternative supplies. India has more than half of the world’s hungriest people and its priority is to safeguard domestic supply. But it too has watched as the cost of food has soared, not just rice but cooking oil, pulses and even vegetables. India has this year forecast a record grain harvest but experts warned farm productivity will have to rise much faster if the nation is to feed its 1.1bn people and avoid a food security crisis. Around two-thirds of India’s population are dependent on agriculture for their livelihoods but agriculture is growing much more slowly than the overall economy.

HAITI

The poorest country in the Western hemisphere has seen a three to four-fold increase in the number of so-called boat people trying to leave because of food shortages. Already gripped by wretched poverty, the food crisis triggered riots that led to the death of six people. Haiti’s wretched food security situation is a result of “liberalisation measures” forced on the country after former president Jean-Bertrand Aristide was returned to power.

THE PHILIPPINES

The government has been desperately trying to secure alternative sources of rice to counteract the decision of a number of nations to halt rice exports. The country’s National Food Authority, which handles rice imports for the government, has now said it plans to increase imports 42 per cent to 2.7m tons this year. This could cost $1.3bn if it does not increase the price of the subsidised rice it is selling to people. But the Philippines is responsible for producing 85 per cent of its own food and international experts believe the country will handle this crisis. The government has also been encouraging consumers and even fast food restaurants to be more frugal and be careful not to waste food. The government is confident it will be able to source sufficient supplies from Vietnam and Thailand.

EUROPE

Less vulnerable to food price fluctuations than emerging nations, but food prices across Europe have nonetheless increased. In Britain wholesale prices of food have increased by 7.4 per cent over the past 12 months, roughly three times the headline rate of inflation. According to the government’s own statistics grocery bills have gone up by an average of £750 over the same period, the equivalent of a 12 per cent rise.

By Jerome Taylor and Andrew Buncombe
Friday, 25 April 2008

Source: The Independent