Greece Buys Time for Insolvent Bankers and Delusional Politicians

Last week, the Greek parliament voted by a narrow margin to pass an economically crippling austerity plan of some $40 billion in return for some $159 billon of fresh liquidity injections. Although many hailed the event as a needed first step on a long road to recovery, I believe the austerity program will make a bad situation worse. It is a flawed solution that stems from a false premise: that Greece should continue to be part of the euro zone, and continue to use the euro as its currency.

To return to national economic viability Greece must abandon its use of the euro currency, which has become a financial straight jacket. Nevertheless, Greek politicians may have agreed secretly to accept the austerity in name only, in return for a liquidity bailout that will buy time for European unity to solidify. Once political unity is restored, we should expect more massive financial transfers from northern countries, present day Germany and Britain, to the subsidized southern regions.

As its price to maintain the status quo, central bank lenders, including the IMF and ECB, are demanding that Greece sell off some $72 billion of its national assets. The likely buyers will be international companies based in the EU, U.S. and possibly even China. Such a fire sale can't restore the Greek economy, but it gives the appearance that the Greeks are paying something for their loans, and it provides cover to northern European politicians who are feeling increasing frustration from voters who have been continually asked to foot the bill for southern European profligacy.

In contrast, Greece could have decided instead to abandon the euro and devalue a new Greek currency unilaterally to pay its debts. This is the typical remedy for marginal economies that have gotten into debt quicksand. Most certainly, devaluation would reduce Greece's standard of living by slashing the purchasing power of Greek citizens. But in recompense it would boost exports and improve Greece's balance of payments. The Greeks could then begin the hard work of restoring their economy while maintaining ownership of their national assets.

However, if Greece was to abandon the euro, the shaken confidence could lead to a euro collapse, bringing to an end the idealistic dreams of a unified Europe. Politicians are desperate to avoid this no matter what it costs their increasingly subjugated peoples.

In addition, a Greek debt default would trigger massive losses on the books of EU banks, many of which had been 'persuaded' by their governments to invest in Greek debt. Also, major U.S. banks have profited hugely by selling Credit Default Swaps (CDSs) to insure these loans. Indeed, they have insured some $32.7bn of Greek debt alone. Furthermore, U.S. banks have invested directly in European sovereign debt. In other words, the financial pressure to keep Greece from defaulting is enormous.

The euro is the world's second largest reserve currency. Its dissolution would cause huge shockwaves in a currency system that already is causing some investors to hedge in precious metals. A collapse of the euro could likely send gold, silver and most food commodities skywards in price. As a result, politicians and the bankers share a common interest in saving Greece from debt default and so salvaging the euro, regardless of the effect on the Greek people.

Greece's vote to accept austerity has yet to be enacted in specific cuts and taxes, but when they do, expect public resistance that will dwarf what we have seen thus far. At that point we can expect this debate to be revisited. I believe that when the pressure becomes too intense, Greece may in fact return to the Drachma.
I have consistently argues in these columns that a sovereign debt crisis would develop into a possible currency collapse. The beginnings of this endgame can be seen today on the streets of Athens.

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Be Careful When Investing Offshore

The expenditure of accomplishing business globally, different time zones and a variety of currencies once made it tough for offshore scammers to ripp off people throughout the united states nonetheless the Web and the capacity to easily move money around with on-line banking wire transfers, paypal and western union online has opened the doors for those thief’s to effortlessly hoax individuals out of their money.

Online ripoffs can take on many diverse types but a greater part of them include “Regulation S.” This is a law that exempts US companies from enrolling securities with the SEC which are sold entirely outside the US to international investors. Scammers manipulate this kind of offering by reselling Regulation S stock to US investors in violation of the guideline.

In ‘09, Texas billionaire R. Allen Stanford was charged with perpetrating an $8 billion investment sham. Mr. Stanford, as the Los Angeles Times reported “cast himself as offshore investment guru to the transatlantic jet set and benefactor to the Caribbean islands’ poor through multimillion-dollar promotions of their beloved sport of cricket.” He was busted by the Fbi four months later.

Extraordinary internet sites, magnificent brochures, as well as “educational” classes are some techniques applied to convince victims to place money in disreputable or non-existent agencies within international countries. The carrot is normally in the form of high, tax-free results with no hazard. Victims don’t succeed to contemplate that if they take a complete loss of their investment, they do so without the safeguard of US regulation given that law- enforcement agencies cannot investigate easily outside the united states.

Advanced scams make use of complicated terminology such as “bank debentures” or “standby letters of credit,” complicated-sounding aspects such as “offshore fund leasing,” and inexplicable instruments just like “interbank trading” and also “seasoned notes.” Tutorials are generally held in fascinating areas and cost thousands of dollars to enroll in; promoters promote “connections” and a warranty of “no taxes” on your investment.

Day Trading scams is a blog devoted to discovering the unkown about people and companies such as Oliver L Velez. Visit today to read informative articles about Mastertrader.

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USA Banks Facts

United States, the super power, being the world’s most developed country is the hub of all activities whether they are industrial or financial, business or commerce, entertainment or media it is offering its public the best of the best. When we talk about the US we virtually find it inevitable to discuss about some of the world’s top banks. Yes, you are right; some of the world’s top banks are having US origin.

Among the top US banks the dominant names are Bank of America, J. P. Morgan Chase & Company, Citigroup, Wells Fargo & Company, HSBC and Barclays. These banks are known world over for their superior services to the customers. However, I am going to touch the four top most banks of the US in this article that are continuously making efforts to make their market in every corner of the world.

Well, among these top US banks, the first place no wonder is occupied by the Bank of America or BOA. According to the number of assets; BOA is without dispute the number one bank in the US. BOA has earned it customers in more than 150 countries of the world owing to the premium services that it provides. Other than this; investment banking industry is another area where BOA has dominancy. A trait that makes it unique is its membership of Global ATM Alliance. GTA membership is a combined venture of some of the top banks of the world to allow their customers to draw money by using ATM card (without any charges) from any of the GTA member bank. Owing to this facility, the customers of BOA can freely travel to abroad without worrying about financial issues.

After BOA, J. P. Morgan Chase & Company is US top bank offering the quality facilities around the world. Although, all of its services and features are worth mentioning, yet the one which is earning a lot of customers is its cash rewards visa card feature. This feature helps the customers in getting different gifts and even cash prizes on making a specific number of points. In addition; the best part is that anyone who is spending as less amount as a single dollar will earn a point. Other than this, it also provides other services to the customers like purchase protection, emergency cash and card replacement etc.

Then there are names like Citigroup and Wells Fargo that are equally renowned and are serving in approximately 140 countries around the globe. They offer a number of attractive features along with providing quality services. Finally, the characteristic which makes all these top US banks the most sought after is that they have huge number of ATMs in nearly every city and state of the US, plus they have the perfect online banking system in all over the world.

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