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.
Latest News From April 22, 2016 to April 28, 2016:
- Putin's Decade-Old Dream Realized as Russia to Price Its Own Oil
Russian President Vladimir Putin is on the verge of realizing a decade-old dream: Russian oil priced in Russia. The nation’s largest commodity exchange, whose chairman is Putin ally Igor Sechin, is courting international oil traders to join its emerging futures market. The goal is to increase revenue from Urals crude by disconnecting the price-setting mechanism from the world’s most-used Brent oil benchmark. Another aim is to move away from quoting petroleum in U.S. dollars.
- Biggest Financial Bubble in History Will Engulf World-Gregory Mannarino
Financial analyst and stock trader Gregory Mannarino says pay no attention to the rising stock market because it is “fake.” Mannarino says, “The manipulation is absolutely epic. We have never seen anything like it. There is going to be a horrible price to pay for this. Why? Because it will correct to fair market value. There is no doubt in my mind that all of this will correct to fair value. All these distortions can only go so far, and we know this. We have seen this throughout history without exception. . . . We have the biggest bubble in the history of the world, and that is the debt bubble that has re-inflated this stock market bubble, it will burst. It will burst because every single financial bubble in history, without exception, has burst before it. This one is going to burst too, but this one is going to engulf the world. It’s going to be unlike anything we’ve seen in the history of the world, and there is no doubt that the middle class will no longer exist when this occurs. It’s going to be a massive transfer of wealth to these financial institutions that are going to go short all of this. It is legal theft on a magnitude and scale that is unimaginable.”
- How Puerto Rico’s debt bomb could blow up on the mainland
Puerto Rico, an awkward legacy of America’s 1898 testosterone spill, the Spanish-American War, is about to teach two things that few Americans know: If conditions get bad enough there, its residents, who are American citizens, can come here. And if Congress does not deal carefully with the mess made by the government in San Juan, Congress will find itself rescuing governments in Springfield, Ill., and other state capitals. Puerto Rico’s approximately 18 debt-issuing entities have debts — approximately $72 billion — they can’t repay. The Government Development Bank might miss a $422 million payment due in May, and the central government might miss a $2 billion payment in July. Congress won’t enact a US taxpayer “bailout.”
- Puerto Rico's Governor Says the Island Will Default on Monday
Puerto Rico’s Government Development Bank has a $422 million payment due to creditors that day. Puerto Rican officials talked tough ahead of a major debt payment due on Monday, with the U.S. territory’s governor predicting default, and chances slipping for a restructuring deal with creditors. Speaking to reporters on Wednesday, Governor Alejandro Garcia Padilla said “there will be a default on Monday,” adding, “I don’t think there is a deal on the table that avoids a default.”
- Yen Surges Most Since 2010 as BOJ Refrains From Adding Stimulus
The yen surged by the most since 2010 after the Bank of Japan maintained its record stimulus, surprising traders who had expected additional easing and forcing them to exit bets on declines in the currency. Japan’s currency rose against all of its 16 major peers as BOJ Governor Haruhiko Kuroda and his colleagues opted to refrain from more policy action and to take more time to assess the impact of their negative interest-rate program. A slight majority of economists surveyed by Bloomberg predicted the central bank would respond to a strengthening yen that’s cast a shadow over prospects for higher wages and investment.
- COMEX Default Is Coming Soon-Bill Holter
According to financial writer Bill Holter, we are getting to the end of the gold and silver price suppression game. Holter contends, “Because the inventories are so small, silver and gold registered categories (at COMEX) total about $1.2 billion. That’s nothing in today’s world. That’s less than one day’s interest the U.S. pays on its debt. I don’t see this going for a long time because inventories are so small. . . . This whole suppression game on gold and silver was brought about to protect the reserve currency, the dollar, because gold is a direct competitor with the dollar. If the silver market blows up, and I shouldn’t say if, it’s when the silver market blows up, that’s going to blow the gold market up, and that is basically going to expose the fact the West is a fraud, that the gold and silver markets were a fractional reserve Ponzi scheme. That’s going to blow confidence, and you are going to see derivatives blow up all over the world, and markets will be closed in a couple of days.”
- US-Style Mortgage Fraud a ‘Nuclear Bomb’ to Australian Banks
The Australian Securities & Investments Commission (ASIC), which regulates financial services companies,has the backbone of a chicken wing when it comes to enforcing the rule of law; this is widely recognized in Australia and resulted in a Parliamentary inquiry. If any politician believes that ASIC is a “tough cop on the beat,” they should seriously reconsider their opinion on this issue. Under the pomp and ceremony of the government’s decision to levy the banks to fund ASIC’s prolonged $400 million+ annual fishing vacation is its pursuit of catching tadpoles in the open seas while leaving sharks and barracudas to freely roam. Unfortunately for the regulator, there is a new term Australians will become accustomed to. Control fraud. It refers to fraud committed by the high-ranking employees of a corporation: executives and managers, typically a bank. It’s a crime that ASIC has decided neither to investigate nor prosecute, leaving borrowers on their own with no pennies to spare and nowhere to turn to.
- Hong Kong Is Building The Biggest Gold Vault And Trading Hub In The World
Less than a week after the official launch of the Chinese Yuan-denominated gold fix on the Shanghai Gold Exchange, a historic move which represents “an ambitious step to exert more control over the pricing of the metal and boost its influence in the global bullion market” and which will gradually transform the market of paper gold trading, in the process shifting the global trading hub from west (London) to east (China), overnight Hong Kong's Chinese Gold and Silver Exchange (CGSE) Society revealed plans to do something similar for physical gold when it announced plans for what may end up being the biggest gold vault in the world.
- Corporations Are Defaulting On Their Debts Like It’s 2008 All Over Again
The Dow closed above 18,000 on Monday for the first time since July. Isn’t that great news? I truly wish that it was. If the Dow actually reflected economic reality, I could stop writing about “economic collapse” and start blogging about cats or football. Unfortunately, the stock market and the economy are moving in two completely different directions right now. Even as stock prices soar, big corporations are defaulting on their debts at a level that we have not seen since the last financial crisis. In fact, this wave of debt defaults have become so dramatic that even USA Today is reporting on it…
- 47 Percent Of Americans Cannot Even Come Up With $400 To Cover An Emergency Room Visit
If you had to make a sudden visit to the emergency room, would you have enough money to pay for it without selling something or borrowing the funds from somewhere? Most Americans may not realize this, but this is something that the Federal Reserve has actually been tracking for several years now. And according to the Fed, an astounding 47 percent of all Americans could not come up with $400 to pay for an emergency room visit without borrowing it or selling something. Various surveys that I have talked about in the past have found that more than 60 percent of all Americans are living to paycheck to paycheck, but I didn’t realize that things were quite this bad for about half the country. If you can’t even come up with $400 for an unexpected emergency room visit, then you are just surviving from month to month by the skin of your teeth. Unfortunately, about half of us are currently in that situation.
- Halliburton says it cut 6,000 jobs in first quarter, delays earnings call
Halliburton Co said on Friday that it reduced headcount by more than 6,000 during the first quarter due to the prolonged slump in oil prices. The oilfield services provider said revenue dropped 40.4 percent to $4.2 billion in the quarter ended March 31. The company also said it would now hold its earnings conference call on May 3, instead of April 25, to accommodate the April 30 deadline for its merger with Baker Hughes Inc.
- UC Berkeley Touts $15 Minimum Wage Law, Then Fires Hundreds Of Workers After It Passes
Labor Markets: Hundreds of employees at the University of California at Berkeley are getting schooled in basic economics, as the $15 minimum wage just cost them their jobs. Too bad liberal elites “fighting for $15” don’t get it. A week after California Gov. Jerry Brown signed the state’s $15 minimum wage boost into law, UC Berkeley Chancellor Nicholas Dirks sent a memo to employees announcing that 500 jobs were getting cut.
- Economy In Decline: Apple Reports Massive Revenue Decline As iPhone Sales Plummet Dramatically
Corporate revenues in the United States have been falling for quite some time, but now some of the biggest companies in the entire nation are reporting extremely disappointing results. On Tuesday, Apple shocked the financial world by reporting that revenue for the first quarter had fallen 7.4 billion dollars compared to the same quarter last year. That is an astounding plunge, and it represents the very first year-over-year quarterly sales decline that Apple has experienced since 2003. Analysts were anticipating some sort of drop, but nothing like this. And of course last week we learned that Google and Microsoft also missed revenue and earnings projections for the first quarter of 2016. The economic crisis that began during the second half of 2015 is really starting to take hold, and even our largest tech companies are now feeling the pain.
- Apple shares plunge 7% on first drop in iPhone sales ever
Apple's streak of iPhone-powered sales ended Tuesday when the company reported its first quarterly sales drop in more than a decade. The news sent Apple's (AAPL) stock into a tailspin with shares plunging 6.5% to $97.55 in late trading Wednesday. CEO Tim Cook signaled a saturated smartphone market would keep a lid on sales, although he suggested the company's new entry-level smartphone, the SE, promised to eventually goose sales among Android switchers and in emerging markets such as China and India.
- Bank-hacking malware discovery leaves 11,000 global financial institutions on high alert
Over ten thousand banks and financial institutions are being urged to remain vigilant after the secure Swift (Society for Worldwide Interbank Financial Telecommunication) system – used to send messages between global firms – was reportedly compromised by the sophisticated hacking scheme that targeted the Bangladesh central bank in March 2016. The news comes after security researchers at British defence contractor BAE Systems claimed to have uncovered a stealthy piece of malware used in the Bangladesh attack, which resulted in the loss of $81m (£56m, €71m). Previously, investigators said that cybercriminals broke into the bank's computer networks to steal vital access credentials. However, fresh research claims that Swift was also likely compromised during the hack in order to erase records of malicious financial transfers.
- How California’s minimum wage increase will add more robotic automation in logistics
California’s minimum wage hikes are going to force logistics firms with low-paid warehouse workers to invest more heavily in robotic technology, according to Inland Empire economist John Husing. Husing said most of Southern California’s warehouse employees who earn minimum wage are working part time. But the newly approved pay hikes that will boost the state’s current minimum wage of $10 per hour to $15 per hour by 2022 will still place financial pressures on logistics companies. And they’ll be looking for ways to increase efficiency while reducing costs.
- The Ugly Truth About A $15 Minimum Wage
The Service Employees International Union spent 2015 expanding its campaign for a $15 minimum wage to other industries. In recent nationwide protests, the union focused again on its original target: Fast food companies, and McDonald's MCD +0.19% in particular. I worked for the company for three decades, and served as its USA President for 13 years. I can assure you that a $15 minimum wage won’t spell the end of the brand. However it will mean wiping out thousands of entry-level opportunities for people without many other options.
- Australian dollar drops sharply after soft inflation data
The Australian dollar dropped two-thirds of a US cent on Wednesday after a lower-than-expected inflation reading saw markets calculating an increase in the risk of an interest rate cut. The Aussie fell to US$0.7678 to show a loss of 0.9 per cent on the day. It touched a 10-month peak of US$0.7836 last week.
- US new home sales fall amid weakness in the West
New U.S. single-family home sales unexpectedly fell in March, but the decline was concentrated in the West region, suggesting that the housing market continued to strengthen. The Commerce Department said on Monday new home sales decreased 1.5 percent to a seasonally adjusted annual rate of 511,000 units. February's sales pace was revised up to 519,000 units from the previously reported 512,000 units.
- Another iconic British high-street brand has gone under
“Well, we have been declining for years,” reflected one despondent shop assistant at British Homes Stores (BHS) after learning that the department store had filed for administration on April 25th. The news has come as no great surprise to many of BHS’s staff and still less to the retail analysts who have been following the firm’s slow demise. Unless a buyer is found soon, the company could well be broken up, its 164 stores and stock sold off to repay creditors. That would spell the end of BHS, founded in 1928, as a high-street clothing and home-goods chain, and disaster for its 11,000 employees. Losses on this scale would simply compound the gloom that accompanied the thousands of recent job losses in the British steel industry, with more, probably, to come.
- Dallas Fed manufacturing index falls more than forecast
The Dallas Federal Reserve's manufacturing index contracted for a 16th straight month, falling to -13.9 in April. Economists had forecast that the index rose a bit to -10 from -13.6 in March, according to Bloomberg. Although the headline index slipped, factory activity expanded for a second straight month, and production output grew. New orders, shipments and wages also increased. But labor-market indicators showed that employment was still weak.
- Austin Reed enters administration putting 1,200 jobs at risk
Menswear retailer Austin Reed has entered administration, putting almost 1,200 jobs at risk. A statement from the administrators blamed a “challenging” retail market and cash flow difficulties. The company, which has 100 standalone stores and is stocked in a further 50, has struggled to compete and has seen its sales fall. Austin Reed began in 1900 as a tailor and counted Winston Churchill as a customer. “Austin Reed is a well-regarded and iconic brand,” said Peter Saville, one of the newly appointed administrators. “We are confident that it is an attractive proposition for a range of potential buyers.” The menswear brand is the second UK retailer to enter administration in as many days, following the failure of BHS.
- America's Department Stores May Have to Close Hundreds of Locations
That’s a quarter of their stores. To get back to their pre-recession productivity peak, the nation’s top department stores would have to close hundreds of locations, according to a leading real estate analysis firm. Chains such as Sears, J.C. Penney and Macy’s have been hit by a double whammy: the loss of market share to Amazon and specialty stores, coupled with chronic drops in shopper traffic to malls. Collectively, they would need to close some 800 stores for sales per square foot to go back to 2006 levels, Green Street Advisors wrote in a recent research note. That translates to 25% of all department stores nationwide, whose list also includes Dillard’s, Bon-Ton and Nordstrom.
- “A Total Game Changer” – From Over-Population To De-Population
Strangely, the world is suffering from two seemingly opposite trends…overpopulation and depopulation in concert. The overpopulation is due to the increased longevity of elderly lifespans vs. depopulation of young populations due to collapsing birthrates. The depopulation is among most under 25yr old populations (except Africa) and among many under 45yr old populations. So, the old are living decades longer than a generation ago but their adult children are having far fewer children. The economics of this is a complete game changer and is unlike any time previously in the history of mankind. None of the models ever accounted for a shrinking young population absent income, savings, or job opportunity vs. massive growth in the old with a vast majority reliant on government programs in their generally underfunded retirements (apart from a minority of retirees who are wildly “overfunded”). There are literally hundreds of reasons for the longer lifespans and lower birthrates…but that's for another day. This is simply a look at what is and what is likely to be absent a goal-seeked happy ending.
- Gerald Celente – China Stock Market Crash To Create Full-Blown Global Panic, But Gold Will Shine
Today the top trends forecaster in the world told King World News that China’s stock market crash will crash along with their economy and this will create a full-blown global panic, but gold will shine. Gerald Celente: “George Soros came out earlier in the week warning about the Chinese debt bubble, which is estimated now to be at about $30 trillion, up from $500 billion twenty years ago… “Soros said: “Stimulus can buy you additional time, but it makes the problem that much bigger. That’s where we are.” So when they talk about China’s growth now at 6.7 percent, they leave out the fact that the Chinese banks pumped in some $212 billion in new local currency loans in March. There was also the social financing of another $360 billion in the month of March.
- Goldman Sachs opens to the masses
For almost 150 years Goldman Sachs has been the go-to bank of the rich and powerful. But now the Wall Street titan is opening up to the masses on Main Street by offering online savings accounts for as little as $1 on deposit.Goldman’s shift down market comes as the bank is under pressure to develop new streams of funding. Weak first-quarter results from the big US banks have highlighted the challenges faced by their investment banking units, under pressure from volatile markets and tight regulations. Analysts last week fired a barrage of questions at the US banks, and at Goldman in particular, wondering why they were not doing more to reboot their businesses. Goldman posted the lowest quarterly return on equity – just 6.4 per cent, on an annualised basis – of the past four years.
- “The Damage Could Be Massive” – How Central Banks Trapped The World In Bonds
Yields on $7.8 trillion of government bonds have been driven below zero by worries over global growth, forcing investors looking for income to flood into debt with maturities of as long as 100 years. Worse still, as Bloomberg reports, central banks’ policy is exacerbating matters, as the unprecedented debt purchases to spur their economies have soaked up supply and left would-be buyers with few options. This has driven the ‘duration' – or risk sensitivity – of the bond market to a record high, meaning, as one CIO exclaimed, even with a small increase in rates “the positions are so huge that the damage can be massive… People are complacent.” Decelerating economic growth worldwide, combined with more aggressive stimulus measures by the Bank of Japan and the European Central Bank, pushed average yields on $48 trillion of debt securities in the BofA Merrill Lynch Global Broad Market Index to a record-low 1.29 percent this month, compared with 1.38 percent currently.
- In 1 Out Of Every 5 American Families, Nobody Has A Job
If nobody is working in one out of every five U.S. families, then how in the world can the unemployment rate be close to 5 percent as the Obama administration keeps insisting? The truth, of course, is that the U.S. economy is in far worse condition than we are being told. Last week, I discussed the fact that the Federal Reserve has found that 47 percent of all Americans would not be able to come up with $400 for an unexpected visit to the emergency room without borrowing it or selling something. But Barack Obama and his minions never bring up that number. Nor do they ever bring up the fact that 20 percent of all families in America are completely unemployed.
- Stricken shipping firm sells off its ships… for $1 each
A heavily indebted shipping firm has been forced to sell off its fleet for as little as $1 a piece as the global shipping crisis takes its toll. Goldenport Holdings said on Friday that it would sell six of its eight vessels for a token consideration of $1 each, while it would look for the best price it can get on its two remaining ships. The company will also delist from the London Stock Exchange after its debt pile spiralled “significantly higher” than the value of its fleet. The embattled shipping group has been locked in negotiations with its lenders, including RBS, since January this year in a bid to restructure its loan facilities, but within the last few weeks shareholders have given the go ahead to sell off the loss-making ships.
- Venezuela cuts power for four hours a day to save energy
Venezuela is introducing power cuts of four hours a day from next week to deal with a worsening energy crisis. The cuts will last for 40 days as the country struggles under a severe drought limiting hydroelectric output. It is the latest setback to Venezuela's economy which has been hit by a sharp fall in the price of its main export, oil. The country's main brewer, Polar, also says it will stop production because it has no dollars to buy grain abroad. The company, which produces 80% of the country's beer, says 10,000 workers will be affected by the stoppage.
- This virtually guarantees that your taxes are going through the roof
I was thinking about this the other day when I read an article in the Financial Times about the “disastrous” $3.4 trillion funding hole in the United States public pension system. To be clear, they’re not talking about the Social Security mess. That’s an additional $40+ trillion funding shortfall. The $3.4 trillion gap is referring primarily to city and state pension funds; these pension funds essentially have way too many liabilities and obligation, with too few assets to support them. And the problem gets worse each year. Now, pension funds in the Land of the Free are supposed to be backed up and insured by a federal agency known as the Pension Benefit Guarantee Corporation (PBGC). The PBGC is sort of like the FDIC for pension funds. There’s just one small problem: in addition to all of these city and state pension funds that are under water, the PBGC is INSOLVENT. In its most recent annual report, the PBGC (which ensures the pension funds of more than 40 million Americans), showed net equity of NEGATIVE $76 billion. So not only do these pension funds need a bailout, but the government organization that is supposed to insure the pension funds needs a bailout…
- A Few Troubling Facts
BANKING BUSINESS – Just 4 banks in the United States hold 91% of all derivatives nationwide as of the end of 2015. The face amount of the derivative contracts held by all insured commercial banks and savings associations was $181.0 trillion as of 12/31/15. 76% of the $181.0 trillion were interest rate derivative contracts (source: Office of the Comptroller of the Currency). I am sure glad that the government has spread the risk in derivatives around.
- The Fed Sends a Frightening Letter to JPMorgan and Corporate Media Yawns
Yesterday the Federal Reserve released a 19-page letter that it and the FDIC had issued to Jamie Dimon, the Chairman and CEO of JPMorgan Chase, on April 12 as a result of its failure to present a credible plan for winding itself down if the bank failed. The letter carried frightening passages and large blocks of redacted material in critical areas, instilling in any careful reader a sense of panic about the U.S. financial system.
- “China Is Hoarding Crude At The Fastest Pace On Record”
In the aftermath of China's gargantuan, record new loan injection in Q1, which saw a whopping $1 trillion in new bank and shadow loans created in the first three months of the year, many were wondering where much of this newly created cash was ending up. We now know where most of it went: soaring imports of crude oil. We know this because as the chart below shows, Chinese crude imports via Qingdao port in Shandong province surged to record 9.86 million metric tons last month based on data from General Administration of Customs.
- US banks endure biggest drop in revenues since 2011
The six biggest US banks have suffered their steepest decline in quarterly revenues since 2011, after a profound slump on Wall Street overshadowed a boost from their consumer businesses. JPMorgan Chase, Bank of America, Citigroup, Goldman Sachs, Morgan Stanley and Wells Fargo generated total revenues of $98bn in the first quarter, down 9 per cent from a year earlier — the steepest fall in five years, according to a Financial Times analysis of Bloomberg data. Deep cost cuts failed to counteract the fall in revenue so the six lenders also saw their collective net income plummet 24 per cent year on year to $18bn.
- Why Are The Chinese Stockpiling Silver? Big Price Move Coming?
It looks like something big may happen to the silver market and the Chinese are preparing for it. After China launched it's new Yuan Gold Fix today, the prices of the precious metals surged. At one point today, silver was up 5%. Silver is now trading at the $17 level, a price not seen in over a year. Even though gold has taken center stage today due to Chinese rolling out there new Yuan Gold fix, something quite interesting has been taking place in the silver market over the past six months. While Comex silver inventories have been declining from a peak of 184 million oz (Moz) in July 2015 to 154 Moz today, silver stocks at the Shanghai Futures Exchange have been doing the exact opposite.
- Mario Draghi Explains Why QE ‘Will' Work This Time – ECB Press Conference Live Feed
As expected today's ECB statements were a snoozer, and likely Mario Draghi's official statement will be too – “more of the same.” However, the real fun and games will come as he combats questions on 1) the lack of effectiveness of QE so far (just wait, any day now it will work), and 2) helicopter money (“whatever it takes”). He better offer some hope for moar as EUR is surging into the meeting…
- “The Men Behind The Curtain Are Being Revealed” – CEO Says Real-World Pricing To Return To Gold & Silver Markets
Astute observers of financial markets, especially in the precious metals sector, have long argued that small concentrations of major market players have been manipulating asset prices. Last week those suspicions were confirmed when Deutsche Bank, one of the world’s leading financial institutions, not only admitted to regulators that they have been involved in the racket, but that they were prepared to turn over records implicating many of their cohorts in a global scheme to suppress prices. In his latest interview with SGT Report, straight-shooting Callinex Mines CEO Max Porterfield explains that now that the men behind the curtain are being revealed, asset prices in precious metals, base metals and other commodities will return to more natural pricing mechanisms based on core supply and demand fundamentals.
- The SUNE Finally Sets: SunEdison Files For Bankruptcy
It's over. After months of arguing that everything will be ok as investors flee the troubled company, it is now officially over: *SUNEDISON FILES FOR BANKRUPTCY AFTER ACQUISITION BINGE. As Bloomberg notes, Terraform Power and Global are not part of the filing. The company reported between $10-50 billion in assets and $10-50 billion in debt.
- In “Unprecedented Snub”, Saudi Arabia Demands “Recalibration Of Relationship” With U.S.
As Obama concludes his fourth and supposedly final meeting to Saudi Arabia as U.S. president, the White House was quick to explain where relations with the Saudi Kingdom lay, and as CNN reported this morning, moved to tamp down suggestions that ties with Saudi Arabia are fraying, with administration officials saying that President Barack Obama “really cleared the air” with King Salman at a meeting Wednesday. Which is strange because that is not how the other side saw it: even as White House officials stressed that the leaders made progress, a prominent member of the Saudi royal family told CNN “a recalibration” of the U.S.-Saudi relationship was needed amid regional upheaval, dropping oil prices and ongoing strains between the two longtime allies.
- FEDERAL EUROPE PLOT: EU draws up plans for United States of Europe behind Britain’s back
PLANS for a United States of Europe have been drawn up in a bid to give Brussels bureaucrats an iron grip over the continent, it has been revealed. In a direct challenge to David Cameron’s claims of British sovereignty, Germany, France, Italy and Luxembourg signed a document last September in Rome calling for the creation of a “general union of states”, which has only now come to light. The further integrated union would not only take a central hold over economic and fiscal matters, as well as internal markets, but would also include social and cultural affairs and foreign, security and defence policy of member states.
- George Soros Warns “China Resembles US In 2008”, Hard Landing “Practically Unavoidable”
China's credit growth in March (and $1 trillion surge in total social financing in Q1) is a “warning sign” according to billionaire George Soros, “because it shows how much work is needed to stop the slowdown.” Speaking at an event in new York this evening, Soros commented on “troubling developments” in China, the anti-corruption drive's impact on capital outflows and the real-estate bubble “feeding on itself.” His conclusion, rather ominously, was that despite all the naysayers and fiction-peddlers, China “resembles US in 2007-8,” before credit markets seized up and spurred a global recession. As Bloomberg reports, Billionaire investor George Soros said China’s debt-fueled economy resembles the U.S. in 2007-08, before credit markets seized up and spurred a global recession.
- One of the nation’s largest pension funds could soon cut benefits for retirees
More than a quarter of a million active and retired truckers and their families could soon see their pension benefits severely cut — even though their pension fund is still years away from running out of money. Within the next few weeks, the Treasury Department is expected to announce a crucial decision on whether it will approve reductions to one of the country’s largest multi-employer pension plans. The potential cuts are possible under legislation passed by Congress in 2014 that for the first time allowed financially distressed multi-employer plans to reduce benefits for retirees if it would improve the solvency of the fund. The law weakened federal protections that for more than 40 years shielded one of the last remaining pillars that workers could rely on for financial security in retirement.
- Negative rates put pressure on central banks to take risks
Investors ranging from small German savers to global life insurers have long complained about central banks’ use of negative interest rates. Now, however, another group is feeling the pain from negative rates — central banks themselves. European and Japanese rate cuts are putting pressure on many central banks’ returns — a source of income used to cover running costs and to provide finance ministries with profits on which they have come to rely. A poll of reserve managers from 77 central banks, entrusted with reserves worth $6tn last August, found a clear majority were changing their portfolio management strategy as a result — including taking steps such as buying riskier assets.
- Abu Dhabi Fund Calls 1MDB in Default After Missed Payment
A key Middle Eastern business partner of 1Malaysia Development Bhd. said the Malaysian state development fund has failed to make a $1.1 billion payment as part of a debt-restructuring agreement and that as a result a debt deal between the two entities has been terminated. The announcement, made in a London Stock Exchange filing by the International Petroleum Investment Company, an Abu Dhabi sovereign-wealth fund, marks a deterioration in relations between the two funds and signals fresh complications for 1MDB as it tries to work its way out from under billions of dollars of debt.
- Saudi Arabia takes out $10bn in bank loans
Saudi Arabia is raising $10bn from a consortium of global banks as the kingdom embarks on its first international debt issuance in 25 years to counter dwindling oil revenues and reserves. The landmark five-year loan, a signal of Riyadh's newfound dependence on foreign capital, opens the way for Saudi to launch its first international bond issue. It comes as the sustained slump in crude encourages other Gulf governments, such as Abu Dhabi, Qatar and Oman, to tap international bond markets. The oil-rich kingdom, which last weekend blocked a potential deal among oil producers to freeze output and bolster prices, has burnt through $150bn in financial reserves since late 2014 as its fiscal deficit is set to widen to 19 per cent of gross domestic product this year.
- “Swimming Naked” – Chinese Corporate Bond Market Worst Since 2003
A week ago we highlight the “last bubble standing” was finally bursting, and as China's corporate bond bubble deflates rapidly, it appears investors are catching on to the contagion possibilities this may involve as one analyst warns “the cost has built up in the form of corporate credit risks and bank risks for the whole economy.” As Bloomberg reports, local issuers have canceled 61.9 billion yuan ($9.6 billion) of bond sales in April alone, and Standard & Poor’s is cutting its assessment of Chinese firms at a pace unseen since 2003. Simply put, the unprecedented boom in China’s $3 trillion corporate bond market is starting to unravel. As Bloomberg notes, China’s leaders face a difficult balancing act.
- China Launches Yuan Gold Fix To “Exert More Control Over Price Of Gold”
Overnight a historic event took place when China, the world's top gold consumer, launched a yuan-denominated gold benchmark as had been previewed here previously, in what Reuters dubbed “an ambitious step to exert more control over the pricing of the metal and boost its influence in the global bullion market.” Considering the now officially-confirmed rigging of the gold and silver fix courtesy of last week's Deutsche Bank settlement, this is hardly bad news and may finally lead to some rigging cartel and central bank-free price discovery. Or it may not, because China would enjoy nothing more than continuing to accumulate gold at lower prices.
- Eric Hunsader: The Financial System Is “Absolutely, Positively Rigged”
Eric Hunsader, founder of Nanex, has been at the vanguard of warning about the dangers and the rampant fraud that the rise of high-frequency trading (HFT) algorithims have let loose in today's financial markets. While he usually feels like a lone voice in a world happy to deceive itself, he was shocked to receive a $750,000 whistleblower award from the SEC for his efforts. He's been sadly less shocked to see that since the award was publicly announced, the abuses he reported have only become more extreme and frequent.
- China debt load reaches record high as risk to economy mounts
China’s total debt rose to a record 237 percent of gross domestic product in the first quarter, far above emerging-market counterparts, raising the risk of a financial crisis or a prolonged slowdown in growth, economists warn. Beijing has turned to massive lending to boost economic growth, bringing total net debt to Rmb163 trillion ($25 trillion) at the end of March, including both domestic and foreign borrowing, according to Financial Times calculations. Such levels of debt are much higher as a proportion of national income than in other developing economies, although they are comparable to levels in the U.S. and the eurozone. While the absolute size of China’s debt load is a concern, more worrying is the speed at which it has accumulated — Chinese debt was only 148 percent of GDP at the end of 2007.
- China Retaliates In Trade Wars – Increases Steel Output To Record High
A funny thing happened when US slapped a major tariff on China's steel exports… prices exploded higher. But the almost 50% surge in steel prices since mid-December back to 15-month highs have left traders equally split on what happens next. Will record production levels exaggerate a global glut amid tumbling exports and rising tariffs, or will China's trillion-dollar surge in credit fuel yet more so-called “iron rooster” projects driving domestic demand even higher. For now, it appears the former is more likely as US Trade reps suggested further protectionism looms. Since Dec 23rd 2015 when the US imposed a 256% tariff on Chinese steel imports, composite steel prices have soared almost 50% even as exports have slipped…
- How Systems Break: First They Slow Down
The reality that cannot be spoken is that all the financial systems we believe are permanent are actually on borrowed time. One way we can judge this decline of resilience is to look at how long it takes systems to recover when they are stressed, and to what degree they bounce back to previous levels. Another is to look at the extremes the system reaches without returning to “normal”: for example, interest rates, which rather than normalizing after seven years of suppression are being pushed to negative rates by increasingly desperate central bankers. The key insight here is that financial systems and indeed economies function as natural systems. Central planning/central banker manipulation appears to control the system, but this control masks the reality that the system is increasingly fragile and prone to collapse, not just from internal dynamics but as a direct result of central bank manipulation. The warning signs of fraying resilience are all around us.
- How The American Neoconservatives Destroyed Mankind’s Hopes For Peace
When Ronald Reagan turned his back on the neoconservatives, fired them, and had some of them prosecuted, his administration was free of their evil influence, and President Reagan negotiated the end of the Cold War with Soviet President Gorbachev. The military/security complex, the CIA, and the neocons were very much against ending the Cold War as their budgets, power, and ideology were threatened by the prospect of peace between the two nuclear superpowers. I know about this, because I was part of it. I helped Reagan create the economic base for bringing the threat of a new arms race to a failing Soviet economy in order to pressure the Soviets into agreement to end the Cold War, and I was appointed to a secret presidential committee with subpeona power over the CIA. The secret committee was authorized by President Reagan to evaluate the CIA’s claim that the Soviets would prevail in an arms race. The secret committee concluded that this was the CIA’s way of perpetuting the Cold War and the CIA’s importance. The George H. W. Bush administration and its Secretary of State James Baker kept Reagan’s promises to Gorbachev and achieved the reunification of Germany with promises that NATO would not move one inch to the East.
- Intel to lay off 11% of workforce in big shift from PCs
Intel will lay off 11% of its global workforce, up to 12,000 employees, a painful downsizing aimed at accelerating its shift away from the waning PC market to one more focused on cloud computing and connected devices. In an email to employees, CEO Brian Krzanich said that after the restructuring, “I am confident that we’ll emerge as a more productive company with broader reach and sharper execution.” Intel CFO Stacy Smith said that half the workforce reduction, 6,000 people, will be accomplished by the end of this year.
- Chinese Launch Gold Price Benchmark Further Increasing Influence on World Stage
In another sign that it is becoming a major player in the world gold market, China launched twice-daily price fixing on Tuesday. According to a Bloomberg report, the move is an attempt to establish a regional benchmark that will bolster its influence in the global gold market: “The Shanghai Gold Exchange set the price at 256.92 yuan a gram ($1,233.85 an ounce) at the 10:30 a.m. session after members of the exchange submitted buy and sell orders for metal of 99.99 percent purity. Members include Chinese banks, jewelers, miners and the local units of Standard Chartered Plc and Australia & New Zealand Banking Group Ltd., according to the bourse.”
- Goldman Sachs profit slumps for fourth straight quarter
Goldman Sachs Group Inc's profit slumped for the fourth straight quarter as market volatility hit the company's bond trading and investment banking businesses. Goldman – the last of the big US banks to release first-quarter results – reported a 56.3 per cent fall in net income applicable to common shareholders to $1.2 billion, or $2.68 per share, for the three months ended March 31. That compared to $2.75 billion, or $5.94 per share, a year earlier, when the Wall Street bank recorded its best quarterly profit in five years.
- Why stronger growth may lie ahead after March housing starts swoon
Disregard the dismal housing starts data out Tuesday, many analysts say: a spring rebound is in the cards. Starts plunged nearly 9% in March to a seasonally adjusted annual rate of 1.09 million, the Commerce Department said Tuesday. That badly missed estimates – economists surveyed by MarketWatch had expected a pace of 1.17 million – but many analysts think the data is unreliable and the overall trend in construction is up.
- Dollar Falls to Lowest Level Since June as Housing Starts Slump
The dollar reached a 10-month low Tuesday after a government report showed new-home construction in the U.S. slipped more than projected in March, clouding Federal Reserve plans to boost interest rates. The U.S. currency weakened against most of its major peers in New York as the central bank is scrutinizing data to measure whether the economy is meeting its goals of full employment and a 2 percent inflation rate. The yen had also declined as oil and stocks rallied, damping haven demand.
- UnitedHealth Flees Sinking Obamacare After Posting $1 Billion In Losses
UnitedHealth, America's largest health insurance provider, says it will exit from most obamacare exchanges next year, citing more than $1 billion in losses. CEO Stephen Hemsley says his company “cannot continue to broadly serve the market created by the Affordable Care Act’s coverage expansion due partly to the higher risk that comes with its customers,” as reported by the Associated Press. The announcement came after UnitedHealth revised its projection for 2016 to $650 million in losses, up from a previous estimate of $525 million, after ending 2015 some $475 million in the red. As the AP tells it, UnitedHealth had “second thoughts” almost immediately after announcing it would expand participation from four state exchanges to 34.
- Greenspan Admits The Fed's Plan Was Always To Push Stocks Higher
Former Federal Reserve Chairman Alan Greenspan admitted in an interview with Sara Eisen that quantitative easing did what it was supposed to do, which was to inflate stock prices and drive multiple expansion. He was confused as to why things such as corporate earnings, capital spending, and productivity have declined given how much QE was pumped into the system. The answer to the riddle of course, is that QE was never intended to help fix anything fundamentally, it was as Kyle Bass said recently, simply a mechanism to transfer wealth and make the rich richer.
- These Maps Show How Vast New Infrastructure Is Bringing the World Together
There’s no better way to score points for gravitas in today’s media than claiming that the world is falling apart. Just say on air that, “This is the most dangerous time since the peak of the Cold War,” and witness your star rise. But such talking heads are responding to yesterday’s news and extrapolating the worst scenarios, whereas the underlying trends seem in fact to point in a very different direction. If you want to understand the world of tomorrow, why not just look at a good map? For my new book, Connectography, I researched every single significant cross-border infrastructure project linking countries together on every continent. I worked with the world’s leading cartography labs to literally map out what the future actually — physically — will look like.
- Americans Spend More On Taxes Than On Housing, Food And Clothing
Three weeks ago, a recent report by Pew revealed something stunning: one third – the poorest – of US households can no longer afford even the most basic necessities: food, rent and transportation. The main reason for this: while the median income had fallen by 13% from 2004 levels over the next decade, expenditures had increased by nearly 14%, driven almost entirely by soaring rent costs. “This change in the expenditure-to-income ratio in the years following the financial crisis is a clear indication of why and how households feel financially strained” Pew concluded.
- OK, I Get it, this Junk-Bond Miracle-Rally Is Doomed – And since stocks follow junk bonds…
Junk bonds started to decline in June 2014, and earlier this year threatened to implode. Contagion was spreading from the collapsing energy sector to the brick-and-mortar retail sector, telecom (Sprint), the media (iHeartMedia), and other sectors. It was really ugly out there. As junk bond prices got beaten down, yields soared. The average yield of bonds rated BB, the top end of the junk-bond scale, according to the BofA Merrill Lynch index, went from 4.2% to 7.07% between June 2014 and February 11, 2016. For CCC-and-lower-rated junk bonds – the bottom end of the scale, deemed to be within uncomfortable proximity to default – the yield of the BofA Merrill Lynch index shot up from around 8% to 21.5% between June 2014 and February 12, 2016. But then the Fed heard the screaming from Wall Street about the chaos in the markets, with junk bonds losing their grip and large swaths of stocks careening deeper into a bear market. Incapable of any independence whatsoever, it brushed rate hikes off the table and changed its verbiage. What ensued was a marvelous rally all around, particularly in bonds.
- China Ocean Freight Index Collapses to Record Low – Relentless deterioration meets stunning overcapacity
The amount it costs to ship containers from China to ports around the world, a function of the quantity of goods to be shipped and the supply of vessels to ship them, just dropped to a new historic low. The China Containerized Freight Index (CCFI) tracks contractual and spot-market rates for shipping containers from major ports in China to 14 regions around the world. It reflects the unpolished and ugly reality of the shipping industry in an environment of deteriorating global trade. For the latest reporting week, the index dropped 0.6% to 636.14, its lowest level ever. It has plunged 41% from the already low levels in February last year, and 36% since its inception in 1998 when it was set at 1,000.
- “War, Confiscation Or Redistribution” – An Anecdote On Systemic Reset
Central banks face a different problem altogether. They need to get people who’ve saved time to exchange it for something other than clever inventions that store it. They’ve largely failed. So now, everything that stores time is extremely expensive and offers little or negative return, while the pace of economic activity slows.
- Obama Administration Makes Stunning Admission: “Seed Money For Al Qaeda Came From Saudi Arabia”
Following a dramatic deterioration in official diplomatic channels between the US and Saudi Arabia when over the weekend the Saudis threatened the U.S. with dumping billions in Treasuries if Congress were to pass a bill probing into their alleged support of Sept 11 terrorists in the aftermath of last weekend's 60 Minutes report on the classified “28 pages” from the Septemeber 11 commission, moments ago the Obama administration made a stunning admission, when for the first time it revealed on the record that the Saudis were the original source of funding for Al Qaeda. As Politico reports, Obama's deputy national security adviser, Ben Rhodes, while speaking to David Axelrod in Monday's edition of “The Axe Files” podcast said that the government of Saudi Arabia had paid “insufficient attention” to money that was being funneled into terror groups and fueled the rise of Al Qaeda when he was asked about the validity of the accusation that the Saudi government was complicit in sponsoring terrorism.
- Sears closing 10 stores and 68 Kmarts
The company made the announcement Thursday, saying the move is an effort to accelerate its plan to close its unprofitable stores and return to profitability. Shares rose more than 6% after hours on the news. Sears said in a statement that employees affected by these closings will get severance and the chance to apply for open positions at local Kmart and Sears stores. The company didn't say how many jobs will be affected.
- Mobs of Angry Investors Fight Market Rigging, Maul Deutsche Bank in Class-Action Lawsuit, other Banks Next
Prior to last week, Deutsche Bank made headlines for a string of huge losses and massive exposure to risky derivatives. The last time the firm’s shares traded at prices this low, the world was in the midst of 2008’s financial apocalypse. Deutsche Bank didn’t need more bad news, but a group of investors who brought suit against the massive German bank for cheating them by rigging the London “fix” price for gold and silver certainly must be smiling. Last week, the bank offered to settle their class action suit for an undisclosed amount.
- This Also Happened the Last 2 Times before Stocks Crashed
Something that happened just before the prior two market crashes, and the recessions that accompanied them, including the Great Recession, is happening again: the boom in financial engineering is starting to backfire against the companies doing it. Their credit ratings are getting slashed, and their borrowing costs are therefore rising, even while they need newly borrowed money to buy back even more shares to keep the charade going. Until the music stops. Downgrades ascribed to “shareholder compensation,” as Moody’s calls share buybacks and dividends, have been soaring, according to John Lonski, Chief Economist at Moody’s Capital Markets Research. The moving 12-month sum of Moody’s credit rating downgrades of US companies, jumped from 32 in March 2015, to 48 in December 2015, and to 61 in March 2016, nearly doubling within a year.
- U.S. Economy 2016: 3 Classic Recession Signals Are Flashing Red
Those that were hoping for an “economic renaissance” in the United States got some more bad news this week. It turns out that the U.S. economy is in significantly worse shape than the experts were projecting. Retail sales unexpectedly declined in March, total business sales have fallen again, and the inventory to sales ratio has hit the highest level since the last financial crisis. When you add these three classic recession signals to the 19 troubling numbers about the U.S. economy that I wrote about last week, it paints a very disturbing picture. Virtually all of the signs that we would expect to pop up during the early chapters of a major economic crisis have now appeared, and yet most Americans still appear to be clueless about what is happening.
- PBOC calls for broadening use of IMF’s basket of reserve currencies
Chinese central bank governor Zhou Xiaochuan on Saturday called for broadening the use of the International Monetary Fund (IMF)’s basket of reserve currencies to advance the reform of the International Monetary System (IMS). “The IMS has inherent deficiencies and faces new challenges from globalization, financial innovation, and volatility in capital flows,” Zhou said in a statement for the meeting of the International Monetary and Financial Committee (IMFC), the IMF’s policy setting committee, on the sidelines of the spring meetings of the IMF and the World Bank. The IMF announced it will add the Chinese yuan to its basket of reserve currencies last year. The addition will take effect Oct. 1, 2016, with the yuan having a 10.92 per cent weighting in the basket, the IMF said. “The SDR has the potential to resolve the existing deficiencies in the IMS,” Zhou said in Washington, referring to the Special Drawing Right, an international reserve asset created by the IMF in 1969.
- Precious Metals Puke – ‘Someone' Dumps $2 Billion Of Gold Into Futures Markets
What goes up… must not be allowed to… Someone just decided this was the perfect time to dump over $2 billion worth of notional paper gold onto the markets… Over 16,000 gold contracts (and 7,500 silver) were dumped in that 5/10 minutes segment. It appears Draghi did not like the impression of his impotence that precious metals were suggesting. It appears the Gold/Silver ratio at 72x was a big buying opportunity?
- Collapse Strategist: “We’re In The Terminal Phase… Economic Pain Like We’ve Never Seen Before”
At this point, despite major highs in U.S. stock markets and reassurances from no less than President of the United States himself that the economy is sound, one only need to look around to understand that we are on the cusp of what researcher and collapse strategist Michael Snyder of The Economic Collapse Blog calls the “early chapters of a total meltdown.” In his latest interview with Future Money Trends Snyder notes that the fundamental economic problems we face can be seen across the globe. The United States, Europe, Asia, and South America are all crashing and no one will be immune to what comes next.
- Empire of Empty Dreams: “Chances of Securing a Better Life Are Declining”
The next few years will strip away the illusions of “growth” and reveal which dominates our society and economy: privilege or social mobility. Among the many lessons of empires is one shared by virtually every empire:once the privileged few limit the rise of those from humble origins (i.e. social mobility), the empire is doomed to rising instability and collapse. The greater the concentration of wealth and power, the lower the social mobility; the lower the social mobility, the greater the odds that the system will collapse when faced with a crisis that it would have easily handled in more egalitarian times.
- The Ruble Is the Most Gold-Backed Currency in the World
The economic situation is increasingly chaotic. The world economy is out of control. We target inflation, and it doubles. Talk about transitioning to a new direction results in a further degradation of the economy. ‘De-offshorization’ got us more foreign equity in our corporations and industries. Import substitution resulted in further price rises. This growing crisis is due to two things: our increasing dependence on the America-centric financial system, and American aggression, which we must resist. There’s clearly a dissonance between our financial and economic dependence on a foreign system and the need to pursue a sovereign foreign policy in order to survive.
- Opinion: Why this market rally looks like a classic investor trap
The U.S. stock market’s rally from its dismal start to the year appears to be a classic investor trap. Many investors have the tendency to jump in a bit too early on first signs of improvement in economic indicators or positive news. But the markets are primed to trap the solvent investors and fool the most rational among us. Nowadays, in a world of high-frequency trading and speculative derivatives, it is hard for even the most experienced investors to stay rational, let alone be clear on whether to buy or hold or sell. This is why so many experts on Wall Street are giving so much conflicting advice. Current forecasting science and predictive models are not yet developed enough to time the market for the next month or quarter.
- China Embracing Gold in Advance of Post Dollar Era
To challenge the US dollar hegemony and increase its power in the global realm of finance, China has a potent gold strategy. Whilst the State Council is preparing itself for the inevitable decay of the current international monetary system, it has firmly embraced gold in its economy. With a staggering pace, the government has developed the Chinese domestic gold market, stimulated private gold accumulation and increased its official gold reserves in order to ensure financial stability and support the internationalisation of the renminbi.
- When Money Fails
Money seldom fails, but occasionally, it does. It failed in Germany and Austria 1921-23. It failed in Hungary after World War II. It failed in Zimbabwe in 2008-9, when the rest of the world was in a recession.
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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.
Latest News From April 15, 2016 to April 21, 2016:
- ALERT: Legend Just Warned That All Hell Is About To Break Loose
Egon von Greyerz: “The global economy turned down in earnest in 2006, but with a massive worldwide printing and lending program, the world has had a temporary stay of execution. But the effect of this fabricated money has now come to an end…
- Great Dangers Now Threaten To Destroy The Global Financial System
John Embry: “Eric, last week was interesting when you tied together a number of developments that occurred. Deutsche Bank publicly acknowledged its manipulation of the silver fix. But this is just the tip of the iceberg considering the true scope of the manipulation in silver being conducted primarily by JP Morgan…
- Nine Meals from Anarchy
In 1906, Alfred Henry Lewis stated, “There are only nine meals between mankind and anarchy.” Since then, his observation has been echoed by people as disparate as Robert Heinlein and Leon Trotsky. The key here is that, unlike all other commodities, food is the one essential that cannot be postponed. If there were a shortage of, say, shoes, we could make do for months or even years. A shortage of gasoline would be worse, but we could survive it, through mass transport or even walking, if necessary.
- Chart: US Produces More Energy Than Ever Before
America is producing more energy than ever before thanks to a boom in oil and natural gas, according to a Monday report by the Energy Information Administration (EIA). American oil production increased by 8 percent and natural gas increased by 5 percent in 2015, according to the EIA report. The boom in oil and gas helped offset the enormous 10 percent decline in U.S. in coal production. The increase had little to due with wind or solar power, as American production of green energy remained flat. Overall, America has produced more energy 6 years in a row.
- World Economy Is Terminally Broken After 50 Years Of Misgovernment
In a world of manipulated economic figures and markets, it is not always easy to maintain your sanity. The world economy is now based on fantasy and hope and has very little to do with reality. But the problem is that virtually nobody understands this. Whether it is a bank analyst or a Nobel Prize winner in economics, they are all spreading the same false message. The Western press and news media are just reporting what governments and the elite are telling them. There is no analysis and no attempt to find the truth in anything. This is why we are now in an era of indoctrination and total brainwashing of the masses. Most people are totally apathetic and incapable of realising that they are being led down a path, both morally and economically, that will make life on earth a lot more difficult not just for the present generation but probably for several generations to come.
- Last time the Saudis opened the spigots the stock market crashed and Soviet Union collapsed
If there’s a certain retro feeling in the air, it’s not just because everyone’s talking about a Donald Trump presidential run and a song called “Me Myself & I” is in the charts. Oil markets are also starting to have a distinctly 1986 feel to them. The collapse of the weekend’s oil talks in Doha heralds a phase where open spigots will drive prices lower once again. Brent crude fell as much as 7 per cent when it opened after the meeting broke up in disarray. Saudi Arabia and other Gulf producers refused to cut production unless they could get a matching agreement from an Iran that hadn’t even bothered to attend the talks.
- America 1956 vs. America 2016
Is America a better place today than it was back in 1956? Of course many Americans living right now couldn’t even imagine a world without cell phones, Facebook or cable television, but was life really so bad back then? 60 years ago, families would actually spend time on their front porches and people would actually have dinner with their neighbors. 60 years ago, cars were still cars, football was still football and it still meant something to be an American. In our country today, it is considered odd to greet someone as they are walking down the street, and if someone tries to be helpful it is usually because they want something from you. But things were very different in the middle of the last century. Men aspired to be gentlemen and women aspired to be ladies, and nobody had ever heard of “bling”, “sexting” or “twerking”. Of course life was far from perfect, but people actually had standards and they tried to live up to them.
- Jubilee Jolt: In Historic Move G20 Wipes Out Tax Haven Anonymity – ‘Market Integrity At Stake'
Breaking news from Agency France Presse (AFP): The G20 has just “embraced a crackdown” on tax haven-corporations and shell companies that will savagely and decisively rip away the last remaining vestiges of financial privacy here on Earth. This is a huge change, almost incomprehensible. In a single month, from start to finish, privacy assurances that have existed for centuries are being stripped away. Less than two weeks ago, the Panama Papers (PP) were strategically leaked and we reported, “Financial Elite’s Attack on Worldwide Privacy“. We said it was almost surely a planned leak by financial elites to bring in more worldwide capital controls.
- Is Deutsche Bank’s Gold Manipulation The Main Scam Or Just A Side-Show?
For years now, the easiest way to finesse a debate over whether precious metals markets are manipulated has been to say, “well, if they’re not manipulated they’re the only market that isn’t.” That was unsatisfying, though, because as the big banks got caught scamming their customers on interest rates, mortgage bonds, forex and commodities trades, those markets (presumably) began to operate more-or-less honestly. Gold and silver, meanwhile, kept right on acting strangely, for instance plunging in the middle of the night on no news but massive futures volume, to the detriment of honest investors and traders who naively bet their capital on fundamentals. The (already huge) amount of money thus stolen from gold bugs kept rising.
- Institutionalized Lying—— Why Central Bankers Never See Bubbles
Every day there is more confirmation that the casino is an exceedingly dangerous place and that exposure to the stock, bond and related markets is to be avoided at all hazards. In essence the whole shebang is based on institutionalized lying, meaning that prouncements of central bankers, Wall Street brokers and big company executives are a tissue of misdirection, obfuscation and outright deceit. And they are self-reinforcing, too. As we indicated in our post over the weekend (The Keynesian House Of Denial), it’s all definitional by the lights of today’s central bankers and their Wall Street camp followers. Since the former are busy “accommodating”, massaging and “stimulating” economies all around the world—- bad things like recessions and stock market busts just can’t happen.
- How to Profit as the New Gold Standard Takes Hold
Has Doug Casey convinced the government to bring back the gold standard? Over the past two weeks, Doug has been working on a special project. He’s spent a lot of time with high-ranking government officials, trying to persuade them to back the currency with gold. Believe it or not, the government is taking Doug’s ideas seriously… Unfortunately, we’re not talking about the U.S. government. As you may know, America gave up on the gold standard in 1971. Prior to that, folks could exchange their U.S. dollars for a fixed amount of gold. This kept the government honest and prevented it from printing too much money. Today, U.S. dollars are merely paper, backed by nothing. Or, as Doug says, the dollar is an “I.O.U. nothing.”
- The oil deal that never came to be
ANALYSIS: It was supposed to be the easiest deal ever reached among key oil market players, a mere formality. Eighteen countries were gathering in the Qatari capital of Doha to rubber-stamp the first joint agreement between major OPEC and non-OPEC nations in 15 years, tackling a huge global glut after flooding the market for two years. The text was agreed and the timeframe was clear. Oil prices were rising. Traders were calling the event boring. Then, the first clouds began to appear.
- We might be repeating the mistakes of the 1999 bubble and crash
The stock market may be in danger of repeating some very bad history. The current market environment is looking a whole lot like the 1998-1999 stock market bubble, and the crash of 2000 may not be far behind, said Michael Hartnett of Bank of America Merrill Lynch. “It could simply be 1998/99 all over again. After all, a ‘speculative blow-off' in asset prices is one logical conclusion to a world dominated by central bank liquidity, technological disruption & wealth inequality,” he wrote in a note Sunday.
- Wall Street banks are getting hammered by the markets — but not the businesses you'd expect
Volatile financial markets took a bite out of earnings at big U.S. banks during the first quarter – not just in trading but wealth management, too. On Monday, Morgan Stanley joined Wells Fargo & Co and Bank of America Corp in reporting weaker wealth management profits, citing less client activity and “an unfavorable market environment” – not to mention fewer trading days than the year-ago period.
- Why All Central Planning Is Doomed to Fail
We’re still thinking about how so many smart people came to believe things that aren’t true. Krugman, Stiglitz, Friedman, Summers, Bernanke, Yellen – all seem to have a simpleton’s view of how the world works. A bunch of famous people with a simpleton view of how the world works…who not only seriously think the economy can and should be “planned”, but arrogantly believe they are the ones who should do it. It’s a bit like the crazy guy who doesn’t know he’s crazy.
- Nomi Prins Reveals A Shocking Private Conversation About The Fed’s Manipulation Of The World
Everything that is happening in the world right now is very connected and predicated on the zero interest rate policy that emanates from the Federal Reserve. Even though we are in the 8th year of that policy and we talk about what Janet Yellen is going to say and do, what’s actually happening is that speculative money, cheap money, continues to flow in and out of places legally and illegally. As an example, the Panama Papers story broke while I was in Brazil. But legally or illegally, the money finds places to be involved for a short-term speculative bet and then it leaves much more quickly.
- What Puerto Rico can teach rural California about minimum wage increases
They’re looking for work in Colusa County, California, but it’s hard to find. It’s also hard to believe there could be a small corner of America – where the national unemployment rate on the national level is down to 5 percent – where more than one-in-five working age adults are unemployed. But that’s the reality in the county of 21,000 people in the Central Valley, a part of the state where nearly every county has unemployment rates two, three or, in Colusa County, four times the national average. No jobs and no work means other problems soon follow.
- As Minimum Wage Marches Toward $15, Small Businesses Adapt
In the aftermath of California and New York becoming the first states to raise the statewide minimum wage to $15, some small businesses with hourly workers are rethinking how they can absorb the increase. The owners of Dog Haus, a chain of about 20 franchise restaurants in the West, may have customers pick up their meals at the counters in two company-owned stores instead of using servers to carry food to tables in the two company-owned stores. The Pasadena, California-based company is also looking at hiring more experienced workers who can shoulder more responsibilities than entry-level staffers who earn minimum wage. For example, a cashier might now take on some administrative tasks. That way, Dog Haus could hire fewer people.
- California minimum wage hike hits L.A. apparel industry: ‘The exodus has begun'
Los Angeles was once the epicenter of apparel manufacturing, attracting buyers from across the world to its clothing factories, sample rooms and design studios. But over the years, cheap overseas labor lured many apparel makers to outsource to foreign competitors in far-flung places such as China and Vietnam. Now, Los Angeles firms are facing another big hurdle — California's minimum wage hitting $15 an hour by 2022 — which could spur more garment makers to exit the state. Last week American Apparel, the biggest clothing maker in Los Angeles, said it might outsource the making of some garments to another manufacturer in the U.S., and wiped out about 500 local jobs. The company still employs about 4,000 workers in Southern California.
- Saudi Arabia Warns of Economic Fallout if Congress Passes 9/11 Bill
Saudi Arabia has told the Obama administration and members of Congress that it will sell off hundreds of billions of dollars’ worth of American assets held by the kingdom if Congress passes a bill that would allow the Saudi government to be held responsible in American courts for any role in the Sept. 11, 2001, attacks. The Obama administration has lobbied Congress to block the bill’s passage, according to administration officials and congressional aides from both parties, and the Saudi threats have been the subject of intense discussions in recent weeks between lawmakers and officials from the State Department and the Pentagon. The officials have warned senators of diplomatic and economic fallout from the legislation.
- Connecticut Chooses to Cut Jobs Over Increased Taxes in Budget Crisis
Like some other states, Connecticut is facing a budget shortfall. And in part because of its shrinking finance sector and dependence on personal income taxes for revenue, state lawmakers, a majority of whom are Democrats, are finding themselves in a fiscal pickle. Forced to rely heavily on its highest earners to fill the state’s coffers, and fearful of alienating more of the highest-earning residents after a tax increase last year, legislators are not entertaining additional taxes on the rich.
- What Did Fed Chairman Yellen Tell Obama?
This week, President Obama and Vice President Biden held a hastily arranged secret meeting with Federal Reserve Chairman Janet Yellen. According to the one paragraph statement released by the White House following the meeting, Yellen, Obama, and Biden simply “exchanged notes” about the economy and the progress of financial reform. Because the meeting was held behind closed doors, the American people have no way of knowing what else the three might have discussed. Yellen’s secret meeting at the White House followed an emergency secret Federal Reserve Board meeting. The Fed then held another secret meeting to discuss bank reform. These secret meetings come on the heels of the Federal Reserve Bank of Atlanta’s estimate that first quarter GDP growth was .01 percent, dangerously close to the official definition of recession.
- OPEC's oil crisis talks stumble as Iran refuses to freeze output
Oil prices could fall again as big exporting nations struggled to agree a plan to freeze production, despite holding crisis talks over the weekend to search for a way to push up prices. Prices have fallen precipitously over the past two years as a fall in demand combined with a big rise in production from sources such as shale flooded the market with oil. Ministers from OPEC countries including Saudi Arabia, Qatar and Venezuela plus other major oil producers such as Russia met in Doha to discuss a plan to limit production and protect their profits. But Iran decided to stay away from the meeting as it does not want to cap its own production, in a move which could limit the effectiveness of any plan struck by the other nations – and which has raised tensions with Saudi Arabia.
- HSBC: Helicopter money is already here and no-one has noticed
Central banks have a problem. Their usual methods of stimulating the economy, like ultra-low interest rates, don't seem to be working as well as they used to. Inflation and growth are stuck at low levels in the Eurozone after years of near-zero interest rates. It's time to get a bit more radical and central banks have talked of using so-called helicopter money – which involves creating new money and giving it directly to people to spend on whatever they want. The American economist Milton Friedman first proposed the idea of helicopter money in 1969 i n a paper called The Optimum Quantity of Money.
- Coal giant Peabody Energy files for Chapter 11 bankruptcy
The nation's largest coal company, Peabody Energy (BTU), filed for Chapter 11 bankruptcy protection Wednesday as the coal industry grapples with the fallout of low natural gas prices, costly regulations and China's economic slowdown. St. Louis-based Peabody, which traces its corporate roots to 1883, had warned in March that “sustained depressed” coal prices had placed it on the edge of insolvency.
- 101 Years Of The Income Tax (In 1 Depressing Table)
More is always better, right? As we noted previously, if you hate taxes, you are far from alone. According to NBC News, here are some of the things that Americans would rather do than pay taxes… Six percent would rather sell a kidney, eight percent would rather name their first-born “Taxes,” and 11 percent would rather spend three years cleaning the bathrooms at noro-torious Chipotle. Of course our system was never intended to be like this anyway. Our founders hated taxes, and they fought a very bitter war to escape the yoke of oppressive taxation. During his very first inaugural address, Thomas Jefferson clearly expressed what he thought about taxes… “A wise and frugal government… shall restrain men from injuring one another, shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned. This is the sum of good government.” Why couldn’t we have listened to him?
- U.S. Industrial Production Fell in March
U.S. industrial output slowed in March, a sign that weakness persists for manufacturers and the energy industry. Industrial production—a broad gauge of output across U.S. factories, mines and power plants—decreased a seasonally adjusted 0.6% in March from the prior month, the Federal Reserve said Friday. Output has fallen for six of the past seven months. From a year earlier, industrial production decreased 2% in March. Manufacturing output, the largest component of the index, fell 0.3% in March.
- US Industrial Production Plunges As March Auto Manufacturing Tumbles Most Since 2008
The US economy has never – ever – seen Industrial Production drop YoY for seven months in a row without being in a recession. Down 2.0% YoY in March, the weakest since December and down 0.6% MoM (weakest since Feb 2015) the decline in factory output is driven a 1.6% plunge in vehicle production (2.8% collapse in motor vehicles specifcally) in March. This 1.76% drop is the worst for a March since 2008.
- U.S. Consumer Sentiment Fell for Fourth Straight Month
Consumer confidence fell for the fourth straight month in April amid growing concerns about weaker economic growth. The University of Michigan preliminary consumer sentiment index for April, released Friday, registered at 89.7, compared with a final March reading of 91.0. April’s reading was the lowest since September 2015. Economists surveyed by The Wall Street Journal had expected the April index would rise to 92.0.
- “It's Getting Worse” – Economic Outlook Plummets In Gallup Poll, Rising Gas Prices Blamed
According to the latest Weekly Economic Confidence poll released by Gallup, Americans' confidence in the US economy is getting worse. The poll asks people to rate the economy as of today, and whether or not the economy as a whole is getting better or worse. It turns out that ordinary people are not as excited about the US economy as those who are cheerleading minimum wage job creation and market levels being close to all time highs, and certainly not as excited as that group of people called each month by either the Conference Board or UMich, the two far more closely tracked confidence indicators. The Economic Confidence Index for the week ending April 10th came in at -14. Down from the prior week, and hitting a low not seen since the first week of November last year.
- Americans Not Buying what the Fed Is Selling
Here’s some free advice for the Federal Reserve. It’s OK. You can tell them. They already know. As Peter Schiff pointed out on CNBC yesterday, the Fed doesn’t really want to raise interest rates. We just witnessed what even a small nudge upward did to the stock markets after years of low rates and monetary policy artificially pumped them up. But on the other hand, the Fed doesn’t want to admit the US economy really isn’t in great shape.
- Baker Hughes US Oil Rig Count Drops 3 More to 351
Baker Hughes reported the active oil rig count fell by 3 more rigs to 351 for the week ending April 15. The total number of active oil and gas rigs declined by 3 to 440. This is the seventeenth week in a row the combined oil and gas rig count has declined, moving further into record low territory. It is the fourth week in a row for oil-rigs only, pushing the count to the lowest levels since the fourth quarter of 2009. For the week ending April 8 the energy company said 7 combined oil and gas rigs went offline, bringing the total number of oil and gas rigs down to 443. The oil-rigs only count fell by 8 to 354.
- Nomi Prins Just Issued A Dire Warning About What Is Going To Trigger Total Global Collapse
Nomi Prins: “We (already) have inflation. Will the bond market deflate? It absolutely will deflate when these policies run out of steam or get taken off the table. And that is why central banks keep coordinating and are so afraid to go back on what they started in 2008. If any of these policies were to have been working for real economic growth, they wouldn’t need to have gone on for this many years, which means they actually have only existed in order to help inflate assets in the financial system and to create liquidity that would have otherwise not been there for these assets.
- 10 Years of Fracking: Its Impact on Our Water, Land and Climate
In a single year, fracking wells across the country released at least 5.3 billion pounds of the potent greenhouse gas methane, as much global warming pollution as 22 coal-fired power plants. The statistic is one of many in a new study by Environment America Research & Policy Center that quantifies the environmental harm caused by more 137,000 fracking wells permitted since 2005.
- New UN report finds almost no industry profitable if environmental costs were included
If you haven’t been paying attention, I don’t blame you for at first not believing this. After all, companies go to great lengths to greenwash their image and present themselves as progressive and environmentally responsible, even while they turn your land to deserts and your oceans into dead zones. Unfortunately, as Mark Twain once famously said: “It’s easier to fool people than to convince them that they have been fooled.”
- FTSE falters on China and UK construction, with housebuilders sliding
Leading shares are slipping lower after China’s economy saw a slowdown in the first quarter, albeit in line with expectations. But the biggest fallers in the UK index were closer to home. Following Persimmon’s cautious trading update on Thursday, housebuilders are leading the way down, with Berkeley Group 106p lower at £28.70, Taylor Wimpey down 4.2p at 172.8p and Persimmon itself falling 21p to £18.79. The falls come despite UK contruction data showing housebuilding recording quarterly growth of 6.8%, the biggest rise since March 2014. Also heading lower is InterContinental Hotels, down 52p to £28.76 as JP Morgan moved from neutral to underweight on worries about its pipeline of rooms.
- Three Historical Patterns Point to Passover 2016 As Major Turning Point
The Jewish feast of Passover is known as a time of major turning points in history. Three historical patterns are now indicating another major turning point is coming during Passover 2016. King Solomon discovered there is an appointed time, a set time for everything and for every event under heaven” (Ecclesiastes 3:1). Nothing just happens randomly. Everything happens at a set time following patterns, seasons of time, which are as predictable as sunrise and sunset.
- Deutsche Bank Admits It Rigged Gold Prices, Agrees To Expose Other Manipulators
Well, that didn't take long. Earlier today when we reported the stunning news that DB has decided to “turn” against the precious metals manipulation cartel by first settling a long-running silver price fixing lawsuit which in addition to “valuable monetary consideration” said it would expose the other banks' rigging having also “agreed to provide cooperation to plaintiffs, including the production of instant messages, and other electronic communications, as part of the settlement” we said “since this is just one of many lawsuits filed over the past two years in Manhattan federal court in which investors accused banks of conspiring to rig rates or prices in financial and commodities markets, we expect that now that DB has “turned” that much more curious information about precious metals rigging will emerge, and will confirm what the “bugs” had said all along: that the precious metals market has been rigged all along.”
- Why is this country so poor?
“What is it about this place that makes it so poor?” It was a simple question posed to me by a friend as we walked the streets of Managua, Nicaragua earlier this week. Nicaragua is a lovely place. But it’s poor. Very poor. It’s the least developed economy in Central America… and that’s saying something. But it’s worth considering: what makes an economy like Nicaragua so poor? And what makes others so wealthy? Having traveled to nearly 120 countries, I’ve seen the full range of rich and poor nations. And I’ll tell you, it has nothing to do with natural resources or anything like that. I often have meetings with senior ministers and government officials around the world who tell me all about the amazing resources they have in their country. “We have so much forestry land,” or, “Our bauxite reserves are among the highest in the world…” Irrelevant. Venezuela has incredible oil reserves. Yet they’ve been living in poverty for years.
- Deutsche Bank Confirms Silver Market Manipulation In Legal Settlement, Agrees To Expose Other Banks
Back in July of 2014, we reported that in an attempt to obtain if not compensation, then at least confirmation of bank manipulation in the precious metals industry, a group of silver bullion banks including Deutsche Bank, Bank of Nova Scotia and HSBC (later UBS was also added to the defendants) were accused of manipulating prices in the multi-billion dollar market. The lawsuit, which was originally filed in a New York district court by veteran litigator J. Scott Nicholson, a resident of Washington DC, alleged that the banks, which oversee the century-old silver fix manipulated the physical and COMEX futures market since January 2007. The lawsuit subsequently received class-action status. It was the first case to target the silver fix. Many expected that this case would never go anywhere and that the defendant banks would stonewall indefinitely: after all their legal budgets were far greater than the plaintiffs.
- Gold resurgence: who's buying gold and why
After four years of sharp falls, a sudden revival has been taking place in the gold market. In the first three months of 2016 the price of the yellow metal soared by 20pc – its best quarterly performance since the financial crisis erupted in the final three months of 2008. The gold price, currently around $1,260 an ounce, is well below its record peak of almost $1,900 achieved in July 2011, at the height of the European sovereign debt crisis. For investors who have missed out on the rally so far, the big question is: has gold turned a corner, suggesting that it will continue to rise, or will it crash back down to earth? As gold pays no income, it is difficult to value. Therefore, unlike an individual share or stock market index, it is less clear whether the metal is cheap or expensive at its current price.
- Hate Taxes? You Certainly Are Not Alone…
At this time of the year, millions of Americans are rushing to file their taxes at the last minute, and we are once again reminded just how nightmarish our system of taxation has become. I studied tax law when I was in law school, and it is one of the most mind-numbing areas of study that you could possibly imagine. At this point, the U.S. tax code is somewhere around 4 million words long, which is more than four times longer than all of William Shakespeare’s works put together. And even if you could somehow read the entire tax code, it is constantly changing, and so those that prepare taxes for a living are constantly relearning the rules. It has been said that Americans spend more than 6 billion hours preparing their taxes each year, and Politifact has rated this claim as true. We have a system that is as ridiculous as it is absurd, and the truth is that we don’t even need it. In fact, the greatest period of economic growth in all of U.S. history was when there was no income tax at all. Why anyone would want to perpetuate this tortuous system is beyond me, and yet we keep sending politicians to Washington D.C. that just keep making this system even more complicated and even more burdensome.
- IMF warns of fresh financial crisis
The International Monetary Fund has highlighted risks of a new financial crisis, warning that global output could be cut by 4% over the next five years by a repeat of the market mayhem witnessed during the 2008-9 recession. The IMF used its half-yearly global financial stability report to call for urgent action on the problems of banks in the eurozone, a third of which it said faced “significant challenges” to be sustainably profitable. “In the euro area, market pressures also highlighted long-standing legacy issues, indicating that a more complete solution to European banks’ problems cannot be further postponed,” the Fund said. It said there needed to be a comprehensive strategy to deal with €900bn (£715bn) of non-performing loans (NPLs) on the books of eurozone banks, adding that banks also needed to be closed in order to deal with excess capacity.
- UK government's fracking definition ‘could allow drilling without safeguards'
The UK government has been accused of including a large loophole in its legal definition of fracking which could enable companies to bypass safety regulations, according to a leading geologist. In rules that came into force on 6 April, fracking is defined by the amount of high-pressure fluid used to fracture shale rocks and release gas or oil. However, the only well fracked in the UK so far, which caused small earthquakes near Blackpool in 2011, would not qualify as fracking under the definition. Furthermore, according to Prof Stuart Haszeldine at the University of Edinburgh, analysis of more than 17,000 gas wells fracked in the US from 2000-10 shows 43% would not be defined as fracking under UK rules. More than 4,500 US wells were fracked to release oil in that time but 89% would not be covered by the UK definition.
- 100,000 Italians sign petition for eurozone exit referendum
Italy’s Five Star Movement (M5S) party has collected more than 100,000 signatures on a petition calling for a law that would allow a referendum on withdrawal from the eurozone. M5S MP Carlo Sibila says he expects a referendum to take place at the start of next year. Though the petition has already surpassed the required amount of signatures needed for the initiative, Sibila said that he hopes it will gather another 50,000 by early May in order to highlight the issue.
- Austria Just Announced A 54% Haircut Of Senior Creditors In First “Bail In” Under New European Rules
Just over a year ago, a black swan landed in the middle of Europe, when in what was then dubbed a “Spectacular Development” In Austria, the “bad bank” of failed Hypo Alpe Adria – the Heta Asset Resolution AG – itself went from good to bad, with its creditors forced into an involuntary “bail-in” following the “discovery” of a $8.5 billion capital hole in its balance sheet primarily related to ongoing deterioration in central and eastern European economies. Austria had previously nationalized Heta’s predecessor Hypo Alpe-Adria-Bank International six years ago after it nearly collapsed under the bad loans it ran up when it grew rapidly in the former Yugoslavia. Having burnt through €5.5 euros of taxpayers’ money to prop up Hypo Alpe, Finance Minister Hans Joerg Schelling ended support in March 2015, triggering the FMA’s takeover. This was the first official proposed “Bail-In” of creditors, one that took place before similar ad hoc balance sheet restructuring would take place in Greece and Portugal in the coming months. Or rather, it wasn't a fully executed “Bail-In” for the reason that creditors fought it tooth and nail.
- IMF says Britain leaving the EU is a significant risk
A British vote to leave the EU risks causing severe economic and political damage to Europe that will spill over into an already febrile world economy, the International Monetary Fund has warned. Cutting its forecasts for global growth and for the UK and other advanced economies, the IMF listed a potential Brexit vote in June’s EU referendum as a key risk in its latest World Economic Outlook (WEO). “In the United Kingdom, the planned June referendum on European Union membership has already created uncertainty for investors; a ‘Brexit’ could do severe regional and global damage by disrupting established trading relationships,” said Maurice Obstfeld, IMF economic counsellor. The Washington-based Fund said economic growth was also threatened by a host of other factors, including “the tragedy of large-scale refugee inflows” to Europe, a potential reappearance of financial market turmoil, China’s difficult economic rebalancing and growing income inequality.
- As Minimum Wages Go Up, Amazon.com Looks Like the Big Winner
Minimum wages are going up around the country. As the Fight for $15 spreads, several major retailers have lifted their base pay, and states and cities have enacted gradual wage hikes to $15/hour. California, the state that more than one out of 10 Americans calls home, passed a bill last week enacting incremental hikes in the minimum wage from $10/hour today to $15/hour in 2022, or a compound annual rate of nearly 9%, for businesses with at least 25 employees. Next year, the wage will rise to $10.50/hour. New York followed suit with a similar law, mandating an increase to $15/hour by 2019 in New York City and 2022 in the suburbs, and to $12.50 by 2021 in upstate New York. Several other cites, including Seattle, San Francisco, Los Angeles, Portland, Ore., and Washington, D.C., have also passed aggressive minimum wage hikes recently.
- There's No Free Lunch With The Minimum Wage
This is not just the normal economic observation that there’s no such thing as a free lunch: there’s always costs to something, not just benefits. Rather this is the quite literal observation that cranking up the minimum wage leads to a disappearance of the free lunch itself. Over in my native UK George Osborne has imposed a remarkably silly “national living wage” which is intended to rise to 60% of median earnings soon enough. That’s too high for a minimum wage (the general consensus, even among those who support a higher minimum wage, is that 50% is as high as it is reasonable to go) but that’s what he’s decided to do. And we can generally predict what the effects will be. There will be a rise in unemployment compared to what would have happened without that rise, there will be price rises negating much of the effect of higher incomes and employers will also respond by trying to cut whatever parts of the non-wage employment bill they can.
- China Goes Prospecting for World’s Gold Mines
Chinese gold miners are aggressively scouting for overseas acquisitions, encouraged by historically low gold prices that could help them scoop up assets cheaply. Though gold prices have risen more than 16% since hitting a six-year low in December, the metal has still been trading close to levels last seen in 2010, in a range of roughly $1,220 to $1,240 a troy ounce. China is the world’s largest gold consumer and producer, but only a few Chinese companies, such as Zijin Mining Group Co., have ventured abroad to buy mines, unlike their counterparts in industrial metals.
- Trans-Atlantic & Trans-Pacific “Partnerships” Complete Corporate World Takeover — Paul Craig Roberts
As I have emphasized since these “partnerships” were first announced, their purpose is to give corporations immunity from the laws in the countries in which they do business. The principle mechanism of this immunity is the granting of the right to corporations to sue governments and agencies of governments that have laws or regulations that impinge on corporate profits. For example, France’s prohibitions of GMO foods are, under the “partnerships,” “restraints on trade that impinge on corporate profits. The “partnerships” set up “tribunals” staffed by corporations that are outside the court systems of the sovereign governments. It is in these corporate tribunals that the lawsuits take place. In other words the corporations are judge, jury, and prosecutor. They can’t lose. The “partnerships” set up secret unaccountable governments that are higher and have power over the elected governments.
- Over 11,000 Coal Miners Lost Their Jobs In The Last Year
Coal mines shed more than 11,000 jobs in the last year, according to recently released employment data, as the industry continues to contract under onerous federal regulations and faltering demand. Bureau of Labor Statistics reports there were around 56,700 coal miners employed across the U.S. as of March 2016, which is down about 11,200 jobs from March 2015 when some 67,900 coal miners had jobs.
- Comparing the 1930s and Today
You've heard the axiom “History repeats itself.” It does, but never in exactly the same way. To apply the lessons of the past, we must understand the differences of the present. During the American Revolution, the British came prepared to fight a successful war—but against a European army. Their formations, which gave them devastating firepower, and their red coats, which emphasized their numbers, proved the exact opposite of the tactics needed to fight a guerrilla war. Before World War I, generals still saw the cavalry as the flower of their armies. Of course, the horse soldiers proved worse than useless in the trenches. Before World War II, in anticipation of a German attack, the French built the “impenetrable” Maginot Line. History repeated itself and the attack came, but not in the way they expected. Their preparations were useless because the Germans didn't attempt to penetrate it; they simply went around it, and France was defeated.
- LIST: Who are the World’s Top 10 Oil Producers?
Countries are producing oil at record levels in an attempt to maintain or grow their market share. Here is a list of the world's top 10 oil producers. Source: US Energy Information Administration; Data includes crude oil, lease condensate, natural gas plant liquids, and refinery processing gain.
- Dead Canaries And Disobedient Falcons: Bad Month Coming, Especially For Banks
Corporate profitability is one of the canaries in today’s financial coal mine. If companies are making more money each year they tend to hire more people, pay more taxes and generally make life easier for everyone else. But when earnings decline, everything from government budgeting to personal financial planning gets much harder. Viewed through this lens, 2015 was a “coming to grips” year in which the financial markets vacillated over the meaning of falling corporate profits: Are they an aberration or the new normal?
- Skunk At A Garden Party—-Kuroda’s Money Printing Failure In Japan Is Bringing Bad News To The G-20
The world’s central bankers, already hitting limits of their effectiveness on growth and inflation, are now contending with another risk: that additional stimulus could produce lackluster results and undercut investor confidence. The Bank of Japan’s decision in January to take interest rates negative has sent bond yields tumbling, while doing little to curb a surging yen that’s squeezing the world’s third-biggest economy just when it needs a weaker currency. That’s put even more monetary and fiscal stimulus on the agenda at a time when Japanese households and companies are increasingly doubting the program. “Japan is bringing bad news to the world,” said Hiromichi Shirakawa, chief Japan economist at Credit Suisse Group AG and a former BOJ official. “It’s demonstrating that massive monetary easing doesn’t work for everyone. Any additional stimulus may invite criticism from other central banks.” The decline in credibility in Japan is a warning sign for central bankers and finance ministers who gather this week in Washington for spring meetings of the International Monetary Fund and World Bank, as well as a Group of 20 session.
- Warren Buffett's right-hand man gave a dark warning about American finance
Warren Buffett's right-hand man, Charlie Munger, is worried about American finance. According to the Berkshire Hathaway vice chairman, we have “a vast gambling culture, and people have made it respectable.” Basically, the stock market is a casino, and too many people want to get rich quickly. He said: There's way, way too much of that in America. And too much of the new wealth has gone to people who either own a casino or are playing in a casino. And I don't think the exaltation of that group has been good for life generally, and I am to some extent a member of that group.
- Why You Should Own Gold Before the Government Starts Handing Out Free Cash
Ivy League economists agree… The economy is struggling because central banks haven’t printed enough money. If you’ve been reading the Dispatch, you know this statement is absurd. After all, central banks have printed trillions of currency units since the 2008 financial crisis. The U.S. Federal Reserve has printed $3.5 trillion by itself. On top of that, many world central banks have dropped interest rates to zero, making it extremely cheap and easy to borrow money. According to mainstream economists, these easy-money policies were supposed to jumpstart the global economy. But this plan has been a miserable failure. The U.S., Europe, and Japan are all growing at the slowest pace since World War II. China, the second-biggest economy after the U.S., is growing at its slowest pace since 1990.
- ‘In five years the vast majority of the cash will be out of the system'
Mark Barnett, the boss of MasterCard in the UK and Ireland, believes that in five years time cash will be practically extinct in Britain and Ireland — and in 30 years it will seem as old fashioned as the horse and cart. Barnett told Business Insider at the Money2020 conference in Copenhagen last week: “By the time we get to another generation, 30 years down the track, will there be any cash? I very much doubt it. The idea of carrying coins — 2p, 1p, 50p all cluttering up your pocket — it will be an anachronism. It will seem as antediluvian as carrying a pouch full of gold.”
- Pastor Lindsey Williams – The Energy Non-Crisis…
Pastor Lindsey Williams – The Energy Non-Crisis… Learn what happened when Chaplain Williams met the Elite of the world… Watch the FULL Presentation NOW! – FREE!
- Quietly the advantage in gold goes to private investors
I can remember only one other time when market factors lined up as favorably for gold as they do now and that was in the spring of 2008. There are a great many similarities to gold market dynamics between now and then, but there are also great differences. One of those differences is the huge influx of interest from institutional investors led by hedge funds and big banks. In 2008, institutional interest was light. Now HSBC, JP Morgan Chase, Bank of America Merrill Lynch, ABN Amro, UBS and Deutsche Bank, PIMCO and Black Rock head a growing list of investment houses that view gold favorably. In what could turn out to be the first among many such announcements, Munich Re, the giant German reinsurer, said it was adding gold to its reserves in the face of negative interest rates. Chief Executive Nikolaus von Bomhard told a news conference, “We are just trying it out, but you can see how serious the situation is.”
- Gold – The Best Defense Strategy
The War on Cash is on! If you are used to making visits to your bank to make your credit card payments, you may find this no longer an option in the future. Some banks are no longer accepting (or limiting their acceptance) of cash deposits. The war on cash forges on. Paper money, which is indeed more or less worthless, is slowly being taken out of circulation and being replaced by digital currency.
- Cash Banned, Freedom Gone
Some politicians want to ban cash, arguing that cash is helping criminals. The first steps in that direction are the withdrawal of big denomination notes and the limits imposed on cash payments. Proponents of a ban on cash claim that this will help fight criminal transactions — involved in money laundering, terrorism, and tax evasion. These promises of salvation are used to get the general public to agree to a society without cash. But there is no convincing proof for the claim that the world without cash will be a better one. Even if undesirable behavior is indeed financed by cash, you still need to answer the question: will the undesirable behavior disappear without cash? Or will those who commit the undesirable acts take to new ways and means to reach their goal?
- Economist Warns: “A Tidal Wave Is Coming… Recession Indicator Has Turned Red”
With corporate earnings for the first quarter of 2016 set to be the worst since the Great Recession, Societe Generale economist Albert Edwards is warning that the United States is about to be hit with a tidal wave. A tidal wave is coming to the US economy, according to Albert Edwards, and when it crashes it’s going to throw the economy into recession. …the profit recession facing American corporations is going to lead to a collapse in corporate credit. “Despite risk assets enjoying a few weeks in the sun our fail-safe recession indicator has stopped flashing amber and turned to red” … He continued: Whole economy profits never normally fall this deeply without a recession unfolding. And with the US corporate sector up to its eyes in debt, the one asset class to be avoided — even more so than the ridiculously overvalued equity market — is US corporate debt. The economy will surely be swept away by a tidal wave of corporate default.
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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.
Latest News From April 8, 2016 to April 14, 2016:
- Hathaway Is Right, The Price Of Gold Will Skyrocket…To $10,000 – $20,000
Eric King: “Stephen, I know you’ve had a chance to look at the KWN interview with John Hathaway — your thoughts on what John had to say.” Stephen Leeb: “John is absolutely right. Eric, I don’t think people really appreciate how little gold there is in the world. If you add it all up, the value of all of the physical gold in the world is something like $7 trillion….
- Greece sells country’s largest port to China
China has described a deal to sell Greece’s biggest port to Chinese shipping group COSCO as a “win-win” for both countries. Under the deal between Greece’s privatization fund HRADF and China COSCO Shipping Corporation, the Chinese investors will pay 280.5 million euros($319.79 million) to HRADF for the initial acquisition of a 51 per cent stake, while it will pay another 88 million euros within five years for the remaining 16 per cent, provided it has implemented the agreed investments in the port.
- Legend Art Cashin Warns This May Shock Investors Across The Globe And Create Panic
Legend Art Cashin warns this may shock investors and create panic. Eric King: “Art, you put out a note yesterday stating that we needed to take a look at the velocity of money. What is that looking like at this point? Any changes? Art Cashin: “Yes, M2 has moved up. But perversely and in a countervailing sense, the Bank of St. Louis released the monetary base. The monetary base is what the Fed can do directly. If you can grow the monetary base, then ordinarily it would indicate that you can get monetary velocity and some inflation.
- World Gold Council First Quarter Report a Bunch of Bull
The World Gold Council’s first quarter report is a bunch of bull. Or perhaps it would be more accurate to say it projects a very bullish outlook for gold. The report confirms what we already knew – gold got off to a glittering start in 2016 – and it predicts the rally will likely continue and evolve into a genuine, long-term bull market.
- Gold Surges As Peter Boockvar Issues An Ominous Warning
On the heels of gold trading $20 higher and silver surging 60 cents, today Peter Boockvar issued an ominous warning. Peter Boockvar: Following the rally from Friday, European bank stocks are up for a 2nd day as more details emerge about a possible private sector involved TARP like program for Italian banks. Officials from the Italian Treasury Department and central bank will be meeting with top bank executives possibly this week. The Euro STOXX bank index is up by 2.3% as of this writing after Friday’s 3% rally with Italian banks again leading the gains. Italian banks have been suffocated by an excess of bad loans and the Renzi government is finally doing something about it…
- How The Oil Crisis Has Impacted Military Spending
A report by the Stockholm International Peace Research Institute has revealed that most of the world’s nations hiked their military budgets last year, marking the first increase in spending since the 2008 crisis. It seems that the only ones not taking part in this military spending hike are some of the world’s biggest oil producers. While the United States is still the country with the largest military budget at $596 billion spent in 2015, this figure was actually a decline on the previous year. Saudi Arabia, according to Bloomberg, would also have cut its military budget if not for the war in Yemen. Russia, the world’s top oil producer, shrank military outlays in 2015 to $66.4 billion.
- How a US President and JP Morgan Made Panama: And Turned it Into a Tax Haven
This goes back a long way. The Panamanian state was originally created to function on behalf of the rich and self-seeking of this world – or rather their antecedents in America – when the 20th century was barely born. Panama was created by the United States for purely selfish commercial reasons, right on that historical hinge between the imminent demise of Britain as the great global empire, and the rise of the new American imperium.
- Something Just Snapped In Saudi Money Markets
Away from the headlines about The Panama Papers, global financial markets turmoiled quietly this week with a surge in equity and FX volatility and banks suffering more death blows. However, something happened in Saudi Arabia's banking system that was largely uncovered by anyone in the mainstream… overnight deposit rates exploded to their highest since the financial crisis in 2009…
- ALERT: Legend Warns That People Must Now Prepare For A Massive Global Collapse
Egon von Greyerz: “The bank stocks are now warning investors that it is time to get money and assets out of the banking system. As you know Eric, we warned investors long before the 2006 – 2009 crisis to get out of the banking system. At that time banks were saved by a $25 trillion global package but that won’t happen again. Credit worldwide has increased by 70% since 2006 and the banking system as well as the world economy are now in a massively worse condition than they were at that time…
- Pierre Lassond On the End of the Bear & $8000 Dollar Gold
Franco-Nevada’s Pierre Lassond is “very sure” gold’s 5 year bear market is over and we’re at the start of a new bull market. Just how high could gold go during this new bull market?
- Will the Bank of Japan force a lower yen?
Both the European Central Bank and the Bank of Japan appear to be making little headway in bringing their respective currencies down against the dollar, and lifting inflation rates which in some cases have faltered into negative territory. And so it was on Friday that the yen’s highest level in two years delivered another blow to the Japanese government’s efforts to swing the economy around since it plummeted in the wake of the Fukushima nuclear disaster five years ago.
- Watch Japan – For All Is Not Well In The Land Of The Rising Sun
One of the epicenters of the global financial crisis that started during the second half of last year is Japan, and it looks like the markets in the land of the rising sun are entering yet another period of great turmoil. The Nikkei was down another 390 points last night, and it is now down more than 1,300 points since a week ago. Why this is so important for U.S. investors is because the Nikkei is often an early warning indicator of where the rest of the global markets are heading. For example, the Nikkei started crashing early last December about a month before U.S. markets started crashing really hard in early January. So the fact that the Nikkei has been falling very rapidly in recent days should be a huge red flag for investors in this country.
- CEO Keith Neumeyer: “There's Going To Be A Major Revolt If We See Negative Rates”
CEO Keith Neumeyer Warns: “There’s Going To Be a Major Revolt… We’re Going To See Riots” With negative interest rates now the order of the day in much of the Western world, it’s only a matter of time before financial institutions start charging American depositors for the privilege of keeping their money safe in the U.S. banking system.
- Why Are Thousands Of Millionaires Fleeing Chicago And Other Major Cities Around The World?
The elite are fleeing major cities around the globe at a staggering rate. In fact, the Chicago Tribune is reporting that approximately 3,000 millionaires left the city of Chicago alone during 2015. The same study discussed in that Chicago Tribune article found that 7,000 millionaires left Paris, France last year. So why is this happening? Why are thousands of millionaires suddenly packing up and moving away from the big cities? Could it be possible that they have many of the same concerns that “preppers” do about what is coming?
- Economic Collapse Is Erupting All Over The Planet As Global Leaders Begin To Panic
Mainstream news outlets are already starting to use the phrase “economic collapse” to describe what is going on in some areas of our world right now. For many Americans this may seem a bit strange, but the truth is that the worldwide economic slowdown that began during the second half of last year is starting to get a lot worse. In this article, we are going to examine evidence of this from South America, Europe, Asia and North America. Once we are done, it should be obvious that there is absolutely no reason to be optimistic about the direction of the global economy right now. The warnings of so many prominent experts are now becoming a reality, and what we have witnessed so far are just the early chapters of a crushing economic crisis that will affect every man, woman and child in the entire world.
- Deutsche Bank Says World “Past The Point Of No Return” In The Default Cycle
Over the past year, the credit cycle finally turned, and has unleashed the latest default cycle. In fact, as BofA's Michael Contopoulos warned last week, it may be the worst default cycle in history with “cumulative losses over the length of the entire cycle could be worse than we’ve ever seen before.” Over the weekend, the FT got the memo with a report that “global company bond defaults at highest level since 2009” in which it said that “the global bond default rate by companies is running at its highest since 2009 with the US accounting for the vast majority, according to rating agency Standard & Poor’s. A further four defaults this week, with three coming from the troubled oil and gas sector, pushed the overall tally to 40 with a little over a quarter of 2016 done.”
- Biggest Collapse Ever-Get Gold Now-James Rickards
Financial expert and best-selling author James Rickards says another economic collapse is coming. Rickards contends, “It’s very clear, and you can prove this scientifically. The next collapse will be bigger than anything in history or maybe since the Bronze Age or the fall of the Roman Empire. Why do I say that? . . . We have these things coming together. The system is larger. That means systemically it is exponentially more risky. The central banks don’t have any dry powder, and it is just a matter of time before the collapse comes. In 1987, the stock market fell 22% in one day, not in a week or a month, but one day. Today, that would be the equivalent of a 4,000 point drop. . . . In 1998, the Long Term Capital crisis shut almost every stock and bond exchange in the world. In 2000, the Dot Com; 2007, the mortgage crisis; and in 2008, you had Lehman and AIG (failures). In other words, these events are not rare, and they happen every three, four or five, six or eight years. It’s not like clockwork, but nobody should be surprised if it happened tomorrow. We’ve got the systemic scale. We’ve got exponential increase in risk. The central banks are out of dry powder, and it’s been eight years since the last one. It’s just a matter of time.”
- Next Shoe to Drop on Spanish Banks – “The mortgage ‘floor clauses’ are a fraud.”
Thursday, April 7, 2016, could go down in history as a great day for Spanish mortgage holders and a very grim one for many Spanish banks, thanks to a new ruling that the so-called mortgage floor-clauses that were unleashed across the whole financial sector in 2009 are abusive (but not illegal) and lack transparency. These floor clauses set a minimum interest rate — typically of between 3% and 4.5% — for variable-rate mortgages, even if the Euribor drops far below that figure. In other words, the mortgages are only really variable in one direction: upwards!
- BlackRock CEO Fink: Negative & Low Interest Rates Eat into Consumer Spending at Worst Possible Time
“A hostile landscape” – that’s what BlackRock CEO Larry Fink called the global investment, economic, and political environment in his gloomy annual letter to his shareholders. It starts out propitiously: Investors today are facing tremendous uncertainty fueled by slowing economic growth, technological disruption, and social and geopolitical instability. More specifically: In China, growth is slowing with global effects. In the U.S., the quality of corporate earnings is deteriorating, with record share repurchases in 2015 driving valuations – an indication of companies succumbing to the pressures of short-termism in place of constructive, long-term strategies.
- Supply Chain Slump “Worse Than The Great Recession”
Not to continue beating a dead horse, but I have a stick and the carcass is right in front of me. The entire supply chain inside the US economy is full agreement both on where the economy is right now and, perhaps more importantly, how it came to be that way. Such harmony is not atypical, as synchronicity usually defines the hard edges of any cycle. This, however, is something else entirely, especially as it stretches back years and confirms we are witnessing nothing like the usual.
- Iran War Drums, Panama Papers Update, Economy Weak and Sick
Lots of news about Iran this week being overlooked because of the so-called Panama Papers. Iran has issued a warning to the U.S. not to interfere with its ballistic missile program. Iranian officials say any attempt to interfere with its weapons program would be crossing a “red line.” Iran also wants to improve the destructive power of its warheads which would also help in detonating a nuclear armed missile. Iran has recently test fired ballistic weapons and continues to develop them. An Iranian General was quoted this week on Iranian state run press, as saying “The reason we designed our missiles with a range of 2000 km is to be able to hit our enemy the Zionist regime from a safe distance.” The Obama Administration is now talking about putting sanctions on Iran because it continues to develop ballistic missiles. Might I remind you, the Iran deal to curtail its nuclear program was not signed by Iran. By the way, the U.S. Navy just intercepted a load of weapons going to the Iranian backed rebels in Yemen.
- Crash of Biblical Proportions Coming in 2016-Bo Polny
Market cycle analyst Bo Polny says don’t bet on the U.S. dollar or the stock market to hold their value in 2016. Polny contends, “The dollar is going down with the stock market. It did in December of 2015. It did in August of 2015, and the dollar is falling right now again. As soon as the stock market gets started to the downside, the dollar is going to go with it again. So, the dollar is going to go down with the stock market with this next meltdown. What’s going to end up happening when they hit the cycle low is what they did the last low (2009) and had QE 3. Guess what, that’s going to mean (in the next crash) QE 4. Then, that will mean they will be printing money like crazy. Let’s say there is a 20% drop on the dollar, even 10%. Everybody goes to sell the bonds. If the 10-year is only giving 1.7% yield, if the dollar drops 10%, they are losing 8%. If the dollar drops 20%, they are losing 18%. So, all these countries will be losing on billions or trillions of dollars of bonds, and then you will get a fire sale on bonds. Everyone will be dumping the bonds because they will be trying to get rid of them as fast as possible. That is what’s going to happen when they announce QE 4.”
- China “Could Push Whole World into Fresh Economic Crisis”
After years of big wage increases in China, the supply of cheap labor is coming to an end. The migration of rural populations to cities, which in practically no time created over 250 cities with over 2 million inhabitants, is also coming to an end. As the cost of labor has soared, the manufacturing base is now migrating to cheap-labor countries like Vietnam, leaving less work in Chinese cities for migrant laborers. With few options left, they’ve started to return to their villages. This leaves China with massive challenges, just when its debt-burdened economy can least afford them.
- Bank Bail Ins Begin as EU Bank “Bailed In” In Austria
Bank bail ins in the EU are here after Austria's financial markets regulator FMA imposed a hefty haircut on creditors in an Austrian bank. Creditors in the bank Heta Asset Resolution will receive less than half of their money back according to the country’s financial regulator, the FMA. Senior bondholders in the so called “bad bank” could expect to receive around €0.46 for each euro which would be paid from the realisation of assets by 2020, according to the FMA statement. It said that this had been calculated using “very conservative” assumptions. “This package of measures also ensures the equal treatment of creditors. Orderly resolution is more advantageous than insolvency proceedings,” the FMA said.
- Silver Surges Most In 6 Months As Hedgers Cover
The last 3 days have seen silver prices surge over 6%, testing back towards the psychologically important $16 level. Having been pressured lower after the ECB bounce, the precious metal jumped perfectly off its critical 200-day moving-average, nearing the highs of the year once again.
- Chesapeake Forced To Pledge Entire Company As Collateral To Preserve Existing Credit Facility
As we enter the critical spring borrowing base redetermination season, which as we previewed previously is the biggest threat to near-insolvent energy companies whose banks may, and in many cases will, decide their assets are worth far less and as a result dramtically cut their revolver availability, one of the biggest question marks was how generous would the banks of troubled gas giant Chesapeake be, whose $4 billion credit facility is one of the few things keeping the company still afloat. We got the answer earlier today when the company announced it had succeeded in maintaining its entire $4 billion borrowing base and as a result would not suffer an imminent liquidity crunch.
- Helicopter Money “Not on the Table,” ECB Swears Furiously
It has finally sunk in: what everyone really wants is helicopter money. Central banks, instead of transferring trillions of newly created dollars or euros or whatever to the banks should just hand them directly to the people, like dropping bank notes from a helicopter, so that these people can grab them and spend them all in one fell swoop, thereby creating sudden artificial demand, driving up inflation, and solving all economic problems of our times. Instead of creating asset price inflation, as QE had done, it would create consumer price inflation. Wages would still remain stuck, and workers would soon not be able to buy the normal things at these inflated prices, but that wouldn’t matter because now they’re getting helicopter money, and companies could increase their sales, margins, and profits simply by raising prices without having to sell a single extra item.
- Ben Bernanke: “Helicopter Money May Be The Best Available Alternative”
Now that the prospect of helicopter money by the ECB has so infuriated Germany, the ECB had to reach out to Schauble to “mollify” the Germans who are dreading the second coming of monetary paradrops in one century, it was only a matter of time before Citadel's most prominent employer opined. In a blog post earlier today, Brookings' blogger and the central banker who together with Alan Greenspan has been most responsible for the world's unprecedented debt pile and sad economic state, Ben Bernanke, took the podium to share his views on “helicopter money” head on.
- Analysis: The mechanics of leaving the European Union
Ignoring shouted questions about whether he will resign, he reprises his reaction to his shock Commons defeat over Syria in 2013. “The will of the British people is clear,” he says, “I get it and I will negotiate accordingly to implement their clear decision.” Suppose that, or something like that, happens. What next, for the government and for Parliament? How would MPs deliver the decision the British people had just voted for? The first point to make is that the process cannot easily be separated from the political mayhem that would then unfold.
- Russia Relies on Gold to Push Reserves Back Over $380 Billion
Whether you define gold as a barbarous relic, a pet rock, “tradition”, or “doomed”, Russia surely refers to it as a saving grace. As Russia’s foreign reserves dwindled to just under $350 billion in early 2015, many predicted Russia was going to burn through all of their reserves in the not too distant future as they dealt with a depreciating Ruble and plummeting oil revenues. However, this dire prediction did not pan out mainly due to one thing: Russia’s strategic decision to load up on as much gold over the past few years as it possibly could. As we have shown in the past, Russia has shown an insatiable desire for Gold, and as Bloomberg points out, has increased their holdings more than 12% since last July.
- Will The Oil Price Dip Send BP plc and Royal Dutch Shell Plc Back Into Reverse?
Oil is up 44% since Brent crude hit a low of $27 a barrel in January, to reach $38.93 at time of writing. FTSE 100-listed oil giant Royal Dutch Shell(LSE: RDSB) has rallied with it, its share price up 33% since mid-January, from a low of 1277p to today’s 1709p. BP(LSE: BP) is a more troubled beast and its share price growth has been less spectacular, rising just 5.5% from its January low of 328p to 346p today.
- European Bank Outlook More Uncertain Than in 2009, Perol Says
Groupe BPCE Chairman Francois Perol said the outlook for the European banking industry is more uncertain in some respects than in 2009 as negative interest rates squeeze margins and digitalization changes the model. “Chinese growth is decreasing, oil prices are down with unexpected consequences, geopolitical risk is in a lot of areas,” Perol told reporters Saturday on the sidelines of the Ambrosetti Workshop in Cernobbio, Italy. Banks also have to deal with structural changes including “digitalization, a huge change for our retail banking business, negative interest rates and a changing regulatory landscape,” he said.
- World Bank goes big on fighting climate change
The World Bank has announced plans to fight climate change through a new Climate Change Action Plan that it hopes will see investment in environmental projects reach $29 billion a year by 2020. In a statement on Thursday, the Bank said that, in the next five years, it planned to help countries in the developing world add 30 gigawatts of renewable energy to global energy capacity; provide “early warning systems” to 100 million people; and develop “climate-smart agriculture investment plans for at least 40 countries.” The news comes in the wake of the historic COP21 agreement reached in Paris at the end of 2015. There, 195 countries agreed to make sure global warming stayed “well below” 2 degrees Celsius and to “pursue efforts” to limit the temperature rise to 1.5 degrees Celsius. The Bank said its announcement came a fortnight before the world's leaders meet in New York to sign the Paris Agreement.
- UK Goods Trade Gap With EU At Widest Level
The UK's trade in goods deficit with the European Union is at its widest ever level, with a series of other indicators providing further evidence of troubles for the economy. The Office for National Statistics (ONS) reported a gap of £23.8bn between imports and exports with the EU in the three months to February. It reflected, the ONS said, a 1.3% decrease in exports and a 1.1% rise in imports during the period – a time when fierce debate began over the country's continued membership of the EU ahead of June's referendum. The economic slowdown in many world markets was also reflected in the country's total deficit in goods and services, which widened to its largest three-monthly figure since March 2008.
- Peter Schiff: The Economy Is A Disaster
Peter Schiff was on Tuesday's edition of PreMarket Prep, where he reiterated his bearish thesis for the market in the wake of the Federal Reserve's decision not to raise interest rates last week. Schiff wasn't convinced by the positive market talk coming out of the Fed. “I knew that it was all talk, and when Janet Yellen actually spoke she validated what I said,” Schiff said. “She basically came out and said ‘We're not raising rates and it's not because we think the economy is weak, it's because we decided that lower interest rates are appropriate.' Which is all B.S, because it's all about the economy. The economy is a disaster. I think Yellen probably realizes we're in a recession.”
- Vermont Residents Leave State As It Becomes Riddled With High Taxes
Democratic presidential candidate Sen. Bernie Sanders isn’t coy about his intention to spend like crazy and raise everyone’s taxes if he’s elected president. Forgetting the fact that his health care plan is a disaster for the working poor, these sentiments of taxation to solve every societal ill appears to be the governing ethos in Vermont, where the state legislature just passed millions more in tax increases.
- Silver Jewelry Sales Strong, Reflecting Broader Demand for the White Metal
The market for silver jewelry grew in 2015, mirroring an overall surge in demand for the white metal, according to a survey report released yesterday by the Silver Institute: “Silver jewelry sales in the United States were solid in 2015 with 60% of jewelry retailers reporting increased sales, according to a survey conducted on behalf of the Silver Institute’s Silver Promotion Service (SPS). This marked the seventh consecutive year of growth for silver jewelry sales and confirmed that silver jewelry is an increasingly important category for many retailers.”
- Schiff: Obama's tax inversion rules will backfire
Economist, author and financial analyst Peter Schiff told CNBC's Rick Santelli the new tax inversion rules from the Obama administration, which ended the Allergan-Pfizer deal, could backfire. “By the government making it harder for American companies to buy foreign companies and invert, they are going to leave American companies vulnerable to being acquired by foreign companies instead,” Schiff said in a Santelli Extra interview exclusive to CNBC Pro subscribers. “And when that happens, the domestic job losses are going to be much bigger.” Apart from tax regulation, Schiff also discusses his views on inflation, gold, the Fed and Donald Trump.
- Fed minutes: Debated rate hike in April, but several concerned
Federal Reserve policymakers debated last month whether an interest rate hike would be needed in April though a consensus emerged that risks from a global economic slowdown warranted a cautious approach. “Many participants expressed a view that the global economic and financial situation still posed appreciable downside risks,” according to the minutes from the Fed's March 15-16 policy meeting released on Wednesday.
- California's $15 Minimum Wage Is Going To Be Painful
Of course, part of the basic intention of the rise in the minimum wage to $15 an hour in California is that it should be painful. Those plutocrats should be forced to disgorge all that they’ve made by exploiting the working man all these years and such pain is just wonderful. However, that’s not quite what’s going to happen as two interesting little studies show. The truth is that California is a very large and very diverse economy and there’s no evidence at all which shows that $15 an hour is the right price for labor right across it. (Of course, I argue that there shouldn’t be a minimum wage in the first place but that’s a slightly different matter.) Whatever your arguments in favor of a rise in the minimum wage there’s no way to make that one rate right for all of California.
- Central Banks are Pushing Monetary Heroin to Addicted Economies
We hear a lot about the role of central banks in the world’s economies. But what exactly have they been doing over the last few years, and what has the actual impact been? Central banks have the authority over the interest rates and the quantity of a nation’s currency. Their official responsibility is to regulate price stability. By law some central banks, such as the Federal Reserve, operate under a dual mandate and must also promote full employment. Central banks hold the reserve assets that support the integrity of their issued currency.
- Venezuela to cut power use with holidays
Venezuela’s President Nicolas Maduro has decreed that all Fridays for the next two months will be holidays, in a bid to save energy in the blackout-hit Opec country. “We’ll have long weekends,” Mr Maduro said in an hours-long appearance on state television on Wednesday night, announcing the measure as part of a 60-day plan to fight a power crunch. A severe drought, coupled with what critics say is a lack of investment and maintenance in energy infrastructure, has hit the South American nation, which depends on hydropower for 60% of its electricity.
- Trump Unbound
Even by The Donald’s standards his 95 minute long interview with the Washington Post was remarkable. He let loose so many stray shots as to leave the establishment press clucking in a chorus of disbelief. It undoubtedly started with the stink bomb he lobbied at the ” all is awesome” meme about the US economy and stock market.
- The Number of People Behind on Student Loan Payments Is Staggering
Student loan debt can haunt borrowers for decades. An increasing number of student loan borrowers are behind on their payments, creating concern that millions of Americans may never pay off their debts. About 43% of the 22 million Americans with federal student loans weren’t making payments as of Jan. 1, the Wall Street Journal reported. That’s actually a slight improvement from the same time last year, when the non-payment rate was 46%, the Department of Education found.
- Wholesale Inventories Drop Most Since 2013; Sales Miss As Slowdown Accelerates
There was one thing keeping US GDP growing in recent months: rising inventory. Well, no more. Moments ago the Dept of Commerce reported the latest inventory data and following major historical revisions, not only was last month's inventory print slashes from 0.3% to -0.2%, but the February Inventory number was a dramatic -0.5% drop, far below the -0.2% expected. This was the biggest sequential drop since the spring of 2013.
- Wholesale Inventory Plunge Is Bad Sign For U.S. GDP Growth
Wholesale inventories tumbled at their fastest rate in nearly three years, data showed, signaling first-quarter U.S. economic growth was even weaker than expected. Wholesale stockpiles fell 0.5%, the Commerce Department said Friday, the biggest drop since May 2013. Analysts had expected a 0.2% decline. Meanwhile, January was revised from a small gain to a 0.2% decline. Wholesale inventories have now fallen for five straight months as companies try to whittle down high stockpile levels. But wholesale sales have dropped for the last four months, down 0.2% in February after January’s 1.9% tumble.
- Cash Limits Are All About Control Over You, But You Can Take Back the Power
JP Morgan Chase Bank just fired another salvo in the “war on cash.” The bank recently capped ATM withdraws for non-Chase customers at $1,000 per day. The move came after the bank began installing new ATMs that dispense $100 bills. Some people were reportedly pulling tens of thousands of dollars out at one time, according to a report in the Wall Street Journal. A spokeswoman said the bank “felt it was prudent to set withdrawal limits on all of our ATMs.”
- The Atlanta GDP Now estimate falls to 0.1% from +0.4%
The Atlanta Fed updated their GDP estimate for the 1st quarter earlier today, and once again it is to the downside. The new GDP growth estimate is 0.1% vs. 0.4% last reported on April 5. The decline was attributed to the wholesale trade report from the US Bureau of Census. The forecast for the contribution of inventory investment to the 1st quarter to real GDP fell from -0.4% to -0.7%.
- Puerto Rico Senate Passes Sweeping Moratorium on Paying Debt
Puerto Rico’s Senate approved a bill calling for a moratorium on a wide range of debt payments, including general-obligation bonds, through January 2017 in the latest escalation of the Caribbean island’s fiscal crisis. The measure, passed around 2:30 a.m. local time, would allow Governor Alejandro Garcia Padilla to suspend payments on debt backed by the government, the island’s Government Development Bank and other public agencies, according to a copy of the legislation obtained by Bloomberg. That includes the Sales Tax Financing Corp., known by its Spanish acronym Cofina. A default on those obligations would be a first for Puerto Rico, which so far has only failed to pay on bonds backed by legislative appropriation and rum taxes.
- Special Report – Puerto Rico's other crisis: impoverished pensions
When Puerto Rico attempted to shore up its chronically underfunded public-employee pensions in 2013, Francisco del Castillo “knew grown men and women who wept.” Under the reform package, retirement ages rose. So did employee contributions. Current and future participants were transferred to less-generous defined-contribution accounts, similar to 401(k) retirement savings plans. Del Castillo, then the deputy chief of the island’s largest government-employee pension system, said members of his own staff who were on the verge of retirement suddenly faced the prospect of working seven or eight more years for reduced benefits. The law extracted “a pound of political flesh” from those, like del Castillo, who helped craft it, he said. “We wanted it to work.”
- Puerto Rico's Development Bank on Brink as Debt Gambit Goes Bad
Puerto Rico’s Government Development Bank, which was set up after the Great Depression to chart a course out of poverty, is on the verge of a collapse that would deepen the Caribbean island’s $70 billion debt crisis. The lender was designed to promote business investment with a long-term horizon, but in recent years politicians turned it into a piggy-bank that lent to the government and its agencies, helping keep them afloat as the island’s economy shrunk. Now it’s rapidly running out of cash and likely to default on a $422 million debt payment due in May — raising the risk that it may be pushed into receivership or broken up.
- Puerto Rico Investors Sue to Stop Development Bank Payments
Hedge funds holding debt in Puerto Rico’s Government Development Bank sued to stop the island’s key fiscal entity from making payments to local government agencies as it faces a growing cash shortage and the prospect of insolvency. The funds, which include affiliates of Brigade Capital Management, Claren Road Asset Management and Solus Alternative Asset Management, accused the bank in a lawsuit filed Monday in San Juan federal court of seeking to “prop up” local agencies at the expense of other creditors. The situation may imperil restructuring efforts for the bank, which its regulator says is facing a cash shortfall of as much as $1.3 billion in June. Puerto Rico, which is negotiating with creditors to reduce a $70 billion debt load, has “had every incentive to cannibalize” the bank to “meet its own liquidity needs through preferential transfers even if such transfers make it impossible to restructure” the bank, the hedge funds said in the complaint. “The unfortunate depositors and bondholders left behind in GDB will be left to bear amplified losses.”
- Kenya's Chase Bank placed under receivership by CBK
A retail bank in Kenya has been placed under receivership after running into financial difficulties. Panic withdrawals on Wednesday, caused by “inaccurate” rumours on social media, led to a run on Chase Bank, said the Central Bank of Kenya (CBK). Its branches were shut on Thursday. The bank is the third to be placed under the CBK's control in the past year. Chase had recently released two conflicting financial statements, a BBC reporter says. A subsequent audit showed it had hidden loans to its directors, adds the BBC's Ferdinand Omondi in the capital, Nairobi. In a statement, the CBK said it would appoint a team to run the bank.
- Chase ATMs to Limit Withdrawals for Noncustomers to $1,000 a Day
J.P. Morgan Chase & Co. capped ATM withdrawals at $1,000 per card daily for noncustomers—cracking down as people started pulling out tens of thousands of dollars at a time when the bank was modifying its machines to dispense hundred-dollar bills with no limit. The bank said there doesn’t appear to be fraud involved. But partly due to heightened regulatory scrutiny, banks are paying more attention to large cash transfers that could be a sign of money laundering or other types of shady activity. Typically, the card-issuing bank sets withdrawal limits, not the bank owning the ATM.
- EU referendum: IMF’s Christine Lagarde warns of dangers of a ‘Brexit’
Christine Lagarde, International Monetary Fund Managing Director, has put June’s EU referendum among the threats to the global economy. A vote to leave the EU is “clearly part of the uncertainty we have at the moment” Lagarde said in an interview with Bloomberg Television in Frankfurt, noting the impact it may have on London’s financial sector. Her comments came on the same say day she has urged governments to pursue more growth-friendly policies in a speech at Frankfurt's Goethe University, Germany. Lagarde warned that the recovery from the 2007-2009 global financial crisis “remains too slow, too fragile and risks to its durability is increasing”. She said that the global outlook has weakened further in the past six months, suggesting the IMD may be revising its growth outlook.
- Think the Market Will Reach a New High? Here’s Why We Don’t – Just look at the environment we’re in.
Stocks are once again rallying after another “mini crash” at the start of the year. We’ve had three of these things since October 2014 without much to show for it. Stocks have basically gone nowhere for a year and a half. After the first crash in late 2014, stocks were able to eke out a new high into May of last year. But since then, stocks have failed to make new highs despite strong attempts like this one. Ten months without a new high.
- Gas Pipeline Uses 160 Eminent Domain Suits To Get People’s Property In 3 States
Eminent domain is a tough pill to swallow for Americans who take their property rights very seriously, and the aggressive moves by Sabal Trail to seize property for a natural gas pipeline running through three southern states is turning into a drama of immense proportions. Sabal Trail, the joint venture planning to build a 500-mile natural gas pipeline through Georgia, Alabama, and Florida, has gone to court in order to secure the right of way through the land where the pipeline should pass. So far, Sabal Trail has filed 160 eminent domain suits and more are expected, according to a report by the Orlando Sentinel. The company is desperately trying to get the right of way through 346 more properties, though it says it has already secured the agreement of 1,248 landowners in the area along the route.
- Robert Kiyosaki And Harry Dent Warn That Financial Armageddon Is Imminent
Financial experts Robert Kiyosaki and Harry Dent are both warning that the next major economic crash is in our very near future. Dent is projecting that the Dow will fall to “5,500 to 6,000 by late 2017″, and Kiyosaki actually originally projected that a great crash was coming in 2016 all the way back in 2002. Of course we don’t exactly have to wait for things to get bad. The truth is that things are not really very good at the moment by any stretch of the imagination. Approximately one-third of all Americans don’t make enough money to even cover the basic necessities, 23 percent of adults in their prime working years are not employed, and corporate debt defaults have exploded to the highest level that we have seen since the last financial crisis. But if Kiyosaki and Dent are correct, economic conditions in this country will soon get much, much worse than this.
- PanamaPapers: India to probe hundreds for possible tax evasion
Even as many governments begin probing financial wrong-doing by those on the “Panama Papers” leak list, Indian Prime Minister Narendra Modi on Monday also ordered a multi-agency team to investigate the expose. 500 Indians, including top Indian film stars, business honchos and politicians, have been named in the list for alleged offshore holdings. According to an Indian Central Bank notification, those Indians setting up or buying foreign companies before 2013 are in ‘technical’ violation of Indian laws. Indian Prime Minister Modi has vowed to take action against all unlawful accounts held abroad.
- The EU Has Bigger Trouble than Brexit alone
The referendum in the Netherlands on April 6th is going to cause a lot of trouble, possibly axing the strong Dutch commitment to the European project. The plebiscite is about the Association Treaty between EU and Ukraine, into which the EU inserted some curious clauses about military cooperation and such. It is not a trading treaty per se, since those are the sole responsibility of the European Commission and would not require ratification by the member states. Another fact that points toward bigger issues at stake is the last-minute involvement of the US government that recently urged Dutch voters to vote YES.
- EL-ERIAN: Here are 10 things you should be closely watching in the global economy
Roller-coaster views about global growth were important contributors to the first quarter's dramatic “V”-shaped stock market performance — from a scare early in the year that weakness in China and elsewhere could tip the US into recession to a more comforting assessment underpinned by friendly central banks and, in the case of the US, strong job creation. Disappointing growth is also the common element behind numerous improbable developments that have become reality, be they negative central-bank policy rates in Europe and Japan, almost one-third of government debt globally trading at negative yields, or the influence of antiestablishment political movements on both sides of the Atlantic.
- The Path to the Final Crisis
Our reader L from Mumbai has mailed us a number of questions about the negative interest rate regime and its possible consequences. Since these questions are probably of general interest, we have decided to reply to them in this post. Before we get to the questions, a few general remarks: negative interest rates could not exist in an unhampered free market. They are an entirely artificial result of central bank intervention. The so-called natural interest rate is actually a non-monetary phenomenon – it simply reflects time preferences. Time preferences are an inviolable category of human action and are always positive.
- China’s Gold Intent – ICBC Bank Reclassified as an LBMA Market Maker
ICBC Standard Bank, China and the world's largest bank, has been reclassified as a spot Market Making Member of the London Bullion Market Association (LBMA) with effect from today according to a note posted on the LBMA website last night at 2100 GMT.
- ‘Everything Is Being Sold' – Smart Money Selling Soars, Now In 10th Straight Week
“Still No Confidence In The Rally” – that's the title of the latest weekly BofA report looking at the buying and selling by its smart money clients (institutional clients, private clients and hedge funds), which finds that not only were sales by this group of clients last week the largest since September, and the fifth-largest in our data history, but this was the 10th consecutive week of selling as absolutely nobody believed this fakest of fake “rebounds” in recent history.
- 19 Facts That Prove Things In America Are Worse Than They Were Six Months Ago
Has the U.S. economy gotten better over the past six months or has it gotten worse? In this article, you will find solid proof that the U.S. economy has continued to get worse over the past six months. Unfortunately, most people seem to think that since the stock market has rebounded significantly in recent weeks that everything must be okay, but of course that is not true at all. If you look at a chart of the Dow, a very ominous head and shoulders pattern is forming, and all of the economic fundamentals are screaming that big trouble is ahead. When Donald Trump told the Washington Post that we are heading for a “very massive recession“, he wasn’t just making stuff up. We are already seeing lots of things happen that never take place outside of a recession, and the U.S. economy has already been sliding downhill fairly rapidly over the past several months. With all that being said, the following are 19 facts that prove things in America are worse than they were six months ago…
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Latest News From April 1, 2016 to April 7, 2016:
- U.S. Oil Rig Count Down by 10
The U.S. oil-rig count fell by 10 to 362 in the latest week, according to Baker Hughes Inc., maintaining a trend of declines. The number of U.S. oil-drilling rigs, viewed as a proxy for activity in the sector, has fallen sharply since oil prices began to fall. But it hasn’t fallen enough to relieve the global glut of crude. There are now about 72% fewer rigs of all kinds since a peak of 1,609 in October 2014.
- Automakers post disappointing U.S. sales, still see strong 2016
General Motors Co, Fiat Chrysler Automobiles and other major automakers reported weaker-than-expected U.S. sales for March, hurt by declining demand for sedans and light dealer traffic during the Easter weekend. Sales for the month rose 3 percent to nearly 1.6 million vehicles, or 16.57 million vehicles on an annualized basis, according to industry analyst Autodata Corp. That was well below expectations of a rise of about 7 percent and annualized estimates that ranged from 17 million to 17.5 million by analysts and economists polled by Thomson Reuters.
- Where The March Jobs Were: The Minimum Wage Deluge Continues
In March the US economy added a healthy 215K jobs, beating expectations and more importantly, pushing the average hourly earnings up by 0.3% on the month. Which, however, is curious because a cursory look at the job additions in the month reveals that nearly two-third of all jobs, and the three top categories of all job additions, were once again all minimum wages jobs.
- Gold Rush by Russia Makes Up for Billions Lost in Currency Rout
Here’s why Governor Elvira Nabiullina is in no haste to resume foreign-currency purchases after an eight-month pause: gold’s biggest quarterly surge since 1986 has all but erased losses the Bank of Russia suffered by mounting a rescue of the ruble more than a year ago. While the ruble’s 9 percent rally this year has raised the prospects that the central bank will start buying currency again, policy makers have instead used 13 months of gold purchases to take reserves over $380 billion for the first time since January 2015. The central bank will wait for the ruble to gain more than 12 percent to 60 against the dollar before it steps back into the foreign-exchange market, according to a Bloomberg survey of economists.
- Part-timers might account for labor-force surge
The number of able-bodied Americans entering the labor force has surged since last fall. But in a marked change from earlier in the recovery, more of them are finding jobs right away instead of just looking for work. What’s going on? It’s hard to say for sure, but circumstantial evidence in the latest U.S. jobs report suggests many of these newly employed workers have found part-time work with mediocre pay. The participation rate hit a two-year high of 63% in March, climbing from a 38-year low of 62.4% in September, the government said Friday. A person is considered part of the labor force if he finds or job or is actively searching for one.
- Meet the angry American voter
The angry primary voter is the election year manifestation of a 25-year trend gnawing away at American self-confidence. Call it one America, two economies. The S&P 500 is up more than 200% over the past seven years. Home prices rose 11% last year, and a quarter of housing markets are showing record high home prices. Millions of jobs have been added and the unemployment rate is 4.9%, approaching a level many economists consider full employment.
- Negative Yields, Opportunity Cost and Gold
Last week, I published an article on the causes and consequences of negative interest rates. In it, I talked briefly about how negative yields hold significant implications for gold as an asset class. In this followup article, I will explain why that is.
- U.S. factory data signal further slowdown in GDP growth
New orders for U.S. factory goods fell in February and business spending on capital goods was much weaker than initially thought, the latest indications that economic growth slowed further in the first quarter. The Commerce Department said on Monday new orders for manufactured goods declined 1.7 per cent as demand fell broadly, reversing January’s downwardly revised 1.2 per cent increase. Orders have declined in 14 of the last 19 months. They were previously reported to have increased 1.6 per cent in January.
- JOHN McAFEE: A time bomb is hidden beneath the Panama Papers
John McAfee is running for US president as a member of the Libertarian Party. This is an op-ed he wrote and gave us permission to run. The hack of Mossack Fonseca, in terms of the certain fallout that will affect many of the wealthiest and most prominent people on the planet, is by far the largest and most damaging cyberattack on record. I am just one of more than 200,000 people to have downloaded the Panama Papers, a record for hacked documents. It was a gold mine.
- Stunning Video the world was never supposed to see…
Pastor Williams shared this video, he has said ‘Every American must see this'. This video is a must watch. US Admiral (Ret) James “Ace” Lyons tells what Islam is like.
- Invitation by Pastor Lindsey Williams – From DVD – Elite Plans For 2016
This is an invitation by Pastor Lindsey Williams taken from the DVD ‘Elite Plans For 2016'. Lindsey Williams, an ordained Baptist minister went to Alaska in 1970 as a missionary. For three years Pastor Lindsey Williams had the opportunity to sit, live and rub shoulders with the most powerful, controlling and manipulative men on the face of this planet.
- Donald Trump Is Starting To Sound Just Like The Economic Collapse Blog (And That Is A Good Thing)
Guess what Donald Trump is saying now? Last week, I discussed how Robert Kiyosaki and Harry Dent are warning that a major crisis is inevitable, but I didn’t expect Donald Trump to come out and say essentially the exact same thing. On Saturday, the Washington Post released a stunning interview with Donald Trump in which he boldly declared that we heading for a “very massive recession”. He also warned that we are currently in “a financial bubble” and that “it’s a terrible time right now” to be investing in stocks. These are things that you may be accustomed to hearing on The Economic Collapse Blog, but to hear them from the frontrunner for the Republican nomination is another thing altogether.
- Shots Fired: Wikileaks Accuses Panama Papers' Leaker Of Being “Soros-Funded, Soft-Power Tax Dodge”
Earlier today, for the first time we got a glimpse into some of the American names allegedly contained in the “Panama Papers”, largest ever leak. “Some”, not all, and “allegedly” because as we said yesterday, “one can't help but wonder: why not do a Wikileaks type data dump, one which reveals if not all the 2.6 terabytes of data due to security concerns, then at least the identities of these 441 US-based clients. After all, with the rest of the world has already been extensively shamed, it's only fair to open US books as well.” The exact same question appeared in an interview conducted between Wired magazine and the director of the organization that released the Panama Papers, the International Consortium of Investigative Journalists, or ICIJ, Gerard Ryle.
- Trump: America is headed for a ‘very massive recession’
Donald Trump said in an interview that economic conditions are so perilous that the country is headed for a “very massive recession” and that “it's a terrible time right now” to invest in the stock market, embracing a distinctly gloomy view of the economy that counters mainstream economic forecasts. The New York billionaire dismissed concern that his comments – which are exceedingly unusual, if not unprecedented, for a major party front-runner – could potentially affect financial markets. “I know the Wall Street people probably better than anybody knows them,” said Trump, who has misfired on such predictions in the past. “I don't need them.” Trump's go-it-alone instincts were a consistent refrain – “I'm the Lone Ranger,” he said at one point – during a 96-minute interview Thursday in which he talked candidly about his aggressive style of campaigning and offered new details about what he would do as president.
- ISM New York Drops To September Lows As All Components Decline; Employment Plunges
While last week's Chicago's PMI staged a strong bounce from its recent contraction and back into expansion, New York did not. ISM New York just printed at 50.4, just barely above the contraction point, and the lowest headline print since mid 2015. The extremely noisy time series continues to swing, this time lower, with every single underlying component deteriorating in the month of March.
- Is Trump's “Recession Warning” Really All Wrong?
Over the weekend, Donald Trump, in an interview with the Washington Post, stated that economic conditions are so perilous that the country is headed for a “very massive recession” and that “it’s a terrible time right now” to invest in the stock market. Of course, such a distinctly gloomy view of the economy runs counter to the more mainstream consensus of economic outlooks as witnessed by some of the immediate rebuttals.
- Trade deficit balloons in February
The US trade deficit widened to $47.1 billion in February, the Commerce Department said Tuesday. Economists had estimated that the excess of imports over exports — or the trade deficit — increased to $46.2 from a revised, expanded print of $45.9 billion in the prior month. “So far this quarter imports have rebounded more than exports, which is why we expect trade to subtract from Q1 GDP growth,” said BNP Paribas' Laura Rosner in a note.
- Employment Numbers an April Snow Job
Donald Trump managed to shove his way into the spotlight again last week, claiming the US is heading for “a massive recession.” Unsurprisingly, the mainstream media scoffed at Trump’s assertion, pointing to the “great jobs report” that came out Friday.
- Pfizer Vs. Obama: The Treasury Tries To Stop Pharma's Tax Dodge
Most experts in corporate taxes thought there was little President Barack Obama could do to force Pfizer PFE +5.01%, the largest drug company in the U.S., from moving its corporate address to Dublin, Ireland, in order to escape paying American taxes. Yesterday evening, Jack Lew, Obama’s secretary of the treasury, called Pfizer’s bluff, instituting new rules to make the move as difficult as possible. The punch hit, and investors are reeling. Now the move could intensify an election-year battle over what it means for companies to be American, and the fairness of the U.S. corporate tax code.
- China's yuan set for biggest quarterly gain since Sept 2014
China's yuan is poised for its biggest quarterly gain since September 2014, underpinned by firmer central bank guidance as the country's financial markets continue to stabilise and the dollar loses momentum. Federal Reserve Chair Janet Yellen's cautious view on U.S. rate hikes this week, which dampened views of other Fed colleagues suggesting another increase was imminent, continued to take a toll on the greenback on Thursday.
- Jobless Claims Surge Most In 2 Years As Challenger Warns Of “Significant” Jump In Retail, Computer Layoffs
With both ISM Manufacturing and Services employment indices collapsing, endless headlines of layoffs, Challenger-Grey noting Q1 as the worst since 2009, and NFIB small business hiring weak, it is no surprise that initial jobless claims is finally waking up. For the 3rd week in a row – the longest streak since July 2015. The last 3 weeks have seen a 9.1% surge in jobless claims – the biggest such rise since April 2014.
- Russia on a Gold Buying Spree
The Russians have launched into a gold buying spree. Based on recently released International Monetary Fund numbers reported at Mining.com., the Russian central bank ranked as the world’s leading gold buyer in February, adding 356,000 ounces to its reserves.
- Gold Soars 16% In Q1 – Best Start To A Year In 42 Years
Gold's 16.1% surge in Q1 2016 ias the best start to a year since 1974. Overall, this is the best quarter since Q3 1986 and is the best performing major commodity of the year. Gold rallied this year as it cemented its status as a store of value amid financial market turbulence and concern about the global economy, which led to speculation that the Federal Reserve would pause on tightening monetary policy in the U.S. Having seen BlackRock's gold ETF halted due to inability to meet physical demand, it appears pet rocks and barbarous relics are ‘worth' something after all.
- NY Senate OKs Budget Bill To Boost State Minimum Wage To $15
The Republican-controlled chamber voted 61-1 for the final bill after working through the night to pass other parts of the $156 billion spending plan for the fiscal year that began Friday. “We knew we could lift millions out of poverty if we just stayed focused,” said Sen. Andrea Stewart-Cousins, leader of the Senate’s Democratic minority. “It’s a good day, even if it is a very, very long day.” The Democrat-controlled Assembly, which adjourned early Friday, was set to meet following Friday afternoon briefings to begin debate on the wage bill.
- Dollar logs worst quarter since 2010; buck hits 5-month low vs. euro
The dollar logged its worst quarterly performance in years as the Federal Reserve slowed the expected pace of interest rate hikes, citing worries about the potential domestic impact of anemic growth abroad. As measured by one gauge, the buck is about to register its worst performance during the first quarter of a year since 2008, when the index fell 6.4%, and its worst overall calendar-quarter performance since Sept. 30, 2010, when the gauge dropped about 8.5%.
- “The Cat Is Out Of The Bag” – In Interview Mossack Fonseca Founders Admit It's Over… To Rothschild's Delight
Days before the ICIJ released this weekend's trove of “Panama Papers” international tax haven data involving Panamaian law firm Mossack Fonseca, Bloomberg conducted an interview on March 29 with the two founding lawyers. In it, it found that even before the full leak was about to be made semi-public (any of the at least 441 US clients are still to be disclosed), the Panama law firm knew that the game was already largely over.
- Here Are Some Of The Americans In The “Panama Papers”
With media attention squarely falling on the foreigners exposed by the Panama Papers offshore tax haven scandal, everyone has been asking for more information on who are the Americans involved in this biggest data leak in history. After all, as we showed, Mossack Fonseca had over 400 American clients. But who are they? Today, courtesy of McClatchy, we get some answers: while there are no politicians of note are in files but plenty of others. Among them: Retirees, scammers, and tax evaders, all of whom found a use for secrecy of offshore companies. As the news paper reports, “the passports of at least 200 Americans show up in this week’s massive leak of secret data on secretive offshore shell companies.”
- 2007 All Over Again: “We Are Outsourcing Our Monetary Policy”
Last night we noted the odd “messaging” that was apparent in The PBOC's Yuan fix shifts into and after The Fed and Janet Yellen spoke… Almost as if The Fed had “outsourced its monetary policy” to China once again. But as DollarCollapse.com's John Rubino notes, it appears Janet Yellen has instead outsoured US monetary policy to the financial markets…
- Waiters And Bartenders Rise To Record, As Manufacturing Workers Drop Most Since 2009
On the surface, the March jobs reported was better than expected… except for manufacturing workers. As shown in the chart below, in the past month, a disturbing 29,000 manufacturing jobs were lost. This was the single biggest monthly drop in the series going back to December 2009.
- Global Data: A New Scapegoat for the Federal Reserve
During March 16th’s FOMC meeting, the Fed announced that it would leave interest rates unchanged and scaled back its December projections for higher rates in 2016, 2017, and 2018. The Fed’s backtracking comes just three months after raising interest rates 25 basis points, its first hike since June 2006.
- GAO Has Been Telling Congress that Financial Regulation Is in Disarray for 20 Years
Who could blame the researchers at the Government Accountability Office (GAO) for thinking that responding to Congressional requests for studies on how to repair the nation’s ineffective maze of financial regulation is an exercise in futility. GAO has been spending boatloads of taxpayer money for the past two decades to define the problems for Congress as our legislative branch has not only failed to take meaningful corrective measures but actually made the system exponentially worse through the repeal of the Glass-Steagall Act in 1999.
- EU admits plot for FEDERAL superstate and describes Brussels attacks as an ‘opportunity'
Gianni Pitella, leader of the socialist group in the European Parliament, claimed the attack's on the Belgian capital's metro system and airport showed the need for even closer intergration of the 28 member nations of the bloc. He also called for a “European Intelligence Agency” to be set up to strengthen the EU's defences against extremists. Critics warned that his outburst laid bare the ambitions for an European super-state held by many EU supporters and highlighted the long-term dangers of Britain staying tied to Brussels. Mr Pitella's remarks came in an interview with the EU news website Euractiv.
- Big Brother Rising: US Turns Into Full-Blown ‘Surveillance State'
The recent revelation that the NSA has plans to share intercepted private communications with other domestic intelligence agencies has caused a massive backlash, with many viewing the shift as “unconstitutional.” Two experts join Radio Sputnik’s Brian Becker to discuss if the policy is just a “giant fishing expedition for law enforcement.”
- This is how World War III starts—it will be financial
In his History of the Peloponnesian War, ancient Greek historian Thucydides told us the tale of a dominant regional power (Sparta) that felt threatened by the rise of a competing power (Athens). Sparta felt so threatened, in fact, that all the moves they made to keep the Athenian rise in check eventually escalated the power struggle into an all out war. Modern political scientists call this the Thucydides Trap.
- Trend Forecaster’s Dire Warning: Massive Crash Will Wipe 12,000 Points Off Dow Jones By Late 2017
Trend forecaster and demographic researcher Harry Dent says we are in a massive bubble. And as he explains in his latest interview with Future Money Trends, central banks around the world continue to fuel this bubble with unlimited fiat money printing. The end result according to Dent? The biggest bubble burst in history… and it’s coming soon.
- Corporate Media Gatekeepers Protect Western 1% From Panama Leak
Whoever leaked the Mossack Fonseca papers appears motivated by a genuine desire to expose the system that enables the ultra wealthy to hide their massive stashes, often corruptly obtained and all involved in tax avoidance. These Panamanian lawyers hide the wealth of a significant proportion of the 1%, and the massive leak of their documents ought to be a wonderful thing. Unfortunately the leaker has made the dreadful mistake of turning to the western corporate media to publicise the results. In consequence the first major story, published today by the Guardian, is all about Vladimir Putin and a cellist on the fiddle. As it happens I believe the story and have no doubt Putin is bent.
- Panama Papers: Revelations show sheer scale of UK links to off-shore tax havens
The UK government’s pledge to crack down on off-shore tax schemes and money laundering has been laid bare after the majority of firms implicated in a huge leak were shown to be registered in British-administered tax havens. Dubbed the Panama Papers, the unprecedented release maps how a global elite of one-percenters has hidden assets, dodged sanctions and evaded taxes over the last 40 years. More than half of the 300,000 firms, believed to have used a single, secretive Panama-based law firm, are registered in British-administered tax havens. Second only to Hong Kong, 1,900 British firms, including banks, law firms, and company incorporators, feature as “intermediaries” between Mossack Fonesca and its clients.
- Putin and the ‘Dirty Dozen': 11million leaked documents reveal how TWELVE world leaders – plus Russian leader's inner circle, British politicians and Lords – hide their millions in tax havens
The biggest financial data leak in history has revealed how Vladimir Putin's inner circle and a ‘dirty dozen' list of world leaders are using offshore tax havens to hide their wealth. A host of celebrities, sports stars, British politicians and the global rich are all implicated in the so-called Panama Papers – a leak of 11million files which contain more data than the amount stolen by former CIA contractor Edward Snowden in 2013. Documents were leaked from one of the world's most secretive companies, Panamanian law firm Mossack Fonseca, and show how the company has allegedly helped clients launder money, dodge sanctions and evade tax. Megastars Jackie Chan and Lionel Messi are among the big names accused of using Mossack Fonseca to invest their millions offshore. And the Panama Papers also reveal that the £26million stolen during the Brink's Mat robbery in 1983 may have been channelled into an offshore company set up by the controversial law firm.
- Panama Papers: David Cameron's father ‘ran offshore fund that paid zero UK tax for 30 years'
David Cameron’s father was allegedly involved in hiring what has been called a small army of Bahamas residents – including a part-time bishop – to sign paperwork for an offshore fund in what may have been an effort to avoid paying UK tax.
- ‘Panama Papers' leak of 11m documents reveals how the super rich hide their money
The largest ever leak of documents has revealed how an offshore law firm has helped its clients to hide their money in tax havens. Dubbed the “Panama Papers”, the 11 million confidential documents from Mossack Fonseca show how the Panama-based firm has used shell companies to benefit the world’s rich and powerful. Some clients have laundered money, dodged sanctions and evaded tax.
- Corporate Debt Defaults Explode To Catastrophic Levels Not Seen Since The Last Financial Crisis
If a new financial crisis had already begun, we would expect to see corporate debt defaults skyrocket, and that is precisely what is happening. As you will see below, corporate defaults are currently at the highest level that we have seen since 2009. A wave of bankruptcies is sweeping the energy industry, but it isn’t just the energy industry that is in trouble. In fact, the average credit rating for U.S. corporations is now lower than it was at any point during the last recession. This is yet another sign that we are in the early chapters of a major league economic crisis. Yesterday I talked about how 23.2 percent of all Americans in their prime working years do not have a job right now, but today I am going to focus on the employers. Big corporate giants all over America are in deep, deep financial trouble, and this is going to result in a tremendous wave of layoffs in the coming months.
- The New Part-Time Job: “Get Paid $15 An Hour To Protest At The Trump Rally”
For those wondering why Trump rallies tend to devolve to pugilistic matches, where even belligerent 15-year-old protesting (or perhaps “provocative” is a better word) girls end up getting pepper sprayed much to the media's fascination, the answer is Craig's List ads such as the one below, in which allegedly “I'm feelin' the Bern”-affiliated organizers provide paid positions for protesters at Trump rallies, and which provide not only shuttle buses, parking, and signs (as well as time cards) but also hand out $15/hour (as a “part-time employment”) for said protest activity “due to the economic inequality.”
- Japan Goes Neocon – Dumps Antiwar Constitution
Last September the Japanese Diet (parliament) passed legislation “reinterpreting” the nearly 70 year old strictly antiwar constitution to allow for the Japanese military to take part in overseas military operations not directly tied to the defense of Japan. Tens of thousands of Japanese took to the streets this week to protest the enactment of this new law. Will Japanese Prime Minister Shinzo Abe's desire to be part of Washington's “pivot to Asia” lead to a fundamental change in Japan's position in the region?
- Does The United States Still Exist? — Paul Craig Roberts
To answer the question that is the title, we have to know of what the US consists. Is it an ethnic group, a collection of buildings and resources, a land mass with boundaries, or is it the Constitution. Clearly what differentiates the US from other countries is the US Constitution. The Constitution defines us as a people. Without the Constitution we would be a different country. Therefore, to lose the Constitution is to lose the country. Does the Constitution still exist? Let us examine the document and come to a conclusion.
- Bernanke on the Fed’s Next Move
When it comes to anticipating Federal Reserve policy, there’s no better place to turn than former Fed Chair Ben Bernanke. No longer bound by an office, Mr. Bernanke is now free to write about monetary policy as an outsider. In a recent two-part post, the former Fed Chair took some time to explain what tools the Fed has left, and where they might turn in the case of another economic downturn. Why is this important? Because many believe the Fed’s hands are now tied as a result of short-term rates being near zero, and the Fed’s balance sheet sitting at over $4 trillion.
- CITI: The ‘Uber moment' for banks is coming — and more than a million people could lose their jobs
Banks are quickly approaching their “automation tipping point,” and they could soon reduce headcount by as much as 30%. That's according to a new Citi Global Perspectives & Solutions (GPS) report on how financial technology is disrupting banks. “Banks' Uber moment will mean a disintermediation of bank branches rather than the banks themselves,” the report said.
- Deflation Welcome! Lower Third of Population Goes Deeper in Debt, Cannot Afford Any Price Increases
A new PEW study on Household Incomes and Expenditures goes a long ways towards explaining why economists who expected a big jump in consumer spending based on falling gasoline prices were dead wrong. The study shows that although expenditures recovered from the downturn, income did not. Also, low-income families spent a far greater share of their income on core needs, such as housing, transportation, and food, than did upper-income families. Households in the lower third spent 40 percent of their income on housing, while renters in that third spent nearly half of their income on housing, as of 2014.
- The Eurogroup Made Simple
The Eurozone is the largest and most important macro-economy in the world. And yet, this gigantic macro-economy features only one institution that has legal status: the European Central Bank, whose charter specifies what powers the Frankfurt-based institution has in its pursuit of a single objective: price stability. Which leaves the question begging: “What about economic goals, beyond price stability, like development, investment, unemployment, poverty, internal imbalances, trade, productivity?” “Which EU body decides the Eurozone’s policies on these?”
- 7 Million at Risk from Man-made Quakes
Interesting Vox article on natural and manmade earthquakes my fellow Vet and cohort in writing Mark Jamison sent me. This year for the first time ever the USGS is including a map of areas in the US which may be prone to human-induced earthquakes” in addition to areas which are prone to natural earthquakes.
- “Spike in Defaults”: Standard & Poor’s Gets Gloomy, Blames Fed
Credit rating agencies, such as Standard & Poor’s, are not known for early warnings. They’re mired in conflicts of interest and reluctant to cut ratings for fear of losing clients. When they finally do warn, it’s late and it’s feeble, and the problem is already here and it’s big. So Standard & Poor’s, via a report by S&P Capital IQ, just warned about US corporate borrowers’ average credit rating, which at “BB,” and thus in junk territory, hit a record low, even “below the average we recorded in the aftermath of the 2008-2009 credit crisis.”
- IBM Laying Off 1000 Workers In Germany
In recent weeks, the stock of IBM has staged a dramatic rebound surging from a February 11 low of $118 to $150 today, on what we previously assumed had to be another long-overdue bout of stock buybacks. However, for that to make sense, the company – already at risk of being downgraded if it did not take further cost-cutting measures to offset the additional debt interest expense – would need to engage in another round of mass layoffs. This is precisely what happened moments ago when Germany press reported that Big Blue is cutting some 1000 jobs in Germany.
- U.S. Home Prices Are 14% Overvalued According To Bank of America
There has been an odd shift when it comes to US sentiment toward home ownership: while in the past, the higher home prices rose the greater the demand was for housing (leading ultimately to the housing debt bubble of 2006), this time around we are getting increasingly more frequent indications of just the opposite. Some have started to notice: as we noted one week ago, in its traditionally cheerful assessment of the US housing market, the NAR's Larry Yun snuck in an unexpected warning.
- First Ocean Freight Rates Collapse to “Zero,” China Freight Index Plunges to Record Low, Bailouts Loom
The amount it costs to ship containers from China to ports around the world has plunged to historic lows. As container carriers are sinking deeper into trouble, whipped by lackluster global demand and rampant oversupply of container ships, they’re escalating a brutal price war with absurd consequences.
- This Shows Financial Reality Has No Place in Today’s Markets
The shares of OHL Mexico, the Mexican subsidiary of Spanish construction behemoth OHL, soared over 10% to 26.72 pesos on Monday morning. It was the stock’s biggest climb in over 8 months. The reason for the market’s new-found enthusiasm for the shares was somewhat counter intuitive: the company had just announced that it had been hit by the biggest fine ever imposed by Mexico’s securities authority, the CNBV. The company had been penalized for irregular accounting practices and was forced to pay 71.7 million pesos in damages — a $4-million slap on the wrist.
- Peter Boockvar Warns Western Central Planners Are In Now Deep Trouble
Outside of another round of Pavlov’s (Yellen’s) panting dog (markets) getting more food, a few things were firmly established yesterday. Firstly, it really doesn’t matter what any regional Fed President says, especially those that don’t vote as Yellen is clearly the boss and what she wants is what she’ll get…
- Solid Sale Of 7 Year Paper Ends Streak Of Poor Treasury Auctions
Following two disappointing auctions earlier this week when first the 2Y and then the 5Y auctions either demonstrated a substantial drop off in bid-side interest or priced wildly through the when issued, we said to await today's 7Y auction for the true picture of demand for primary paper, as the first auction took place when Europe was out for Easter vacation, and the second one took place just as Yellen speaking at the Economic Club yesterday.
- Attention President Obama: One Third Of U.S. Households Can No Longer Afford Food, Rent And Transportation
While the Fed has long been focusing on the revenue part of the household income statement (which unfortunately has not been rising nearly fast enough to stimulate benign inflation in the form of nominal wages rising at the Fed's preferred clip of 3.5% or higher), one largely ignored aspect of said balance sheet has been the expense side: after all, for any money to be left over and saved, income has to surpass expenses. However, according to a striking new Pew study while household spending has returned to pre-recession levels (the average household spent $36,800 in 2014) incomes have not.
- Doug Casey and the War on Cash: “We Are Truly on the Edge of a Precipice”
Recently, my friend and colleague Louis James, editor of International Speculator, sat down with Doug Casey to discuss the ongoing “War on Cash.” Doug reveals what people looking to protect their money should do. As the War on Cash has gone into overdrive lately, this is a timely discussion that you’ll find below.
- How Have Hedge Funds Been Affected By Oil Prices?
After suffering large losses in 2014, trying to find a bottom in crude oil, the hedge fund industry wizened up: In 2015, it reduced its weightage to the energy sector to the lowest levels since 2008, saving themselves from profound losses when crude hit new 12-year lows—levels not seen since 2004. It was a short-lived euphoria, however, as most missed the stellar run in crude from the lows and are scrambling to enter after the rebound.
- Job Growth Doesn’t Mean We’re Getting Richer
In response to recent claims by the Obama administration and others that “millions of jobs” have recently been created, I examined the data here at mises.org to see if the claims were true. It turns out that job growth since the 2008 recession has actually been quite weak, and hardly something to boast about. Nevertheless, our conclusions from these analyses tend to rest on the idea that job growth is synonymous with gains in wealth and economic prosperity. But is that a good assumption? In an unhampered market, the answer would be no, for several reasons.
- Greece Demands Explanation From IMF Over Leaked Transcript
Greek politicians wasted no time in seeking a response from the IMF over the leaked transcript released earlier today by Wikileaks suggesting the IMF may threaten to pull out of the country's bailout as a tactic to force European lenders to more offer debt relief, and which according to the Greek government was “interpreted as revealing an IMF effort to blackmail Athens with a possible credit event to force it to give in on pension cuts which it has rejected.” According to Reuters, “Greece demanded an explanation from the International Monetary Fund on Saturday after an apparent leaked transcript suggested the IMF may threaten to pull out of the country's bailout as a tactic to force European lenders to more offer debt relief.”
- Wikileaks Reveals IMF Plan To “Cause A Credit Event In Greece And Destabilize Europe”
One of the recurring concerns involving Europe's seemingly perpetual economic, financial and social crises, is that these have been largely predetermined, “scripted” and deliberate acts. This is something the former head of the Bank of England admitted one month ago when Mervyn King said that Europe's economic depression “is the result of “deliberate” policy choices made by EU elites. It is also what AIG Banque strategist Bernard Connolly said back in 2008 when laying out “What Europe Wants”
- Price Controls May Be On the Way
If you thought negative interest rates were as bad as it could get with central banks, you might be in for a surprise. Central banks have been so spectacularly unsuccessful with their accommodative monetary policies that they are discussing pulling out all the stops to get the results they want. They fail to realize that the reason prices aren’t rising is because they really want and need to fall. Bad debts weren’t liquidated during the last financial crisis, the debtors were merely bailed out. Overpriced assets weren’t allowed to be reduced in price. Central banks pumped trillions of dollars into the economy to attempt to paper over the recession. Market forces want to drive prices down, while central banks attempt to prop them up. So what to do when central banks aren’t getting their way?
- Relative Strength in Silver
Gold went down (as the muggles would measure it, in dollars). It dropped almost 40 bucks. Silver fell almost 60 cents. Since silver fell proportionally farther than gold, the gold-silver ratio went up. Why do we keep reiterating that gold goes nowhere, that it’s the dollar which mostly goes down over long periods of time and sometimes up as in 2011-2015? Why do we insist that the dollar be measured in gold, and that gold cannot be measured in dollars the way a steel meter stick cannot be measured in rubber bands? Some ideas that are impossible to understand using the dollar paradigm. For example, gold is in the process of withdrawing its bid on the dollar. This will have devastating consequences, which the word “reset” does not begin suggest. If the dollar is money, then this assertion — gold bids on the dollar — is incomprehensible. However, if gold is money then that makes the dollar just the irredeemable scrip issued by the Fed in order to finance its purchase of Treasury bonds. Who would be eager to trade his money to buy such scrip?
- The Pitfalls of Currency Manipulation – A History of Interventionist Failure
Readers may recall that the last G20 pow-wow (see “The Gasbag Gabfest” for details) featured an uncharacteristic lack of grandiose announcements, a fact we welcomed with great relief. The previously announced “900 plans” which were supposedly going to create “economic growth” by government decree seemed to have disappeared into the memory hole. These busybodies deciding to do nothing, is obviously the best thing that can possibly happen.
- Gerald Celente Issues Trend Forecast For Gold As Global Economy Falters
For several days, gold prices fell on hawkish comments from a number of regional Federal Reserve Bank presidents signaling support for an interest-rate rise, pointing to a possible increase at the upcoming Federal Open Market Committee meeting in late April. They reasoned, as has President Obama and the establishment business media, that anyone questioning the strength of the US economy was “peddling fiction,” and that a Fed rate hike, the second since 2006, was in order…
- ALERT: Important Update On The War That Is Raging In The Gold & Silver Markets
The commercial shorts are now at a level (real-time) that raises serious concern. In fact, the commercials are close to one of their largest short positions in history. The last time the commercials held this large of a short position in silver was in 2008. Again, that does not mean that the price of silver cannot head significantly higher in the short-term.
- Americans Have Been Turned Into Peasants – Time To Fight Back?
In the 1970’s, Goldman Sachs CEO Gus Levy famously encouraged his employees to be “long-term greedy.” In order to understand how far we have fallen as an economy and culture, it’s important to understand the meaning of the phrase and reflect upon it. “Long-term greedy” implies two very important principles that define a well functioning and ethical free market economy. First, is the unrepentant belief that earning a good profit and striving for financial success is a reasonable and admirable goal for both individuals and corporations. Second, is the understanding that such financial success should be earned, not stolen. If one’s focus is the long-term, the implication is that you’re committing yourself to building something real, and that the marketplace will ultimately reward you handsomely for your product or service.
- Is A Gas War Between The U.S. And Canada About To Start?
The United States and Canada work well together. The countries share the world’s largest and most comprehensive trade relationship, exchanging more than $2 billion per day in goods and services; the U.S. is Canada’s largest foreign investor and Canada is the third-largest foreign investor in the U.S. The partnership clearly isn’t broken, but it may need some mending as bilateral and international gas trade stands to complicate matters in short order.
- Why the Fed rate talk was ‘a bunch of nonsense'
The Federal Reserve was never hiking rates four times this year. Investors didn't believe it, and now Fed Chair Janet Yellen has all but explicitly acknowledged it. Indeed, Yellen's blockbuster speech Tuesday assuring that the central bank would go slowly on future adjustments to monetary policy only caught some of the market by surprise. Others realized there was virtually no chance of a hawkish Fed in 2016. “Central bankers at the Fed bark but they won't bite,” Peter Schiff, frequent Fed critic and founder of Euro Pacific Capital, told CNBC.com. “I knew all that talk was a bunch of nonsense.”
- Emerging-Market Currencies Set for Best Month in 18 Years on Fed
It’s been at least 18 years since emerging-market currencies had it this good as the Federal Reserve adopted a gradual approach to its rate-increase cycle, fueling optimism that capital inflows can be sustained. A Bloomberg gauge of 20 currencies gained for a fourth day after Fed Chair Janet Yellen said that policy makers would act “cautiously” as they look to raise borrowing costs. Stocks rallied, sending shares in Shanghai up the most in a month, while South African equities rebounded from a two-week low and Russia ended the longest run of losses since 2011. The premium investors demand to hold emerging-market debt dropped from the highest since March 16.
- Central Bank Policy Sparking Gold Demand in Europe
When we talk about increasing gold demand, the focus tends to fall on Asia. Earlier this week, we reported surging investor demand for the yellow metal in China. The Japanese have also gone on a gold buying spree since that country’s central bank plunged interest rates into negative territory. But it isn’t just Asians who are bullish on gold. Analysts say they see signs of growing demand for the metal in Europe as well.
- Boeing to Cut More Than 4,500 Jobs
Boeing Co. on Tuesday said it planned to cut more than 4,500 jobs by June, as the company accelerates cost-cutting efforts to keep pace with customers demanding less expensive jetliners. The cuts come even as Boeing has booked record orders for its jets and is increasing production of its single-aisle and twin-aisle aircraft. But the company has been losing market share to rival Airbus Group SE. Boeing’s commercial unit expects to cut about 2,400 positions by attrition and around 1,600 through voluntary layoffs, a company spokesman said. This includes the culling of “hundreds” of managers and executives, some through involuntary layoffs.
- Dollar Falls to Five-Month Low on Slower Fed Rate Path Outlook
The dollar fell to a five-month low against the euro on speculation the Federal Reserve will take a slower path to higher interest rates as the central bank factors in headwinds from slowing global economic growth. A gauge of the U.S. currency headed for the biggest quarterly loss since 2010 after Fed Chair Janet Yellen said Tuesday the central bank will act “cautiously” as it looks to withdraw monetary stimulus. The greenback has fallen against all of its 31 major peers in March with Russia’s ruble and Brazil’s real posting the biggest gains, helping emerging-market currencies to their best month in 18 years.
This is an invitation by Pastor Lindsey Williams taken from the DVD ‘Elite Plans For 2016‘. Lindsey Williams, an ordained Baptist minister went to Alaska in 1970 as a missionary. For three years Pastor Lindsey Williams had the opportunity to sit, live and rub shoulders with the most powerful, controlling and manipulative men on the face of this planet.