Monetary union has left half of Europe trapped in depression

Events are moving fast in Europe. The worst riots since the fall of Communism have swept the Baltics and the south Balkans. An incipient crisis is taking shape in the Club Med bond markets. S&P has cut Greek debt to near junk. Spanish, Portuguese, and Irish bonds are on negative watch.

Dublin has nationalised Anglo Irish Bank with its half-built folly on North Wall Quay and €73bn (£65bn) of liabilities, moving a step nearer the line where markets probe the solvency of the Irish state.

A great ring of EU states stretching from Eastern Europe down across Mare Nostrum to the Celtic fringe are either in a 1930s depression already or soon will be. Greece’s social fabric is unravelling before the pain begins, which bodes ill.

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Milwaukee neighborhoods could print own money

They may be talking funny money, but it’s not funny business.

Residents from the Milwaukee neighborhoods of Riverwest and East Side are scheduled to meet Wednesday to discuss printing their own money. The idea is that the local cash could be used at neighborhood stores and businesses, thus encouraging local spending. The result, supporters hope, would be a bustling local economy, even as the rest of the nation deals with a recession.

“You have all these people who have local currency, and they’re going to spend it at local stores,” said Sura Faraj, a community organizer who is helping spearhead the plan. “They can’t spend it at the Wal-Mart or the Home Depot, but they can spend it at their local hardware store or their local grocery store.”

Incentives could be used to entice consumers into using the new money. For example, perhaps they could trade $100 U.S. for $110 local, essentially netting them a 10 percent discount at participating stores.

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Silver Prices Ready to Rocket; Four Reasons Why and Two Ways to Buy

Silver prices have vaulted an extraordinary 106% in the past two and a half years.

More impressive, silver prices have gained 33% since mid December.

Now, compare that to how U.S. stocks have fared since then: The Dow Jones Industrial Average has plunged 13.6%; The Nasdaq Composite Index tumbled 10.5%; The S&P 500 Index has fallen 11.1%.

Like gold, silver is a safe haven from inflation and a weak dollar. The prices of the two metals often move parallel to one another. However, silver is poised to rocket – handing investors not only gains in our bear-market economy, but steeper gains than gold.

James Turk, founder of GoldMoney, said in his annual forecast that the U.S. economy “will get much worse in 2008, making gold the premier asset of choice, but not the best performing precious metal. That honor will go to silver, which I expect will clear $30 in 2008.”

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Echoes of Great Depression as Dow takes another dive

The Dow Jones dived a further 350 points yesterday, giving America’s key economic benchmark its worst June performance since the Great Depression, as oil hit a record and analysts said that the fallout from the credit crunch was far from over.

Citigroup’s shares fell by $1.18, or 6.26 per cent, to $17.67 in New York, their lowest since October 1998, after William Tanona, a Goldman Sachs analyst, tripled the net loss he expects the group to make in its second quarter to 75 cents a share, or $3.75 billion (£1.9 billion).

Shares in Merrill Lynch tumbled by $2.41, or 6.8 per cent, to $33.05, as Brad Hintz, an influential analyst with Sanford Bernstein, changed his second-quarter forecast for the group from an 82 cents a share profit to a loss of 93 cents a share, or $832 million.

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American financial fiasco could take down world economy

Triple warnings this past week: the Royal Bank of Scotland fears a steep fall in the world stock market; the bank of all banks in the world, the BIS, Bank of International Settlements, in Switzerland, said that a worldwide depression is now a distinct possibility; Morgan Stanley, a leading American Investment firm, signaled similar pessimistic messages.

So what’s happening out there? Frankly, all financial institutions are in deep trouble, and the reason is the American dollar. The situation is so dire that it’s not going to make a hoot of difference who becomes the next president of the United States: it’s beyond the power of the rulers of the American political and economic system to curtail severe damage to its entire economic enterprise. Neither Obama nor McCain can do anything to stem the disaster that will be fully employed by the end of this year.

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Bond insurer, economic woes to feed fresh credit turmoil

More credit turmoil is yet to come as further problems emerge, including a massive shift in risk from bond insurers to banks, and fresh macroeconomic risks, leading bankers and investors said on Tuesday.

Global stock and credit markets have suffered in June as sentiment has worsened, with the tone darkening this week as fresh worries about the financial system have emerged.

The FTSEurofirst 300 hit a three-month low on Tuesday, while the iTraxx Europe credit derivatives index flirted with the 100-basis-point barrier for the first time since April.

“For most of the year we have seen a market contraction which is the result of over-leverage,” Jan Pethick, Merrill Lynch’s (MER.N: Quote, Profile, Research, Stock Buzz) chairman of debt capital markets for Europe, the Middle East and Africa, said at the Euromoney Global Borrowers and Investors Forum in London.

“Now we are in for another dose,” he said, as risk held by the monoline insurers could fall back on the books of the banks.

Moody’s Investors Service last week dished out multi-notch downgrades to MBIA Inc (MBI.N: Quote, Profile, Research, Stock Buzz) and Ambac Financial Group (ABK.N: Quote, Profile, Research, Stock Buzz), formerly rated triple-A.

Analysts have warned that the downgrades could set off fresh turmoil — with some saying it could be worse than March’s sell-off, when Bear Stearns neared collapse.

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The importance of investing in silver

This video is the last part of a four part series. The speaker in this video cites several examples of why people should invest in silver. Please watch this video and pass it along to your family and friends. -Ed.