Catalonia’s Push For Independence Reflects Anti-Eurozone Sentiment

Upcoming elections in Catalonia spell more trouble for the Spanish central government in particular and the Eurozone in general, regardless of whether or not Catalonian independence will actually happen soon:

Spain’s economic powerhouse Catalonia took its first step toward independence – and threatened to proceed unilaterally if necessary – in a serious challenge to Madrid’s already besieged central government, which is struggling with social turmoil and economic uncertainty.

Catalonia’s conservative regional leader Artur Mas moved up local elections to Nov. 25 in an effort to secure the political mandate he needs to press the central government to authorize a referendum on independence. But he said that Catalonia could proceed with a referendum even if Madrid didn’t authorize one.

“If we can go ahead with a referendum because the government authorizes it, it’s better. If not, we should do it anyway,” Mr. Mas told the regional parliament Wednesday. “This is about Catalonia being able to exercise its right to self-determination.”

While Eurocrats are trying to patch up the unfixable, postponing the inevitable to a later more painful point in time, the Eurozone has long lost the moral support that would be needed to maintain it much longer. The events in Catalonia is just another example for a universal and widely held sentiment across the board.

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Quantitative Easing, Take 3 – The Global Shutdown

QE3 is the ultimate move of desperation. Open ended bond buying and monetization of debt.

So this is it folks: Once people see that this measure, too, will have failed to spur sustainable job and economic growth, there’s most likely going to be no other fantasy left to look forward and cling on to.

Expect gold and other save haven investments to break out, while stocks and junk bonds finally hit their ceiling and economic crises around the world, in particular China, Australia, and Japan, move to the center of attention while the US, too, will enter its next and well deserved recession.

King World News writes:

Today Mish warned King World News that investors should prepare, “… for a big plunge in economic growth worldwide.” Mish also said that despite the plunge in the global economy, “I expect to see gold breakout to the upside and I think we are starting to see that right now. The same thing is true for silver.”

But first, here is what Mish, who runs the Global Economic Analysis site, had to say regarding the plunge in economic activity: “We are seeing a decline in the global economy. China has slowed down dramatically, so any commodity exporters which export to China are slowing down as well. We’re already seeing this happen in countries like Australia. We are also starting to see the Australian housing market begin to crash.”

Government intervention is aggression. Aggression breeds malinvestment. Excessive aggression breeds excessive malinvestment. Excessive malinvestment calls for radical correction. Radical correction is what we’ll get, whether we like it or not.

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Capital Flight From France to London

As always, when socialists make it into office, people take their money elsewhere:

London real estate agents are like the canary in the coalmine for the debt crisis. They can sense early on the next country to get sucked into the vortex. So who’s up next? Apparently it’s the French.

Wave of Interest

Real estate agents have been aware of a new wave of interest for months, but it’s been especially noticeable since Feb. 28. The night before, the then Socialist candidate for French president, François Hollande, who famously said “I don’t like the rich,” announced that, if elected, he would raise the top rate of tax on incomes over €1 million to 75 percent. At home, he got much applause for the announcement. But in London, the news produced a reaction that was noticeable on the computers of the London-based property company Knight Frank.

“Since February, when Hollande announced his wealth tax, there has been a large rise in web searches from French customers,” Liam Bailey, head of residential research at Knight Frank, recently told the Daily Telegraph.

Those who do the best they can to attract money will probably fare best during this debt crisis.

You reap what you sow …

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Real Estate Crash Well Underway In China; GDP Crash Will Follow

Mish recently posted a synopsis of an article about things happening in China:

  • Year-on-year sales in Q1, for all real estate, was down 14.6%.
  • Residential property sales were down 17.5%
  • Office sales were down -10.2%
  • Sales in January-February were a disaster, falling 20.9% overall, compared to the first two months of 2011, -24.7% for residential.
  • Total amount of floor space “for sale” was up 35.5%, compared to the same date last year
  • Floor space of residential units “for sale” grew 47.4%.
  • At the end of 2011, total floor space “under construction” was roughly 4.6 times the floor space sold
  • A year and a half worth of excess inventory is hidden somewhere in the pipeline
  • New starts in April fell 14.6% year-on-year and 27.0% month-on-month, for property as a whole
  • Housing starts fell -14.4% year-on-year and -23.4% month-on-month
  • Office starts fell -21.0% year-on-year in April, and -45.1% compared to March
  • Retail property starts fell -18.7% year-on-year, and -36.8% compared to March
  • Land sale revenues in April (RMB 27 billion) were down -54.7% compared to April last year
  • Foreign funding for property development was down -91.4% in March and -80.8% in April, compared to the same months last year.

Clearly a crash is underway. The above stats also show the soft-landing thesis is written on toilet paper.

Clearly a big reset is happening in China.

Michael Pettis is betting on an average GDP growth of 3 percent over the next 10 years. I’m with him on that.

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Spanish Government Bans Transactions over EUR 2500

The creeping progression towards all-round state control under one soviet style European Union has hit a new low as Spain Bans Cash Transactions Over 2,500 Euros:

The Prime Minister, Mariano Rajoy, has announced on Wednesday that the plan to combat tax evasion on Friday approved the Cabinet prohibit the payment in cash transactions of over € 2,500 and which at least involved a businessman professional.

During the control session the Government in the House of the Congress of Deputies and in response to a question about the tax amnesty made by the general coordinator of IU, Cayo Lara, the Prime Minister has revealed that those who violate the ban will face fines of 25% of the payment made ​​in cash.

The Government had already advanced the plan to combat fraud limitations include the use of cash for certain operations, although he had not yet specified which would place the threshold (yes at the time there was talk that it could be 1,000 euros for self-employed).

I highly doubt that this is in line with one of the supposedly fundamental pillars of the European Union, namely the unrestricted mobility of capital. Spain might as well exit right now and get it over with.

As everyone with half a brain knows and as we have been arguing here for a long time now: Government intervention leads to problems that will be combated with more government intervention until a complete breakdown of trade, credit, and the monetary system becomes inevitable.

We are witnessing the inevitable and accelerating downhill ride that is being aggravated and prolonged by one failed government intervention after another.

What’s next? All round capital controls, baby!

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