From James Harkin (Webmaster & Editor of LindseyWilliams.net). Here is a summary of articles of interest from around the world for this week. Please LIKE the Lindsey Williams Online Facebook Page to see stories posted daily regarding the current state of the economy around the world.
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Latest News From June 17, 2016 to June 23, 2016:
- Gold Prices: This Catalyst to Send Gold to $2,000?
Negative interest rates (which mean you are paying a bank or government to hold your money instead of them paying you) are coming to North America and with that, gold prices could soar. So far, 2016 has already been a banner year for gold prices. In fact, gold has been the best-performing investment this year. But I think the “party is only getting started” for gold prices. Below is a chart of the 10-year U.S. Treasury. From the chart, you can easily see the yield on 10-year U.S. Treasuries has been moving in an almost perfect downward trend since 2006—that’s 10 years ago. - Share-Buyback Announcements Plunge, Stocks Risk Getting Clocked
In 2015, S&P 500 companies bought back $569 billion of their own shares, down just a smidgen from $572 billion in 2014, according to FactSet. That’s a combined $1.14 trillion in stock repurchases. With the S&P 500 market capitalization at $18.8 trillion currently, corporate buybacks over the past two years have mopped up about 6% of the total float in dollar terms. And this has been happening year after year with increasing vehemence since 2010. While some sectors already cut back in 2015, buybacks soared 44% in the Industrial sector and 26% in the Consumer Discretionary sector. Companies buying back their own shares act purposefully as the relentless bid, with the sole goal of driving up share prices. They want to buy high! And it works. - Elizabeth Warren’s War on the Poor
There is no American politician more closely associated with “progressive” economic causes than Massachusetts Senator Elizabeth Warren. The senator is widely regarded by the political Left as an expert on financial issues, is a self-professed champion of the “working poor,” and is a proud, finger-wagging chastiser of the 1 percent and Wall Street. Her cause is to lift up the least powerful and protect them from the most powerful. She appears to genuinely believe in this cause, and has made several policy proposals that she believes will serve it. Because of her position and the public’s association of the senator with this cause, it is assumed that the policies she proposes will in fact serve it, and that anyone who supports the same causes should get on board and support her proposed policies. - End in Sight for Alaska’s Oil-Based Economy?
Alaska has long been one of the few U.S. states without an income tax. Thanks to its incredible bounty of natural resources, the state had more than enough cash coming in through oil company taxes and especially Prudhoe Bay production. All of that is starting to change. After a 40 year oil boom that transformed Alaska from a frozen tundra into one of the richest states in the country, the oil price crash is bringing reality back to bear. Alaska’s problems go deeper than the current oil price collapse though. Simply put, the state is getting long in the tooth – at least as far as its productive assets go. The Prudhoe Bay Oil field, once the largest such field in North America, is starting to reach the end of its life. In 1985, the Prudhoe Bay field was pumping 2 million barrels per day – roughly a quarter of the total U.S. output. Today it is pumping 500,000 barrels a day. That’s leaving the 800 mile Trans-Alaska pipeline seriously under-utilized. - US Freight Drops to Worst May since 2010
“May is usually a relatively strong month for freight shipments, but given the high inventories with ever slower turnover rates and the decline in new production orders, May could be another soft month,” predicted Rosalyn Wilson at Cass Transportation a month ago. It has now come to pass – only worse. Freight shipments by truck and rail in the US, excluding commodities, fell 5.8% in May 2016 from the already anemic levels in May 2015, and 7.0% from May 2014, according to the Cass Freight Index, released today. It was the worst May since 2010. “This year we have failed to see the robust growth in shipments that we expect to see this time of year,” Wilson lamented. - The man responsible for Germany's hyperinflation nightmare has a scary lesson for modern economics
Every now and then it helps to dig through the past to think about what's going on in the present. So let's rewind back to 1920s Germany. Back then the country was stuck in a less-than-ideal economic situation after the suspension of the gold standard and Kaiser Wilhelm II's failure to pass an income tax to help pay for World War I. To deal with the huge debts left over after the Great War, the president of the country's central bank, Rudolf von Havenstein, printed up a ton of money. But that idea backfired. It led to skyrocketing hyperinflation, economic breakdown, weaker institutions, and a destabilization of German politics. - Central bank titans warn of Brexit tremors as global recession fears surface
The two most powerful people in central banking have given their strongest warning yet on the impact of a Brexit vote, as top US bank Morgan Stanley warned that a British decision to leave could push the world towards recession. Janet Yellen, chair of the US Federal Reserve, and Mario Draghi, the European Central Bank president, have warned that a vote for Brexit could have deleterious effects for the global economy. With only two days to go before Britons head to the polls, Ms Yellen warned that a withdrawal from the EU “could have significant economic repercussions”, during her testimony to the US Senate banking committee. - There's No Other Way to Say It: Minimum Wage Laws Are Racist
Unfortunately, the agenda of early twentieth century leftists has proven effective; minimum wage laws are still bearing racist fruit today. Specifically, low-skilled minorities are being priced out of the job market. As small business owners are forced to pay a higher wage than their employees produce, employers are often forced to cut staff. A story published by BET in 2011 highlighted the negative effect that minimum wage hikes have on black teens. Another report, published by the American Legislative Exchange Council, unpacks several studies on the impact of minimum wage hikes. ALEC reports, “The bottom line is that someone must pay for the costs associated with an increased minimum wage. Often, because a business cannot pay these costs, they are paid for by the individuals the minimum wage is intended to help — low-skilled, undereducated individuals – as they lose out on job opportunities.” Later, the report breaks it down even further and delivers the sobering news that “a 10 percent increase in the minimum wage decreases minority employment by 3.9 percent, with the majority of the burden falling on minority youth whose employment levels will decrease by 6.6 percent.” - Gold and Brexit
Gold is soaring. It should—and a lot—but in my view not for the reason it is. Indeed gold is insurance for uncertain times, a time that Brexit seems to represent. But insurance is an administrative cost — one must minimize its use. Moreover, insuring against Brexit might ironically be equivalent to insuring against a good event. The market believes that Brexit will lead to wealth-destruction (based on its statist views, in which those running our institutions are omniscient, when they actually are quite naive, incompetent, and incapable of understanding the concept of complexity). - ALERT: SentimenTrader Issues Extremely Important Update On The Gold Market
With continued consolidation in the gold and silver markets, below is an extremely important update on the gold market that was just issued by SentimenTrader. From Jason Goepfert at SentimenTrader: “The Optimism Index on gold has moved above 75 for the first time since 2011, a troubling level. That’s especially true since “smart money” commercial hedgers have moved to a near-record net short position against the metal. It suffered a key reversal day as sellers rejected a new 52-week high on June 16, but those one-day patterns have been inconsistent predictors of further weakness. Even so, we consider the market to be high-risk. - Brexit: What Is It About? — Paul Craig Roberts
If you read the presstitute media, Brexit—the referendum tomorrow on the UK’s exit from the EU— is about racism. According to the story line, angry rightwing racists of violent inclinations want to leave the EU to avoid having to accept more dark-skinned immigrants into England. Despite the constant propaganda against exit, polls indicated that more favored leaving the EU than remaining until a female member of Parliament, Jo Cox, was killed by a man that a witness said shouted “Brexit.” Cox was an opponent of leaving the EU. The UK government and presstitute media used Cox’s murder to drive home the propaganda that violent racists were behind Brexit. However, other witnesses gave a different report. The Guardian, which led with the propaganda line, did report later in its account that “Other witnesses said the attack was launched after the MP became involved in an altercation involving two men near where she held her weekly surgery.” Of course, we will never know, because Cox’s murder is too valuable of a weapon against Brexit. - Here's why gold could jump 10% very soon
“Gold is a reliable barometer of risk, and we believe it could rally by up to 10% should the UK vote to leave the EU,” that’s according to a flash research note from HSBC’s chief precious metals analyst James Steel sent to clients today. According to the report, if the UK votes to leave the European Union on June 23, the price of gold could rally by 10% to around $1400 an ounce as investors look to the yellow metal to provide a safe haven in times of uncertainty. What’s more, gold could also benefit from the reluctance of investors to move into sterling or even the euro following a ‘leave’ vote. - Why Janet Ain’t Yellin’ “Higher Interest” Anymore: Jobs Worse than Expected and Far Worse than Reported
In the fall of 2015, I said the Federal Reserve would raise interest rates once in December then would not be able to fly any higher thereafter. The stock market would crash shortly after the Fed pulled up on the interest stick (which it did in what became the worst January in stock-market history), and then the Fed’s hopes of recovery would fade away. I also said that, in spite of a continually degrading economic situation around the world, the Fed would badly want to lift its interest target again in order to prove its recovery had recovered from the first lift. The fact that it would not be able to without stalling the economy completely wouldn’t mean it wouldn’t try. If it did try, however, it would find out in hindsight that any additional pull back on the stick would crash the economy into the dust of the earth. - NY Fed Warns about Booming Subprime Mortgages, now Insured by the Government
The New York Fed just warned about the ticking mortgage subprime time bombs once again being amassed, and what happens to them when home prices decline. But unlike during the last housing bust, a large portion of these time bombs are now guaranteed by the government. Subprime mortgages are what everyone still remembers about the Financial Crisis. They blew up has home prices fell. Folks who thought they were “owners with equity” found out that they were just “renters with debt.” - Anxiety Builds As Money Managers Near Record Long Gold Position
“There’s still a lot of fear out there,” warns one investor as the combination of event risks (e.g. Brexit, Spain, US Election) and the contagious collapse of central bank credibility has asset managers around the world piling into bonds and bullion. With negative rates now de rigeur, global developed market bond yields are pushing record lows as demand for protection from fiat debacles in precious metals (and alternative currencies) has sent money managers long position near Aug 2011's record highs. As Fed credibility collapses (red line – inverted expectations of rate-hike-pace) so Gold (gold line) and global developed market bonds (green line) have soared tick for tick… - Unprecedented Mainstream Media Criticism of Central Banking Bodes Ill for the Larger Economy
There is definitely considerable negativity about central banking in the mainstream media these days. This is surprising, on the one hand, because central banking provides the foundation of the current economic system, worldwide. On the other hand, such negativity may be signaling far worse. Our theory, for years has been that the central banking system is presented as something that is economically positive when, in fact, it is quite negative and responsible for the gradual collapse of Western prosperity. The mainstream media makes no real reference to the state of the West – or the world – when it comes to the larger economy. China is collapsing. The European Union is half-bankrupt. The US is in a kind of depression. But until recently the system that has created this mayhem has been treated as a kind of eternal or natural constant, like the sky or the moon or the sun. Now however, with half the West running on negative interest rates, the cracks cannot be papered over. The recent Bilderberg meetings apparently focused in large part on the economy. Disaster was predicted and preparations were made. In fact, this is how economies and economic systems “evolve.” Out of “chaos,” order. - Switzerland withdraws longstanding application to join EU
The upper house of the Swiss parliament on Wednesday voted to invalidate its 1992 application to join the European Union, backing an earlier decision by the lower house. The vote comes just a week before Britain decides whether to leave the EU in a referendum. Twenty-seven members of the upper house, the Council of States, voted to cancel Switzerland’s longstanding EU application, versus just 13 senators against. Two abstained. In the aftermath of the vote, Switzerland will give formal notice to the EU to consider its application withdrawn, the country’s foreign minister, Didier Burkhalter, was quoted as saying by Neue Zürcher Zeitung. The original motion was introduced by the conservative Swiss People’s Party MP, Lukas Reimann. It had already received overwhelming support from legislators in the lower house of parliament in March, with 126 National Council deputies voting in favor, and 46 against. - Propaganda, Depression And The Greatest Illusionist Of All Time
On the heels of the dollar moving higher and the gold and silver markets getting hit, today one of the greats in the business discusses today’s action, and also included are some questions and answers about the market, precious metals. By Bill Fleckenstein President Of Fleckenstein Capital. The “remain” party continued overnight, with most equity markets rallying about 1%. Naturally, the U.S. stock market joined in, though to a slightly lesser degree, with the indices just fractionally higher through midday. In the afternoon the market strengthened somewhat and with an hour to go it was about 0.3% higher (with the Nasdaq lagging)… - IMF issues warning saying eurozone is ‘weak' and on the brink of collapse – but STILL insists we shouldn't vote out
The eurozone is on the brink of another financial crisis – but leaving the EU would still plunge Britain into recession, the IMF said last night. In its latest controversial intervention in the referendum campaign, the International Monetary Fund said the eurozone was in danger of being torn apart by political tensions. It said that while the single currency bloc had recovered over the past six months, the medium-term future looked ‘weak’ and that it was racked by high unemployment and bad debts. It also said the failure of the EU to tackle the refugee crisis had ‘vividly exposed political fault lines’ which threatened the entire European project. - Credit Suisse CEO Said to Tell Staff Shorts Wrong on Capital
Credit Suisse Group AG Chief Executive Officer Tidjane Thiam said hedge funds are wrong to assume that the Swiss lender will have to raise additional capital after the shares touched a fresh all-time low last week, according to two people with knowledge of the matter. The lender’s share price is hurt by “an unusually high level of short positions,” Thiam wrote in a memo to staff last week, the people said, asking not to be identified because the contents are private. While some hedge funds are speculating on another capital increase, partly because of restructuring measures and operational losses, they’re “not correct,” Thiam wrote. - Janet Yellen’s $200-Trillion Debt Problem
The U.S. stock market broke its losing streak on Thursday [and even more so on Monday, ed.]. After five straight losing sessions, the Dow eked out a 92-point gain. The financial media didn’t know what to say about it. So, we ended up with the typical inanities, myths, and claptrap. “Brexit panic may be your big chance to buy the S&P 500,” says a headline at Marketwatch. The article claims investors have pushed down the value of the S&P 500 in fear of a so-called “Brexit.” Next Thursday, in a national referendum, British voters will decide whether to end Britain’s 43-year membership in the European Union. But there are a number of problems with this… First, there has been no big rout in the S&P 500; it’s only slightly below its all-time high. Second, Brexit is a mystery to most U.S. investors, not a cause for alarm. Third, nobody knows which side will win – or what it will mean. Would a Brexit be good for Britain? Would it be bad for stocks? Nobody knows! Meanwhile, the Financial Times focuses on “slowing job growth and risk of Brexit…” - Jim Sinclair-Next Crash Will Look Like Mad Max
Renowned gold and financial expert Jim Sinclair says recent dire predictions from Wall Street icons are more than a warning. They are telegraphing their trading positions. Sinclair explains, “They are preparing for what they believe. They talk their own positions. So, it’s more than a warning. They are telling you exactly what they have done. They are not out to save the man in the street. They are out to make money in a huge short position, probably in over-the-counter derivatives. . . . They’re not looking for a market tic down. They are looking for a market with a character of backing up to an open to an elevator with no elevator there. . . . We’ve got no volume, fake prices, and we’ve got the biggest money in the world short the market. We’ve also got a Fed with no tools, and now we have a Fed whose primary indicator is starting to have a heart attack. . . . When this thing comes down, it’s going to be a free fall.” - Puerto Rico Says Talks Cease on Revised Debt Exchange Offers
Puerto Rico said confidential talks with some bondholders ended without any agreements to reduce its debt as the island edges closer toward what may be its biggest default yet. The disclosure from the commonwealth came 10 days before $2 billion of interest and principal is due on a variety of securities, which Governor Alejandro Garcia Padilla has said the island can’t pay in full. The focus now turns to the U.S. Senate, which may take up a bill next week to establish an oversight board that would restructure Puerto Rico’s $70 billion in debt. “The assumption here has to be simply that everybody thinks they’re going to get a better deal from the oversight board than they are negotiating with each other,” said Phil Fischer, head of municipal research at Bank of America Merrill Lynch in New York. “Everyone is preparing the book for the next trade, and the next trade is with the oversight board.” - Solving Italy's $408 Billion Bad Loan Problem 30 Cents At a Time
It will only cost 30 cents to solve Italy's bad debt problem — 30 cents in every euro of the country's 360 billion-euro ($408 billion) pile of loans past due, that is. That's the difference between what Italian banks think their non-performing loans are worth and what investors are willing to pay for them. Reconciling these disparate valuations is key to clearing the gridlock in the European Union's fourth-largest economy. Morgan Stanley's Srikanth Sankaran says current prices on secured NPLs, i.e. those backed by collateral such as real estate, are between 20 to 30 cents on the euro, while unsecured loans can attract prices as low as 5 cents. Meanwhile, banks are marking the loans on their books for sale at around 50 to 65 cents, he said. - Deutsche Bank’s advice to ‘invest in UK if Leave wins ballot’ after EU referendum
ONE of Europe’s biggest banks yesterday advised investing in UK companies in the event of Brexit because they would “outperform the European market”. Analysts at Deutsche Bank say a vote to leave the EU would cause panic on Europe’s stock markets in the weeks after June 23, causing them to fall by as much as 10 per cent. But the FTSE 100 will perform better, boosted by a weak pound. A note from the bank reads the UK stock market “tends to outperform during periods of GBP (pound) weakness”. It said the value of the pound could tumble by as much as another 5 per cent by the end of the year. - ‘Brexit’ could send shock waves across U.S. and global economy
Britain's departure from the European Union could send shock waves across the global economy and threaten more than a trillion dollars in investment and trade with the United States. International policymakers are ramping up their warnings of the dangers of a British exit – popularly known as “Brexit” — from the political and economic alliance that has united Europe for the past four decades. Voters in Britain will decide whether to leave or remain in the European Union in a referendum on Thursday, but financial market volatility has already spiked as polls show a growing desire to abandon the partnership. - The man who accurately predicted 4 market crashes told us 3 more dates to worry about this year
The man who accurately predicted four market crashes to the exact date each time has told Business Insider about three more dates to worry about. Sandy Jadeja is a technical analyst and chief market strategist at Core Spreads. Technical analysts look at charts to pinpoint patterns in various markets and asset classes. From that, they forecast which direction prices are likely to move in. They can't tell you the reasons why there will be a big market movement, only that there is going to be one. He now warns that the following dates spell trouble for the Dow Jones in the US that could spread to other markets. 1. Between August 26 and August 30, 2016. 2. September 26, 2016. 3. October 20, 2016. “We have interesting times ahead of us. We are dealing with issues on so many levels from economic uncertainty in the financial markets including currencies and commodities as well as the rising house prices we have seen,” said Jadeja in an interview. - Venezuela police arrest 400 for looting in food shortage
At least 400 people have been arrested in Venezuela after rioting and looting over food shortages. Over 100 shops in the coastal town of Cumana were hit and at least one person died according to local media. Venezuela has one of the world's highest inflation rates at 180% and people can queue for hours for subsidised food. Opposition politicians blame government mismanagement for the shortages. But the government says the shortages are part of an economic war being waged to drive President Nicolas Maduro from office. - China Dumping More Than Treasuries as U.S. Stocks Join Fire Sale
For the past year, Chinese selling of Treasuries has vexed investors and served as a gauge of the health of the world’s second-largest economy. The People’s Bank of China, owner of the world’s biggest foreign-exchange reserves, burnt through 20 percent of its war chest since 2014, dumping about $250 billion of U.S. government debt and using the funds to support the yuan and stem capital outflows. While China’s sales of Treasuries have slowed, its holdings of U.S. equities are now showing steep declines. The nation’s stash of American stocks sank about $126 billion, or 38 percent, from the end of July through March, to $201 billion, Treasury Department data show. That far outpaces selling by investors globally in that span — total foreign ownership fell just 9 percent. Meanwhile, China’s U.S. government-bond stockpile was relatively stable, dropping roughly $26 billion, or just 2 percent. - Why US Coal Production Collapsed to Lowest Level since 1981
It was called “king coal” because it ruled! Coal-fired power plants were the cheapest way to generate electricity, based on capital costs and operating costs. And the US has plenty of coal. In the 1980s, over 55% of electricity generation was coal-fired. By 2000, it was down to 50%. Now it’s down to just over 30%, in second place, for the first time ever, behind natural gas. In the first quarter of 2016, according to the US Energy Information Administration, coal production plunged 17% from the prior quarter, the largest quarterly drop since Q4 1984. At 173 million short tons (MMst), production was down 42% from its peak in Q3 2008. It was the lowest quarterly production since Q2 1981 when a strike crippled coal mines. But this time, there was no strike. - Brexit Chaos to Serve as Cover for ECB Bank Bailouts
Over the course of the last few months, Brexit has become one of the biggest catch-all preemptive scapegoats of recorded human history. Even far beyond the old continent’s porous borders, politicians, central bankers, and economists are warning their respective populations to brace for a serious aftershock if the people of Britain vote to leave the EU. This is is a remarkable feat given that the UK has its own perfectly functioning currency, and as such decoupling from the EU, while bumpy, should not pose an immediate financial threat either to the UK or the EU, let alone the world at large. But try telling that to the eurocrats, politicians, and central bankers whose long cherished dream of creating a seamlessly interconnected, interdependent European superstate appears to be in the process of unraveling. - How the Government Hides Inflation, as Housing Costs Soar
For inflation lovers, the headline numbers that the Bureau of Labor Statistics reported today was benign: The Consumer Price Index for All Urban Consumers (CPI-U) rose 0.2% in May, seasonally adjusted. Over the last 12 months, not seasonally adjusted, the index rose 1.0%. The Atlanta Fed’s “sticky-price” CPI – “a weighted basket of items that change price relatively slowly,” as it says – wasn’t quite that benign. It rose 2.6% for the 12-month period, the hottest increase since April 2009! - All Signs Point to Big Financial Crash in 2016-Bill Holter
Financial writer Bill Holter says there are many signs that are signaling big trouble. Holter’s list starts with the troubled banking giant Deutsche Bank and says it is his top candidate for the next Lehman style financial meltdown. Holter explains, “It would make sense that they are the candidate because, as you know, they had a recent settlement in the gold and silver fix. So, they may get thrown under the bus. The only problem is if they get thrown under the bus, there’s going to be a bomb that blows up the whole bus.” So, can we make it out of this year without a big financial crash? Holter contends, “I don’t see how. There is the potential unrest all over the world. You have “Brexit,” and now the polls are saying that’s going to happen. That’s going to absolutely dislocate Europe. You have the U.S. election, and no matter who wins, I would say there are going to be riots. There will be riots no matter if Hillary wins or Trump wins. You will probably see rioting going into the election. You also have the tragic event in Orlando, and it’s common knowledge that ISIS says it is going to be doing this all summer long. So, you got all kinds of potential dislocations. I don’t see how we get to next year with the can being kicked down the road.” - Right Now It’s About Keeping the Whole System from Collapsing-Andy Hoffman
Financial writer Andy Hoffman says the real endgame is upon us, and big money people like “Bond King” Bill Gross know it. Hoffman explains, “He has said some pretty alarming things that are pretty well in line with what all the other ‘big money,’ . . . people have has been saying lately. We’re talking about the biggest debt explosion in history on top of the already biggest debt edifice in history. He also is . . . talking about Japan’s endgame is to forgive their debt. Forgive means default. It means the collapse of the major Western currencies. It means the domino game, that started 40 years ago when they got rid of the gold standard, must end as all fiat currency standards end in shambles.” - Peter Schiff Issues a Rather Large Economic Warning… “It’s Gonna Be Awful”
The interview below is vintage Schiff vs. CNBC. After being “demoted” to only doing CNBC website interviews for the last several months, something Peter hasn’t been too shy about mentioning in other interviews, within the first 22 seconds Peter manages to sneak in a jab about finally being IN studio again, jokes about how his competition at CNBC aren’t really full fledged bears, but rather “little cubs that haven’t matured into full grown bears yet,” and when asked how bad he thinks the coming financial crisis will be, Schiff responds saying, “It’s gonna be awful,” all while he’s laughing. - The Stock Market Crash Of 2016: Stocks Have Already Crashed In 6 Of The World’s 8 Largest Economies
Over the past 12 months, stock market investors around the planet have lost trillions of dollars. Since this time last June, stocks have crashed in 6 of the world’s 8 largest economies, and stocks in the other two are down as well. The charts that you are about to see are absolutely stunning, and they are clear evidence that a new global financial crisis has already begun. Of course it is true that we are still in the early chapters of this new crisis and that there is much, much more damage to be done, but let us not minimize the carnage that we have already witnessed. In general, there have been three major waves of financial panic over the past 12 months. Late last August we saw the biggest financial shaking since the financial crisis of 2008, then in January and February there was an even bigger shaking, and now a third “wave” has begun in June. Not all areas around the globe have been affected equally by each wave, but without a doubt this new financial crisis is a global phenomenon. The charts that I am about to show you come from Trading Economics. It is an absolutely indispensable website that is packed full of useful data, and I encourage everyone to check it out. Let’s talk about China first. The Chinese economy is the second largest on the entire planet, and since this time last year Chinese stocks are down an astounding 40 percent… - The Federal Reserve has brought back “taxation without representation”
In February 1768, a revolutionary article entitled “No taxation without representation” was published London Magazine. The article was a re-print of an impassioned speech made by Lord Camden arguing in parliament against Britain’s oppressive tax policies in the American colonies. Britain had been milking the colonists like medieval serfs. And the idea of ‘no taxation without representation’ was revolutionary, of course, because it became a rallying cry for the American Revolution. The idea was simple: colonists had no elected officials representing their interests in the British government, therefore they were being taxed without their consent. To the colonists, this was tantamount to robbery. Thomas Jefferson even included “imposing taxes without our consent” on the long list of grievances claimed against Great Britain in the Declaration of Independence. It was enough of a reason to go to war. - The subprime mortgage is back: it’s 2008 all over again
Apparently the biggest banks in the US didn’t learn their lesson the first time around… Because a few days ago, Wells Fargo, Bank of America, and many of the usual suspects made a stunning announcement that they would start making crappy subprime loans once again! I’m sure you remember how this all blew up back in 2008. Banks spent years making the most insane loans imaginable, giving no-money-down mortgages to people with bad credit, and intentionally doing almost zero due diligence on their borrowers. With the infamous “stated income” loans, a borrower could qualify for a loan by simply writing down his/her income on the loan application, without having to show any proof whatsoever. Fraud was rampant. If you wanted to qualify for a $500,000 mortgage, all you had to do was tell your banker that you made $1 million per year. Simple. They didn’t ask, and you didn’t have to prove it. Fast forward eight years and the banks are dusting off the old playbook once again. - China’s Jan-May outbound direct investment surges
Chinese companies continued to invest big in the overseas market in the first five months of the year, official data showed on Wednesday. China’s non-financial outbound direct investment (ODI) rose 61.9 per cent from a year earlier to 479 billion yuan ($74 billion) in January-May period, the Ministry of Commerce said on its website. Major investment destinations included ASEAN, Australia, the EU, Hong Kong SAR, Japan, Russia and the United States, which together were in receipt of $59 billion, about four fifth of the total. China had sent 181,000 labourers to work abroad since the start of the year, bringing the total number of Chinese labourers overseas to 987,000 at the end of May, down 20,000 from the same period last year. Chinese outbound direct investment will continue to grow at more than 10 percent per annum, a report from international accounting firm KPMG showed earlier this year. - China, Russia elected to UN’s ECOSOC
China and Russia have been elected to the UN Economic and Social Council (ECOSOC), the coordinating body for the economic and social work of UN agencies and funds. China won 182 votes out of a total of 185 votes casted in the Asia Pacific group in the election held on Tuesday. Other elected ECOSOC members are North Korea, Britain, United Arab Emirates, Sweden and Norway among others. ECOSOC accredits and oversees human rights groups at the UN, deciding who can participate at the UN Human Rights Council. The winners require two thirds majority of the votes in relevant groups. - Faber: Brexit Would be The Best Thing in British History
The European Union is an “empire that is hugely bureaucratic,” warns Marc Faber, telling CNBC that he thinks that “a Brexit would be bullish for global economic growth,” because “it would give other countries incentive to leave the badly organized EU.” The Gloom, Boom & Doom-er explained that Brexit is a risk Britain should be willing to take, and that it would not be a disaster, “on the contrary, it would be the best thing for Britain that would ever happen!” As CNBC reports, Faber defended his case by citing Switzerland, which is not a member of the EU nor the European Economic Area, but instead operates in the “single” market. That enables the Swiss to have rights in the U.K., but theoretically allows them to operate independently of both groups. - Authoritarian Control and Mass Murder in America the Hegelian Dialectic Way
Georg Wilhelm Friedrich Hegel (1770-1831) was a highly influential German philosopher. To this day his Hegelian Dialectic is a model used by central powers of government to create a problem that causes a reaction most often in the form of a crisis or series of crises, and consolidation of concentrated power results in fewer hands as a consequence of the proposed solution put forth by the same political body that created the problem and crises in the first place. It’s been a highly effective deadly game formula of deceit that the ruling elite has perpetrated on the people to fool and entice them into blindly accepting greater centralized control and authority. This article will demonstrate how New World Order globalists and their neocon puppets in Washington have consistently employed this repeating cycle of the Hegelian Dialectic consisting of the problem (originally called thesis), reaction (anti-thesis) and solution (synthesis) during this century’s federal governmental domestic policies. Inasmuch as US Empire virtually controls all Western nations as well as nearly all Third World nations, this insidious undemocratic process is unfolding globally on the geopolitical chessboard with the ultimate objective of establishing one world government tyranny. - Morgan Stanley fears policy makers repeating mistakes of 1930s
Policy makers are repeating the types of mistakes that prolonged the Great Depression, economists at Morgan Stanley warned Thursday. High debt, deflation, slower growth and lower yields on top of policy missteps have often been identified as the prime culprits for extending the Great Depression in the 1930s. “We think that the current macroeconomic environment has a number of significant similarities with the 1930s,” said a team led by Chetan Ahya, global co-head of economics at the firm. - Why there’s a new kind of housing crisis
America has a housing crisis, and most Americans want policy action to address it. That’s the conclusion of an annual survey released Thursday by the MacArthur Foundation. The “crisis” is no longer defined by the layers of distress left behind after the subprime bubble burst, but about access to stable, affordable housing. - U.S. bank earnings will feel bite of U.K. exit from EU
Earnings of large U.S. banks would be trimmed by as much as 5.6% this year and as much as 9% in 2017 if the U.K. opts to leave the European Union in a referendum to be held next week, analysts at brokerage Keefe, Bruyette & Woods said. The banks most exposed to an increase in costs and weaker capital market activity as a result of the so-called “Brexit” include Goldman Sachs Group Inc. Morgan Stanley, J.P. Morgan Chase & Co. Citigroup Inc. and Bank of America Corp. BAC, said KBW analyst Brian Kleinhanzl and team in a note dated Wednesday and distributed to media on Thursday. - How Fascism Comes to America
I think there are really only two good reasons for having a significant amount of money: To maintain a high standard of living and to ensure your personal freedom. There are other, lesser reasons, of course, including: to prove you can do it, to compensate for failings in other things, to impress others, to leave a legacy, to help perpetuate your genes, or maybe because you just can't think of something better to do with your time. But I'll put aside those lesser motives, which I tend to view as psychological foibles. Basically, money gives you the freedom to do what you'd like – and when, how, and with whom you prefer to do it. Money allows you to have things and do things and can even assist you to be something you want to be. Unfortunately, money is a chimera in today's world and will wind up savaging billions in the years to come. - Wall Street has been rocked by an $8 billion hedge fund's implosion
Visium Asset Management, a multibillion-dollar hedge fund, has imploded in the biggest scandal to hit the industry in years. The fund told investors of its plan to close in a letter Friday. It's the most high-profile shutdown since authorities forced Steve Cohen's controversial SAC Capital to close in 2013. A slew of factors — from a brewing insider-trading scandal to a contentious investment by Visium's founder that rankled investors and staffers alike — led to Visium's demise. On top of all of that, Visium's flagship fund had been reporting dismal performance. Visium is selling one of its better performing funds to AllianceBernstein, it said. - Iranian Professor: ‘OPEC Is Finished’
An Iranian professor said Tuesday that the Organization of Petroleum Exporting Countries (OPEC) is doomed, because of power struggles between Iran and Saudi Arabia that have created serious political fallout. “OPEC’s power is not waning — I’m sorry, OPEC is finished,” Hossein Askari, an Iranian professor of business at George Washington University who studies the oil industry, told USA Today. “OPEC is just powerless. They cannot agree to anything, both for political reasons and economic realities.” - Bill Gross: Negative yields are a $10 trillion ‘supernova’ that will ‘explode’
Bond guru Bill Gross believes the growing global move toward negative yields will have dire consequences. In a tweet from his firm, Janus Capital, Gross goes back half a millennium to assert that the current situation with the world’s debt market is unprecedented and dangerous: ‘Gross: Global yields lowest in 500 years of recorded history. $10 trillion of neg. rate bonds. This is a supernova that will explode one day'. The warning comes as yields on Japanese government bonds and German bunds hit record lows. - $30 oil could come back later this year
The oil crash is over, right? Maybe not. At least that’s the warning from Morgan Stanley, which argues crude oil prices could spiral downward later this year to as low as $30 a barrel. It’s a counterintuitive warning, given that oil prices have actually soared by nearly 100% since mid-February. But Morgan Stanley points out that the huge rally has been driven largely by unexpected supply outages in Nigeria, Canada and elsewhere, all of which won’t last forever. - Bilderberg Group 2016: attendee list and agenda
The secretive Bilderberg Group, which is set to meet in Dresden, Germany later this week, will discuss how to prevent Donald Trump from becoming president, the possibility of mass riots as a result of wealth inequality, the migrant crisis, as well as the United Kingdom’s vote on leaving the European Union. The influential meeting of bankers, politicians, media heads and business moguls has released its official participant list and agenda for 2016. - Former head of Morgan Stanley indicted for evading $45 million in taxes
Morris Zukerman spent 16 years at Morgan Stanley, at various points overseeing its energy and merchant banking practices, before starting his own investment firm in the late 1980s. His firm’s partners have included ConocoPhillips, ExxonMobil and Kinder Morgan. He endowed a Harvard sociology professorship. He collected dozens of expensive paintings, including works he loaned to the Metropolitan Museum of Art. Along the way, he evaded more than $45 million in taxes, the U.S. now alleges. - $50 Oil Might Not Last to the End of 2016
Hold off on celebrating the recent surges to more than $50 per barrel in WTI and Brent crude prices. First, consider what’s behind the increase. The simplest explanation is that supply disruption is to blame. In the past few weeks, the world has experienced a bevy of supply disruptions. - IEA says supply glut will remain until 2021
The International Energy Agency says they are decreasing gas demands once again. Although oil markets are hopeful to a rebalance next year, the surplus will not disappear right away. They report that an annual increase in global consumption is expected to rise by 1.5 percent through 2021, down from the original of 2 percent prediction and the 2.5 percent gain over years past. This growth inhibition is driven by the low usage of fuel in the U.S. and Japan as it competes with renewable coal in power generation. They continue, “Slower generation growth, rock-bottom coal prices and robust deployment of renewables constrain gas’s ability to grow faster in today’s low-price environment.” - What happens after Brexit?
When it comes to “Plan B” Europe is funny: it never has one. The best example is, of course, Greece most notably from an April 2013 press conference, when Mario Draghi responded to a question from Zero Hedge readers about a worst case scenario for Greece. - The Daily Data Dive: A Tale of 3 Retail Sales Figures And A 12.5% Drop Since 2007
The Commerce Department reported that the seasonally adjusted headline number for Retail Sales rose in May by an estimated 0.5%. That figure will be revised multiple times in the months and years ahead as more data comes in and the seasonal adjustment factor is repeatedly revised until its curve reasonably approximates the actual data. In the game of Pin the Tail on The Number, Wall Street economists undershot, coming in with a consensus guess of +0.3%. The reported number was a “beat” in that regard. The actual, not seasonally adjusted number rose by $20.5 billion or 4.5% from April. The best way to tell if that’s a good number or not is to compare it with May’s performance last year. May of 2015 saw a month to month gain of $27.4 billion or 6.1%. Compared to last year, this year fell short. - Meltdown! Central Banks Are Destroying The Global Bond Market
Japanese, German and Swiss bond yields fell to records, as government debt around the world extended its best gains in two decades, with the prospect of Britain leaving the European Union boosting demand for havens. Federal Reserve Chair Janet Yellen fueled the rally by saying Wednesday slow productivity growth and aging societies may keep interest rates at depressed levels. Fewer Fed officials expect the central bank to raise interest rates more than once this year than they did three months ago, based on projections the central bank issued. The Bank of Japan said inflation in the nation may be zero or negative, while holding monetary policy unchanged. - GOLDMAN SACHS: This is how far we expect the pound to crash after a Brexit
Brexit could trigger a huge sell-off in the pound, sending the currency down by as much as 11% against a basket of the world's most important currencies, according to new research from Goldman Sachs released late on Wednesday. Goldman analysts Silvia Ardagna, Robin Brooks, and Michael Cahill argue that a so-called “Lehman-type” scenario — where uncertainty in the markets increases as much as it did following the collapse of the investment bank Lehman Brothers in 2008 — would cause a huge crash in the pound sending it down to levels not seen in decades. - After Brexit—-There’s Grexit, Spexit, Uscitaly and Portugal, Too
If there was any doubt that Brexit was “relevant” then the surges in European peripheral bond risk,despite massive bond-buying by The ECB, should send shivers up and down the status quo huggers that are shrugging the referendum decision off because “central banks will provide liquidity.” However, it’s not just The UK that EU officials need to worry about, as The Globalist notes, Germany will have to change its policies if it wants to avoid exit of other countries from the eurozone. Portugal, Italy, and Spain are all seeing bond risk explode in recent weeks… - Will Brexit Give The US Negative Interest Rates?
One of the oddest things in this increasingly odd world is the spread of negative interest rates everywhere but here. Why, when the dollar is generally seen as the premier safe haven currency, would Japan and much of Europe have government bonds — and some corporate bonds — trading with negative yields while arguably-safer US Treasuries are positive across the entire yield curve? One answer is that the Bank of Japan and the European Central Bank are buying up all the high-quality (and increasing amounts of low-quality) debt in their territories, thus forcing down rates, while the US Fed has stopped its own bond buying program. So the supply of Treasury paper dwarfs that of German or Japanese sovereign debt. Greater supply equals lower price, and lower price equals higher yield. The other answer is that this is just one of those periodic anomalies that persist for a while and then get arbitraged away. And Brexit might be the catalyst for that phase change. - The pound is getting annihilated
Sterling is getting crushed once again on Thursday, as currency traders react to ever increasing odds that the UK will vote to leave the European Union as well as renewed warnings from the Bank of England about the dangers of Brexit. Around 3:45 p.m. BST (10:45 a.m. ET) the pound is lower by around 1.37% against the dollar to trade at $1.4014, having tumbled steadily for around two hours in the early afternoon, as Brexit jitters intensify in the markets. - Gold Price: USD 65,000/OZ In 5 Years?
16 June 2021 is five years from today. What will the gold price be 16 June 2021? Currencies are Worthless. As the world’s fiat paper currencies have lost 99% or more of their purchasing power in the last 100 years, we have to understand that fiat paper currencies are not a suitable unit of account to accurately measure prices. Gold is in fact a much better measuring stick for value than paper currencies. A currency doesn’t measure anything. It just has an arbitrary value placed upon it by the population using it. It’s not backed by anything and it can fail at any time. By the tale of history, we know that the unbacked fiat paper currencies used today will ultimately destruct and become worthless. All unbacked fiat currencies throughout human mankind have failed. A more accurate measurement is to measure fiat currencies in gold. If we look at the US Dollar as measured in gold, we can see that the US Dollar has utterly failed in keeping its store of value, with the value plunging about 98% in a mere 50 years. - Free Speech Under Attack
Bill Bonner, whose Diaries we republish here, is well-known for being an equal opportunity offender – meaning that political affiliation, gender, age, or any other defining characteristics won’t save worthy targets from getting offended. As far as we are concerned, we generally try not to be unnecessarily rude to people, but occasionally giving offense is not exactly beneath us either. Some people really deserve it, after all, …which is why we often refer to modern-day central bankers as lunatics, politicians as psychopaths, governments as gangs of highway robbers waving a flag, and so forth. On one occasion we even provided a translation of Mr. Böhmermann’s “abusive criticism” of Mr. Erdogan, which fell afoul of a 19th century lèse majesté law on Germany’s statute books. - How Fiat Money Destroys Culture
It may seem unusual that an economist would talk about culture. Usually, we talk about prices and production, quantities produced, employment, the structure of production, scarce resources, and entrepreneurship. But there are certain things that economists can say about the culture, and more precisely, that economists can say about the transformation of the culture. So what is culture? Well, to put it simply, it is the way we do things. This can include the way we eat — whether or not we dine with family members on a regular basis, for example — how we sleep, and how we use automobiles or other modes of transportation. And of course, the way we produce, consume, or accumulate capital are important aspects of the culture as well. - Oil Is Set To Rally Beyond $50
This week’s key data for the oil and gas industry shows a small rebound in U.S. oil production after months of declines. While U.S. crude stocks continue to fall, we notice a small build in gasoline stocks as refinery runs continue to increase. - Weak Indian Demand May Soon Impact Gold Prices
Incredible numbers this week on gold demand. Coming out of a nation that’s supposed to be the world’s top consumer — but is showing hardly any buying right now. India. Preliminary reports suggest that May was another very weak month for India’s gold demand. With Bloomberg citing familiar persons in the finance ministry as saying that May’s gold imports totaled just 31 tonnes — a drop of 51 percent from year-ago levels. That would come after India’s gold imports dropped 67 percent in April — to just 22 tonnes. Showing that gold buying is incredibly sluggish right now. In fact, sources in India’s jewelry sector were quoted as saying that there is “hardly any demand” right now in this key consuming nation. A fact that seems incredible in light of the recent strength in the gold price.
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