Como anda la cosa... (how things are going? Economic collapse in Spain)

[ginebra]

Hello david,

I will write in English as suggested. Yes, you are right regarding the simplification of things with the Euro as a unique currency, but the drawbacks
are also important.

On the question of understanding Catalan; I have no problem with it, so as soon as I have the time, I will watch the whole video.

Thanks.

 

[Chu]

It seems to me that no matter what "solution" they find, it is always the average population who suffers.

As far as I can see, there could well be a possibility of a "corralito" in Spain (it's interesting that this word actually means "little pen/barnyard". Sheeple, anyone?). But (this is in reply to Loreta) if that's the case, it's not something that just gets better within 6 months. It could take a long time before people can start having a decent quality of life again.

On the other hand, accumulating external debt while the rich pathocrats in Spain fill in their pockets, with banks later getting "bailed out", is never a good solution for the people either. I would not be surprised if the government were to go for the bailout option first.

I don't know. In any case, since it's difficult to know what can happen at all, if I was living in Spain, I would try to make sure that any savings I have are not at the bank, and if possible, buy a little bit of gold. Having seen how people suffered in Argentina, I wouldn't wish that on anyone. When you suddenly wake up one day to learn that all your life savings are worth almost nothing, and that you struggle to meet your loved ones' needs, it's not a nice situation.

 

[loreta]

I don't know. In any case, since it's difficult to know what can happen at all, if I was living in Spain, I would try to make sure that any savings I have are not at the bank, and if possible, buy a little bit of gold. Having seen how people suffered in Argentina, I wouldn't wish that on anyone. When you suddenly wake up one day to learn that all your life savings are worth almost nothing, and that you struggle to meet your loved ones' needs, it's not a nice situation.

I think it is the best thing to do: take out the money from the banks. I, myself, have 0 in my account so this question is not for me. But what for my old friends? I will try to tell them that maybe... they should take out their money.... But I know that they will not listen to me. They are stubborn! Like burritos. My, my, my. Spaniards will suffer alot, I know. I feel the future very black for this country, I am always very mad when I listen the lies at the radio news. I am angry.

Today two very important banks in Spain, el Banco Santander and another one very important also, had lost many money in the stock exchange...

 

[Deleted member 4320]

I don't know. In any case, since it's difficult to know what can happen at all, if I was living in Spain, I would try to make sure that any savings I have are not at the bank, and if possible, buy a little bit of gold. Having seen how people suffered in Argentina, I wouldn't wish that on anyone. When you suddenly wake up one day to learn that all your life savings are worth almost nothing, and that you struggle to meet your loved ones' needs, it's not a nice situation.

I think it is the best thing to do: take out the money from the banks. I, myself, have 0 in my account so this question is not for me. But what for my old friends? I will try to tell them that maybe... they should take out their money.... But I know that they will not listen to me. They are stubborn! Like burritos. My, my, my. Spaniards will suffer alot, I know. I feel the future very black for this country, I am always very mad when I listen the lies at the radio news. I am angry.

Today two very important banks in Spain, el Banco Santander and another one very important also, had lost many money in the stock exchange...

The financial market is designed to earn the richest. Risk and discrepancies allow to earn these who have a big money.

People not always are aware of this but costs of financial products to various financial institutions are oddly high... They have many years affect people trying to force acceptance of the higher price and the lowest standard of living for ordinary people, taking as much for himself. Note else conditions of the various financing agreements which are understand for creators and the average people usually do not know what they sign.

We are part of the financial system which actually we do not understand. We are part of the financial system which actually makes immoral acts under the law.

Assuming that we have our capital in cash for self. We withdrew from financial products that we had, but often it is expensive or just impossible. What's next? Currency can be subjected to various speculations. Investment in gold, in fact, makes no warranty. If the system would have fallen gold would be a good medium of exchange, or it could be salt.

We do not have too many moves to do. Theoretically, people could come together, depart from the system and start exchange between each other, what you have more should give to those who are poor. In practice, we are left to find a compromise with the system, on the one hand, on the other to alone try to protect self materially in the basic stuff, clothes, food, etc.

My two cents

 

[hesperides]

For all those among us who have a hard time understanding some basic bank economic/benefit principles, like myself, I recommend to have a look at a recent tv report, through a video in which Mr. Francisco Alvarez, Vice-President of Paris´stock market and Ex Counselor of Valencia´stock market gives some pretty clear ideas about why and how countries like Spain are now going into an economic general crash.
I wasn´t able to find the related link, but you can just do a search on Google, type SALVADOS , select the first one appearing on Google page saying SALVADOS LA SEXTA and then select the video placed on the left side, under the main video that fills near the whole screen. It starts reading "Desmontando el laberinto financiero...". It would be cool if somebody could manage to put the direct link here.

 

[Pierre]

Assuming that we have our capital in cash for self. We withdrew from financial products that we had, but often it is expensive or just impossible. What's next? Currency can be subjected to various speculations. Investment in gold, in fact, makes no warranty. If the system would have fallen gold would be a good medium of exchange, or it could be salt.

Here's a short article about asset management in crisis time published in the Dot Connector Magazine in 2010:

10 Asset Management Tips to Face a Crisis

* Don't leave your savings in banks. Since late 2006, 384 US lending organizations have disappeared (http://ml-implode.com/). Banks are theoretically insured by the FDIC (Federal Deposit Insurance Corporation), but legally this FDIC fund is a corporation and it can also go bankrupt (http://banking-law.lawyers.com/consumer-banking/The-FDIC-Can-It-Go-Bankrupt.html)

* Avoid stock markets. Volatility is very high (http://curiouscapitalist.blogs.time.com/2010/05/25/stock-market-turbulence-here-to-stay/) because operators perceive a very high level of risks (Middle East instability, debt levels, currency over-creation, EU crisis, US collapse bringing down the whole economy…) and most personal investors have escaped this investment sector.

* Avoid bonds. Bonds issued by nations or companies are not 100% safe. National and corporate bankruptcies are on the increase. In addition, bonds are usually labeled in dollars. What is the point of getting a 5%-a-year-bond if the dollar drops 10% meanwhile?

* Prefer a "stable" currency like the Swiss Franc to a "threatened" one like the US dollar. The US total debt (more than $54 trillion, 385% of the GDP) (http://en.wikipedia.org/wiki/Financial_position_of_the_United_States) and currency over-creation (from September 2008 to March 2010 the monetary base was increased from 800 billion to 2.1 trillion) (http://traderscreen.net/WhyWorryAboutInflation.aspx) make the dollar likely to drop against most other currencies in the long term.

* Buy real estate only if: 1) you don't plan to sell back and make profit, 2) you’re sure to be able to pay for the whole price, 3) you can also buy all the necessary goods to sustain your life 4) you don’t find a better solution through renting 5) you’ll be able to pay for the taxes relating to this property even if they increase drastically (which is likely).

* Exchange most of your savings/income for tangible and useful assets. In crisis time, assets scarcity and inflation are most likely. So it’s better to sell your dollars/euros now (before they lose value) and buy “crisis” goods before they become overpriced and scarce (tools, fuel, non perishable goods, seeds…)

* Gold is the priority tradable and anti-inflation asset in crisis time. Since you won’t be able to buy ahead all the goods you will need, you need something to exchange. Gold is the best for crisis time: its value usually increases, it doesn’t rust, it doesn’t take much space, and it’s universally valued.

* Prefer gold coins to gold bars. Gold coins are easier to deal and to transport. For this reason you might prefer small coins (quarter of ounce) to big coins (ounce). Also worldly recognized coins (Sovereign, Krugerrand, etc.) should be preferred to small national productions/types.

* Store gold at home. You don’t know if your bank will still be open tomorrow, so you’d rather think about a safe place at home and store your gold there.

* Keep a bit of local currency at home for urgent spending, but don't store too much because of inflation/devaluation risks. If you've found a good secret hiding for your gold, you might want to hide your money there too.

As you said gold is not 100% sure. Nothing else is 100% sure either in such uncertain times. However in past crisis, gold has outperformed most assets. A solution is actually to replace cash and savings with a mix of tangible/useful/lasting tradable assets (salt, gold, canned food, machinery, seeds...)

One of those assets can be silver too. It's been quite volatile lately because of speculation, however because of its lower value it's even more "tradable" than gold coins. Also for the ones who can't afford gold coins (around 400 dollars for a quarter ounce coin), silver coins represent an excellent alternative.

Also, for the ones interested in a real case, there's this excellent article written by a Russian citizen who survived the crisis that hit her country in the 90's :
http://www.sott.net/articles/show/147683-Survival-in-Times-of-Uncertainty-Growing-Up-in-Russia-in-the-1990s

 

[loreta]

This is the link for the program of Salvado.

http://www.lasexta.com/salvados/inicio

Thanks for the links, Belibaste.

What is happening is Spain is terrible, under my point of view: it is not just a question of money and what to do with our money or if the government will make a devaluation of the money, or if it is OK if the European Bank will help us or not... Those things are very important but what is worse than that is what is happening here, now, a total and salvage destruction of the society in general, of the country. Education, health care and many other infrastructures that made a society are destroyed like with a bulldozer . This government wants like hell the privatization of everything. They wanted to take out all the Spaniards have constructed. They wanted a society of ignorant and a society without liberty. They wanted us sick, without help of anything, sick, without any resources, any help, nothing. It is very, very grave. It makes me very, very, very angry to see all this.

While all of this there is the soccer, yes madame. And a possible confrontation with the British Empire for Gibraltar how important! All these two issues to make us forget the devastation that is happening and the void that this government is doing of this beautiful country.




*******

The program of Salvado it is about the economic crisis that Spain is living.The man talks about the difficulty of leaving this economic situation and what causes this situation. Talks about the rescue of the banks and how these banks don't want to rescue the people. Tells that the European Bank is public money, this money is put there by the governments of each country and how this bank just helps other banks but not the public. How come the European Bank can not help the public, through the government? since the Lisbon Treaty the European Bank can not help other governments but is there to help JUST the banks. Talks also about the debt of the country, about how this debt is business for the banks and how the countries are controlled by the banks. Finally if I remember correctly talks about how everybody is responsible to certain degree of what is happening. For him crisis are good in the sense that they make us take conscience of many things, specially our ignorance of the economics. And that knowledge is power that we accepted to give to others, in this case to the bankers.
And he says also the incongruence of this system and how education is important to see how this system works. He also remembers us that it is possible to "change" the direction of this situation talking a little about Iceland.

Sorry for my English.

 

[loreta]

About all this mess.

http://theeconomiccollapseblog.com/archives/jim-cramer-is-predicting-bank-runs-in-spain-and-italy-and-financial-anarchy-throughout-europe

 

[hesperides]

This is the link for the program of Salvado.

http://www.lasexta.com/salvados/inicio
*******

The program of Salvado it is about the economic crisis that Spain is living.The man talks about the difficulty of leaving this economic situation and what causes this situation. Talks about the rescue of the banks and how these banks don't want to rescue the people. Tells that the European Bank is public money, this money is put there by the governments of each country and how this bank just helps other banks but not the public. How come the European Bank can not help the public, through the government? since the Lisbon Treaty the European Bank can not help other governments but is there to help JUST the banks. Talks also about the debt of the country, about how this debt is business for the banks and how the countries are controlled by the banks. Finally if I remember correctly talks about how everybody is responsible to certain degree of what is happening. For him crisis are good in the sense that they make us take conscience of many things, specially our ignorance of the economics. And that knowledge is power that we accepted to give to others, in this case to the bankers.
And he says also the incongruence of this system and how education is important to see how this system works. He also remembers us that it is possible to "change" the direction of this situation talking a little about Iceland.

Sorry for my English.

Thank you Loreta for the link. By the way, would you mind to tell me how you managed to find the link?

 

[David Topi]

To keep on reporting a bit on the situation in Spain not sure if you guys noticed all the mess about Bankia (the 4th largest bank in the country) and how now it has become a state-owned bank. Today, Guindos (economic minister) reported that other banks may follow soon (Unnim I think and other I can't remember).


Lots of people have made a huge profit with Bankia in just one week. The shares dropped to almost nothing after it was known that the goverment was going to bail it out, some people bought tons of shares that day, and a few days later, when the "crisis" of Bankia was over, or calmer, they sold the shares.


The profit that day was over 70cents per share, which is huge ( I have invested in the past in the markets in Spain and if you get 10 or 20 cents per share you are really lucky). Imagine how easy it was to make millions last week.


It all seems so staged, that it probably is.


My view on the situation as per the latests (public) news are changing a bit, I really do not know what will happen, but I am starting to think that neither Greece is going to be out of the Euro, neither Spain will suffer the corralito or something similar. It all seems (just to me, just a perception) that it is another huge strategic movement to push for Eurobonds and to gain more control about the countries economic policies. There is nothing that Rajoy won't do today that Merkel does not approve (which probably has always been the case with any other goverment).


Meawhile, cuts in budgets keep going. Taxes for students have been raised terribly in the last two weeks, and it seems we will get a new raise in the VAT taxes.


I try to figure out the big picture out of it, probably the people pulling the strings here are just a few levels above any public figure we may know, and those we see trying to cope with the situation may or not be aware of it. But so far, it does not make sense to me to "deconstruct" the EU by putting one member out of the Euro, looks more consistent to push for more centralised control, which I guess could be the next thing we will see in Spain.

 

[loreta]

I really don't understand economics. The non-sense of the politicians, their decisions, their cuts, anything, I don't understand anything. I just see... what those decisions will do, and the, how can I say, the impotence. When I think about all this I wanted to leave this country now. I will surely leaving next year, I am feed up about this country. I am tired about Spain. 12 years is to much. Sorry, hors contexte.

Here is a link about Eurobonds. But even after reading about it I still have difficulty. Maybe I have a mental problem? I am blocked.

http://theeconomiccollapseblog.com/archives/eurobonds-the-issue-that-could-shatter-europe

Hesperides: did you saw the video? I just went to the canal and look for the title. Tell me if you are unable to see it and I will put the link. But if you don't understand catalan... ;)

Edit: sorry, I make a mistake, the program is in Castillan, no in Catalan.

 

[David Topi]

Fully understand you Loreta. My wife is a foreigner, and we talk constantly about moving out of this country, she never liked it (different culture) so for her it means really nothing packing and leaving, I do not mind much either, but I guess that each country will have its own set of problems that right now we do not fully see because we are not living there.


What the PTB do not implement or mess around here, will implement or mess around somewhere else and I guess that if we move, we will be facing different issues. But as said, it is a conversation we are having often also here at home.


This week the Economist has a full range of articles about the Break up of Europe or the Super-Federal state, which seems to be (I believe) the main reason for all this mess (or part of it). I pretty much think Eurobonds are next in line soon to be followed for more power-centralised reforms in the core of the EU.


At least I feel now in "observer" mode, more than in "panic" mode as I was few weeks ago when "problem" after "problem" was reported for us here in Spain and reform after reform was adopted (there is a joke now among journalist covering friday's goverment press conference, in which they "bet" how many cuts and new laws and taxes will be put forward that week, I do not know if it is "spanish humor" or a depressing situation! )

 

[loreta]

At least I feel now in "observer" mode, more than in "panic" mode as I was few weeks ago when "problem" after "problem" was reported for us here in Spain and reform after reform was adopted (there is a joke now among journalist covering friday's goverment press conference, in which they "bet" how many cuts and new laws and taxes will be put forward that week, I do not know if it is "spanish humor" or a depressing situation! )

The Spaniards have a good sense of humor, as I said in another comment. It is positive but not enough, for me anyway. And I think there are countries and countries. But you are right, every country has his problems, but as big as here, in Spain? Although moving is very complicated, when you have to bring with you all your books! And the dogs, and the cats and your husband... ;D Ok, hors subject again, damn!

Today the news are bad: the debt of this country is almost 500 points! And Bankia is in need of... 19 thousand millions dollars from... us, peasants. :O

 

[hesperides]

Hesperides: did you saw the video? I just went to the canal and look for the title. Tell me if you are unable to see it and I will put the link. But if you don't understand catalan... ;)

Edit: sorry, I make a mistake, the program is in Castillan, no in Catalan.

Thanks for the link, Loreta but what I really mean is how did you manage to find Salvado´s video link, and then how did you stick it here, in this thread? What I did was "Copiar dirección de enlace", and then use the "insert hyperlink" function and stick it here but it didn´t seem to me I made it right. First, let me try another time now, before you show me how to do it, to see how the link will appear in this post. If it works, then just forget about it: -http://www.lasexta.com/sextatv/salvados/por_que_los_gobiernos_estan_sometidos_a_los_mercados/309203/1061

 

[loreta]

More bad news for Spain. :(

http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/100017477/spain-runs-out-of-money/