Insolvent Spain Forced To “Borrow” From Social Security Fund To Pay Pensions [zerohedge]

Spain’s slow-motion implosion into an insolvent singularity has been one of the most amusing sideshows for over a year. The chief reason for this is the sheer schizophrenic and absurdist polarity between the sad reality, visible to everyone, and the unprecedented propaganda by the government desperate to paint a rosy picture. While on one hand the economic data shows very clearly the painfully obvious sad ending for this chapter of European integration, it continues to be punctuated almost daily by such amusing confidence games as Spain’s Economy Minister de Guindos telling anyone who cares to listen that the labor market is improving “beyond the seasonal pick up” and that Q2 GDP would be close to zero (because 0% GDP is the new killing it). That’s the good news.  The bad news is that as Reuters reports, and contrary to fairy tales of unicorns and soaring 0% GDP, Spain’s government is so insolventit was just forced to “borrow” from its social security reserve to fund pension payments.

From Reuters:

Spain tapped its social security reserve fund for the second time in a month on Monday, the Labour Ministry said, to help with extra summer pension payments as unemployment and retirement costs deplete government funds.

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El Pais Article Discusses “Liberating Spain from Shackles of the Euro” [Mish]

The El Pais Screwdriver Blog openly asks “Are we to Liberate the Euro?

Here is a Mish-modified translation:

 Today Spain has reached a record number of unemployed. Although we do not like the current state of things, no one seems to know against whom to direct their anger.

Actually, we are under a dictatorship perhaps worse than the Portuguese or Spanish forty years ago because it is more subtle and works almost invisibly. And we can embody it too, not in an institution or a person, but with a symbol: the euro.

There are many reasons to believe that Spain would not be as bad off out of the single currency. To explore this question we must look at least three things: First, what is the profile of the countries that have left monetary unions? Second, what does empirical evidence tells us regarding effectiveness of countries have left currency unions? Third, what are the economic and social conditions that need to be taken into account in making such a decision?


Spain jobless rate hits new record high of 26.6% [presstv]

New data shows Spain’s jobless rate hit a new record high of 26.6 percent for the month of November 2012, amounting to 6.157 million Spaniards.

People stand in line outside of an unemployment office in Madrid, Spain. (File photo)

The European Union’s statistics office, Eurostat, released the new data on Tuesday, which showed an increase of 0.4 percent from October’s reading of 26.2 percent.

The EU’s Employment Commissioner Laszlo Andor urged Spain’s government to find a political strategy to decrease the number of people without work

Andor said he is extremely worried about the unemployment rate for the country’s youth under 25, which was reported at 56.5 percent in November 2012, a 0.7 percent increase from 55.8 in October last year.


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Huge gold imports into China/Japanese Pension funds eyeing gold for first time/Unemployment in Spain rises to 26.6%/ [harveyorgan]

Gold closed up $16.00 to finish the comex session at $1661.50  Silver also followed gold rising by 39 cents to $30.42. Today we saw gold and silver actually strength as the Dow fell deeper into the red.
Demand for physical continues to strength despite the crazy antics of our bankers. Today we witnessed a huge increase in physical imports into China through Hong Kong to the tune of 91 tonnes of gold last month. Also silver imports are rising as well.  The USA mint saw a big rise in silver eagle sales. The Shanghai physical exchange continues to show huge strength with a total monthly sales of 19.5 tonnes of gold turnover.
The bankers will have massive trouble shorting gold as turnover sales continue to strengthen each and every month.

With gold shares performing poorly despite gold/silver’s rise, expect more of the same raiding by the bankers as they try and quell these two precious metal’s demand!!

In other news, Greece again is in need of cash.  Today, the Greek banks announced that due to the Greek haircut on the bonds it held, its income was curtailed badly.  Thus the Greek banks have a non performing problem coupled with a lack of income.  The EU set aside 50 billion euros and already the banks need more than that.

Unemployment again rises in Spain, this time a record 26.6% and all of Europe has an unemployment level of 11.8%.


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Euros discarded as impoverished Greeks resort to bartering [Guardian]


Stall-holders at a bartering market in the central Greek city of Volos, where shoppers use Tem coupons to exchange services or products. Photograph: Despoina Vafeidou /AFP/Getty Images

It’s been a busy day at the market in downtown Volos. Angeliki Ioanitou has sold a decent quantity of olive oil and soap, while her friend Maria has done good business with her fresh pies.

But not a single euro has changed hands – none of the customers on this drizzly Saturday morning has bothered carrying money at all. For many, browsing through the racks of second-hand clothes, electrical appliances and homemade jams, the need to survive means money has been usurped.

“It’s all about exchange and solidarity, helping one another out in these very hard times,” enthused Ioanitou, her hair tucked under a floppy felt cap. “You could say a lot of us have dreams of a utopia without the euro.”

In this bustling port city at the foot of Mount Pelion, in the heart ofGreece‘s most fertile plain, locals have come up with a novel way of dealing with austerity – adopting their own alternative currency, known as the Tem. As the country struggles with its worst crisis in modern times, with Greeks losing up to 40% of their disposable income as a result of policies imposed in exchange for international aid, the system has been a huge success. Organisers say some 1,300 people have signed up to the informal bartering network.

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Spain to offer residency to foreign house buyers [Yahoo]

MADRID (AP) — Spain is to offer foreigners residency permits if they buy houses worth more than €160,000 ($200,000) as part of an attempt to reduce the country’s bloated stock of unsold homes.

Trade Ministry secretary Jaime Garcia-Legaz said the plan, expected to be approved in the coming weeks, would be aimed principally at the Chinese and Russian markets as the domestic demand was stagnant and showed no sign of improving. Spain has more than 700,000 unsold houses following the collapse of its real estate market in 2008.

The country’s economy is struggling and is currently in recession with 25 percent unemployment. Thousands of houses have been repossessed by banks and their owners evicted because they cannot pay their mortgages. The government last week approved a decree under which evictions would be suspended for two years in specific cases of extreme need.

The country’s offer beats others in bailed-out countries such asIreland and Portugal, where residency papers are offered to foreigners buying houses worth more the €400,000 and €500,000, respectively. It was not immediately clear if the residency would only refer to Spain, and not the European Union.

The stricken state of the country’s real estate market was highlighted Monday by figures from theBank of Spain which showed that the level of bad debt in the country’s banks had risen to a record 10.7 percent of their loan total in September.

The bank said the amount totaled €182 billion, up from €179 billion in August — the 15th monthly increase in a row.

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Wave of Evictions Leads to Homeless Crisis in Spain [NewYorkTimes]

SEVILLE, Spain — The first night after Francisco Rodríguez Flores, 71, and his wife, Ana López Corral, 67, were evicted from their small apartment here after falling behind on their mortgage, they slept in the entrance hall of their building. Their daughters, both unemployed and living with them, slept in a neighbor’s van.

“It was the worst thing ever,” Mrs. López said recently, studying her hands. “You can’t image what it felt like to be there in that hall. It’s a story you can’t really tell because it is not the same as living it.”

Things are somewhat better now. The Rodríguezes are among the 36 families who have taken over a luxury apartment block here that had been vacant for three years. There is no electricity. The water was recently cut off, and there is the fear that the authorities will evict them once again. But, Mrs. López says, they are not living on the street — at least not yet.

The number of Spanish families facing eviction continues to mount at a dizzying pace — hundreds a day, housing advocates say. The problem has become so acute that Prime Minister Mariano Rajoy has promised to announce emergency measures on Monday, though what they may be remains unclear.

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