http://hosted.ap.org/dynamic/stories/U/US_ARGENTINA_DEBT?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2014-06-26-19-48-37

NEW YORK (AP) -- A judge Thursday denied Argentina's request to extend deadlines to repay a $1.65 billion debt to U.S. hedge funds, leaving the nation few options and little time to meet a Monday deadline to make a required payment to the majority of its creditors.

U.S. District Judge Thomas Griesa said Argentina's request was "not appropriate" because the requirement to pay U.S. hedge funds involved in the Manhattan litigation was only triggered if Argentina makes a payment to bondholders who exchanged their bonds for bonds of lesser value in the years after Argentina's economy collapsed in 2001.

Argentina's economy minister, Axel Kicillof, said Thursday that Argentina has taken steps to pay $832 million owed by Monday to creditors who participated in debt swaps in 2005 and 2010.

"Not paying while having the resources and forcing a voluntary default is something that is not contemplated in Argentine law," Kicillof said. "It would be a clear violation of the debt prospects."

http://hosted.ap.org/dynamic/stories/E/EU_EU_TRADE_DEALS_GLANCE?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2014-06-27-04-47-23

KIEV, Ukraine (AP) -- Leaders from the 28-country European Union on Friday signed broad trade and economic deals with non-member countries Ukraine, Moldova and Georgia.

The so-called "association agreements" have been a focal point in the region's turmoil. In Ukraine, deadly protests broke out this winter when the president decided not to sign the EU deal under pressure from Moscow. The protests drove pro-Russian President Viktor Yanukovych from office, but drew the ire of Russia and pro-Russian militants in the country's east.

Here is a look at the agreements and their likely impact.

PURPOSE: The EU uses them to increase trade and political cooperation with non-members. The document provides an extensive blueprint for adopting the same rules, standards and practices that apply in the EU.

TRADE: Most importantly, the agreements remove almost all tariffs on imports into the EU of goods and services. The aim is to increase trade, growth and jobs. The signing countries should benefit because the EU, with 506 million people, is a very large market to do business with, and because tariffs are being removed more quickly by the EU than by the signing countries.

http://hosted.ap.org/dynamic/stories/E/EU_UKRAINE?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2014-06-27-05-25-18

BRUSSELS (AP) -- Ukrainian President Petro Poroshenko on Friday signed up to a trade and economic pact with the European Union, saying it may be the "most important day" for his country since it became independent from the Soviet Union.

It was the decision of his pro-Moscow predecessor, Viktor Yanukovych, to back out of the same EU association agreement in November that touched off massive protests in Ukraine that eventually led to Yanukovych's flight abroad, Russia's annexation of the Crimean Peninsula and the ongoing tensions between Russia and Ukraine.

Later Friday, EU heads of state and government were expected to consider whether to ramp up sanctions against Russia over its conduct toward Ukraine.

Before the signing ceremony, Poroshenko brandished a commemorative pen inscribed with the date of EU's Vilnius summit where Yanukovych balked at approving the agreement.

http://hosted.ap.org/dynamic/stories/W/WORLD_MARKETS?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2014-06-27-05-43-43

HONG KONG (AP) -- Asian stocks slumped Friday after reports showed weak U.S. consumer spending and slowing Chinese industrial profit growth, casting doubts on whether the world's two biggest economies can rebound.

European stocks were higher in early trading as investors digested a slew of economic data being released throughout the day. France's CAC 40 rose 4,458.48 while Germany's DAX advanced 0.3 percent to 9,828.69. The FTSE 100 index of leading British companies rose 0.2 percent to 6,750.55.

U.S. stocks were poised to open lower ahead of the release of the widely watched University of Michigan consumer confidence index for June. Dow futures eased 0.1 percent to 16,750.00 while broader S&P 500 futures slipped 0.1 percent to 1,946.60.

Asian stocks reacted poorly after U.S. consumer spending, which accounts for 70 percent of economic activity, inched up in May at half the rate that economists had predicted. The poor reading disappointed investors who had been looking for stronger signs that the U.S. economy is bouncing back after shrinking 2.9 percent in the first quarter. Many had been predicting the contraction was a blip because of a harsh winter.

http://hosted.ap.org/dynamic/stories/O/OIL_PRICES_?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2014-06-27-01-36-33

The price of oil held steady on Friday as poor U.S. economic data raised the prospect of weak growth in energy demand while fears eased that fighting in Iraq would disrupt exports.

Benchmark U.S. crude for August delivery edged 4 cents lower to $105.80 on the New York Mercantile Exchange. The contract slipped 66 cents per barrel to settle at $105.84 on Thursday.

Brent crude, used to price international oils, dipped 1 cent to $113.20 a barrel in London.

U.S. consumer spending in May grew at half the rate that economists expected, in a sign that the rebound in the world's biggest economy - and resulting growth in energy demand - may not be as big as hoped for.

http://hosted.ap.org/dynamic/stories/U/US_UNITED_STATES_CHINA?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2014-06-27-04-21-44

WASHINGTON (AP) -- The United States next month will urge China to resume discussions on cybersecurity that were suspended abruptly after the U.S. charged five Chinese military officers with hacking into U.S. companies to steal trade secrets, a U.S. official said Thursday.

Assistant Secretary of State Daniel Russel told The Associated Press the U.S. would push for a resumption of the cyber working group when Cabinet-level officials of both sides meet at the annual U.S.-China Security and Economic Dialogue in Beijing in the second week of July.

After the indictments against the five officers were unsealed in May, Beijing pulled the plug on the group. It had been set up a year ago in what Washington viewed at the time as a diplomatic coup after President Barack Obama and China's President Xi Jinping held a summit in California, aiming to set relations between the two global powers on a positive track.

Those ties have come under growing strain, also because of China's assertive actions in the disputed South and East China seas. Russel, the top U.S. diplomat for East Asia, reiterated those concerns Thursday, saying the U.S. views it as essential that China show greater restraint and use diplomacy to manage its differences on territorial issues.

http://hosted.ap.org/dynamic/stories/E/EU_EUROPE_NEW_LEADER?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2014-06-27-05-22-33

BRUSSELS (AP) -- European Union leaders are set to nominate former Luxembourg Prime Minister Jean-Claude Juncker to become the 28-nation bloc's new chief executive, despite strong British opposition.

The leaders on Friday are expected to choose Juncker by an overwhelming majority as the candidate they'll propose to the European Parliament.

Danish Prime Minister Helle Thorning-Schmidt says Juncker "is an experienced politician who has worked pragmatically for the European Union for many, many years."

British Prime Minister David Cameron is isolated in openly opposing Juncker's appointment as the head of the bloc's powerful executive arm. He views the 59-year-old as the embodiment of a pro-integration, consensus-favoring, empire-building Brussels clique that won't return power to member nations.

http://www.businessinsider.com/map-world-geopolitical-risks-2014-6

http://www.businessinsider.com/state-of-the-four-recession-indicators-2014-6

There is, however, a general belief that there are four big indicators that the committee weighs heavily in their cycle identification process. They are

Industrial Production
Real Personal Income (excluding transfer payments)
Nonfarm Employment
Real Retail Sales (a timelier substitute for Real Manufacturing and Trade Sales)



June nominal Personal Income rose 0.4% month-over-month, in line with most forecasts. When we subtract Transfer Payments, which accounts for 17.3% of PI, and adjust for inflation using the BEA's Personal Consumption Expenditure Price Index, the MoM growth was a smaller 0.17%, and this indicator is up only 1.67% YoY. This is the only one of the Big Four that has yet to reach an all-time high, now 1.5% off that mark.

The chart and table below illustrate the performance of the Big Four with an overlay of a simple average of the four since the end of the Great Recession. The data points show the cumulative percent change from a zero starting point for June 2009. We now have the fourth indicator update for the 59th month following the recession. The Big Four Average (gray line below).


Read more: http://www.businessinsider.com/state-of-the-four-recession-indicators-2014-6#ixzz35pjckrlq

They just report that one is occurring, in real time.

The factors that CAUSE recessions are alive and well and growing even faster.

http://www.businessinsider.com/japan-household-spending-falls-2014-6

Japan's household spending fell sharply in May as the consumption tax hike took its toll. While some decline was expected, the 8% year-on-year drop puts the BOJ's optimistic economic forecast in doubt. As inflation cools with the diminishing impact of weaker yen (discussed here), the central bank is likely to accelerate asset purchases later this year.

http://www.businessinsider.com/japans-unemployment-rate-hits-a-16-year-low-2014-6

TOKYO (Reuters) - Japan's unemployment rate hit a 16-year low in May, suggesting the economy will rebound in the third quarter from a sales tax hike and consequent slump in consumer spending.
The jobless rate in the world's third-largest economy fell to 3.5 percent, the lowest since 1997 and a level the Bank of Japan says is near full employment.

At the same time, the availability of jobs rose to its highest level since 1992, good news for Prime Minister Shinzo Abe as he tries to cement a recovery after two decades of stagnation.

The strong employment numbers were published alongside other data on Friday showing Japan's household spending fell 8 percent in the year to May, four times the drop projected in a median market forecast and more than the 4.6 percent decline in April.



Read more: http://www.businessinsider.com/japans-unemployment-rate-hits-a-16-year-low-2014-6#ixzz35plNR4Dd

http://www.businessinsider.com/r-banks-withdraw-from-barclays-dark-pool-ft-2014-26

(Reuters) - Big banks have started pulling their business out of Barclays' <BARC.L> dark pool, after the British bank was sued by New York’s top securities regulator for allegedly misleading institutional investors over its anonymous trading venue, The Financial times reported.
Deutsche Bank <DBKGn.DE>, Credit Suisse <CSGN.VX> and Royal Bank of Canada <RY.TO>, asset manager Alliance Bernstein were among the institutions that withdrew from Barclays’ dark pool on Thursday, the paper said. (http://on.ft.com/1liYksA)

Barclays said any drop in trading volumes at LX might be due to a technical glitch.

Goldman Sachs <GS.N>, Morgan Stanley <MS.N> and JPMorgan Chase & Co <JPM.N>, were not sending orders to Barclays’ dark pool, the daily reported, citing people familiar with the companies.



Read more: http://www.businessinsider.com/r-banks-withdraw-from-barclays-dark-pool-ft-2014-26#ixzz35plqLmn6

The Truth Behind Today’s Long-term Unemployment Crisis and Solutions to Address It

http://www.epi.org/publication/truth-todays-long-term-unemployment-crisis/

***SNIP

I am now going to talk about what we should do about this. My role here is to identify what economic analysis tells us should be done, not what is necessarily politically feasible. Given that demand is the problem, we should be:

Passing extended benefits again to help the long-term unemployed, who are the ones who have been the hardest hit by the lasting effects of the Great Recession,

Undertaking other measures that also stimulate aggregate demand, and

Enacting policies that spread total hours worked across more workers.

Taking these in turn:

Extended UI benefits would do the obvious thing of providing a lifeline to those workers and their families who have suffered the blow of job loss when the labor market is historically weak. Some have argued that extended benefits could actually make the labor market weaker by giving laid-off workers an incentive not to return to work. The empirical evidence strongly rejects this concern.

The most rigorous papers on this show that there is almost no delay in returning to work—for example a paper by Henry Farber of Princeton and Rob Valletta of the San Francisco Fed show that UI extensions in the Great Recession increased the time it took UI recipients to take another job by three percent. Further, a slight increase in search-time is actually a benefit of UI—the point is to give liquidity-constrained unemployed workers a little space to find a job-match that will provide durable benefits to both them and potential employers. For example, it may not be optimal for either workers or employers for people with young kids to be forced to take the first job available even if it comes with a two hour commute, as they will likely quit when as soon as a more convenient job becomes available.

Besides not hindering job-search, UI extensions also stimulate the macroeconomy and this stimulus generates jobs. A wealth of macroeconomic studies confirm that spending on UI extensions is one of the most effective mechanisms available for injecting money into the economy, since the long-term unemployed are, almost by definition, cash strapped and very likely to immediately spend their UI benefits. This spending creates demand for goods and services, and who provides goods and services? Workers. Thus, it generates jobs. We estimate that if we allow UI extensions to lapse for all of 2014, it will cost the U.S. economy about 300,000 jobs by the end of the year.

http://www.bloomberg.com/news/2014-06-26/yen-holds-gains-as-most-asian-futures-fall-crude-drops.html

The dollar fell to a seven-week low as the yen strengthened and falling Treasury yields boosted demand for emerging-market currencies. Standard & Poor’s 500 Index futures signaled the gauge will extend this week’s losses.

The Bloomberg Spot Dollar Index fell 0.1 percent to 1,006.65 at 6:28 a.m. in New York, and touched 1,005.67, the lowest since May 9. The yen appreciated 0.3 percent to 101.41 per dollar and Russia’s ruble and South Korea’s won both gained 0.3 percent. The 10-year Treasury yield touched 2.51 percent, the least since June 2. The Stoxx Europe 600 Index rose less than 0.1 percent, while S&P 500 futures slipped 0.2 percent.

Treasuries rallied this week, sending the 10-year yield to a three-week low after data showed the U.S. economy shrank more than analysts predicted and consumer spending rose less than estimated. A report on consumer confidence is due today. Core inflation (JNCPIXFF) in Japan climbed 3.4 percent last month, the most since 1982, reducing the need for further central bank stimulus.

“The dollar has come under pressure and that’s a function of the yields coming back down,” said Ian Stannard, head of European currency strategy at Morgan Stanley in London. “It gives a little bit more breathing space to the carry trade.”

http://www.bloomberg.com/news/2014-06-27/yellen-spending-recipe-lacking-key-ingredient-bigger-wage-gains.html

Janet Yellen and her Federal Reserve colleagues are finally succeeding in their efforts to generate higher inflation. Now they must do the same for wages to prevent U.S. households from getting squeezed.

The price measure tracked by the central bank rose 1.8 percent in May from a year earlier, the biggest 12-month gain since October 2012, and just shy of policy makers’ 2 percent goal, data showed yesterday. After adjusting for inflation, consumer spending dropped for a second consecutive month.

Americans are paying more to fill up their grocery carts and cars’ fuel tanks, leaving less for discretionary items, including the latest fashions, restaurant meals and movie tickets. While rising stock and home prices are shoring up finances for higher-income households, fatter paychecks would allow spending by the majority of consumers to shift into a higher gear and stimulate economic growth.

“Consumer spending could struggle in an environment where wages don’t accelerate, particularly if inflation starts to move up,” said Emanuella Enenajor, an economist at Bank of America Corp. in New York. “We’re looking for that hand-off from the wealth-effect to an actual underlying increase in wages and income to support consumer spending.”

http://www.bloomberg.com/news/2014-06-27/fastest-growing-metro-area-in-u-s-has-no-crime-or-kids.html

For Jerry Conkle, life in America’s fastest-growing metropolitan area moves as slowly as the golf carts that meander through his palm-lined neighborhood at dusk. Most days, he wakes early, reads the newspaper, and then hops into his four-wheeled buggy for a 20-mile-per-hour ride to one of the 42 golf courses that surround his home.

“It’s like an adult Disney World,” Conkle, 77, said of The Villages, Florida, whose expansion has come with virtually no crime, traffic, pollution -- or children.

The mix has attracted flocks of senior citizens, making The Villages the world’s largest retirement community. Its population of 110,000 has more than quadrupled since 2000, U.S. Census Bureau data show. It rose 5.2 percent last year, on par with megacities like Lagos, Nigeria, and Dhaka, Bangladesh.

That the most rapidly expanding U.S. metro area is a Manhattan-sized retirement village -- with more golf carts than New York has taxis -- highlights the transformation of the world’s demographic profile. The over-60 set -- which the United Nations projects will almost triple to 2 billion by 2050 -- offers opportunity to marketers and homebuilders even as it confounds governments that must care for an aging populace.

http://www.bloomberg.com/news/2014-06-26/italian-debt-swells-to-rival-germany-as-bonds-rally-euro-credit.html

As Italy’s borrowing costs fall to new lows, its debt is rising to the most ever.

The country owed 5 percent more in April compared with a year earlier, with debt reaching 2.15 trillion euros ($2.9 trillion), Bank of Italy figures show. That matches the outstanding borrowing of Germany, the largest economy in Europe and the most of any country on the continent, at the end of last year, according statistics office Eurostat.

While Germany is scheduled to grow 2 percent this year, Italy will expand 0.3 percent in 2014, according to a Bloomberg survey. To ensure its debt is sustainable, Prime Minister Matteo Renzi is under pressure to push through spending cuts and foster growth in an economy burdened by the threat of deflation and the highest jobless rate on record.

“In our forecasts Italian debt will overtake Germany by the end of the year,” said Raffaella Tenconi, an economist at Bank of America Merrill Lynch in London. “It is particularly important that the government moves ahead with the promised reforms to firm the sovereign credit rating and strengthen further investors’ appetite for Italian assets.”

http://www.bloomberg.com/news/2014-06-26/world-bank-says-emerging-market-calm-may-turn-volatile.html

Developing economies enjoying “remarkably favorable” financing conditions in recent months remain susceptible to changes in investor sentiment that could crimp capital inflows, a World Bank report said.

“Current market conditions are supportive to developing-country prospects in the short term, but could encourage investors to underprice risk and borrowers to increase leverage,” the Washington-based lender said in a report today. “This might set the ground for sudden spikes in volatility and sharp adjustments to adverse news.”

Since March, long-term interest rates and market volatility declined to “unusually low levels,” narrowing bond spreads and putting downward pressure on borrowing costs, the report said. This triggered “a renewed search for yields which supported the demand for developing-country assets and currencies,” according to the report.

If long-term U.S. bond yields rise 100 basis points, or 1 percentage point, developing economies could experience a 50 percent drop in capital inflows, which would have “potentially destabilizing consequences” for some, the report said.

http://www.bloomberg.com/news/2014-06-27/euro-area-economic-confidence-unexpectedly-fell-in-june.html


Euro-area economic confidence unexpectedly declined in June, led by industry, as tensions in Ukraine and the single currency’s strength hindered efforts by the European Central Bank to boost lending and growth.

An index of executive and consumer sentiment fell to 102 from a revised 102.6 in May, the European Commission in Brussels said today. The median forecast in a Bloomberg News survey of 27 economists was for an increase to 103.

“The global slowdown in the first quarter, the euro’s strength and geopolitical tensions are weighing on consumer and industrial confidence,” said Pernille Bomholdt Nielsen, an analyst at Danske Bank in Copenhagen. “The impact should be temporary and start to fade, enabling consumer and business confidence to improve again in the second half.”

The ECB introduced an unprecedented range of measures, including a negative deposit rate, this month to fight anemic price growth and spark demand. Efforts by the ECB and European Union leaders to spur the economic recovery have been undercut in part by the violent conflict in Ukraine, where a week-long truce that expires today has been repeatedly flouted by pro-Russian separatists.

http://www.bloomberg.com/news/2014-06-27/jamaica-moves-to-curb-worse-than-cyprus-debt-load-win-imf-praise.html

Two defaults since 2010, the second-heaviest debt burden in emerging markets and “fragile” economic growth. Things haven’t looked this good for Jamaica in years, according to the International Monetary Fund.

A year after restructuring $9 billion in local bonds, Prime Minister Portia Simpson-Miller’s government has cut tax deductions, limited public sector wage growth and generated the first budget surplus since 1995. Ahead of a visit by Managing Director Christine Lagarde today, the IMF said Jamaica is undertaking the policies needed to tackle a debt burden equal to 140 percent of GDP, more than the 93 percent Cyprus had when it won a European Union-backed bailout last year.

“For decades, Jamaica has been stuck in a negative spiral of low growth, high unemployment, high debt and precarious fiscal finances,” the Washington-based lender said in a June 5 report. “There has been significant progress in implementing the needed reforms.”

The Caribbean island, known for its beach resorts and reggae music, saw its $15 billion economy expand for a third consecutive quarter in the first three months of the year following six consecutive quarters of contraction. Budding investor confidence over the past year has helped push the yield on Jamaica’s dollar bonds due in 2019 down 213 basis points, or 2.13 percentage points, to 6.24 percent.

http://www.bloomberg.com/news/2014-06-27/vietnam-economic-growth-quickens-on-exports-after-dong-devalued.html

Vietnam’s economic growth quickened in the second quarter as the outlook for exports (VEEXTYOY) improved after the dong was devalued for the first time in a year.

Gross domestic product rose 5.25 percent in the second quarter from a year earlier, according to data released by the General Statistics Office in Hanoi today. That compares with a revised 5.09 percent pace in the three months through March. The economy expanded 5.18 percent in the first half from a year earlier, compared with a median estimate of 5.2 percent in a Bloomberg News survey of 8 economists.

The State Bank of Vietnam last week devalued the dong to help spur exports after anti-China protests in May halted production at foreign-owned factories and caused Chinese workers to flee. The government is trying to bolster an economy that the World Bank estimates will expand 5.4 percent this year, below a government target of 5.8 percent.

“Vietnam’s high gearing to the external sector looks to be paying off,” said Philip McNicholas, a senior economist at BNP Paribas SA in Hong Kong. Today’s data “puts it on course for a strong performance over the rest of the year,” he said, adding that the dong’s devaluation should help exporters regain competitiveness.

http://www.bloomberg.com/news/2014-06-26/consumer-spending-in-u-s-increased-less-than-forecast-in-may.html

Consumer spending grew less than forecast in May, putting a damper on the strength of the projected rebound in U.S. economic growth this quarter.

Purchases, which account for about 70 percent of the economy, climbed 0.2 percent last month after being little changed in April, the Commerce Department reported today in Washington. The report also showed Americans squirrelled away more money for a rainy day as incomes and inflation picked up.

While some households are heartened by gains in employment and equities, elevated prices at grocery stores and service stations are straining budgets. Shoppers will probably remain circumspect until wage gains are big enough to help cope with rising food and fuel bills.

“Clearly the consumer is getting a bit squeezed here,” said Nariman Behravesh, chief economist at IHS Inc. in Lexington, Massachusetts, who correctly projected the gain in spending. “The second quarter could come in a little lower” than currently projected.

appx 8 minutes

"In economics, the mainstream rely on experts who don't know what they are talking about," explains Professor Steve Keen in this brief but compelling documentary discussing 'when the herd turns'. "Herd behavior is a fundamental aspect of capitalism," Keen chides, but it is left our of conventional economic theory "because they don't believe it;" instead having faith that investors are all "rational individuals" (e.g. willing to pay 112x for OpenTable), which he notes, means "economists can't foresee any crisis in the future." The reality is - "we do have herd behavior" and people will follow the herd off a cliff unless they are aware its going to happen. "Contrary to herd wisdom, financial crisis are not unpredictable black swans..."
http://www.zerohedge.com/news/2014-06-26/when-herd-turns

6/26/14 China Finds $15 Billion of Loans Backed by Fake Gold Trades
China’s chief auditor discovered 94.4 billion yuan ($15.2 billion) of loans backed by falsified gold transactions, adding to signs of possible fraud in commodities financing deals. Twenty-five bullion processors in China, the biggest producer and consumer of gold, made a combined profit of more than 900 million yuan from the loans, according to a report on the National Audit Office’s website. Public security authorities are also probing alleged fraud at Qingdao Port, where copper and aluminum stockpiles may have been pledged multiple times as collateral for loans. Steps by the Chinese government to rein in credit by raising borrowing costs in recent years created a surge in commodities financing deals that Goldman Sachs Group Inc. estimates to be worth as much as $160 billion.
more...
http://www.bloomberg.com/news/2014-06-26/china-finds-15b-of-loans-backed-by-falsified-gold-trades.html

Jesse's commentary...
6/26/14 Asked and Answered: Some Thoughts on Leverage in the Great Gold and Silver Frauds

The Story
Bloomberg (and The Financial Times et al.) are positing that the scandal in the contracts tied to the price of gold in China is depressing the price of gold now. Is this true?

The Question
Q: If something is collateralised more than it exists, how does it become excess versus in short supply?

A: It's bearish because it's convenient to certain parties who see an opportunity in it? lol
In all seriousness, I do think one can get a temporary move in the paper price of a commodity like gold or anything else, because in their fear investors start dumping and unwinding their paper positions based on some question of fraud.
The question an objective inquiry must frame is, 'Was the demand itself false, or the means of supplying the demand a false alternative? ' In other words, what is the essence of the demand, and what are the incidentals, or accidents.
In a situation where a fraud is exposed, you can get an excess of 'supply' of gold related instruments from those who wish to sell, against a deficit in 'demand' for that class of instruments because people doubt the veracity of the instruments themselves. You get a temporary break in demand from a disruption in market transactions.
How do their liabilities match up against proven assets? In a case like this any affect on the price of the assets is generally a very short term phenomenon, not unlike the withdrawal of the tide in advance of a tsunami.

more...
http://jessescrossroadscafe.blogspot.com/2014/06/asked-and-answered-some-thoughts-on.html

A stagnant economy has undoubtedly put a lot of financial stress on the middle class. And that is bumming out America’s 1 percenters. “Our country is rapidly becoming less a capitalist society and more a feudal society,” entrepreneur Nick Hanauer wrote recently in Politico, in an open letter to “my fellow zillionaires.”

He’s not the only wealthy worrier. Venture capitalist Tom Perkins complained earlier this year about the “persecution” of the rich through high taxes, while magnates such as Sam Zell, Wilbur Ross and John Mack have griped of late about the unschooled masses scapegoating America’s moneyed elite.

The rich ought to chill out. While the masses may envy their wealth, there’s no evidence of a revolution brewing, or even a well-behaved civil disturbance. Americans are clearly dismayed at the direction the country seems to be heading, but they are also docile in the face of decline and confused about possible solutions. Hanauer fears mobs heading for the castles of Greenwich and Palo Alto, but America’s disaffected these days are more likely to vent their rage behind closed doors as they shake their fists at Fox News or MSNBC and leave cranky comments on websites such as this one. If there’s a populist threat to the plutocrats, it’s years or even decades away.

Here’s the proof: Before the pitchforks, there will be higher taxes on the wealthy — yet there’s meager support for more redistribution of wealth. Polls show that slightly more than half of Americans favor raising taxes on the wealthy for specific causes such as helping reduce poverty, which makes it sound like tax hikes have widespread support and are inevitable. But here’s the catch: An even higher portion of Americans are disgusted with the government, with little trust that it spends tax money wisely. That’s why Republicans can consistently block tax hikes on the wealthy with little payback at the voting booth.

___________________________________________________


http://finance.yahoo.com/blogs/daily-ticker/why-the-rich-are--mistakenly--worried-about-the-middle-class-151842954.html


This guy left me flabbergasted. The article absolutely gasted my flabber. He cites Citizens United and the McCutcheon decision as reasons to make the rich feel safe.

Memo: From Nick Hanauer
To: My Fellow Zillionaires

You probably don’t know me, but like you I am one of those .01%ers, a proud and unapologetic capitalist. I have founded, co-founded and funded more than 30 companies across a range of industries—from itsy-bitsy ones like the night club I started in my 20s to giant ones like Amazon.com, for which I was the first nonfamily investor. Then I founded aQuantive, an Internet advertising company that was sold to Microsoft in 2007 for $6.4 billion. In cash. My friends and I own a bank.

But let’s speak frankly to each other. I’m not the smartest guy you've ever met, or the hardest-working. I was a mediocre student. I’m not technical at all—I can’t write a word of code. What sets me apart, I think, is a tolerance for risk and an intuition about what will happen in the future. Seeing where things are headed is the essence of entrepreneurship. And what do I see in our future now?

I see pitchforks.

At the same time that people like you and me are thriving beyond the dreams of any plutocrats in history, the rest of the country—the 99.99 percent—is lagging far behind. The divide between the haves and have-nots is getting worse really, really fast. In 1980, the top 1 percent controlled about 8 percent of U.S. national income. The bottom 50 percent shared about 18 percent. Today the top 1 percent share about 20 percent; the bottom 50 percent, just 12 percent.

__________________________________________________

Read more: http://www.politico.com/magazine/story/2014/06/the-pitchforks-are-coming-for-us-plutocrats-108014.html#ixzz35s1MKGSh

Nick Hanauer @ Politico: "Any student of history knows that’s not the way it happens. Revolutions, like bankruptcies, come gradually, and then suddenly. One day, somebody sets himself on fire, then thousands of people are in the streets, and before you know it, the country is burning. And then there’s no time for us to get to the airport and jump on our Gulfstream Vs and fly to New Zealand. That’s the way it always happens."

It's the Twitter argument.

Might be kinda difficult to globally communicate instantly

before it bit them in the ass...