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American International Group Inc. (AIG) Chief Executive Officer Robert Benmosche saidEurope’s debt crisis shows governments worldwide must accept that people will have to work more years as life expectancies increase.
“Retirement ages will have to move to 70, 80 years old,” Benmosche, who turned 68 last week, said during a weekend interview at his seaside villa in Dubrovnik, Croatia. “That would make pensions, medical services more affordable. They will keep people working longer and will take that burden off of the youth.”
The crisis, now in its third year, threatens to destroy Europe’s 17-nation currency union as Greece contemplates exiting the euro and Spain sees its bond yields rise and banking industry falter. German Chancellor Angela Merkel hardened her opposition to joint debt sharing in the euro region as U.S. President Barack Obama singled out Europe’s leaders for not doing enough to arrest the crisis.
Greece abandoning the euro could be a disaster for the country and Europe must work to keep that from happening, said Benmosche, whose company was the world’s biggest insurer before it took a U.S. bailout.
“People in Greece have to see there is no easy way out of this” and the government must get them to work longer, he said in the June 2 interview on the Adriatic coast. “If not, and if they go to their own currency, I think they will see huge inflation and it will be devastating for people on fixed incomes.”
Life Expectancy
Greece, where the average life expectancy is 81.3 years, has an effective retirement age of 59.6, among the lowest in Europe, according to data compiled by Bloomberg. French President Francois Hollande, the Socialist who was sworn in last month, has pledged to cut the retirement age to 60 from 62 while increasing corporate and bank taxes and introducing a 75 percent levy on earnings of more than 1 million euros.
http://www.bloomberg.com/news/2012-06-03/aig-chief-sees-retirement-age-as-high-as-80-after-crisis.html
Bear trap on May 30 puts near-term outlook into doubt.
On May 30 I posted an analysis of Gold highlighting the importance of the $1500 to $1530 zone on the weekly chart.
As a trader I look for sizable patterns and tend to ignore shorter-term technical developments. However, the price action last Wednesday, Thursday and Friday was textbook and deserves to be analyzed.
The decline on May 30 penetrated the May 23 low and tested the lower boundary zone of the massive descending triangle. The reversal on the close was a strong indication of a bear trap being sprung. Thursday was a quiet day on very little volume — but the fact the market did not go straight back down was positive. The huge advance on Friday was the confirmation of the bear trap.
17 comments:
Tax/Kreditanstalt
I hold my gold via Bullionvault in Zurich. Although BV uses Viamat vaults and has nothing to do with any bank. I still do not trust the Anglo-Americans with my gold being on their territory should the need come and they have to introduce some sort of gold backed currency. (See Jim Rickards's "Currency Wars" it will probably end up being shifted off to Fort Knox or West Point with BV being given an IOU)
Having said that though Faber has written recently about wanting to shift his gold out to the Far East (presumably Singapore?) on the basis that his compatriots usually bend over when the Americans require them to do so.
In this month's market commentary he recommends buying gold and gold shares, his pick being Goldcorp GG
GAW
I could not agree more with your comments about "goldbugs". The type I think you are referring to are the "armed to the teeth survivalists" sort that you find on TFs site. What they forget, to their own future detriment in that I do not believe they are wealthy enough to live without it. Is that a gold standard currency and its limitation on the amount of currency in circulation would see all their state provided welfare benefits disappear as the government no longer had the money to provide them
It seems gold stocks could finally get a run
Good morning / evening (depending upon which side of the planet you happen to be on). Great weekend comments, I am just now getting caught up after doing outdoor-stuff at home over the weekend.
Got over 40 basil seedlings transplanted planted into pots inside the greenhouse, and another 20 or so hot pepper starts also transplanted into pots there.
The strawberries are beginning to get ripe, and my six-year old - who is completely oblivious to the issues we discuss such as PM's, QE3, the markets, and govt. intervention - picks & eats every single ripe one that she can find!
But now it is Monday and so it is back to the Real World, sigh...
Some folks seem to think Gold has finally turned around, but I am still skeptical and have a 'wait & see' attitude until after the Greek election in two weeks.
I wish benmouche would die already.
WMW well said in regards to gold buggery. TF and SD are just like that. Guns and Ammo and Silver and Gold and stay off my property or I will shoot you. Not all of them as we have a welcome newcomer from there and I read from time to time. I just won't try to place a comment to bring some balance their mindset.
I know most of you read Jesse's but he has a unique take on gold manipulation. His blog is on the left. Jesse's Cafe Americain.
Mammoth's greenhouses are amazing. Not because they're high-tech or anything, but because of the opposite. They are something anyone could do with some basic skills and material, even if the material was salvaged from abandoned houses. It's just that Mammoth has the ability, and most important, the WILL, to do it.
If an economic dislocation or an "energy descent" (i.e. the massive changes to our current system of civilization that will happen if Peak Oil or Peak Debt destroy the hydrocarbon production sphere) happen, a greenhouse will be more valuable than gold and guns. the TF/SD "I can shoot you if you try to grab my gold" mindset will not get anyone very far. Isolated, hostile people are going to die alone in their bolt-holes. It's the people who can cooperate with others, share resources and skills, who will survive. The anti-social goldbugs are stunted in their ability to relate to other human beings, and will not be able to sustain when the lights go out.
QB, you posed the question yesterday about how is housing doing in British Columbia. I did not answer because I was busy living life on a sunny Sunday, including transplanting basil seedlings. Only 5, not as many as Mammoth. I had put them in at our community garden plot at a church about a mile from where we live, bit I had them too close to some tomatoes that I had put in there. (Two of which are from seeds of the yellow 'maters you gave us last year, Mammoth.) A friend who's a master gardener told me that when the tomato plants grew larger, they'd spread out and block light from the basils. I took her suggestion and moved them to new holes. You see, it's being able to make friends like Mammoth and this master gardener who will help you live better than are going to be more valuable than guns and gold in the Grim World of the Afterscape...
Anyway, my perceptions of the Vancouver housing sphere are coloured by my own biases. On the surface, it looks like things are booming. I often ride my bicycle for exercise around our part of the city. It's south of the condo-centric downtown, still in the Vancouver urban area, but mostly single-family neighbourhoods, some small apartment blocks, with store-and-restaurant zones scattered throughout.
Home construction is everywhere! I have mentioned how four houses on my block have been demolished, and new, larger houses are taking their place. (Not sure why one lot is still a dirt-covered pit.) This is not atypical. Most city blocks on the leafy, more-prosperous west side have one or two "demolish and replace with something bigger" going on. Even on the poorer, more Asian ethnic east side, there's a lot of construction, just not as much as here.
"For Sale" signs are all over, and a lot of them have "Sold" stickers placed atop. It seems to me that there are more "Sale" signs than last year at this time, but that could be my bias affecting my perception. I do NOT see any signs saying "Price Reduction." Nor do I see any signs that seem to be lingering for long periods. However, I do not do any sort of scientific calculations on the numbers.
(Continued in case this gets too long for Blogger.)
My bias leads me to think this might be a "crack-up boom" going on, though. I noticed the proliferation of "For Sale" signs in San Francisco circa 2004-2005 before we bailed out of the U.S. People wanted to flip their houses while the flipping was good. When we flew back from Australia to visit S.F. in 2008-2009, "For Sale" signs were almost extinct in our old neighbourhood.
I scan the real estate section of the local free twice-weekly paper, looking for clues between the lines. Again, my bias might be leading me to false conclusions. I have started to see columns by realtors saying "There is NO bubble." That tells me they're worried about a bubble, or the perception there is one, or they wouldn't be arguing against it. Loss of confidence kills bubbles.
I get inklings such as when they say "There are __% more homes offered for sale now than during the same month last year." Rising inventory of houses, they can't sell, perhaps? Prices are supposedly still rising, but they use something called the "benchmark" price. As far as I can tell from what glimmerings of how "benchmark" is calculated, it's a number they pull out of their ass. Prices for condos downtown, and for housing in cities up the Fraser River (the major waterway here, along which human habitation has spread) are softening, even according to the real estate propaganda.
My perception is that we're in the last, frantic stages of a mania. People talk about "the bubble" a lot, even though most opine that money from overseas Chinese will keep things puffy. (There is an undercurrent of ethnic tension developing, with Anglo Canadians and more recent immigrants scapegoating newer Chinese for making things unaffordable.) But I'm prejudiced (against bubbles, not against Chinese) so I could be seeing what I want to see with my thoughts of crack-up boom.
All I can say for sure is that there's lots of construction and sale-sign activity. My part of town looks prosperous and clean. Party on!
Looks like GC will be back as their Sales manager did reach out to me and we worked things out. This means I will once again be placing a banner up asap. I really do like them it is just that I got a bad taste my mouth when I didn't get a response.
Yes it is hard to tell Bukko unless you have Realtor info as to whether the homes are moving. if the builders are just as dumb as the ones in the US they were probably the first to lose their shirts. I am limited as to how I can prepare at this point for the big changes that may or may not occur, but if GAW says that Maudlin is changing his muddle through then I think I need to sit up and take notice.
Hi all, thanks for the anecdotal stories.
John Mauldin was all "we'll muddle through" a few years ago, but he has been slowly, month by month, inching to the dark side. I think that is a compliment to him actually, as he can recognize a change taking place right in front of him.
As there is no way to just "muddle through", for the economy. when you are bursting a credit bubble 30 years in the making.
There will be individuals who will muddle through, but we will all pay a price, one way or another. But when a resolution to the crisis is long years away, as Bukko says, you have to live your life, regardless.
I wish I could garden here, but lacking the time is a barrier. The main issue is, I have so much wildlife around who would just love to eat whatever I could grow, and they are very determined. Porcupines are big, and around almost every night, so I have to keep the dogs indoors at night. Raccoons will chew through 3.4" plywood to get at something that smells good. Etc. It would be a constant war, gardener vs wildlife, and I think they would win.
Kicking the can does not work, as Japan has proven. I see stories today: "Japanese market at 28 year low" - and no bottom in sight yet.
Because they STILL have not, after all those years, dealt with their underlying problem- they still spend way more than they take in, and finance it with deficits.
They have proven one thing, that Einstein was right on with his definition of stupidity.
And note that Japan has printed more fiat currency per capita than anyone, and is still in deflation.
When the economy is moribund, it is very difficult for inflation to take hold - higher prices are the cure for high prices.
Thanks GAW for telling me that I remembered it right about Maudlin. I can garden, but Yvonne was the gardener and I don't really have much of a clue nor the desire. How big do you suppose a one kilo coin is? I have never seen one and I want the perth dragon one that GC has with the red paint and a gemstone inserted.
@What me worry?,
I have half my gold in Taiwan and half in Canada...guess I'll keep it that way. You never know.
Mining shares are IMO a screaming buy now...unfortunately, people have been saying that for years and so I'm all in and, probably like most people, have little capital to spare. I just hope i wasn't in too high.
The advice NOT to sell whatever market shenanigans occur is probably wise - these markets are totally manipulated but cultimately cannot buck the primary trend of gold. We're in this to PRESERVE purchasing power, not to speculate on the vain and dangerous hope of POSSIBLY making a few more dollars...
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