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 June 24, 2016 to June 30, 2016:
- Jim Rogers on Brexit: ‘Worse than any bear market you’ve seen in your lifetime'
The UK's decision to leave the European Union will lead to an economic crisis more severe than what the world faced in 2008, according to legendary investor Jim Rogers, chairman of Rogers Holdings. “This is going to be worse than any bear market you’ve seen in your lifetime,” he said on Yahoo Finance’s “Market Movers” program Monday. “2008 was bad because of debt. The debt all over the world is much, much higher now. Stocks in the US, for instance, have been going sideways for 18 months to 24 months. That’s called a distribution by many people. When you have distribution for a year and a half, it usually leads to bad things.”
- The United States Of Europe: Germany And France Hatch A Plan To Create An EU Superstate
If you believe that the Brexit vote is going to kill the idea of a “United States of Europe”, you might want to think again. In fact, it appears that the decision by the British people to leave the European Union is only going to accelerate the process of creating an EU superstate. As you will see below, one of the largest newspapers in the UK is reporting that the foreign ministers of France and Germany have drafted “a blueprint to effectively do away with individual member states”. So even though men like George Soros are warning that the eventual dissolution of the European Union is “practically irreversible” after the Brexit vote, the truth is that the globalists are not about to give up so easily.
- Gerald Celente Just Issued A Dire Warning To The World After His Shockingly Accurate Brexit Prediction
Top trends forecaster in the world, Gerald Celente, just issued a dire warning to King World News on the heels of his shockingly accurate Brexit prediction. “The world certainly did change forever on that historic vote to leave the EU. As I have long predicted, we are now looking at the dissolution of the European Union. Since the British voted to Brexit, what have we seen throughout Europe? France, Germany, Italy, Finland, and the Netherlands, are all calling for referendums to leave the EU.
- ALERT: Man Whose Work Is Praised Around The World Says Gold To Soar $1,000 In 24 Months
Interest rates have never been as low as today; 5,000 years of data confirm this. In the meantime government bonds valued at more than eight trillion dollars have negative yields to maturity. As an asset class, fixed income securities are more expensive than ever before. By now, central bank interventions have decimated all notions of honest, free market price discovery in bond markets and beyond. The centrally planned bubble in bonds is about to bring about the “euthanasia of the rentier” so craved by Keynes himself and his acolytes. When this bubble inevitably bursts, it will be abundantly clear how valuable an insurance policy in the form of gold truly is.
- Is This Epicenter Of Serious Trouble About To Send Shockwaves Across The World?
Well, it looks like my traveling finally set a world record for volatility that will likely never be topped. I am of course referring to all the wild gyrations in virtually every tradeable market that took place on Friday — which continued for the most part today. There are any number of topics I could try to discuss, but I would like to focus on what I think are the key points of the ramifications of the Brexit vote. The very first thing to keep in mind is that the “winner” of all of this is liable to be a massive amount of uncertainty (compounded by the U.S. election looming in five months), which inhibits businesses from making decisions and at the margin causes people to sell many types of assets.
- Report to Supporters: The British Woke UP — Can The Americans?
Many thanks for the support that you give to the website and for the words of encouragement and appreciation that you send to me. The website resulted from you calling me out of retirement. It is widely read and translated into foreign languages. I try to read every email, but it is not possible for me to read and comment on the many articles and books that you send or to respond to your questions over a wide range of issues, not all of which I know anything about. This website is a great deal of work. In our time to be truthful is to be provocative. To write provocatively leaves little room for error or mistatement as today’s euphemism terms it. I could shill for the establishment and be wrong 98% of the time and nothing ever would be said about it. But there is no forgiveness for a provocative truth-teller.
- China state planner on UK investment after Brexit: “Wait and see”
Chinese companies may want to “wait and see” the impact of Britain’s vote to leave the European Union before they invest in the country, Xu Shaoshi, the head of China’s top economic planner said on Sunday, according to Reuters. However, the impact of the referendum on China’s economy will be limited, the chairman of the National Development and Reform Commission said. At the World Economic Forum meet in Tianjin city on Monday, Chinese Premier Li Keqiang said that China would continue strengthening ties with Europe and the UK.
- ECB Blows €400bn on “Brexit Black Friday” Bank Bailouts
Dealing with a Financial Crisis under cover of Brexit Chaos. Remember TARP, the Troubled Asset Relief Program that the US Congress approved to bail out banks and other companies during the Financial Crisis? $700 billion were authorized, later reduced to $475 billion. The Treasury eventually dispersed $432 billion. I bring this up because the ECB bailed out the European banks with more than TARP, in just one day: on Brexit Black Friday. The ECB saw what was happening to the shares of the largest banks on that propitious day.
- How Vulnerable is the Shaky US Economy to Brexit Fallout and European Bank Meltdown?
You know things are getting bad when our leaders call for calm. US Secretary of State John Kerry just did that. “It is absolutely essential that we stay focused on how in this transitional period, nobody loses their head, nobody goes off half-cocked, people don’t start moving on scatter-brained or revengeful premises,” he told reporters in Brussels on Monday after Brexit had thrown the EU into political turmoil, while European bank stocks had their worst two-day meltdown ever, on the toxic mix of Brexit and a full-blown banking crisis. And all kinds of things are suddenly happening.
- Crash of All Crashes Coming-Bo Polny
Market cycle analyst Bo Polny says the vote by the UK (Brexit) to leave the European Union is a big turning point. Polny says, “Brexit is England and part of the cycle and I believe looks to be the actual trigger that is going to take gold higher and the trigger that is going to cause the world equity markets to collapse. It looks like it started, but we will have a little bit of time yet before things get extremely crazy. We are not going to get out of June before all heck breaks loose.” Polny also is predicting the Dow will eventually grind down to around the 5,000 level. Polny explains, “Basically, after the Dow hits that 5,000 or 6,000 point, it never recovers. This is the crash of all crashes. This is the one where there is no recovery.”
- US Banks Are Crashing & British Banks Halted After Crashing
The Brexit contagion is spreading as USD liquidity and counterparty risk in the interconnected global financial system has reached US banks with Goldman at 3 year lows and BofA and Citi plunging over 12%. This happens just two days after the Fed released its latest stress test results finding that none of the 33 banks tested would need additional capital in case of a “severe” financial crisis. That conclusion may be tested soon.
- King Says Carney Calm Will Guide U.K. Through Brexit Uncertainty
Mark Carney will help to guide the U.K. through the next few months amid political stasis after the Brexit vote, according to his predecessor as Bank of England governor. Mervyn King said the “most important thing” for the U.K. is an effective government and opposition. Both are absent after Britain’s vote to leave the European Union prompted Prime Minister David Cameron to resign and led to turmoil in the opposition Labour Party. Concern about political leadership was one factor cited by S&P Global Ratings on Monday when it stripped the U.K. of its top credit grade.
- Banks Suffer More Downgrades, Other Sectors To Feel Post-Brexit Pinch: Tuesday's Analyst Actions
After Monday's deluge of downgrades on European banks, RBC Capital Markets continued the pile-on. “There has been a strong correlation between share prices and consensus EPS,” the analysts write. “We expect a prolonged period of uncertainty post Brexit to negatively impact business and consumer confidence across the U.K. and Europe and beyond.” And in this case, the team sees a number of reasons why their peers will also sour on the outlook for banks' bottom lines. Estimates for net interest income, investment banking revenues, and equity-sensitive revenues should come under the knife while loan loss provisions move higher, they anticipate.
- Italy eyes €40bn bank rescue as first Brexit domino falls
Italy is preparing a €40bn rescue of its financial system as bank shares collapse on the Milan bourse and the powerful after-shocks of Brexit shake European markets. An Italian government task force is watching events hour by hour, pledging all steps necessary to ensure the stability of the banks. “Italy will do everything necessary to reassure people,” said premier Matteo Renzi. “This is the moment of truth we have all been waiting for a long time. We just didn’t know it would be Brexit that set the elephant loose,” said a top Italian banker.
- Brexit Is Just The Beginning: A Tidal Wave Of Popular Revolt Against The Ruling Elites
Now that Britain has done the unthinkable and voted to leave the European Union, the critics are ruthless in their condemnation of Prime Minister David Cameron for his “irresponsible act” in calling the referendum in the first place. As if it were his fault. As if he was responsible for the bloated Brussels bureaucracy and undemocratic governance structure in the EU. As if he were to blame for the domination of an unequal union by a German chancellor responsive and accountable only to her own domestic political concerns.
- Ron Paul: The People Will Not Suffer From Brexit, Only the Global Banking Elite Will
Since 1958, the European Union has been absorbing independent states across the continent. Starting with the original inner 6 countries (Belgium, France, Italy, Luxemburg, Netherlands, and West Germany) and ending with Croatia in 2013, the forced centralization of Europe was a massive and ominous force with which to be reckoned. Until now. On Friday, the people of Great Britain made their voice heard. They no longer want to be a part of the European Union and for good reason. For decades they have sat back and watched the global elite enrich themselves through special trade agreements ostensibly designed to bolster the economy, but in reality grant special treatment to those close to the top. George Soros exposed the dependence of the elite on the EU when he took to fearmongering about rampant financial collapse upon Brexit.
- ‘The Unthinkable Is Happening’: Italy Demands EU Reform, Warns Over Full Collapse
Italian ministers warned Saturday that the European Union must change direction or risk collapse after Britain’s vote to leave the bloc. “The unthinkable is happening,” Finance Minister Pier Carlo Padoan said. “A double reaction to Brexit is under way, one financial, one political. The financial one, at least until now, is limited. I am more worried about the political one. “There is a cocktail of factors that can lead to various outcomes, including a further push towards disintegration.”
- Barclays, RBS Hit Post-Crisis Lows on Banks’ Brexit Plunge
Barclays Plc and Royal Bank of Scotland Group Plc had their shares halted as the banks plunged to the lowest level since the financial crisis, accelerating declines after the U.K.’s vote to leave the European Union sparked fears about political and economic risks. Barclays shares fell more than 17 percent for the second straight day, and the stock has now lost more than half its value in the last 12 months. RBS plummeted as much as 26 percent in London trading, reaching the lowest levels since January 2009 amid the lender’s taxpayer bailout. Trading in both banks was halted earlier in the day amid the rapid drops.
- European Banks Have Their Worst Two Day Stretch EVER As The Global Financial Crisis Intensifies
Over the last two trading days, European banks have lost 23 percent of their value. Let that number sink it for a bit. In just a two day stretch, nearly a quarter of the value of all European banks has been wiped out. I warned you that the Brexit vote “could change everything“, and that is precisely what has happened. Meanwhile, the Dow was down another 260 points on Monday as U.S. markets continue to be shaken as well. Overall, approximately three trillion dollars of global stock market wealth has been lost over the last two trading days. That is an all-time record, and any doubt that we have entered a new global financial crisis has now been completely eliminated. But of course the biggest news on Monday was what happened to European banks. The Brexit vote has caused financial carnage for those institutions unlike anything that we have ever seen before.
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- We Just Witnessed The Greatest One Day Global Stock Market Loss In World History
More stock market wealth was lost on Friday than on any other day in world history. As you will see below, global investors lost two trillion dollars on the day following the Brexit vote. And remember, this is on top of the trillions that global investors have already lost over the past 12 months. It is important to understand that the Brexit vote was not the beginning of a new crisis – it has simply accelerated a global financial crisis that started last year and that was already in the process of unfolding. As I noted on Friday, we have been waiting for “the next Lehman Brothers moment” that would really unleash fear and panic globally, and now we have it. The next six months should be absolutely fascinating to watch. According to CNBC, the total amount of money lost on global stock markets on Friday surpassed anything that we had ever seen before, and that includes the darkest days of the financial crisis of 2008.
- Six More Countries Want Referendums to Exit EU
Brussels simply went too far. They crossed the line after moving from an economic union to a political subordinate of Europe. Now, six more countries want to hold referendums to exit the EU; France, the Netherlands, Italy, Austria, Finland, and Hungary all could leave. With Hollande’s approval rating at about 11%, Merkel is lucky she is not tarred & feathered. Front National leader Marine Le Pen has pledged to hold a French referendum. If she emerges victorious in next year’s presidential elections, that means the next major player in the EU after Germany is out and there goes the EU.
- Time for a bit of project cheer? Despite Brexit turmoil, the FTSE 100 closes UP 158 points and the pound has a steady day against the dollar – but experts warn of a ‘dead cat bounce'
The markets rallied today after the pound dropped to a 31-year low against the US dollar and £40billion was wiped off the FTSE 100. The FTSE 100 closed 158 points higher as initial jitters triggered caused by the Brexit vote calmed. Sterling had a relatively calm and is currently trading against the dollar at 1.33 – higher than where it was after the pound hit its lowest level since 1985 yesterday. However, experts dubbed the increases a ‘dead cat bounce'. This is a recovery in share prices after a substantial fall, only caused by traders buying to cover their positions when the markets reach new lows.
- BREXIT BODY COUNT — Bill Holter
BREXIT: Does it signal a tidal wave of rising sentiment against the international criminal banking syndicate and its Globalist agenda, or is it merely a Trojan horse designed by the Rothschild banksters to further ensnare humanity in their NWO spider’s web? After all, Rothschild puppet George Soros was very publicly shorting stocks and going long gold in the months leading up to the Brexit vote. Did he know something the rest of us didn’t? Regardless, Bill Holter says there are dead bodies that need to be carried out as the result of the global financial chaos we saw on Friday, June 24th – and we will know a lot more about who those bodies belong to, on Monday morning.
- It's official—Brexit's ‘Black Friday' sell-off was the worst ever at $2 trillion
The U.K.'s referendum to leave the European Union was a costly decision in more ways than one. Worldwide markets hemorrhaged more than $2 trillion in paper wealth on Friday, according to data from S&P Global, the worst on record. For context, that figure eclipsed the whipsaw trading sessions of the 2008 financial crisis, according to S&P analyst Howard Silverblatt. The prior one day sell-off record was $1.9 trillion back in September of 2008, Silverblatt noted. According to S&P's Broad Market Index, combined market capitalization is currently worth nearly $42 trillion. As bourses sold off from Asia to the U.S., the fallout from Brexit culminated in the Dow Jones Industrial Average racking up a 600 point loss. Bloomberg's Billionaires Index noted that the world's 400 wealthiest investors lost a combined $127 billion in Friday's market downturn.
- What Billionaire Investors Are Doing with Gold While You're Not Watching
With each passing day, systemic risks in the financial system become greater. Smart money insiders and billionaire investors are taking note – and taking defensive actions. Mega-billionaire Carl Icahn, whose long-term track record is unrivaled, recently warned that “there will be a day of reckoning unless we get fiscal stimulus.” Icahn’s hedge fund is betting on a day of reckoning scenario. He has gone 150% net short the stock market while holding commodity-related positions to the long side.
- UK votes to leave European Union: Period of uncertainty expected – Investors rush to gold
In a stunning decision that is reverberating around the world, the people of the United Kingdom have decided to leave the European Union, the 28 member bloc and market of some 500 million that has its roots in the aftermath of the Second World War. Even more shocking perhaps is the margin of victory, the “Leave” campaign winning by 52 percent over the “Remain” side’s 48 percent. More than 17.4 million British people voted in the June 23rd referendum to exit the EU, compared to 16.1 million who cast ballots to stay the course.
- Alan Greenspan says British break from EU ‘is just the tip of the iceberg'
Former Fed Chairman Alan Greenspan told CNBC on Friday the U.K. vote to leave the European Union ushers in a period that's even worse than the darkest days of October 1987. Britons voted by 51.9 percent to quit the 28-country union, shocking markets that had priced in a win for the remain camp. “This is the worst period I recall since I've been in public service,” Greenspan said on “Squawk on the Street.” “There's nothing like it, including the crisis — remember October the 19th, 1987, when the Dow went down by a record amount, 23 percent? That I thought was the bottom of all potential problems. This has a corrosive effect which is not easy to go away.”
- “The Global Economy Can No Longer Rely On Debt” – BIS Warns Central Bank Actions “Have Started To Backfire”
It's late June which means it is time for the annual warning by the Bank of International Settlements about the growing futility of monetary policy and central bank impotence. Exactly one years ago, the BIS asked “Of What Use Is A Gun With No Bullets?”, in which the BIS said central banks are defenseless against the coming crisis. Well, it underestimated just how far the central banking “magic people” are willing to reach inside their “magic bag of tricks” to preserve the status quo: to be sure nobody at the time expected the ECB to begin buying not just corporate bonds but junk bonds too.
- UK Loses AAA Credit Rating After Brexit Vote
Ratings agency Standard and Poor's has stripped the UK of its top AAA credit rating after the vote to leave the European Union. “In our opinion, this outcome is a seminal event, and will lead to a less predictable, stable, and effective policy framework in the UK,” a statement from the agency read. “The negative outlook reflects the risk to economic prospects, fiscal and external performance, and the role of sterling as a reserve currency, as well as risks to the constitutional and economic integrity of the UK if there is another referendum on Scottish independence,” S&P said. The loss of the last remaining “AAA” rating represents a fresh blow to Britain's economic standing after the referendum.
- As the west Brexits, Russia and China sign pacts to ‘Strengthen Global Strategic Stability'
Chinese President Xi Jinping and his Russian counterpart Vladimir Putin promosed ever-closer cooperation and oversaw a series of deals on saturday, as the two countries deepen ties in the face of growing tensions with the west. In what was Putin’s fourth trip to China since Xi became president in 2013, the two men stressed their shared outlook which mirrors the countries’ converging trade, investment and geopolitical interests. “Russia and China stick to points of view which are very close to each other or are almost the same in the international arena,” Putin said. The Russian leader added that the two had discussed “strengthening together the fight against international terrorism”, the nuclear issue on the Korean peninsula, Syria, and stability in the South China Sea. Russia and China have been brought together by mutual geopolitical concerns, among them wariness of the United States.
- END OF THE EU? Germany warns FIVE more countries could leave Europe after Brexit
FIVE European countries may seek to follow Britain’s lead in leaving the EU in a Brexit domino effect, Germany has warned. France, the Netherlands, Austria, Finland and Hungary could leave. Front National leader Marine Le Pen has pledged to hold a French referendum if she emerges victorious in next year's presidential elections. While for the past two months a Nexit has been on the cards after Dutch voters overwhelmingly rejected a Ukraine-European Union treaty. Details of Berlin's concerns were outlined in a finance ministry strategy document.
- How a secretive elite created the EU to build a world government
As the debate over the forthcoming EU referendum gears up, it would be wise perhaps to remember how Britain was led into membership in the first place. It seems to me that most people have little idea why one of the victors of the Second World War should have become almost desperate to join this “club”. That's a shame, because answering that question is key to understanding why the EU has gone so wrong. Most students seem to think that Britain was in dire economic straits, and that the European Economic Community – as it was then called – provided an economic engine which could revitalise our economy. Others seem to believe that after the Second World War Britain needed to recast her geopolitical position away from empire, and towards a more realistic one at the heart of Europe. Neither of these arguments, however, makes any sense at all.
- Brexit vote, UK political confusion keep world markets on edge
Britain's vote to leave the European Union continued to reverberate through financial markets, with the pound falling to its lowest level in 31 years, despite government attempts to relieve some of the confusion about the political and economic outlook. UK finance minister George Osborne said early Monday that the British economy was strong enough to cope with the market volatility caused by last week's “Brexit” referendum which has resulted in the biggest blow since World War Two to the European goal of forging greater unity. “Our economy is about as strong as it could be to confront the challenge our country now faces,” Osborne told reporters.
- This is what the City and Wall Street are saying about Brexit
Britain created history on Thursday night, voting to become the first country to leave the European Union, with a 52% to 48% split in votes to get out of the EU. Market reaction was insane, with assets across the board getting crushed. The pound saw its biggest single-day drop in history, European and US banking stocks crashed lower, and safe haven assets like gold took off upwards. Soon after the vote was confirmed, the Bank of England announced that it is “ready to provide more than £250bn of additional funds” to the UK's financial system. Simply put, Brexit totally freaked participants in the global financial system out.
- Brexit vote wipes nearly 100 billion pounds off FTSE in two days; banks slump
Britain's top share index extended the previous session's steep losses on Monday as the country's vote last week to leave the European Union hurled it into political and economic uncertainty, hitting banks, housebuilders and airlines hard. Some investors took refuge in firms producing gold, seen as a safe-haven asset, with Fresnillo (FRES.L) closing up 7 percent after hitting a three-year high and Randgold Resources (RRS.L) gaining 9 percent. The FTSE 100 .FTSE ended 2.6 percent lower at 5,982.20 points, taking total losses to 5.6 percent in two sessions and wiping off nearly 100 billion pounds since the referendum results early on Friday. Shares in easyJet (EZJ.L) recorded their biggest one-day percentage drop in 12 years.
- Nigel Farage: UK heading for recession regardless of Brexit
Nigel Farage has said Britain is progressing towards a “mild” recession – but insisted it was not because the UK had voted to leave the European Union. In the wake of the shock EU referendum results, hundreds of billions were wiped off the value of global stocks and the pound plunged to its lowest level against the dollar in more than 30 years. But the Ukip leader told the Sunday Telegraph: “There’s nothing new here. “I think we are going into a mild recession anyway, completely regardless of Brexit. “Our growth forecasts are down. Our public sector borrowing is still not under control at all and everyone forgets that sterling is in a bear market, declining since July 2014.”
- The magic number 7: Brexit collapse falls exactly on Shemitah date
In 2014, Christine Lagarde gave a speech on “the magic number 7.” It, along with work by Jonathan Cahn, led us to the Shemitah seven-year cycle and the Jubilee year, which the globalist elites are well aware of. What we’ve discovered since is that there is even more to the “magic number 7” than just years… it appears to correlate right down to months, weeks and days. The last major market crash occurred on September 29, 2008. On that day, the Dow Jones fell 777 points, of all numbers…. its biggest one day point drop ever. On Friday, in the aftermath of Brexit, the Dow fell over 600 points. What’s interesting about Friday’s date? It was 7 years, 7 months, 7 weeks and 7 days since September 29, 2008. And what a day Friday, June 24th was!
- They Are Putting Armed Guards On Food Trucks In Venezuela
We are watching what happens when the economy of a developed nation totally implodes. Just a few years ago, Venezuela was the wealthiest nation in all of South America, and they still have more proven oil reserves than anyone else on the entire planet including Saudi Arabia. But now people down there are so hungry and so desperate that some of them are actually hunting dogs, cats and pigeons for food. Just a few days ago, I gave a talk down at Morningside during which I warned that someday we would see armed guards on food trucks in America. After that talk was done, I went back up to my room and I came across a New York Times article which had been republished by MSN that explained that this exact thing is already happening down in Venezuela.
- Despite the Vote, the Odds Are Against Britain Leaving the EU — Paul Craig Roberts
The Brexit vote shows that a majority of the British voters understand that the UK government represents interests other than the interests of the British people. As difficult as the British know it is to hold their own government to account, they understand they have no prospect whatsoever of holding the EU government to account. During their time under the EU, the British have been reminded of historical times when law was the word of the sovereign. The propagandists who comprise the Western political and media establishments succeeded in keeping the real issues out of public discussion and presenting the leave vote as racism. However, enough of the British people resisted the brainwashing and controlled debate to grasp the real issues: sovereignty, accountable government, financial independence, freedom from involvement in Washington’s wars and conflict with Russia.
- After Brexit Shocker There Is Trouble At The Comex And The Global Financial System Is On The Brink
In the wake of the stunning Brexit outcome in Britain there is trouble at the Comex as the price of gold surges and the global financial system is now on the brink. This is why emergency central bank intervention is taking place. Victor Sperandeo: “Right now I would be a buyer of the FTSE and a buyer of the British pound. I would also stay long gold at this point. I have 85 percent of my pension fund long gold and I would be a buyer on any dips. What’s more important is that there is virtually no gold at the Comex. If the longs ask for delivery and they can’t deliver, then there will be a force majeure. Meaning, they will settle for cash and that will send the price of gold much, much higher.
- EU Debate – Oxford Union. Daniel Hannan MEP
Superb speech on Brexit. Daniel Hannan is a European Parliament member, who subsequently has now lost his job given the outcome of the referendum.
- People Around The Globe Are Still Stunned But This Is Really Going To Shock The World
On the heel of an absolutely wild trading week where we witnessed history being made, people around the globe are still stunned but this is really going to shock the world. Stephen Leeb: “A lot of things are uncertain after the Brexit vote. But there’s one thing that is certain: it sure hasn’t hurt the case for owning gold and silver. It goes beyond the mere fact that the added global uncertainty will in itself favor precious metals. If you look behind the shocking outcome of the referendum to see the frustrations that led so many in Britain to pull the lever to leave the EU, it suggests further reasons that gold and silver will benefit. At their core, those frustrations reflect a long period in which lack of real growth meant shrinking horizons and contracting lives, a state of affairs as true in the U.S. as in Britain for those outside the rarefied elite of top earners.
- Energy Expert Thinks U.S. Government Should Cut Its Strategic Oil Reserves In Half
An energy expert thinks America’s massive oil reserves should be sold off, maybe as much as half — if not all of it. In a Wednesday interview with NPR, the global head of energy analysis for Oil Price Information Service, Tom Kloza said, “You might as well be wearing bell-bottoms as having 690 million barrels in storage,” indicating his belief that storing so much oil is an antiquated policy. Kloza also said that since U.S. oil production is on the rise and imports are declining, the need for such massive reserves is antiquated. The Strategic Petroleum Reserve (SPR) was created in 1975 in response to the Arab oil embargo, which lead to a spike in oil prices and even saw Congress call for increasing fuel standards for cars.
- BRICS react cautiously to Brexit
After Britain voted to leave the 28-member European Union, members of the BRICS reacted with caution on Friday. China’s Foreign Ministry said Britain’s choice to exit the EU will have significant ramifications, although China is still keen to strengthen its ties with the UK. “The impact will be on all levels, not only on China-Britain relations. As to what kind of impact there will be, I believe all sides will calmly and conscientiously assess this,” Hua Chunying, spokesperson of the Foreign Ministry said in Beijing. “China supports the European integration process and would like to see Europe playing a positive role in international affairs. We have full confidence in the prospects for the development of China-EU ties,” she added. Beijing’s cautionary note came as other euro-sceptic leaders in the European Union called for their countries to follow suit.
- The Amount Of Stuff Being Bought, Sold And Shipped Around The U.S. Hits The Lowest Level In 6 Years
When less stuff is being bought, sold and shipped around the country with each passing month, how in the world can the U.S. economy be in “good shape”? Unlike official government statistics which are often based largely on projections, assumptions and numbers seemingly made up out of thin air, the Cass Freight index is based on real transactions conducted by real shipping companies. And what the Cass Freight Index is telling us about the state of the U.S. economy in 2016 lines up perfectly with all of the other statistics that are clearly indicating that we have now shifted into recession mode.
- Black Friday: Shocking Brexit Vote Result Causes The 9th Largest Stock Market Crash In U.S. History
Has the next Lehman Brothers moment arrived? Late Thursday night we learned that the British people had voted to leave the European Union, and this could be the “trigger event” that unleashes great financial panic all over the planet. Of course stocks have already been crashing all over the globe over the past year, but up until now we had not seen the kind of stark fear that the crash of 2008 created following the collapse of Lehman Brothers. The British people are certainly to be congratulated for choosing to leave the tyrannical EU, and if I could have voted I would have voted to “leave” as well. But just as I warned 10 days ago, choosing to leave will “throw the entire continent into a state of economic and financial chaos”. And “Black Friday” was just the beginning – the pain from this event is going to continue to be felt for months to come. The shocking outcome of the Brexit vote caught financial markets completely off guard, and the carnage that we witnessed on Friday was absolutely staggering.
- The Real Brexit “Catastrophe”: World's 400 Richest People Lose $127 Billion
For all the scaremongering and threats of an imminent financial apocalypse should Brexit win, including dire forecasts from the likes of George Soros, the Bank of England, David Cameron (who even invoked war), and even Jacob Rothschild, something “unexpected” happened yesterday: the UK was the best performing European market following the Brexit outcome. This outcome was just as we expected three days ago for reasons that we penned in “Is Soros Wrong”, where we said “in a world in which central banks rush to devalue their currency at any means necessary just to gain a modest competitive advantage in global trade wars, a GBP collapse is precisely what the BOE should want, if it means kickstarting the UK economy.” On Friday, the market started to price it in too, and in the process revealed that the biggest sovereign losers from Brexit will not be the UK but Europe.
- Special Report on Brexit/Fantasy Meets Reality
Do not believe the mainstream media that the Brexit vote crashed the global markets. The real reason why all markets tanked is record debt levels around the world that will never be paid back. Fantasy has just met reality in the global markets, and the carnage is far from over. The fantasy of unpayable debt expanding forever is now beginning to be realized by the central banks that have been propping up the global economy since the 2008 meltdown. The central banks cannot and will not be able to stop this unfolding crash. If you are not prepared, there is little time left. Bo Polny from Gold2020Forecast.com is on for the Early Sunday Release, and he says although there may be a bounce in the stock market, and pull back in gold and silver prices, the overarching direction for stocks is down, and the overarching direction for physical gold and silver prices are up. I say the bonds which are considered an “asset” will turn into huge liabilities, and gold and silver will reclaim their proper place as money and a store of value. Physical gold and silver will be considered true assets once again. Please get ready for some very rough riding in the economy.
- Massive Defaults & Dramatic Increase in Gold-Nick Barisheff
Gold expert Nick Barisheff wrote a book titled “$10,000 Gold” in 2013. According to Barisheff, that number is even more possible today. Barisheff contends, “It’s hard to believe when I wrote the book three years ago, and I talked about the issues that would lead to $10,000 gold are still there and have gotten much worse. None of the issues have been solved, and now we are in multiple bubbles, a lot of them surrounding debt, and it keeps growing all over the world, and that’s the main correlation to the price of gold.”
- Germany Says “We Won't Let Anyone Take Europe From Us”
Yesterday we said that in the historic fallout and unprecedented confusion over Brexit, so far only one sure winner has emerged – namely Russia, where Vladimir Putin is watching the slow-motion collapse of this latest artifical aggregation of Europen states (a quick search of failed attempts at European integration results in tens of pages of results) with great interest and willingness to pounce at any opportunity – even as all of Europe is a loser, and nobody more so than Germany, whose chancellor Merkel is now watching her legacy go down in flames as first the UK, then France (National Front), Italy (Five Star Movement), Denmark (Danish People’s Party), and Holland (Freedom Party) have all called for either a EU referendum of their own or a renegotiation of their country’s EU membership. As would be expected, the more worried and desperate Germany gets, the more ridiculous things Germany is apt to say. Case in point is what German Foreign Minister Frank-Walter Steinmeier said earlier today, when he tried to reassure onlookers that the EU would weather the shock of the British vote to leave the union as he convened crisis talks.
- George Soros: “Brexit Makes EU Disintegration Irreversible”
Just four days ago, the “big guns” when George Soros wrote a Guardian op-ed titled “The Brexit crash will make all of you poorer – be warned” in which he said that “as opinion polls on the referendum result fluctuate, I want to offer a clear set of facts, based on my six decades of experience in financial markets, to help voters understand the very real consequences of a vote to leave the EU.” We promptly countered that Soros' set of “facts” may be clouded by his far greater equity stake in interests around Europe, and the globe, which would be drastically impacted by not only a Brexit, but by a European Union which is suddenly on the rocks. That's precisely what happened when, as we wrote earlier, the world’s 400 richest people lost $127.4 billion Friday following the Brexit vote. Soros was among them.
- Fake Jobs Plague the U.S. Economy
“When it becomes serious, you have to lie.” — Jean-Claude Junker, President of the European Commission. Normally, I would not bring a European politician into a discussion about the U.S. economy. But in this case, European Commission President Jean-Claude Junker has “let the cat out of the bag.” In an unguarded moment, Junker let slip the working principle that guides politicians everywhere. Think about it.
- Why Wal-Mart can NOT afford to pay workers a $15 minimum wage
Can large corporations afford a $15 minimum wage better than small businesses? Despite the fact that roughly half of the minimum wage workforce is employed at businesses with fewer than 100 employees, corporations such as Wal-Mart have been used as the poster child in the case for a much higher wage floor. This claim rests on three talking points: These companies sell billions of dollars of retail goods or food products; their CEOs are typically paid a lot of money; and the higher pay will help get their employees off government programs. None of these justifications survive careful scrutiny.
- IRS admits to illegally seizing bank accounts; agrees to give the money back
It's the stuff of libertarian dreams. The IRS admits that it wrongfully took money from innocent citizens, and it gives the money back. This is actually happening to victims of a little-known form of civil asset forfeiture carried out by the IRS on the premise of “structuring” violations. In case you didn't know, depositing or withdrawing just under $10,000 from your bank account multiple times is viewed as suspicious and possibly criminal activity. In a victory for lawmakers working to make it harder for the government to take property from innocent Americans, the Internal Revenue Service plans to give people who have had money seized over the last six years the chance to petition to get their money back, The Daily Signal has learned. According to a GOP source, the IRS told the House Ways and Means Oversight Subcommittee that it will send letters to everyone the agency seized money from for alleged structuring violations, which involves making consistent cash transactions of just under $10,000 to avoid reporting requirements, starting in October 2009. One petition has already been granted, and others are likely to follow.
- Europe's robots to become ‘electronic persons' under draft plan
Europe's growing army of robot workers could be classed as “electronic persons” and their owners liable to paying social security for them if the European Union adopts a draft plan to address the realities of a new industrial revolution. Robots are being deployed in ever-greater numbers in factories and also taking on tasks such as personal care or surgery, raising fears over unemployment, wealth inequality and alienation. Their growing intelligence, pervasiveness and autonomy requires rethinking everything from taxation to legal liability, a draft European Parliament motion, dated May 31, suggests.
- Asian millionaires now the wealthiest in the world
Your Asian counterparts are now wealthier than you are. Asian millionaires now control more wealth than their peers in North America, Europe and other regions, according to a new World Wealth Report from Capgemini, a consulting group. Asian millionaires saw their wealth jump by 9.9% in 2015, while poor performance in the equity markets in the United States and Canada slowed growth in North America to a sluggish 2.3% last year. Latin American millionaires, meanwhile, suffered a decline in net worth of 3.7%, driven by political volatility and a turbulent stock market in Brazil. Europe's growth was steady, with a 4.8% increase led by Spain and the Netherlands.
- New Home Sales Plunge Most In 8 Months Following Sharp Downward Revisions; Median Home Price Tumbles
Despite exuberance in existing home sales, new home sales just printed 551k SAAR – missing expectations for the first time since Oct 2015 – sliding by the most since Sept 2015. With the last 3 months of exuberant increases – to 8 year highs – now revised drastically lower; and median prices tumbling to the lowest since June 2015, the picture of the US housing recovery is considerably less rosy than before… time for a rate-hike? This is what we said last month when new home sales soared to 8 year highs… Here is what drove the overall surge: a clearly “goalseeked” number resulting from a massive surge in Northeast sales, one which will be promptly revised lower next month.
- With a British adieu to EU, it's farewell to a Fed rate hike for now
The U.S. Federal Reserve, already undecided on when next to raise interest rates, now has one more reason to wait: Britain's vote on Thursday to leave the European Union. Not that the Fed needed another reason. Weaker-than-expected growth in U.S. jobs in recent months had already forced U.S. central bankers to put off a rate hike at their meeting last week.
- U.S. Durable-Goods Orders Fell 2.2% in May
American businesses were pulling back on purchases of new equipment even before the U.K. vote to exit the European Union rocked global financial markets, a sign of corporate caution that will likely continue to act as a brake on the economy. Overall U.S. economic growth picked up in the second quarter, boosted by stronger consumer spending. But surprisingly weak business investment has remained a concern for Federal Reserve Chairwoman Janet Yellen and others. That weakness could be exacerbated in the coming months by “Brexit”-fueled uncertainty and dollar strength. “ ‘Brexit’ will not likely help matters,” said Steve Blitz, chief economist at M Science LLC, in a note to clients.
- Oi Bankruptcy Causes Shockwaves in Brazil’s Financial System
The bankruptcy filing of Oi SA, the largest in Brazil’s history, is reverberating through the nation’s strained financial industry as investors tally the potential hit to creditors. Even as Egyptian billionaire Naguib Sawiris said he’s prepared to invest in the wireless carrier, Monday’s bankruptcy filing is likely to leave Banco do Brasil SA, Itau Unibanco Holding SA and others with steep losses on their holdings of Oi debt and trigger payments on $14 billion of derivatives contracts that are designed to pay out in an event of a default. Shares of Banco do Brasil slumped 4.5 percent.
- IMF warns the US over high poverty
The US has been warned about its high poverty rate in the International Monetary Fund's annual assessment of the economy. The fund said about one in seven people were living in poverty and that it needed to be tackled urgently. It recommended raising the minimum wage and offering paid maternity leave to women to encourage them to work. The report also cut the country's growth forecast for 2016 to 2.2% from a previous prediction of 2.4%. Slower global growth and weaker consumer spending were blamed. US economic growth slowed to an annual pace of 0.5% during the first three months of the year, down sharply from 1.4% in the last three months of 2015.
- Famous technical analyst now predicting crash during jubilee time period
The flurry of banksters, ex-banksters (Alan Greenspan), insiders (Soros) and billionaires all warning we are on the edge of collapse now continues with a famous technical analyst. In an interview with Business Insider, Sandy Jadeja just predicted market crashes in late August, late September and late October. Jadeja is a famous technical analyst and chief market strategist at Core Spreads. He previously made no less than four accurate predictions of market crashes based on his charts and technical analysis. His latest dates are right around the Jubilee year end-date on October 2nd, 2016.
- China debt load reaches record high as risk to economy mounts
China’s total debt rose to a record 237 per cent 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 Rmb163tn ($25tn) 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 US and the eurozone.
- US Federal Reserve should let inflation overshoot targets, IMF recommends
US policymakers should allow inflation to rise above official targets, the International Monetary Fund has recommended, as it warned that the risks of deflation still loom over the world’s largest economy. The fund has said that the Federal Reserve should “accept some modest, temporary overshooting” of its inflation goal, allowing price growth to exceed 2pc for a period. IMF staff said that this would “provide valuable insurance against the risk of disinflation”, allowing price growth to wane, and fall back towards negative territory.
- Trolling for War With Russia
Some 50 State Department officials have signed a memo calling on President Obama to launch air and missile strikes on the Damascus regime of Bashar Assad. A “judicious use of stand-off and air weapons,” they claim, “would undergird and drive a more focused and hard-nosed U.S.-led diplomatic process.” In brief, to strengthen the hand of our diplomats and show we mean business, we should start bombing and killing Syrian soldiers.
- Phantom Retail Job Growth And The Obamacare Hours Shuffle
How is it that employment in the retail sector increased by 253,000 jobs since last August, yet total aggregate hours worked has not budged an inch? The number of U.S. workers clocking just above 30 hours has fallen to a record low relative to those with work hours just below ObamaCare’s new full-time threshold. The Obamacare shift from defining full-time employment for health-care benefits from 32 hours to 30 hours is to blame. As hours worked declines, reported employment rises. I have been harping about this for years.
- Have U.S. Weather Patterns Changed Permanently? This Week Record High Temps Scorch The Southwest
This week we are going to see “life threatening” heat all across the southwest United States. In southern California, temperatures will top triple digits in many areas on Monday, and the forecast is for the mercury to reach an astounding 121 degrees in Palm Springs. Further inland, it is being projected that Phoenix and Las Vegas could both experience their highest temperatures ever early this week. Summer is just beginning and we are literally seeing things take place that we have never seen happen before. Just a few weeks ago, I wrote an article about how the weather seems to be going crazy all over America. Is this just a temporary phenomenon or have weather patterns in the United States changed permanently? Most people know that the hottest place in America is Death Valley, California. The record high for Death Valley during the month of June is 129 degrees, and it is being reported that even that record could fall this week.
- What the Heck’s Going on in Global Stocks?
In Japan, the Eurozone, Denmark, Sweden, and Switzerland, where central banks, in their infinite wisdom, have imposed negative interest rates supplemented with harebrained bond-buying schemes, bond prices have soared to where many government bonds and even some corporate bonds are trading with negative yields. Given this amount of liquidity and the free-for-all in corporate borrowing, stock markets in those countries should be booming, which had been part of the plan. Alas, they’ve gotten hammered: almost all NIRP countries’ major stock market indices have gotten shoved, some deeply, into a bear market.
- Day of Reckoning for Banks in Italy, Spain, & Portugal Kicked Down the Road (Elegantly) for 18 Months
Senior bankers in Spain and Italy can breathe a collective sigh of relief after Europe’s finance and economic ministers decided on Friday to postpone, for at least 18 months, a decision on setting a limit on the government bonds some banks can hold as eligible “risk-free” capital. It was one of four things keeping Spanish senior bankers awake at night. Now, they can sleep a little sounder. The initiative, initially proposed by the German government and supported by other fiscally hawkish governments such as Finland and the Netherlands, was intended to limit the purchase of public debt by banks, in order to break the vicious cycle of co-dependence that now exists between sovereign and bank risk.
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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 June 17, 2016 to June 23, 2016:
- Gold Prices: This Catalyst to Send Gold to $2,000?
Negative interest rates (which mean you are paying a bank or government to hold your money instead of them paying you) are coming to North America and with that, gold prices could soar. So far, 2016 has already been a banner year for gold prices. In fact, gold has been the best-performing investment this year. But I think the “party is only getting started” for gold prices. Below is a chart of the 10-year U.S. Treasury. From the chart, you can easily see the yield on 10-year U.S. Treasuries has been moving in an almost perfect downward trend since 2006—that’s 10 years ago.
- Share-Buyback Announcements Plunge, Stocks Risk Getting Clocked
In 2015, S&P 500 companies bought back $569 billion of their own shares, down just a smidgen from $572 billion in 2014, according to FactSet. That’s a combined $1.14 trillion in stock repurchases. With the S&P 500 market capitalization at $18.8 trillion currently, corporate buybacks over the past two years have mopped up about 6% of the total float in dollar terms. And this has been happening year after year with increasing vehemence since 2010. While some sectors already cut back in 2015, buybacks soared 44% in the Industrial sector and 26% in the Consumer Discretionary sector. Companies buying back their own shares act purposefully as the relentless bid, with the sole goal of driving up share prices. They want to buy high! And it works.
- Elizabeth Warren’s War on the Poor
There is no American politician more closely associated with “progressive” economic causes than Massachusetts Senator Elizabeth Warren. The senator is widely regarded by the political Left as an expert on financial issues, is a self-professed champion of the “working poor,” and is a proud, finger-wagging chastiser of the 1 percent and Wall Street. Her cause is to lift up the least powerful and protect them from the most powerful. She appears to genuinely believe in this cause, and has made several policy proposals that she believes will serve it. Because of her position and the public’s association of the senator with this cause, it is assumed that the policies she proposes will in fact serve it, and that anyone who supports the same causes should get on board and support her proposed policies.
- End in Sight for Alaska’s Oil-Based Economy?
Alaska has long been one of the few U.S. states without an income tax. Thanks to its incredible bounty of natural resources, the state had more than enough cash coming in through oil company taxes and especially Prudhoe Bay production. All of that is starting to change. After a 40 year oil boom that transformed Alaska from a frozen tundra into one of the richest states in the country, the oil price crash is bringing reality back to bear. Alaska’s problems go deeper than the current oil price collapse though. Simply put, the state is getting long in the tooth – at least as far as its productive assets go. The Prudhoe Bay Oil field, once the largest such field in North America, is starting to reach the end of its life. In 1985, the Prudhoe Bay field was pumping 2 million barrels per day – roughly a quarter of the total U.S. output. Today it is pumping 500,000 barrels a day. That’s leaving the 800 mile Trans-Alaska pipeline seriously under-utilized.
- US Freight Drops to Worst May since 2010
“May is usually a relatively strong month for freight shipments, but given the high inventories with ever slower turnover rates and the decline in new production orders, May could be another soft month,” predicted Rosalyn Wilson at Cass Transportation a month ago. It has now come to pass – only worse. Freight shipments by truck and rail in the US, excluding commodities, fell 5.8% in May 2016 from the already anemic levels in May 2015, and 7.0% from May 2014, according to the Cass Freight Index, released today. It was the worst May since 2010. “This year we have failed to see the robust growth in shipments that we expect to see this time of year,” Wilson lamented.
- The man responsible for Germany's hyperinflation nightmare has a scary lesson for modern economics
Every now and then it helps to dig through the past to think about what's going on in the present. So let's rewind back to 1920s Germany. Back then the country was stuck in a less-than-ideal economic situation after the suspension of the gold standard and Kaiser Wilhelm II's failure to pass an income tax to help pay for World War I. To deal with the huge debts left over after the Great War, the president of the country's central bank, Rudolf von Havenstein, printed up a ton of money. But that idea backfired. It led to skyrocketing hyperinflation, economic breakdown, weaker institutions, and a destabilization of German politics.
- Central bank titans warn of Brexit tremors as global recession fears surface
The two most powerful people in central banking have given their strongest warning yet on the impact of a Brexit vote, as top US bank Morgan Stanley warned that a British decision to leave could push the world towards recession. Janet Yellen, chair of the US Federal Reserve, and Mario Draghi, the European Central Bank president, have warned that a vote for Brexit could have deleterious effects for the global economy. With only two days to go before Britons head to the polls, Ms Yellen warned that a withdrawal from the EU “could have significant economic repercussions”, during her testimony to the US Senate banking committee.
- There's No Other Way to Say It: Minimum Wage Laws Are Racist
Unfortunately, the agenda of early twentieth century leftists has proven effective; minimum wage laws are still bearing racist fruit today. Specifically, low-skilled minorities are being priced out of the job market. As small business owners are forced to pay a higher wage than their employees produce, employers are often forced to cut staff. A story published by BET in 2011 highlighted the negative effect that minimum wage hikes have on black teens. Another report, published by the American Legislative Exchange Council, unpacks several studies on the impact of minimum wage hikes. ALEC reports, “The bottom line is that someone must pay for the costs associated with an increased minimum wage. Often, because a business cannot pay these costs, they are paid for by the individuals the minimum wage is intended to help — low-skilled, undereducated individuals – as they lose out on job opportunities.” Later, the report breaks it down even further and delivers the sobering news that “a 10 percent increase in the minimum wage decreases minority employment by 3.9 percent, with the majority of the burden falling on minority youth whose employment levels will decrease by 6.6 percent.”
- Gold and Brexit
Gold is soaring. It should—and a lot—but in my view not for the reason it is. Indeed gold is insurance for uncertain times, a time that Brexit seems to represent. But insurance is an administrative cost — one must minimize its use. Moreover, insuring against Brexit might ironically be equivalent to insuring against a good event. The market believes that Brexit will lead to wealth-destruction (based on its statist views, in which those running our institutions are omniscient, when they actually are quite naive, incompetent, and incapable of understanding the concept of complexity).
- ALERT: SentimenTrader Issues Extremely Important Update On The Gold Market
With continued consolidation in the gold and silver markets, below is an extremely important update on the gold market that was just issued by SentimenTrader. From Jason Goepfert at SentimenTrader: “The Optimism Index on gold has moved above 75 for the first time since 2011, a troubling level. That’s especially true since “smart money” commercial hedgers have moved to a near-record net short position against the metal. It suffered a key reversal day as sellers rejected a new 52-week high on June 16, but those one-day patterns have been inconsistent predictors of further weakness. Even so, we consider the market to be high-risk.
- Brexit: What Is It About? — Paul Craig Roberts
If you read the presstitute media, Brexit—the referendum tomorrow on the UK’s exit from the EU— is about racism. According to the story line, angry rightwing racists of violent inclinations want to leave the EU to avoid having to accept more dark-skinned immigrants into England. Despite the constant propaganda against exit, polls indicated that more favored leaving the EU than remaining until a female member of Parliament, Jo Cox, was killed by a man that a witness said shouted “Brexit.” Cox was an opponent of leaving the EU. The UK government and presstitute media used Cox’s murder to drive home the propaganda that violent racists were behind Brexit. However, other witnesses gave a different report. The Guardian, which led with the propaganda line, did report later in its account that “Other witnesses said the attack was launched after the MP became involved in an altercation involving two men near where she held her weekly surgery.” Of course, we will never know, because Cox’s murder is too valuable of a weapon against Brexit.
- Here's why gold could jump 10% very soon
“Gold is a reliable barometer of risk, and we believe it could rally by up to 10% should the UK vote to leave the EU,” that’s according to a flash research note from HSBC’s chief precious metals analyst James Steel sent to clients today. According to the report, if the UK votes to leave the European Union on June 23, the price of gold could rally by 10% to around $1400 an ounce as investors look to the yellow metal to provide a safe haven in times of uncertainty. What’s more, gold could also benefit from the reluctance of investors to move into sterling or even the euro following a ‘leave’ vote.
- Why Janet Ain’t Yellin’ “Higher Interest” Anymore: Jobs Worse than Expected and Far Worse than Reported
In the fall of 2015, I said the Federal Reserve would raise interest rates once in December then would not be able to fly any higher thereafter. The stock market would crash shortly after the Fed pulled up on the interest stick (which it did in what became the worst January in stock-market history), and then the Fed’s hopes of recovery would fade away. I also said that, in spite of a continually degrading economic situation around the world, the Fed would badly want to lift its interest target again in order to prove its recovery had recovered from the first lift. The fact that it would not be able to without stalling the economy completely wouldn’t mean it wouldn’t try. If it did try, however, it would find out in hindsight that any additional pull back on the stick would crash the economy into the dust of the earth.
- NY Fed Warns about Booming Subprime Mortgages, now Insured by the Government
The New York Fed just warned about the ticking mortgage subprime time bombs once again being amassed, and what happens to them when home prices decline. But unlike during the last housing bust, a large portion of these time bombs are now guaranteed by the government. Subprime mortgages are what everyone still remembers about the Financial Crisis. They blew up has home prices fell. Folks who thought they were “owners with equity” found out that they were just “renters with debt.”
- Anxiety Builds As Money Managers Near Record Long Gold Position
“There’s still a lot of fear out there,” warns one investor as the combination of event risks (e.g. Brexit, Spain, US Election) and the contagious collapse of central bank credibility has asset managers around the world piling into bonds and bullion. With negative rates now de rigeur, global developed market bond yields are pushing record lows as demand for protection from fiat debacles in precious metals (and alternative currencies) has sent money managers long position near Aug 2011's record highs. As Fed credibility collapses (red line – inverted expectations of rate-hike-pace) so Gold (gold line) and global developed market bonds (green line) have soared tick for tick…
- Unprecedented Mainstream Media Criticism of Central Banking Bodes Ill for the Larger Economy
There is definitely considerable negativity about central banking in the mainstream media these days. This is surprising, on the one hand, because central banking provides the foundation of the current economic system, worldwide. On the other hand, such negativity may be signaling far worse. Our theory, for years has been that the central banking system is presented as something that is economically positive when, in fact, it is quite negative and responsible for the gradual collapse of Western prosperity. The mainstream media makes no real reference to the state of the West – or the world – when it comes to the larger economy. China is collapsing. The European Union is half-bankrupt. The US is in a kind of depression. But until recently the system that has created this mayhem has been treated as a kind of eternal or natural constant, like the sky or the moon or the sun. Now however, with half the West running on negative interest rates, the cracks cannot be papered over. The recent Bilderberg meetings apparently focused in large part on the economy. Disaster was predicted and preparations were made. In fact, this is how economies and economic systems “evolve.” Out of “chaos,” order.
- Switzerland withdraws longstanding application to join EU
The upper house of the Swiss parliament on Wednesday voted to invalidate its 1992 application to join the European Union, backing an earlier decision by the lower house. The vote comes just a week before Britain decides whether to leave the EU in a referendum. Twenty-seven members of the upper house, the Council of States, voted to cancel Switzerland’s longstanding EU application, versus just 13 senators against. Two abstained. In the aftermath of the vote, Switzerland will give formal notice to the EU to consider its application withdrawn, the country’s foreign minister, Didier Burkhalter, was quoted as saying by Neue Zürcher Zeitung. The original motion was introduced by the conservative Swiss People’s Party MP, Lukas Reimann. It had already received overwhelming support from legislators in the lower house of parliament in March, with 126 National Council deputies voting in favor, and 46 against.
- Propaganda, Depression And The Greatest Illusionist Of All Time
On the heels of the dollar moving higher and the gold and silver markets getting hit, today one of the greats in the business discusses today’s action, and also included are some questions and answers about the market, precious metals. By Bill Fleckenstein President Of Fleckenstein Capital. The “remain” party continued overnight, with most equity markets rallying about 1%. Naturally, the U.S. stock market joined in, though to a slightly lesser degree, with the indices just fractionally higher through midday. In the afternoon the market strengthened somewhat and with an hour to go it was about 0.3% higher (with the Nasdaq lagging)…
- IMF issues warning saying eurozone is ‘weak' and on the brink of collapse – but STILL insists we shouldn't vote out
The eurozone is on the brink of another financial crisis – but leaving the EU would still plunge Britain into recession, the IMF said last night. In its latest controversial intervention in the referendum campaign, the International Monetary Fund said the eurozone was in danger of being torn apart by political tensions. It said that while the single currency bloc had recovered over the past six months, the medium-term future looked ‘weak’ and that it was racked by high unemployment and bad debts. It also said the failure of the EU to tackle the refugee crisis had ‘vividly exposed political fault lines’ which threatened the entire European project.
- Credit Suisse CEO Said to Tell Staff Shorts Wrong on Capital
Credit Suisse Group AG Chief Executive Officer Tidjane Thiam said hedge funds are wrong to assume that the Swiss lender will have to raise additional capital after the shares touched a fresh all-time low last week, according to two people with knowledge of the matter. The lender’s share price is hurt by “an unusually high level of short positions,” Thiam wrote in a memo to staff last week, the people said, asking not to be identified because the contents are private. While some hedge funds are speculating on another capital increase, partly because of restructuring measures and operational losses, they’re “not correct,” Thiam wrote.
- Janet Yellen’s $200-Trillion Debt Problem
The U.S. stock market broke its losing streak on Thursday [and even more so on Monday, ed.]. After five straight losing sessions, the Dow eked out a 92-point gain. The financial media didn’t know what to say about it. So, we ended up with the typical inanities, myths, and claptrap. “Brexit panic may be your big chance to buy the S&P 500,” says a headline at Marketwatch. The article claims investors have pushed down the value of the S&P 500 in fear of a so-called “Brexit.” Next Thursday, in a national referendum, British voters will decide whether to end Britain’s 43-year membership in the European Union. But there are a number of problems with this… First, there has been no big rout in the S&P 500; it’s only slightly below its all-time high. Second, Brexit is a mystery to most U.S. investors, not a cause for alarm. Third, nobody knows which side will win – or what it will mean. Would a Brexit be good for Britain? Would it be bad for stocks? Nobody knows! Meanwhile, the Financial Times focuses on “slowing job growth and risk of Brexit…”
- Jim Sinclair-Next Crash Will Look Like Mad Max
Renowned gold and financial expert Jim Sinclair says recent dire predictions from Wall Street icons are more than a warning. They are telegraphing their trading positions. Sinclair explains, “They are preparing for what they believe. They talk their own positions. So, it’s more than a warning. They are telling you exactly what they have done. They are not out to save the man in the street. They are out to make money in a huge short position, probably in over-the-counter derivatives. . . . They’re not looking for a market tic down. They are looking for a market with a character of backing up to an open to an elevator with no elevator there. . . . We’ve got no volume, fake prices, and we’ve got the biggest money in the world short the market. We’ve also got a Fed with no tools, and now we have a Fed whose primary indicator is starting to have a heart attack. . . . When this thing comes down, it’s going to be a free fall.”
- Puerto Rico Says Talks Cease on Revised Debt Exchange Offers
Puerto Rico said confidential talks with some bondholders ended without any agreements to reduce its debt as the island edges closer toward what may be its biggest default yet. The disclosure from the commonwealth came 10 days before $2 billion of interest and principal is due on a variety of securities, which Governor Alejandro Garcia Padilla has said the island can’t pay in full. The focus now turns to the U.S. Senate, which may take up a bill next week to establish an oversight board that would restructure Puerto Rico’s $70 billion in debt. “The assumption here has to be simply that everybody thinks they’re going to get a better deal from the oversight board than they are negotiating with each other,” said Phil Fischer, head of municipal research at Bank of America Merrill Lynch in New York. “Everyone is preparing the book for the next trade, and the next trade is with the oversight board.”
- Solving Italy's $408 Billion Bad Loan Problem 30 Cents At a Time
It will only cost 30 cents to solve Italy's bad debt problem — 30 cents in every euro of the country's 360 billion-euro ($408 billion) pile of loans past due, that is. That's the difference between what Italian banks think their non-performing loans are worth and what investors are willing to pay for them. Reconciling these disparate valuations is key to clearing the gridlock in the European Union's fourth-largest economy. Morgan Stanley's Srikanth Sankaran says current prices on secured NPLs, i.e. those backed by collateral such as real estate, are between 20 to 30 cents on the euro, while unsecured loans can attract prices as low as 5 cents. Meanwhile, banks are marking the loans on their books for sale at around 50 to 65 cents, he said.
- Deutsche Bank’s advice to ‘invest in UK if Leave wins ballot’ after EU referendum
ONE of Europe’s biggest banks yesterday advised investing in UK companies in the event of Brexit because they would “outperform the European market”. Analysts at Deutsche Bank say a vote to leave the EU would cause panic on Europe’s stock markets in the weeks after June 23, causing them to fall by as much as 10 per cent. But the FTSE 100 will perform better, boosted by a weak pound. A note from the bank reads the UK stock market “tends to outperform during periods of GBP (pound) weakness”. It said the value of the pound could tumble by as much as another 5 per cent by the end of the year.
- ‘Brexit’ could send shock waves across U.S. and global economy
Britain's departure from the European Union could send shock waves across the global economy and threaten more than a trillion dollars in investment and trade with the United States. International policymakers are ramping up their warnings of the dangers of a British exit – popularly known as “Brexit” — from the political and economic alliance that has united Europe for the past four decades. Voters in Britain will decide whether to leave or remain in the European Union in a referendum on Thursday, but financial market volatility has already spiked as polls show a growing desire to abandon the partnership.
- The man who accurately predicted 4 market crashes told us 3 more dates to worry about this year
The man who accurately predicted four market crashes to the exact date each time has told Business Insider about three more dates to worry about. Sandy Jadeja is a technical analyst and chief market strategist at Core Spreads. Technical analysts look at charts to pinpoint patterns in various markets and asset classes. From that, they forecast which direction prices are likely to move in. They can't tell you the reasons why there will be a big market movement, only that there is going to be one. He now warns that the following dates spell trouble for the Dow Jones in the US that could spread to other markets. 1. Between August 26 and August 30, 2016. 2. September 26, 2016. 3. October 20, 2016. “We have interesting times ahead of us. We are dealing with issues on so many levels from economic uncertainty in the financial markets including currencies and commodities as well as the rising house prices we have seen,” said Jadeja in an interview.
- Venezuela police arrest 400 for looting in food shortage
At least 400 people have been arrested in Venezuela after rioting and looting over food shortages. Over 100 shops in the coastal town of Cumana were hit and at least one person died according to local media. Venezuela has one of the world's highest inflation rates at 180% and people can queue for hours for subsidised food. Opposition politicians blame government mismanagement for the shortages. But the government says the shortages are part of an economic war being waged to drive President Nicolas Maduro from office.
- China Dumping More Than Treasuries as U.S. Stocks Join Fire Sale
For the past year, Chinese selling of Treasuries has vexed investors and served as a gauge of the health of the world’s second-largest economy. The People’s Bank of China, owner of the world’s biggest foreign-exchange reserves, burnt through 20 percent of its war chest since 2014, dumping about $250 billion of U.S. government debt and using the funds to support the yuan and stem capital outflows. While China’s sales of Treasuries have slowed, its holdings of U.S. equities are now showing steep declines. The nation’s stash of American stocks sank about $126 billion, or 38 percent, from the end of July through March, to $201 billion, Treasury Department data show. That far outpaces selling by investors globally in that span — total foreign ownership fell just 9 percent. Meanwhile, China’s U.S. government-bond stockpile was relatively stable, dropping roughly $26 billion, or just 2 percent.
- Why US Coal Production Collapsed to Lowest Level since 1981
It was called “king coal” because it ruled! Coal-fired power plants were the cheapest way to generate electricity, based on capital costs and operating costs. And the US has plenty of coal. In the 1980s, over 55% of electricity generation was coal-fired. By 2000, it was down to 50%. Now it’s down to just over 30%, in second place, for the first time ever, behind natural gas. In the first quarter of 2016, according to the US Energy Information Administration, coal production plunged 17% from the prior quarter, the largest quarterly drop since Q4 1984. At 173 million short tons (MMst), production was down 42% from its peak in Q3 2008. It was the lowest quarterly production since Q2 1981 when a strike crippled coal mines. But this time, there was no strike.
- Brexit Chaos to Serve as Cover for ECB Bank Bailouts
Over the course of the last few months, Brexit has become one of the biggest catch-all preemptive scapegoats of recorded human history. Even far beyond the old continent’s porous borders, politicians, central bankers, and economists are warning their respective populations to brace for a serious aftershock if the people of Britain vote to leave the EU. This is is a remarkable feat given that the UK has its own perfectly functioning currency, and as such decoupling from the EU, while bumpy, should not pose an immediate financial threat either to the UK or the EU, let alone the world at large. But try telling that to the eurocrats, politicians, and central bankers whose long cherished dream of creating a seamlessly interconnected, interdependent European superstate appears to be in the process of unraveling.
- How the Government Hides Inflation, as Housing Costs Soar
For inflation lovers, the headline numbers that the Bureau of Labor Statistics reported today was benign: The Consumer Price Index for All Urban Consumers (CPI-U) rose 0.2% in May, seasonally adjusted. Over the last 12 months, not seasonally adjusted, the index rose 1.0%. The Atlanta Fed’s “sticky-price” CPI – “a weighted basket of items that change price relatively slowly,” as it says – wasn’t quite that benign. It rose 2.6% for the 12-month period, the hottest increase since April 2009!
- All Signs Point to Big Financial Crash in 2016-Bill Holter
Financial writer Bill Holter says there are many signs that are signaling big trouble. Holter’s list starts with the troubled banking giant Deutsche Bank and says it is his top candidate for the next Lehman style financial meltdown. Holter explains, “It would make sense that they are the candidate because, as you know, they had a recent settlement in the gold and silver fix. So, they may get thrown under the bus. The only problem is if they get thrown under the bus, there’s going to be a bomb that blows up the whole bus.” So, can we make it out of this year without a big financial crash? Holter contends, “I don’t see how. There is the potential unrest all over the world. You have “Brexit,” and now the polls are saying that’s going to happen. That’s going to absolutely dislocate Europe. You have the U.S. election, and no matter who wins, I would say there are going to be riots. There will be riots no matter if Hillary wins or Trump wins. You will probably see rioting going into the election. You also have the tragic event in Orlando, and it’s common knowledge that ISIS says it is going to be doing this all summer long. So, you got all kinds of potential dislocations. I don’t see how we get to next year with the can being kicked down the road.”
- Right Now It’s About Keeping the Whole System from Collapsing-Andy Hoffman
Financial writer Andy Hoffman says the real endgame is upon us, and big money people like “Bond King” Bill Gross know it. Hoffman explains, “He has said some pretty alarming things that are pretty well in line with what all the other ‘big money,’ . . . people have has been saying lately. We’re talking about the biggest debt explosion in history on top of the already biggest debt edifice in history. He also is . . . talking about Japan’s endgame is to forgive their debt. Forgive means default. It means the collapse of the major Western currencies. It means the domino game, that started 40 years ago when they got rid of the gold standard, must end as all fiat currency standards end in shambles.”
- Peter Schiff Issues a Rather Large Economic Warning… “It’s Gonna Be Awful”
The interview below is vintage Schiff vs. CNBC. After being “demoted” to only doing CNBC website interviews for the last several months, something Peter hasn’t been too shy about mentioning in other interviews, within the first 22 seconds Peter manages to sneak in a jab about finally being IN studio again, jokes about how his competition at CNBC aren’t really full fledged bears, but rather “little cubs that haven’t matured into full grown bears yet,” and when asked how bad he thinks the coming financial crisis will be, Schiff responds saying, “It’s gonna be awful,” all while he’s laughing.
- The Stock Market Crash Of 2016: Stocks Have Already Crashed In 6 Of The World’s 8 Largest Economies
Over the past 12 months, stock market investors around the planet have lost trillions of dollars. Since this time last June, stocks have crashed in 6 of the world’s 8 largest economies, and stocks in the other two are down as well. The charts that you are about to see are absolutely stunning, and they are clear evidence that a new global financial crisis has already begun. Of course it is true that we are still in the early chapters of this new crisis and that there is much, much more damage to be done, but let us not minimize the carnage that we have already witnessed. In general, there have been three major waves of financial panic over the past 12 months. Late last August we saw the biggest financial shaking since the financial crisis of 2008, then in January and February there was an even bigger shaking, and now a third “wave” has begun in June. Not all areas around the globe have been affected equally by each wave, but without a doubt this new financial crisis is a global phenomenon. The charts that I am about to show you come from Trading Economics. It is an absolutely indispensable website that is packed full of useful data, and I encourage everyone to check it out. Let’s talk about China first. The Chinese economy is the second largest on the entire planet, and since this time last year Chinese stocks are down an astounding 40 percent…
- The Federal Reserve has brought back “taxation without representation”
In February 1768, a revolutionary article entitled “No taxation without representation” was published London Magazine. The article was a re-print of an impassioned speech made by Lord Camden arguing in parliament against Britain’s oppressive tax policies in the American colonies. Britain had been milking the colonists like medieval serfs. And the idea of ‘no taxation without representation’ was revolutionary, of course, because it became a rallying cry for the American Revolution. The idea was simple: colonists had no elected officials representing their interests in the British government, therefore they were being taxed without their consent. To the colonists, this was tantamount to robbery. Thomas Jefferson even included “imposing taxes without our consent” on the long list of grievances claimed against Great Britain in the Declaration of Independence. It was enough of a reason to go to war.
- The subprime mortgage is back: it’s 2008 all over again
Apparently the biggest banks in the US didn’t learn their lesson the first time around… Because a few days ago, Wells Fargo, Bank of America, and many of the usual suspects made a stunning announcement that they would start making crappy subprime loans once again! I’m sure you remember how this all blew up back in 2008. Banks spent years making the most insane loans imaginable, giving no-money-down mortgages to people with bad credit, and intentionally doing almost zero due diligence on their borrowers. With the infamous “stated income” loans, a borrower could qualify for a loan by simply writing down his/her income on the loan application, without having to show any proof whatsoever. Fraud was rampant. If you wanted to qualify for a $500,000 mortgage, all you had to do was tell your banker that you made $1 million per year. Simple. They didn’t ask, and you didn’t have to prove it. Fast forward eight years and the banks are dusting off the old playbook once again.
- China’s Jan-May outbound direct investment surges
Chinese companies continued to invest big in the overseas market in the first five months of the year, official data showed on Wednesday. China’s non-financial outbound direct investment (ODI) rose 61.9 per cent from a year earlier to 479 billion yuan ($74 billion) in January-May period, the Ministry of Commerce said on its website. Major investment destinations included ASEAN, Australia, the EU, Hong Kong SAR, Japan, Russia and the United States, which together were in receipt of $59 billion, about four fifth of the total. China had sent 181,000 labourers to work abroad since the start of the year, bringing the total number of Chinese labourers overseas to 987,000 at the end of May, down 20,000 from the same period last year. Chinese outbound direct investment will continue to grow at more than 10 percent per annum, a report from international accounting firm KPMG showed earlier this year.
- China, Russia elected to UN’s ECOSOC
China and Russia have been elected to the UN Economic and Social Council (ECOSOC), the coordinating body for the economic and social work of UN agencies and funds. China won 182 votes out of a total of 185 votes casted in the Asia Pacific group in the election held on Tuesday. Other elected ECOSOC members are North Korea, Britain, United Arab Emirates, Sweden and Norway among others. ECOSOC accredits and oversees human rights groups at the UN, deciding who can participate at the UN Human Rights Council. The winners require two thirds majority of the votes in relevant groups.
- Faber: Brexit Would be The Best Thing in British History
The European Union is an “empire that is hugely bureaucratic,” warns Marc Faber, telling CNBC that he thinks that “a Brexit would be bullish for global economic growth,” because “it would give other countries incentive to leave the badly organized EU.” The Gloom, Boom & Doom-er explained that Brexit is a risk Britain should be willing to take, and that it would not be a disaster, “on the contrary, it would be the best thing for Britain that would ever happen!” As CNBC reports, Faber defended his case by citing Switzerland, which is not a member of the EU nor the European Economic Area, but instead operates in the “single” market. That enables the Swiss to have rights in the U.K., but theoretically allows them to operate independently of both groups.
- Authoritarian Control and Mass Murder in America the Hegelian Dialectic Way
Georg Wilhelm Friedrich Hegel (1770-1831) was a highly influential German philosopher. To this day his Hegelian Dialectic is a model used by central powers of government to create a problem that causes a reaction most often in the form of a crisis or series of crises, and consolidation of concentrated power results in fewer hands as a consequence of the proposed solution put forth by the same political body that created the problem and crises in the first place. It’s been a highly effective deadly game formula of deceit that the ruling elite has perpetrated on the people to fool and entice them into blindly accepting greater centralized control and authority. This article will demonstrate how New World Order globalists and their neocon puppets in Washington have consistently employed this repeating cycle of the Hegelian Dialectic consisting of the problem (originally called thesis), reaction (anti-thesis) and solution (synthesis) during this century’s federal governmental domestic policies. Inasmuch as US Empire virtually controls all Western nations as well as nearly all Third World nations, this insidious undemocratic process is unfolding globally on the geopolitical chessboard with the ultimate objective of establishing one world government tyranny.
- Morgan Stanley fears policy makers repeating mistakes of 1930s
Policy makers are repeating the types of mistakes that prolonged the Great Depression, economists at Morgan Stanley warned Thursday. High debt, deflation, slower growth and lower yields on top of policy missteps have often been identified as the prime culprits for extending the Great Depression in the 1930s. “We think that the current macroeconomic environment has a number of significant similarities with the 1930s,” said a team led by Chetan Ahya, global co-head of economics at the firm.
- Why there’s a new kind of housing crisis
America has a housing crisis, and most Americans want policy action to address it. That’s the conclusion of an annual survey released Thursday by the MacArthur Foundation. The “crisis” is no longer defined by the layers of distress left behind after the subprime bubble burst, but about access to stable, affordable housing.
- U.S. bank earnings will feel bite of U.K. exit from EU
Earnings of large U.S. banks would be trimmed by as much as 5.6% this year and as much as 9% in 2017 if the U.K. opts to leave the European Union in a referendum to be held next week, analysts at brokerage Keefe, Bruyette & Woods said. The banks most exposed to an increase in costs and weaker capital market activity as a result of the so-called “Brexit” include Goldman Sachs Group Inc. Morgan Stanley, J.P. Morgan Chase & Co. Citigroup Inc. and Bank of America Corp. BAC, said KBW analyst Brian Kleinhanzl and team in a note dated Wednesday and distributed to media on Thursday.
- How Fascism Comes to America
I think there are really only two good reasons for having a significant amount of money: To maintain a high standard of living and to ensure your personal freedom. There are other, lesser reasons, of course, including: to prove you can do it, to compensate for failings in other things, to impress others, to leave a legacy, to help perpetuate your genes, or maybe because you just can't think of something better to do with your time. But I'll put aside those lesser motives, which I tend to view as psychological foibles. Basically, money gives you the freedom to do what you'd like – and when, how, and with whom you prefer to do it. Money allows you to have things and do things and can even assist you to be something you want to be. Unfortunately, money is a chimera in today's world and will wind up savaging billions in the years to come.
- Wall Street has been rocked by an $8 billion hedge fund's implosion
Visium Asset Management, a multibillion-dollar hedge fund, has imploded in the biggest scandal to hit the industry in years. The fund told investors of its plan to close in a letter Friday. It's the most high-profile shutdown since authorities forced Steve Cohen's controversial SAC Capital to close in 2013. A slew of factors — from a brewing insider-trading scandal to a contentious investment by Visium's founder that rankled investors and staffers alike — led to Visium's demise. On top of all of that, Visium's flagship fund had been reporting dismal performance. Visium is selling one of its better performing funds to AllianceBernstein, it said.
- Iranian Professor: ‘OPEC Is Finished’
An Iranian professor said Tuesday that the Organization of Petroleum Exporting Countries (OPEC) is doomed, because of power struggles between Iran and Saudi Arabia that have created serious political fallout. “OPEC’s power is not waning — I’m sorry, OPEC is finished,” Hossein Askari, an Iranian professor of business at George Washington University who studies the oil industry, told USA Today. “OPEC is just powerless. They cannot agree to anything, both for political reasons and economic realities.”
- Bill Gross: Negative yields are a $10 trillion ‘supernova’ that will ‘explode’
Bond guru Bill Gross believes the growing global move toward negative yields will have dire consequences. In a tweet from his firm, Janus Capital, Gross goes back half a millennium to assert that the current situation with the world’s debt market is unprecedented and dangerous: ‘Gross: Global yields lowest in 500 years of recorded history. $10 trillion of neg. rate bonds. This is a supernova that will explode one day'. The warning comes as yields on Japanese government bonds and German bunds hit record lows.
- $30 oil could come back later this year
The oil crash is over, right? Maybe not. At least that’s the warning from Morgan Stanley, which argues crude oil prices could spiral downward later this year to as low as $30 a barrel. It’s a counterintuitive warning, given that oil prices have actually soared by nearly 100% since mid-February. But Morgan Stanley points out that the huge rally has been driven largely by unexpected supply outages in Nigeria, Canada and elsewhere, all of which won’t last forever.
- Bilderberg Group 2016: attendee list and agenda
The secretive Bilderberg Group, which is set to meet in Dresden, Germany later this week, will discuss how to prevent Donald Trump from becoming president, the possibility of mass riots as a result of wealth inequality, the migrant crisis, as well as the United Kingdom’s vote on leaving the European Union. The influential meeting of bankers, politicians, media heads and business moguls has released its official participant list and agenda for 2016.
- Former head of Morgan Stanley indicted for evading $45 million in taxes
Morris Zukerman spent 16 years at Morgan Stanley, at various points overseeing its energy and merchant banking practices, before starting his own investment firm in the late 1980s. His firm’s partners have included ConocoPhillips, ExxonMobil and Kinder Morgan. He endowed a Harvard sociology professorship. He collected dozens of expensive paintings, including works he loaned to the Metropolitan Museum of Art. Along the way, he evaded more than $45 million in taxes, the U.S. now alleges.
- $50 Oil Might Not Last to the End of 2016
Hold off on celebrating the recent surges to more than $50 per barrel in WTI and Brent crude prices. First, consider what’s behind the increase. The simplest explanation is that supply disruption is to blame. In the past few weeks, the world has experienced a bevy of supply disruptions.
- IEA says supply glut will remain until 2021
The International Energy Agency says they are decreasing gas demands once again. Although oil markets are hopeful to a rebalance next year, the surplus will not disappear right away. They report that an annual increase in global consumption is expected to rise by 1.5 percent through 2021, down from the original of 2 percent prediction and the 2.5 percent gain over years past. This growth inhibition is driven by the low usage of fuel in the U.S. and Japan as it competes with renewable coal in power generation. They continue, “Slower generation growth, rock-bottom coal prices and robust deployment of renewables constrain gas’s ability to grow faster in today’s low-price environment.”
- What happens after Brexit?
When it comes to “Plan B” Europe is funny: it never has one. The best example is, of course, Greece most notably from an April 2013 press conference, when Mario Draghi responded to a question from Zero Hedge readers about a worst case scenario for Greece.
- The Daily Data Dive: A Tale of 3 Retail Sales Figures And A 12.5% Drop Since 2007
The Commerce Department reported that the seasonally adjusted headline number for Retail Sales rose in May by an estimated 0.5%. That figure will be revised multiple times in the months and years ahead as more data comes in and the seasonal adjustment factor is repeatedly revised until its curve reasonably approximates the actual data. In the game of Pin the Tail on The Number, Wall Street economists undershot, coming in with a consensus guess of +0.3%. The reported number was a “beat” in that regard. The actual, not seasonally adjusted number rose by $20.5 billion or 4.5% from April. The best way to tell if that’s a good number or not is to compare it with May’s performance last year. May of 2015 saw a month to month gain of $27.4 billion or 6.1%. Compared to last year, this year fell short.
- Meltdown! Central Banks Are Destroying The Global Bond Market
Japanese, German and Swiss bond yields fell to records, as government debt around the world extended its best gains in two decades, with the prospect of Britain leaving the European Union boosting demand for havens. Federal Reserve Chair Janet Yellen fueled the rally by saying Wednesday slow productivity growth and aging societies may keep interest rates at depressed levels. Fewer Fed officials expect the central bank to raise interest rates more than once this year than they did three months ago, based on projections the central bank issued. The Bank of Japan said inflation in the nation may be zero or negative, while holding monetary policy unchanged.
- GOLDMAN SACHS: This is how far we expect the pound to crash after a Brexit
Brexit could trigger a huge sell-off in the pound, sending the currency down by as much as 11% against a basket of the world's most important currencies, according to new research from Goldman Sachs released late on Wednesday. Goldman analysts Silvia Ardagna, Robin Brooks, and Michael Cahill argue that a so-called “Lehman-type” scenario — where uncertainty in the markets increases as much as it did following the collapse of the investment bank Lehman Brothers in 2008 — would cause a huge crash in the pound sending it down to levels not seen in decades.
- After Brexit—-There’s Grexit, Spexit, Uscitaly and Portugal, Too
If there was any doubt that Brexit was “relevant” then the surges in European peripheral bond risk,despite massive bond-buying by The ECB, should send shivers up and down the status quo huggers that are shrugging the referendum decision off because “central banks will provide liquidity.” However, it’s not just The UK that EU officials need to worry about, as The Globalist notes, Germany will have to change its policies if it wants to avoid exit of other countries from the eurozone. Portugal, Italy, and Spain are all seeing bond risk explode in recent weeks…
- Will Brexit Give The US Negative Interest Rates?
One of the oddest things in this increasingly odd world is the spread of negative interest rates everywhere but here. Why, when the dollar is generally seen as the premier safe haven currency, would Japan and much of Europe have government bonds — and some corporate bonds — trading with negative yields while arguably-safer US Treasuries are positive across the entire yield curve? One answer is that the Bank of Japan and the European Central Bank are buying up all the high-quality (and increasing amounts of low-quality) debt in their territories, thus forcing down rates, while the US Fed has stopped its own bond buying program. So the supply of Treasury paper dwarfs that of German or Japanese sovereign debt. Greater supply equals lower price, and lower price equals higher yield. The other answer is that this is just one of those periodic anomalies that persist for a while and then get arbitraged away. And Brexit might be the catalyst for that phase change.
- The pound is getting annihilated
Sterling is getting crushed once again on Thursday, as currency traders react to ever increasing odds that the UK will vote to leave the European Union as well as renewed warnings from the Bank of England about the dangers of Brexit. Around 3:45 p.m. BST (10:45 a.m. ET) the pound is lower by around 1.37% against the dollar to trade at $1.4014, having tumbled steadily for around two hours in the early afternoon, as Brexit jitters intensify in the markets.
- Gold Price: USD 65,000/OZ In 5 Years?
16 June 2021 is five years from today. What will the gold price be 16 June 2021? Currencies are Worthless. As the world’s fiat paper currencies have lost 99% or more of their purchasing power in the last 100 years, we have to understand that fiat paper currencies are not a suitable unit of account to accurately measure prices. Gold is in fact a much better measuring stick for value than paper currencies. A currency doesn’t measure anything. It just has an arbitrary value placed upon it by the population using it. It’s not backed by anything and it can fail at any time. By the tale of history, we know that the unbacked fiat paper currencies used today will ultimately destruct and become worthless. All unbacked fiat currencies throughout human mankind have failed. A more accurate measurement is to measure fiat currencies in gold. If we look at the US Dollar as measured in gold, we can see that the US Dollar has utterly failed in keeping its store of value, with the value plunging about 98% in a mere 50 years.
- Free Speech Under Attack
Bill Bonner, whose Diaries we republish here, is well-known for being an equal opportunity offender – meaning that political affiliation, gender, age, or any other defining characteristics won’t save worthy targets from getting offended. As far as we are concerned, we generally try not to be unnecessarily rude to people, but occasionally giving offense is not exactly beneath us either. Some people really deserve it, after all, …which is why we often refer to modern-day central bankers as lunatics, politicians as psychopaths, governments as gangs of highway robbers waving a flag, and so forth. On one occasion we even provided a translation of Mr. Böhmermann’s “abusive criticism” of Mr. Erdogan, which fell afoul of a 19th century lèse majesté law on Germany’s statute books.
- How Fiat Money Destroys Culture
It may seem unusual that an economist would talk about culture. Usually, we talk about prices and production, quantities produced, employment, the structure of production, scarce resources, and entrepreneurship. But there are certain things that economists can say about the culture, and more precisely, that economists can say about the transformation of the culture. So what is culture? Well, to put it simply, it is the way we do things. This can include the way we eat — whether or not we dine with family members on a regular basis, for example — how we sleep, and how we use automobiles or other modes of transportation. And of course, the way we produce, consume, or accumulate capital are important aspects of the culture as well.
- Oil Is Set To Rally Beyond $50
This week’s key data for the oil and gas industry shows a small rebound in U.S. oil production after months of declines. While U.S. crude stocks continue to fall, we notice a small build in gasoline stocks as refinery runs continue to increase.
- Weak Indian Demand May Soon Impact Gold Prices
Incredible numbers this week on gold demand. Coming out of a nation that’s supposed to be the world’s top consumer — but is showing hardly any buying right now. India. Preliminary reports suggest that May was another very weak month for India’s gold demand. With Bloomberg citing familiar persons in the finance ministry as saying that May’s gold imports totaled just 31 tonnes — a drop of 51 percent from year-ago levels. That would come after India’s gold imports dropped 67 percent in April — to just 22 tonnes. Showing that gold buying is incredibly sluggish right now. In fact, sources in India’s jewelry sector were quoted as saying that there is “hardly any demand” right now in this key consuming nation. A fact that seems incredible in light of the recent strength in the gold price.
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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 June 10, 2016 to June 16, 2016:
- June 23, 2016: The Brexit Vote Could Change EVERYTHING And Plunge Europe Into Financial Chaos
On June 23rd, a vote will be held in the United Kingdom to determine if Britain will stay in the European Union or not. This is most commonly known as the “Brexit” vote, and that term was created by combining the words “Britain” and “exit”. If the UK votes to stay in the European Union, things over in Europe will continue on pretty much as they have been. But if the UK votes to leave, it will likely throw the entire continent into a state of economic and financial chaos. And considering how bad the European economy is already, this could be the trigger that plunges Europe into a full-blown depression. So if things will likely be much worse in the short-term if Britain leaves the EU, then it makes sense for everyone to vote to stay, right? Unfortunately, it isn’t that simple. Because this choice is not about short-term economics. Rather, the choice is about long-term freedom. The EU is a horribly anti-democratic bureaucratic monstrosity that is suffocating the life out of most of Europe a little bit more with each passing year. So if I was British, I would most definitely be voting to leave the EU.
- Halliburton & Baker Hughes get downgraded: Moody’s
Following the failed merger of Baker Hughes and Halliburton, Moody’s has made the decision to downgrade both companies’ credit ratings. Halliburton and Baker Hughes had their senior unsecured debt downgraded from A2 to Baa1. Halliburton announced that they planned to acquire Baker Hughes back in November of 2014, and HAL, therefore, took on much debt in order to finance the acquisition. Moody’s Vice President, Andrew Brooks, stated that “Debt incurred to finance its failed bid to acquire Baker Hughes Incorporated together with the negative impact on profitability and cash flow of the very weak oilfield services environment have eroded HAL’s credit metrics to levels which no longer support its A2 rating.”
- 15 Facts About The Imploding U.S. Economy That The Mainstream Media Doesn’t Want You To See
You are about to see undeniable evidence that the U.S. economy has been slowing down for quite some time. And it is vital that we focus on the facts, because all over the Internet you are going to find lots and lots of people that have opinions about what is going on with the economy. And of course the mainstream media is always trying to spin things to make Barack Obama and Hillary Clinton look good, because those that work in the mainstream media are far more liberal than the American population as a whole. It is true that I also have my own opinions, but as an attorney I learned that opinions are not any good unless you have facts to back them up. So please allow me a few moments to share with you evidence that clearly demonstrates that we have already entered a major economic slowdown.
- Where Do Matters Stand? — Paul Craig Roberts
On the eve of World War II the United States was still mired in the Great Depression and found itself facing war on two fronts with Japan and Germany. However bleak the outlook, it was nothing compared to the outlook today. Has anyone in Washington, the presstitute Western media, the EU, or NATO ever considered the consequences of constant military and propaganda provocations against Russia? Is there anyone in any responsible position anywhere in the Western world who has enough sense to ask: “What if the Russians believe us? What if we convince Russia that we are going to attack her?” The same can be asked about China.
- BRICS Bank inks strategic cooperation deal with China Construction Bank
The New Development Bank (NDB) launched by the BRICS countries on Wednesday signed a strategic cooperation agreement with China Construction Bank, the country’s second-largest lender. “The NDB, as per its mandate, is building partnerships with major banks in its member countries. Cooperation with CCB is important for us, given the key role it plays in infrastructure financing,” said NDB President Kundapur Vaman Kamath in an emailed statement to The BRICS Post. “The MoU signed today will provide our two institutions with a framework for collaboration in several areas including bond issuance, joint financing and information exchange. I look forward to a long and mutually beneficial partnership,” Kamath added. The China Construction Bank is planning to support the BRICS Bank with adequate credit lines and a commitment to invest in the new lender’s first financial green bonds. The BRICS bank has said clean energy will be part of its core focus.
- It’s 2000 All Over Again!
At this year’s Strategic Investment Conference, my good friend Mark Yusko poured cold water on whatever bullishly warm feelings the most optimistic folks may have clung to. You might think someone who manages real money would have a more enlightened view than those bearish economists. Mark, however, was hardly bullish. He listed ten plausible scenarios that could send markets down to the basement. Here I’ll focus on his “Surprise #6: Déjà vu, Welcome to #2000.2.0.” That’s right: Mark says it’s year 2000 all over again. That was when the tech bubble popped and sent us to an ugly bear market and recession. Here are four major parallels he pointed out that make it clear we are heading for another ugly recession—or are already in one without realizing it.
- How a summer of shocks threatens to bring mayhem to the markets
Two words are back on the lips of every investor in the City. “Event risk” has begun to dominate trading floor conversations, as a slew of central bank decisions, legal rulings, and political upheavals threaten to bring an end to the calm that has descended upon the markets. May is the one calm month we have before a pretty volatile JuneMarchel Alexandrovich. After a brief break from the turbulence that dominated the start of the year, when fears over the strength of the global economy and the idea of a sharp slowdown in China unnerved money managers, volatility is set to return to the scene.
- Eurozone banks hit by bad debts
Investment in the eurozone remains far below pre-crisis levels, partly due to problems in the banks, the Organisation for Economic Co-operation and Development (OECD) has said. Bad debts at the banks are making them less willing to lend. The OECD says many legacies of the area's financial crisis are unresolved and major new problems have emerged.
- Libya claims $1.2bn damages from Goldman Sachs over trades
Libya's $67bn national investment fund is seeking damages from Goldman Sachs, saying the bank encouraged it to make complex, money-losing investments. The Libyan Investment Authority, which runs the fund, is looking to claw back $1.2bn (£840m) it says was lost through nine disputed trades conducted in 2008. The Libyans said the trades were made under “undue influence”. Goldman said the claims were without merit and it would fight them vigorously. The trial started on Monday at the High Court in London.
- Why are so many bankers committing suicide?
Three bankers in New York, London and Siena, Italy, died within 17 months of each other in 2013-14 in what authorities deemed a series of unrelated suicides. But in each case, the victim had a connection to a burgeoning global banking scandal, leaving more questions than answers as to the circumstances surrounding their deaths. The March 6, 2013, death of David Rossi — a 51-year-old communications director at Monte dei Paschi di Siena, the world’s oldest bank — came as the institution teetered on the brink of collapse. Rossi was found dead in an alleyway beneath his third-floor office window in the 14th-century palazzo that served as the bank’s headquarters. A devastating security video shows Rossi landing on the pavement on his back, facing the building — an odd position more likely to occur when a body is pushed from a window.
- Chart of the Decade: European Banks Fleeing German Banks Like Rats From A Sinking Ship
Smaller banks often deposit funds in bigger banks. The level of banks’ deposits at other banks is a reflection of their confidence in the system as a whole. The ECB measures and is kind enough to share with us the level of bank deposits in other banks in Europe, breaking the data down by country and the Eurozone as a whole. Banks have been pulling their money out of other banks in Europe like rats deserting a sinking ship since 2012. Even the advent of QE in 2014 only slowed the stampede. European banks are still gettin’ out of Dodge.
- Bogle Says Prepare for Stocks, Bonds to Miss Historical Returns
John Bogle, the founder of Vanguard Group Inc., said investors should prepare for weaker results than stock and bond markets generated during his six-plus decades in money management. The average annual return has been around 12 percent for stocks and 5 percent for bonds during his career, Bogle, 87, said Wednesday in an interview with Bloomberg Radio. “That is not going to be true in the future,” he said. “It’s reasonable to think that stocks might return 4 to 5 percent in the next decade.” A bond portfolio, including corporate debt, could produce a yield of about 2.5 percent, he said.
- The Land Below Zero: Where Negative Interest Rates Are Normal
In Copenhagen, bicycles take undisputed priority over cars and even pedestrians. A sizzling restaurant scene has made foodie fetishes of moss, live ants, and sea cucumbers. Despite a minimum wage not far below $20 an hour and some of the world’s steepest taxes, unemployment is almost the lowest in Europe. Parents happily leave infants unattended in strollers on the sidewalk while they stop in to cafes. Clearly the usual rules tend not to apply in Denmark. So it’s no surprise that the country in recent years has added a major new entry to its sprawling repertoire of eccentricities: Since 2012 it’s been a place where you can get paid to borrow money and charged to save it. Scandinavia’s third-largest economy (the population is 5 million, and there are about as many bikes) is deep into an unprecedented experiment with negative interest rates, a monetary policy tool once viewed by mainstream economists as approaching apostasy, if not a virtual impossibility. Companies—though not yet individuals—are paying lenders for the privilege of keeping funds on deposit; homeowners, in some cases, are actually making money on mortgages.
- There Have Almost Never Been This Many Global Stocks in Decline
Fear of a possible Brexit is being manifested in equities around the world. The Bloomberg composite referendum poll tracker shows that in recent days, the share of the electorate who would vote to leave the E.U. has pulled ahead of the percentage who would vote to remain. Amid the evidence that the “Leave” camp is gaining support, global equities have come under acute pressure, with the MSCI All World Index giving back more than 4 percent over the four sessions through Tuesday. What's startling about this particular pullback is how the number of stocks that are rising was, at the time of yesterday's close, absolutely dwarfed by the amount in decline, observe analysts at Bespoke Investment Group.
- S. Africa Gets Reprieve From Junk as S&P Keeps Rating Unchanged
South Africa got a reprieve from a junk credit rating as S&P Global Ratings warned it could cut the nation’s debt assessment if the economy doesn’t recover. The foreign-currency rating was kept at BBB-, one level above junk, and the local-currency rating was affirmed at BBB+, S&P said in a statement on Friday. The outlook on the rating was kept at negative. The rating affirmation keeps South Africa on the same level as India and Italy. “South Africa’s weak economic growth, relative to that of peers in similar wealth categories, continues to be hurt by a combination of factors,” S&P said. The negative outlook signals “that we could lower our ratings on South Africa this year or next if policy measures do not turn the economy around,” it said. While the nation maintained its investment grade for now, economic growth forecast at the slowest pace since the 2009 recession will keep pressure on the rating. A downgrade to junk for Africa’s most-industrialized economy could prompt forced selling by some funds that are prevented by their mandate from owning junk-rated securities.
- Gerald Celente – The Next 8 Days May Change The World Forever
Today top trends forecaster Gerald Celente just that the next 8 days may change the world forever. Gerald Celente: Direct Democracy referendums, a staple in Switzerland – one of the wealthiest, most democratic, least violent, most market-oriented countries in the world – in which the public, not politicians, vote on high-profile issues… has gone British… Next Thursday, United Kingdom citizens will vote whether to stay in or exit (Brexit) the European Union. In the run-up to the referendum, world equity markets swoon and sway with polls that fluctuate between “Remain” or “Leave.”
- Brazil’s Exploding Debt-to-GDP Is Going to Become a Problem Soon
Reining in Brazil’s mammoth budget is no small feat, no matter how good you are. Cut discretionary spending, and risk blowback from an already frustrated electorate. Raise taxes, you could exacerbate the nation’s crushing recession. Privatize government companies? Beware the wrath of the unions. Shrink social security? It’ll take decades to manifest itself on the nation’s balance sheet. And that doesn’t even start to address Brazil’s massive interest tab. That’s the harsh reality facing Acting President Michel Temer, 75, who took over three weeks ago for Dilma Rousseff as she awaits an impeachment trial. His economic cabinet — dubbed the “dream team” by Goldman Sachs Group Inc. — takes over a crisis-torn country with a public-sector debt burden that climbed 9 percentage points last year alone to 67 percent of gross domestic product. And liabilities keep mounting fast. The budget gap is now the biggest among all countries in the G-20 except Saudi Arabia, equal to more than 10 percent of GDP.
- National Bank profit falls 48% on bad energy loans; boosts dividend
National Bank of Canada (NA.TO) has delivered quarterly results that look ugly but invite observers to look ahead to better times later this year. The smallest of the Big Six reported that its second-quarter profit fell to $210-million, down 48 per cent from last year. That’s the ugly part, and it stands out from the far-more encouraging results from the other big banks this quarter. The decline was expected though, after the bank announced last month that it would set aside $250-million to cover bad loans to the energy sector. Overall, provision for credit losses came to $317-million, giving National Bank the opportunity to construct two what-if scenarios that can make its results look considerably more upbeat.
- The Federal Reserve Has Created an Unprecedented Disaster for Pension Funds
When it comes to the Fed, Congress is mired in hypocrisy. The anti-regulation, de-regulation crowd on Capitol Hill shuts its mouth when it comes to the most powerful regulators of all – you and the Federal Reserve. Meanwhile, Congress goes along with the out-of-control, private government of the Fed—unaccountable to the national legislature. Moreover, your massive monetary injections scarcely led to any jobs on the ground, other than stock and bond processors.
- Next Banking Scandal Explodes in Spain
The last five years have been a bumper period for banking scams and scandals in crisis-ridden Spain. From Bankia’s doomed IPO in 2012 to the “misselling” of complex preferentes shares to “unsophisticated” retail bank customers, including children and Alzheimers sufferers, all of the scandals have had one thing in common: the banks have consistently and ruthlessly sacrificed the welfare and wealth of customers, investors, and taxpayers on the altar of short-term survival. Some commentators claim that the problem of banking instability in Spain has been put to rest in recent times, thanks chiefly to a robust, debt-fueled recovery, a tepid resurgence of the real estate sector and the transfer of the most toxic assets from banks’ balance sheets to the festering balance sheets of the nation’s bad bank, Sareb. They could not be more wrong. Despite the untold billions of euros of public funds lavished on “cleaning up” their balance sheets and the roughly €240 billion of provisions booked against bad debt since December 2007, the banks are just as weak and disaster-prone as they were four years ago.
- Negative rates stir bank mutiny
Lenders in Europe and Japan are rebelling against their central banks’ negative interest rate policies, with one big German group going so far as to weigh storing excess deposits in vaults. The move by Commerzbank to consider stashing cash in costly deposit boxes instead of keeping it with the European Central Bank came at the same time as Tokyo’s biggest financial group warned it was poised to quit the 22-member club of primary dealers for Japanese sovereign debt. The ECB and the Bank of Japan have for months imposed negative rates for holding bank deposits in an attempt to push lenders to deploy their cash in the real economy through more aggressive lending to businesses. The policy in effect taxes banks for storing excess liquidity.
- ECB Gets Clocked by the Two Biggest German Banks
On the fateful day of June 8, when the ECB began buying euro-denominated corporate bonds, some of which now trade in negative-yield absurdity, the two biggest German banks counter-attacked in a well-coordinated two-pronged move. Commerzbank, of which the German government owns nearly 16% as a consequence of the bailout during the Financial Crisis, leaked to Reuters with impeccable timing that it was considering hoarding tons (literally) of cash in its vaults rather than paying the punishment interest on deposits at the ECB. That “punishment interest,” as Germans call the negative interest the ECB charges for deposits, is -0.4%. Currently, Eurozone banks have €850 billion on deposit at the ECB, so the punishment interest would cost them €3.4 billion per year.
- “Death of the Dollar” Not Yet
Our favorite death-of-the-dollar gurus will have to remain patient for a while longer, it appears. Not that they don’t have plenty of reasons to be confident. But right now, the much maligned dollar is hot – on every level! With its top two competitors – the euro and the yen – now mired in negative-yield absurdity, investors are fleeing to greener pastures where yields are still higher. And the greenest pasture of them all with the most liquid government bond market is the US. Foreign demand at the 10-year Treasury auction on Wednesday hit a record high of 73.6%, beating the prior all-time record of 73.5% in May. And they sold at a yield of 1.702%!
- Four alternatives to holding your savings in a bank
“Global yields lowest in 500 years of recorded history. $10 trillion of neg. rate bonds. This is a supernova that will explode one day.” Those were the words of famed bond fund manager Bill Gross. (Gross was actually the first portfolio manager inducted into the Fixed Income Analyst Society’s “Hall of Fame”. And yes, there really is a hall of fame for that.) Gross wrote that more than $10 trillion in government bonds actually have NEGATIVE yields, and that interest rates are at the lowest levels in financial history. For example, the British government just issued its lowest-yielding bonds since 1694. This has very dangerous implications.
- Introducing Europe’s Frightening New Tax Directive
A few days ago, the European Commission released details of a tax directive that will create a pan-European tax system, complete with a brand new Tax ID number for all the good citizens of Europe. The proposal also aims to increase taxes across the board if they feel that a member state (like Ireland) doesn’t charge enough tax. According to the proposal, other European countries like Ireland and Estonia “distort competition by granting favourable tax arrangements.” Apparently it’s not ‘fair’ that high-tax France and Belgium have to compete with low-tax Ireland and Estonia. So rather than the bankrupt countries getting their act together to attract business, the solution is to penalize everyone and make the entire continent less attractive. It’s genius! The directive goes on to demand more onerous reporting, attack anyone who takes legal steps to reduce what they owe, and even threaten businesses with exit taxes if they try to leave Europe. This really is like a return to the feudal system.
- John Hathaway – There Is A Deepening Shortage Of Physical Gold
On the heels of gold and silver moving higher along with the dollar and the Dow tumbling, here is a reminder from one of the greats in the business, John Hathaway, that discusses the deepening shortage of physical gold. John Hathaway: “According to the World Gold Council, the current investment allocation of world institutional portfolios to gold is a miniscule .55 percent. The flows resulting from a return of investment interest in gold for hedging purposes only, and in the best of all possible worlds (robust economic growth, world peace, etc.), would seem to have a potentially powerful impact on gold prices.”
- FTSE Loses £30bn In Value As Brexit Fears Grow
The FTSE 100 slumped below the 6,000 threshold for the first time in four months on Tuesday, as growing concern about the EU referendum caused jitters in global markets. More than £30bn was wiped off the index as it finished a fourth session in negative territory, following further opinion polls which indicate strong support for Brexit and The Sun's decision to throw its support behind the Out campaign. In London, the FTSE fell 2% to close at 5924 – and other European markets also ended the day in the red, including the CAC 40 in France and Germany's DAX. The STOXX 600, a pan-European index, has lost 8% since the start of June, wiping off €600bn (£475bn) off the value of its constituents.
- A Trip Down The Rabbit Hole Of Money Dropping Helicopters, Followed By Debt Repudiation
Today one of the greats in the business has given King World News permission to share a crucial piece of information with our global audience. This piece takes a trip down the rabbit hole of money dropping helicopters, followed by debt repudiation. Bill Fleckenstein: It is worth noting, however, that today is a bit of a red-letter day in the annals of monetary experimentation because it marks the beginning of Mario Draghi’s and the ECB’s buying of corporate bonds as part of their roughly 80-billion-euro-per-month (i.e., over $90 billion) monetization scheme…
- George Soros Is Preparing For Economic Collapse – Does He Know Something That You Don’t?
Why is George Soros selling stocks, buying gold and making “a series of big, bearish investments”? If things stay relatively stable like they are right now, these moves will likely cost George Soros a tremendous amount of money. But if a major financial crisis is imminent, he stands to make obscene returns. So does George Soros know something that the rest of us do not? Could it be possible that he has spent too much time reading websites such as The Economic Collapse Blog? What are we to make of all of this? The recent trading moves that Soros has made are so big and so bearish that they have even gotten the attention of the Wall Street Journal…
- Top Advisor To Sovereign Wealth Funds Warns Another Lehman Moment Is Coming As Gold & Silver Surge!
With Wall Street having one of the strangest years in 2016, today a top advisor to the most prominent sovereign wealth funds, hedge funds, and institutional funds in the world, warned King World News that another Lehman moment is coming. He also discussed what this will mean for major markets and he exposed what will be the trigger for gold and silver to skyrocket. Michael Belkin: “The world is changing. What’s happening economically in Europe is we have extremely weak banks. Let me give you two names, UniCredit and Deutsche Bank. I’m telling my clients to sell and short those stocks. UniCredit is one of the biggest, if not the biggest Italian bank. It has a huge balance sheet, not enough capital, and huge non-performing loans (20 percent). The stock is down about 50 percent on the year and they are gasping for air.
- Something Big That Always Happens Right Before The Official Start Of A Recession Has Just Happened
What you are about to see is major confirmation that a new economic downturn has already begun. Last Friday, the government released the worst jobs report in six years, and that has a lot of people really freaked out. But when you really start digging into those numbers, you quickly find that things are even worse than most analysts are suggesting. In particular, the number of temporary jobs in the United States has started to decline significantly after peaking last December. Why this is so important is because the number of temporary jobs started to decline precipitously right before the last two recessions as well.
- Global markets rattled as Brexit gains traction
Jitters over the coming EU referendum have wiped £67bn off of the FTSE 100 in the past three days, amid signs that support for Brexit has risen to the strongest levels on record. Concerns over a leave vote pushed London’s leading index down by 1.2pc, to a three-month low of 6,044.97, as nerves about the repercussions of a withdrawal from the EU sent shockwaves through global equity markets. European stocks were left battered, with the Euro Stoxx 50 shedding nearly 2pc. Worries about the global economy, in part fuelled by the belief that a Brexit vote could destabilise the wider eurozone bloc, also dampened investors’ appetites for US stocks. The flagship S&P 500 index closed down more than 0.8pc as traders fled for the perceived safety of government bonds and gold.
- Was The Gotthard Base Tunnel Opening Ceremony An Illuminati Ritual Intended To Honor Satan?
The opening ceremony of the Gotthard Base Tunnel in Switzerland featured a “goat-man” that dies, is resurrected, is worshipped and is crowned as “the king of the world”. The “goat-man” that played such a key role in this performance bore a striking resemblance to Baphomet, which in recent decades has become one of the key symbols used to represent Satan in the occult community. So could it be possible that this entire ceremony was actually an Illuminati ritual that was intended to honor Satan? Don’t pass judgment until you see the videos. On Wednesday, June 1st, the long-awaited opening ceremony of the Gotthard Base Tunnel in Switzerland finally took place. It is the longest and the deepest railroad tunnel in the entire world, and it took 17 years to build. It is 35 miles long, more than 2,000 meters deep in places, and the construction of this unprecedented tunnel cost a grand total of more than 11 billion euros. So the opening of this tunnel was quite a big deal over in Europe. Prominent European politicians such as German Chancellor Angela Merkel, Italian Prime Minister Matteo Renzi and French President Francois Hollande were all in attendance, and they were treated to an incredibly bizarre opening ceremony that cost approximately 8 million euros to produce. From Switzerland, this opening ceremony was broadcast by television all over the world, and so countless numbers of people were exposed to it.
- Why Is The Weather So Crazy All Of A Sudden?
All over the planet, global weather patterns have gone completely nuts. Just over the past few days we have seen “life threatening” heatwaves, extremely dangerous wildfires, vicious tornadoes and unprecedented flooding – and that is just in the United States. And of course this is just the continuation of a trend that stretches back to last year, when extremely weird weather created “apocalyptic-like conditions” in many areas around the world. So why is this happening? For decades, we could count on weather patterns falling within fairly predictable parameters, but now that is completely changing all of a sudden. All over the globe we are seeing things happen that we have never seen happen before, and the weather just seems to get even more crazy with each passing month.
- George Soros Sells America Short – Literally
The Wall Street Journal reported on its front page this morning that leftist billionaire and Democratic mega-donor George Soros, the convicted insider trader who “broke the Bank of England,” has stepped back into trading personally in recent months. The Journal reports that Soros is betting against America, adopting “bearish derivative positions that serve as wagers against U.S. stocks.” It is not clear at what point in the first quarter the firm took those positions; the S&P 500 was up 3% on the quarter, so Soros may be in the red so far, according to the Journal report. But on May 16, Soros’ fund disclosed that it had doubled its bet against American stocks.
- The Woman who Discovered $200 MILLION missing from E.U. Accounts
Marta Andreasen was hired as the EU’s first proper chief accountant in 2002. She was in charge of 130 staff and, surprisingly, was the first properly qualified accountant to hold the post. She did her job correctly – and in no time at all, identified that £170 million was missing or unaccounted for in the E.U. budget – that’s more than $200 million! The corrupt E.U. immediately slapped her with a disciplinary charge for “defamation” and she was suspended from her job.
- Fed's Yellen sees rate hikes ahead, but few hints on when
Federal Reserve Chair Janet Yellen on Monday gave a largely upbeat assessment of the U.S. economic outlook and said interest rate hikes are coming but, in an omission that stood out to some investors, gave little sense of when. Overall, Yellen said, “I see good reasons to expect that the positive forces supporting employment growth and higher inflation will continue to outweigh the negative ones.” While last month's jobs report, released Friday, was “disappointing,” and bears watching, policymakers will respond “only to the extent that we determine or come to the view that the data is meaningful in terms of changing our view of the medium- and longer-term economic outlook.”
- The Fed's credibility gap is getting wider
If Fed policy was a fairy tale, the title might be “The Central Bank That Cried Wolf.” Investors have watched in bemusement as Fed officials throughout the past several years have warned that policy would change, only to back down at the slightest sign of turbulence. It now appears the market is no longer taking the Fed's threats seriously. In a speech Monday, Fed Chair Janet Yellen gave only modest signals that she was reconsidering policy, which just a few months ago was geared for as many as four interest rate increases this year. Nevertheless, a market bracing for a high likelihood of a summer hike now is considering that “we may well not see one,” said David Rosenberg, chief economist and strategist at wealth management firm Gluskin Sheff.
- Half Of Washington DC Employers Have Cut Jobs, Hours Due To Minimum Wage Increases – And It's Going To Get Worse
As former McDonald's CEO Ed Rensi so eloquently explained not long ago, raising the minimum wage would wipe out thousands of entry level jobs for those who don't have very many other options. Washington, DC is validation of Rensi's theory. According to a report from the Employment Policies Institute, nearly half of Washington, DC employers said they have either laid off employees or reduced the hours of employees to adapt to the District of Columbia's minimum wage hikes since 2014.
- Weak Jobs, Consumer Activity Hint at Weakening American Economy
A disappointing increase in job openings and a poor increase in consumer credit indicate Americans are increasingly struggling to make ends meet. In April, consumer credit rose just $13.4 billion, far below the $18 billion expected and less than half of March’s $28.4 billion, according to new data released by the Federal Reserve. Analyst expectations of sharply increasing consumer credit usage were based on previous data that showed strong retail sales, which is often financed by credit cards.
- Wholesale Inventories Rise Most In 10 Months, Sales Miss; Ratio Only Higher Post-Lehman
Wholesale inventories rose more than expected in April (up 0.6% MoM vs 0.1% exp) – the biggest monthly jump in 10 months – but sales disappointed (rising only 1.0% versus a 1.1% expectation). This sales growth topping inventory growth is a positive but for context the inventory-to-sales ratio remains at 1.35x – the highest level ex-Lehman on record. They just keep building inventories… even as sales remain lower YoY…
- Urban Outfitters (URBN) Stock Plunges in After-Hours Trading on Q2 Sales Trend
Urban Outfitters (URBN) stock is falling by 7.84% to $25.74 in after-hours trading on Thursday, after the apparel retailer announced its comparable store sales are declining in the fiscal 2017 second quarter, which ends next month. “Thus far during the second quarter of fiscal 2017, comparable retail segment net sales are mid single-digit negative,” the company said its quarterly report filed with the SEC. If trends continue through the quarter, comparable store sales would decline, compared with a 4% increase for the same quarter last year and a 1% increase for the fiscal 2017 first quarter ended April 30.
- Venezuela announces new plan to tackle food crisis
The Venezuelan government says it has imported thousands of tons of basic foodstuffs and will begin distributing them through communal councils directly to family homes. In Caracas the Food Minister, Rodolfo Marco Torres, said 70% of the country's food would be supplied in this way. The Venezuelan opposition says the new system could discriminate against them. The country has been badly hit by the fall in oil prices and is suffering severe shortages in food and medicines. President Nicolas Maduro has accused private food production companies and supermarkets of hoarding food for speculation. Mr Torres said the government had purchased 115,000 tons of basic goods including rice, sugar, maize and beans.
- Bond markets hit by economic worries
The returns on British and German government debt, or bonds, have hit new all-time lows. The market has been affected by concerns about the global economic outlook. Weaker economic performance usually leads to cuts in interest rates and bond yields tend to move down in parallel. An increasing number of government bonds are now giving negative returns, less than zero. These moves have highlighted a question that is increasingly being asked in the markets: Is the world heading for another financial crisis, this time in the market for government and company debt? The new records being hit by government bonds are the results of central bank policies of very low or even negative interest rates.
- Grains Decline as U.S. Sees Global Supply Exceeding Estimates
Grain prices dropped in Chicago after the U.S. government said that supplies will be bigger than analysts expected. World wheat inventories in the 2015-16 season will reach 243 million metric tons, the U.S. Department of Agriculture said Friday in a report. That compares with analyst projections at 242.5 million, on average. Global corn reserves will be 206.5 million tons, topping the 205.5 million estimate.
- The Pension Bubble: How The Defaults Will Occur – Peter Diekmeyer
Experts worry about stock, bond and real estate market excesses. But a bubble is forming that dwarfs them all: in pension plans. Millions of Americans and Canadians who are counting on pension benefits to fund their retirements risk being severely disappointed. The hard money community has, of course, been aware of this for some time. However in recent years, even the elites have been taking notice. One such group, the International Forum of the Americas, will be holding its fourth annual pension conference in Montreal next Monday. There politicians, financiers and monetary policy officials will discuss the declining rates of return in public and private sector pension plans. The picture they will paint is increasingly grim.
- Wall Street’s Treasuries Market Bluff Exposed in Auction Retreat
When U.S. officials broached the question of more oversight in Treasuries this year, Wall Street pushed back by pointedly reminding them of the “critical role” it plays in ensuring America’s ability to borrow. Turns out, the firms might be overstating their influence. Banks known as primary dealers, which trade directly with the Federal Reserve and bid at U.S. debt auctions, have bought just 30 percent of the new securities this year, the smallest share on record, data compiled by Bloomberg show. The 23 firms — which include JPMorgan Chase & Co., Goldman Sachs Group Inc. and Deutsche Bank AG — also aren’t bidding as aggressively as they once did.
- A ‘tsunami' is about to overwhelm the debt market
A tidal wave may be coming to the bond market, and it's not going to be pretty. At least that's the view of Matthew Mish, credit strategist at UBS. To Mish, the elevated rates of default in the commodity sector and high risk bonds are a harbinger of things to come for the broader debt market. “First, our quantitative framework is signaling a broader deterioration in the default outlook, with our model projecting default rates of 4.3% over the next 12 months (versus 2.6% one year prior),” Mish wrote in a note to clients on Thursday.
- New Reasons to Worry About Europe's Banks
European banks have lost their mojo. A toxic combination of negative interest rates, comatose economies and a regulatory backdrop that might euphemistically be described as challenging is wreaking havoc with bank business models. Their collective market value has dropped by a quarter so far this year. The smoke signals emanating from the European Central Bank in recent weeks suggest regulators aren’t blind to this. Daniele Nouy, who chairs the ECB’s bank supervisory board, said earlier this week that the central bank “is aware that the low-interest-rate environment is putting pressure on the profitability of European banks.” Regulators may respond by going easier when drafting new rules.
- China's Debt Load Is (Much) Higher Than Previously Thought, Goldman Says
Count total social financing (TSF) as another Chinese statistic of increasingly dubious value, according to analysts at Goldman Sachs Group Inc. With many investors grappling to understand the degree to which China's economic growth has been fueled by debt, efforts to get a grip on measures of new credit creation have gained fresh urgency. To date, many have relied on the TSF invented by the Chinese authorities in 2011 as a way of capturing a larger slice of the country's shadow banking activity, but Goldman analysts led by M.K. Tang cast fresh doubt, in a note published on Wednesday, on the measure's ability to gauge credit creation.
- Pensions may be cut to ‘virtually nothing' for 407,000 people
One of the biggest private pension funds in the country is almost out of money, and fresh out of options. The Central States Pension Fund has no new plan to avoid insolvency, fund director Thomas Nyhan said this week. Without government funding, the fund will run out of money in 10 years, he said. At that time, pension benefits for about 407,000 people could be reduced to “virtually nothing,” he told workers and retirees in a letter sent Friday. In a last-ditch effort, the Central States Pension Plan sought government approval to partially reduce the pensions of 115,000 retirees and the future benefits for 155,000 current workers. The proposed cuts were steep, as much as 60% for some, but it wasn't enough. Earlier this month, the Treasury Department rejected the plan because it found that it would not actually head off insolvency. The fund could submit a new plan, but decided this week that there's no other way to successfully save the fund and comply with the law. The cuts needed would be too severe.
- Jerome Kerviel, rogue trader, wins unfair dismissal case
The French ex-trader Jerome Kerviel, whose unauthorised transactions lost his bank €4.9bn (£3.82bn), has won a claim for unfair dismissal. A labour court said the bank, Societe Generale, had dismissed him not because of his actions, which it must have known of, but for their consequences. The court ordered the bank to pay him €450,000 (£350,000) in damages. A lawyer for the bank said it would be appealing a “scandalous” decision that ran counter to the law. Mr Kerviel, 39, served a three-year jail term after being convicted of breach of trust and fraud in October 2010. He was charged with gambling €50bn (£39bn) of Societe Generale's money on trades without the bank's knowledge, which nearly brought down the business.
- Here’s How George Soros’s Latest Predictions Have Played Out
George Soros, the 85-year-old billionaire who broke the Bank of England in 1992, is becoming more involved in day-to-day trading at his family office, taking a series of big, bearish bets. Soros is best known for netting $1 billion as a hedge fund manager decades ago when he and his then-chief strategist Stan Druckenmiller wagered that the U.K. would be forced to devalue the pound. His predictions haven’t always played out so well. Anticipating weakness in various global markets, his Soros Fund Management cut its publicly disclosed U.S. stock holdings by 37 percent in the first quarter while buying shares of gold miners and an exchange-traded fund tracking the price of the precious metal. Since then, the S&P 500 Index has returned 3.1 percent. Barrick Gold Corp., his largest new position disclosed in the quarter, fared better, jumping 44 percent.
- Puerto Rico’s Bonds Rally as House Nears Passage of Rescue Plan
Puerto Rico bonds are staging the longest rally in six months with the U.S. House of Representatives poised to vote on legislation to help resolve the island’s $70 billion debt crisis. The prices of some securities rose Thursday amid speculation that the House will approve a bill, known as Promesa, that empowers a federal control board to monitor the U.S. territory’s budgets and oversee any debt restructurings. The gains came after an index of Puerto Rico debt climbed for eight straight days through Wednesday, the longest winning streak since November, S&P Dow Jones indices show.
- US warns of hacking threat to interbank payment network
US regulators have warned banks about potential cyber attacks linked to the interbank messaging system. The statement came two weeks after the Federal Bureau of Investigations sent a notice cautioning US banks after the hacking of Bangladesh's central bank. The FBI message warned of a “malicious cyber group” that had already targeted foreign banks. In February, hackers stole $81m (£56m) from Bangladesh's account with the Federal Reserve Bank of New York. The hackers used the Bangladesh central bank's Swift credentials to transfer money to accounts in the Philippines. Swift is the system banks use to exchange messages and transfer requests. The hackers attempted to steal nearly $1bn, but several of their requests were rejected because of irregularities.
- Chinese police require DNA for passports in Xinjiang
Police in China's north-western region of Xinjiang are asking some residents to provide DNA samples and other biological data when applying for travel documents. People in the multi-ethnic area of Yili will have to provide the samples before being allowed to go abroad. The Chinese government is trying to crack down on periodic violence, which it blames on Islamist militants. Many Muslims in Xinjiang say they are discriminated against. They say the Chinese authorities often refuse to issue documents allowing them to travel. Most of the Uighur ethnic minority, which makes up about 45% of Xinjiang's population, practise the Muslim faith. Over the years China's authorities have attributed violent attacks to Uighur militants, who they say are inspired or aided by overseas terror groups. Uighur leaders have denied being behind the violence.
- Compare The Contrast Of Censored Images Showing Socialist Country Where The Elite Thrive, The Poor Starve
Most of us have seen the heartbreaking images and videos flowing out of Venezuela where food lines are hours long, basics like bread are unattainable for many and recent reports showing Venezuelans are so hungry and desperate they are hunting dogs, cats and pigeons, but that is only half the story. Due to government corruption, there are “two Venezuelas,” one where the poor are having their electricity and food rationed by the government, causing civil unrest and bringing the country to the brink of civil war, but the other “country within the country” is living high drinking champagne and vodka, eating Belgian chocolates and lobster, wearing brand name clothes, and dining in exclusive restaurants. Via Telesur, a man by the name of Agustin Otxotorena, a Basque executive living in Caracas, grew tired of constant calls from friends and relatives in Spain telling him that there was no food in Venezuela, so on May 20 he began publishing photos on Facebook of supermarkets in upscale sectors of Caracas filled with goods. What you will see below is what the ABC news bureau in Venezuela censors from their reports, images from Otxotorena's Facebook account which when seen side by side with the tragic images of starving Venezuelans show a sickening contrast between who the government allows to starve and who doesn't.
- Saudi Post-Oil Plan Weighs Income Tax on Expat Workers
Saudi Arabia is considering taxing millions of foreign residents as the kingdom seeks to reduce its reliance on oil revenue after the plunge in crude prices. The proposal was included in the country’s National Transformation Plan, an ambitious multi-year program released this week. But the tax element is only “an initiative that will be discussed,” Finance Minister Ibrahim al-Assaf said on Tuesday at a news conference in Jeddah. Economists said the proposal is unlikely to see the light soon because it could hamper the kingdom’s ability to attract the foreign investment it needs to revive growth hit by the oil slump. Still, raising the possibility of income tax in the blueprint — even if only on foreigners — shows the readiness of its architect, Deputy Crown Prince Mohammed bin Salman, to consider steps that past Saudi rulers have shunned. Prince Mohammed, the king’s son and second-in-line to the throne, has already cut fuel and utility subsidies and proposed reducing the public-sector wage bill. The kingdom is also joining other members of the six-nation Gulf Cooperation Council in imposing value-added taxation starting from 2018.
- The Obama Administration Could Cause the Next Big For-Profit College Collapse
The Obama administration is at risk of repeating the mistakes that led to the expensive collapse of for-profit chain Corinthian Colleges Inc. In that case, the Department of Education failed to address years of allegations that the company’s schools swindled its students and warning signs that Corinthian was facing financial difficulty. When the department finally took action by delaying the delivery of federal student aid to the schools, officials were “surprised” by the cash crunch the delay caused. That set off a series of events that culminated in Corinthian filing for bankruptcy protection less than a year later. The increasing cost to taxpayers of Corinthian's collapse was at least $90 million as of March.
- Trail of Defaults Leads to Dark Corner of Tax-Exempt Bond Market
When Philip J. Kennedy needed financing to buy low-income housing in a wealthy Dallas suburb, he bypassed Texas agencies for a tax-exempt bond issuer 700 miles away in Gulf Breeze, Florida. Leaving the state allowed Kennedy’s non-profit American Opportunity Foundation Inc. to secure $35 million to buy Garden Gate Apartments in Plano, Texas, and a development in Fort Worth without answering questions from local authorities about AOF’s past difficulties repaying debt. Scores of non-profit organizations like AOF are required to use government-created agencies when selling bonds. In return, the agencies charge fees. At times, these conduits aren’t in the same state as the projects they’re financing, giving officials on the ground little incentive to scrutinize the deals.
- S&P 500 Record Taunts Investors Before Floor Caves In on Friday
Another run at a record ended in frustration for stock investors as the biggest selloff since mid-May erased gains for the week and dragged the S&P 500 further from a 10-month high. A week that started with the whiff of celebration as equities pulled within 1 percent of their all-time high ended with disappointment amid concerns about global growth and Britain’s referendum on the European Union. The S&P 500 dropped 0.9 percent to 2,096.07 on Friday, its worst decline since May 17, leaving it down 0.2 percent over the five days.
- Day 8 No Money on EBT Cards – Riots Next? – Get Prepared!
It interesting over the weekend I got several emails telling me about cell phones being down, internet being down, and get this, EBT cards not working and having no money associated to them. This is a concern because when the US Government has payment failures, then there is possibly something happening that the press is not telling you about. Now, we know that computers have problems and that states, counties and cities run on computers. But what is interesting is that since the beginning of 2016, The US government has had over 2,700 reports on downdetector.com showing that they have been late loading the money onto these EBT cards. Folks, we are now going on 8 days where the Government has not paid the EBT payments so that people have food. Why is this? Are we looking a possible Venezuela event taking place here in the US?
- Dire Financial Warnings and Debt Jubilee-David Morgan
Finance and economy writer David Morgan says there has been a noticeable increase in dire warnings from some of the biggest names in the investing world. Why are the elite sounding the alarm on another financial meltdown? Morgan says, “One reason is they see it’s rather imminent . . . so, could it be this year? Absolutely. I have been kind of right and wrong on this. I am right about the deterioration in the economy, the money supply and the inability to directly address the problem. Where you pinpoint it is more difficult. I said 2015 would be the year that most sleepy Americans would wake up and see the economy isn’t really recovering. . . . I think it’s going to be 2016.”
- Rise in Starving Children Puts Strain on Venezuela’s Hospitals
The increasing shortage of food and other basic products in Venezuela, on top of inflation, is now takingits toll on the health of the nation — most notably, on its malnourished children. Children frequently arrive to the San Felipe Central Hospital after having fainted from malnourishment, officials told the PanAm Post, and are given medicine to take three times a day. Mothers tell physicians they don’t have enough food in their homes, even after rationing. “Children under five months of age come in here with diarrhea and when the parents are asked what the child has been eating, they say mostly rice cream because they can’t get milk,” one hospital worker said. The same source confirmed parents blame themselves because they don’t have the salary or access to staple foods to improve the situation. “You can’t feed a five-month-old on rice,” the source said, “and it’s going to affect their long-term health.”
- A Breakdown in Old Rules Leads to a Rethink on How Global Markets Work
A standard textbook relationship that every student of economics learns in school has been flipped on its head, and it’s leading to a major rethink on the connection between bank balance sheets, exchange rates, global asset prices, and monetary policy. The prices of derivatives used for hedging currency risk are violating no-arbitrage rules, a development that points to a significant decline in global banks’ ability to intermediate capital flows from global investors, in part because of new regulations that have been introduced in recent years. That decline in intermediation capacity appears to have heightened the sensitivity of exchange rates and global asset prices to monetary policy since the crisis, and helps explain some of the unusual gyrations witnessed recently in markets — like extreme moves in the so-called cross-currency basis, which according to traditional theory should be non-existent, and mostly was before the crisis that began in 2007.
- Whistle-Blower Said to Aid SEC in Deutsche Bank Bond Probe
The U.S. Securities and Exchange Commission is being helped by a whistle-blower in an investigation of Deutsche Bank AG’s post-crisis mortgage-trading business, according to people with knowledge of the situation. The SEC received a whistle-blower complaint alleging that the bank inflated the value of mortgage bonds on its books and masked losses around 2013, said the people, who asked not to be identified because the matter is confidential. The SEC is probing how the bank valued government-backed mortgage bonds known as Agency pass-through securities that it amassed after the 2007 U.S. housing crisis.
- Bond yields in UK and Germany fall to record low
The return on benchmark UK government bonds has fallen to a record low as investors move in to safer assets on concerns about the global economy. The yield on the UK's 10-year gilt dropped below 1.25% for the first time. The yield on the German equivalent also sank to a record low. More buyers cause bond values to rise and yields to fall, hitting annuity rates, pension fund income, and debts. Analysts see it as a “pessimistic” sign. “The low yield on government bonds paints a pretty pessimistic picture of the global economy, and suggests we are set for an extended period of low or negative inflation, and weak economic performance,” said Hargreaves Lansdown analyst Laith Khalaf.
- Britain's property market is going to have a flash crash this summer
Britain's property prices are going to fall for the first time since 2012 and London's house prices will be affected the most, says the Royal Institution of Chartered Surveyors. Buyers are cautious due to the uncertainty surrounding the UK's referendum on European Union membership on June 23. RIC's chief economist Simon Rubinsohn said in his latest report that the new stamp duty tax imposed by the government on April 1 this year also has some bearing on the lack of demand and therefore the pulldown in prices. But “there is not at this point a sense that a fundamental shift is taking place in the market,” he added, which shows how property prices are likely to experience a flash crash — a short-term burst of cratering prices. This might be a relief for people looking to buy in London as the price drop is going to be the greatest in the capital.
- EU Referendum … The Plan to DESTROY the UK
The UK is being set up the final destruction of the NATION STATE! On Thursday 23rd June 2016, the outcome of the EU referendum will be manipulated … but perhaps not in the way many expect! At the recent AV7 Conference, Ian R Crane presented the magnitude of deceit & deception being perpetrated by both UK & EU politicians and names those specifically tasked with bringing about the Final Destruction of ALL European Nation States.
- The Untold Story Behind Saudi Arabia’s 41-Year U.S. Debt Secret
Failure was not an option. It was July 1974. A steady predawn drizzle had given way to overcast skies when William Simon, newly appointed U.S. Treasury secretary, and his deputy, Gerry Parsky, stepped onto an 8 a.m. flight from Andrews Air Force Base. On board, the mood was tense. That year, the oil crisis had hit home. An embargo by OPEC’s Arab nations—payback for U.S. military aid to the Israelis during the Yom Kippur War—quadrupled oil prices. Inflation soared, the stock market crashed, and the U.S. economy was in a tailspin.
- Bank of England in preparations for potential Brexit
The Bank of England will draw on lessons learned from the Scottish referendum and the global financial crisis as it steps up its preparations for a possible decision by Britain to leave the EU on 23 June. The first of three special funding operations by Threadneedle Street will be launched on 14 June to ensure the UK’s commercial banks have the necessary cash to cope with any turmoil caused by the uncertainty surrounding a Brexit vote. The move would just be the start of action by the Bank, which has drawn up a plan ready for use if necessary on 24 June if the UK votes to leave the EU.
- Arrant Star Trek Socialism
In spite of the fact that Marx expressed nothing but disdain for his Utopian socialist predecessors such as Henri Saint-Simon and Auguste Comte, variants of Utopian socialism evidently live on. The latest iteration of the socialist dream is firmly focused on the capabilities of one of the countless fruits of free market capitalism, namely robots. It is quite ironic that something that would never have come into existence in a socialist system is now supposed to hasten the introduction of same – and of course, this time, it will be done right! The idea is basically this: as robots are becoming more sophisticated, more and more labor that is widely regarded as drudgery will become obsolete. Eventually, robots will take over the production of all the goods we need and want, and human workers will be free to pursue art, philosophy, or whatever else strikes their fancy.
Precious Metals Are The Only Lifeboat! I have persistently WARNED you what was happening in the gold market and why you needed to convert your paper assets to physical gold and silver by the middle of September 2015. You need to hedge against the financial instability with physical gold and silver. Call the experts to help you convert your IRA or 401k into Gold, Silver and Other Precious Metals. Call GoldCo NOW before it's too late! Call Toll-Free 1-877-414-1385.
Latest News From June 3, 2016 to June 9, 2016:
- 8 Lessons That We Can Learn From The Epic Economic Meltdown In Venezuela
We are watching an entire nation collapse right in front of our eyes. As you read this article, there are severe shortages of just about anything you can imagine in Venezuela. That includes food, toilet paper, medicine, electricity and even Coca-Cola. All over the country, people are standing in extremely long lines for hours on end just hoping that they will be able to purchase some provisions for their hungry families. At times when there hasn’t been anything for the people that have waited in those long lines, full-blown riots have broken out. All of this is happening even though Venezuela has not been hit by a war, a major natural disaster, a terror attack, an EMP burst or any other type of significant “black swan” event. When debt spirals out of control, currency manipulation goes too far and government interference reaches ridiculous extremes, this is what can happen to an economy. The following are 8 lessons that we can learn from the epic economic meltdown in Venezuela…
- US Commercial Bankruptcies Soar (despite Rosy Scenario)
The post-February euphoria in the US bond market has been a sight to behold, stirred up by NIRP and QE in Japan and the Eurozone. The ECB is beginning to buy corporate bonds, including euro-denominated corporate bonds issued by US companies. This is pushing larger amounts of corporate euro bonds into the negative-yield absurdity. And it has opened all kinds of credit doors in the US. But beneath the market euphoria, reality continues to plod forward. Standard & Poor’s reported that among the companies it rates there were 12 defaults in May, which pushed its speculative-grade corporate default rate up to 4.1%, the highest since December 2010 when it was recovering from the Financial Crisis.
- Helicopter Money Drops on Europe, But Not for ‘Normal’ Folks
Money for nothing, for everyone: This is supposedly the next stage of the treatment program for today’s debt-addicted economic system. Milton Friedman’s hypothetical scenario of giving every citizen direct money transfers in a desperate bid to stoke inflation is gaining traction with growing legions of mainstream economists. In their theory-addled brains, a massive one-off injection of central bank-conjured money into people’s bank accounts would do wonders for the real economy — in particular a terminally stagnating one like Europe’s. Rather than creating asset price inflation, as QE has done, it would fuel consumer price inflation. This is seen as the solution to the recently created and now unpayable mountain of debt: the central bank would simply erode it away via inflation.
- This financial bubble is 8 times bigger than the 2008 subprime crisis
On July 1, 2005, the Chairman of then President George W. Bush’s Council of Economic Advisors told a reporter from CNBC that, “We’ve never had a decline in house prices on a nationwide basis. So, what I think is more likely is that house prices will slow, maybe stabilize, might slow consumption spending a bit. I don’t think it’s gonna drive the economy too far from its full employment path, though.” His name was Ben Bernanke. And within a year he would become Chairman of the Federal Reserve. Of course, we now know that he was dead wrong. The housing market crashed and dragged the US economy with it. And Bernanke spent his entire tenure as Fed chairman dealing with the consequences. One of the chief culprits of this debacle was the collapse of the sub-prime bubble.
- DEUTSCHE BANK: The ECB is on course to destroy the eurozone
The European Central Bank risks tearing the eurozone apart for the sake “of short-term financial stability,” and the ECB needs to reverse course before it is too late, says Deutsche Bank. A new note from the bank's group chief economist, David Folkerts-Landau, says that the ECB has gone badly off course and needs to correct itself before it makes some “catastrophic” mistakes. That correction should come, Deutsche argues, in the form of abandoning the bank's negative interest rate policy (NIRP) and stopping the mass bond-buying it has undertaken in recent years. President Mario Draghi and other senior staff at the ECB are already causing the central bank to lose credibility in both the markets and with the general public, and is hurting savers, says the bank. Here's the quote (emphasis ours): Already it is clear that lower and lower interest rates and ever larger purchases are confronting the law of decreasing returns. What is more, the ECB has lost credibility within markets and more worryingly among the public.
- Andrew Maguire – This Will Send The Price Of Gold Hurtling Into The $1,400s
On the heels of Friday’s big dollar decline and surge in the price of gold and silver, today whistleblower and London metals trader Andrew Maguire spoke with King World News about what will send the price of gold hurtling into the $1,400s! Andrew Maguire: “Eric, in my opinion no one knows the true, undiluted supply/demand price of gold. But what we can be sure of is that is substantially above the current paper price. Once gold breaks out above $1,308, and large short stops are triggered, I see a very fast move in the $1,400s, which in itself…
- Japan Is First To Panic; Won’t Be The Last
The most widely-reported result of the recent G-7 meeting was Japan’s attempt to convince the other major economies to admit that a crisis is imminent and take appropriately radical steps. The response seems to have been a bunch of blank stares. As India’s Business Standard noted: “G7 pact offers minimal cover for Abenomics reset. A Group of Seven compromise offers minimal cover for Shinzo Abe. The Japanese prime minister’s plan to revitalize the world’s third-largest economy needs fresh impetus. Abe didn’t get as much international backing as he might have liked from hosting the rich nations’ club. But, the summit communique can, just about, be spun his way. Abe’s counterparts, understandably, do not share his view that the world risks another Lehman Brothers-style financial crisis. That is important because Abe has inexplicably committed to raising the country’s sales tax next April, a surefire way to choke off recovery – unless a shock of this scale emerges.”
- What Makes this Jobs Report so Truly Ugly?
It would have been nice if we’d been correct to the minute, but we were two months early, and therefore wrong, when we wrote on March 30, If This Plays Out, Friday Will Get Ugly. But it did play out today. At the time, we suspected that the March jobs report, released in early April, would be a debacle. We based this on an analysis of the divergence over time between the reports issued by payroll processing company ADP and the jobs reports issued by the Bureau of Labor Statistics. That divergence had been going on for months. Eventually it reverts to the mean. We postulated that March would be that month. Instead, it happened two months behind schedule, so to speak, as today’s jobs report was precisely that sort of debacle.
- Here’s proof that the US dollar is insanely overvalued
Shocking. Astonishing. Jaw dropping. There’s just no other way to describe how cheap South Africa is right now. Between the worldwide decline in commodities prices, and a major crisis of confidence in the national government here, the local currency (South African rand) remains at the lowest level it’s been… ever. And that’s made nearly EVERYTHING here dirt cheap if you’re spending foreign currency… especially US dollars. Just doing something simple like eating out at a restaurant or going to the grocery store can be startling. Once you do the math and convert the prices back to US dollars, it almost seems like you’re missing a zero. This also carries over into many asset prices, including certain areas in the property market.
- Employment Lies — Paul Craig Roberts
June 3, 2016. Today the Bureau of Labor Statistics announced that the US economy only created 38,000 new jobs in May and revised down by 59,000 jobs the previously reported gains in March and April. Yet the BLS reported that the unemployment rate fell from 5.0 to 4.7 percent, a figure generally regarded as full employment. The May jobs increase only covers a small fraction of the monthly growth in the labor force and, therefore, cannot account for the drop in unemployment. Moreover, the BLS reported that the labor force participation rate fell by 0.2 percentage points, bringing the decline to 0.4 percentage points over the past two months. Normally, a strong labor market, such as one represented by a 4.7% unemployment rate, causes an increase in the labor force participation rate. The question becomes: How real is the 4.7% rate of unemployment? The answer is: Not at all.
- Will Silver Outperform Gold? And Why John Hathaway Believes The Gold Price Will Rise
With continued uncertainty in global markets, many wonder, will silver outperform gold? Also, why John Hathaway believes the gold price will rise. Japan led world markets lower last night, losing 2%, but that decline, as well as small changes elsewhere, were of no consequence. The early going here saw a modest amount of weakness, but that dip was (again) bought as folks jockeyed for position in front of tomorrow’s nonfarm payroll report. On a related note, the ADP report hit the magic estimated number on the button at 173,000 jobs created…
- BREAKING: Gerald Celente Just Issued One Of His Most Prescient Trend Alerts Of 2016!
Today top trends forecaster Gerald Celente just issued one of his most important Trend Alerts of 2016, with exclusive bonus material only available through King World News! Oil is on a tear. Gold is shining, silver is surging and the dollar is tumbling. Over the last few weeks, Federal Reserve Chair Janet Yellen and fellow Fed members bombarded the business media with the refrain that America’s economy was strong, and to expect an interest-rate rise “in the coming months.” The Street bought it and the markets believed it. Gold prices, for example, on a 20 percent upward streak since the new year, sharply dove on the pending interest-rate-hike hype. Since the great criticism from the “investor” world is that gold yields no interest, with interest rates among developed nations in negative or near-low territory, and holding cash yields nothing, holding gold was deemed safer than holding cash. But with the Fed signaling rising rates, that rationale for owning gold no longer held and a selling wave ensued.
- This Could Soon Lead to the Collapse of the U.S. Dollar
“I did not have sexual relations with that woman.” “Read my lips: no new taxes.” “We were not trading arms for hostages.” Politicians are professional liars. They do it every day. And they usually do it without any consequences. I’d bet that Bill Clinton, George H. W. Bush, and Ronald Reagan, who told the three lies quoted above, didn’t think twice about them. But the lies would all come back to haunt and humble them. Those words cost Bush senior his reelection. Congress nearly impeached Clinton. And the Iran-Contra scandal forced Reagan to apologize on national TV. The Iran-Contra scandal showed that a strange series of events in a small, obscure, and impoverished country could come back to humiliate the most powerful person in the world.
- Warren Resources Files For Bankruptcy
Warren Resources Inc, an energy production company, filed for Chapter 11 bankruptcy protection on Thursday. According to a court filing, the company held operations in both California and Pennsylvania. A major slump in oil prices has pressed a number of energy production companies to file bankruptcy since early 2015. Nearly a third of production companies could be at risk of bankruptcy if prices don’t increase, says one study by the consulting firm, Deloitte.
- Hercules Offshore files for bankruptcy, again
After emerging from bankruptcy in November, Hercules Offshore has a plan to sell drilling rigs while filling bankruptcy for the second time since last summer. The demand for their rigs has dropped since the waters have suddenly become overpopulated with drilling equipment. The plan includes slowly halting production by selling the remaining working rigs to pay its shareholders $12.5 million and distribute cash flow from the sales to their creditors. A.P Moeller-Maersk group is interested in their Hercules Highlander, designed for harsh environments. A lot of the older designs rest on the sea floor, making them unable to go deeper than the shallow waters of the Gulf of Mexico.
- Worst Jobs Report In Nearly 6 Years – 102 Million Working Age Americans Do Not Have Jobs
This is exactly what we have been expecting to happen. On Friday, the Bureau of Labor Statistics announced that the U.S. economy only added 38,000 jobs in May. This was way below the 158,000 jobs that analysts were projecting, and it is also way below what is needed just to keep up with population growth. In addition, the number of jobs created in April was revised down by 37,000 and the number of jobs created in March was revised down by 22,000. This was the worst jobs report in almost six years, and the consensus on Wall Street is that it was an unmitigated disaster.
- Barack Obama Warns Americans ‘To Be Prepared For A Disaster’
When Barack Obama speaks to the public, it is very rare that he does so without a specific purpose in mind. So why is he urging Americans “to be prepared for a disaster” all of a sudden? On May 31, Obama took time out of his extremely busy schedule to deliver an address at the FEMA National Response Coordination Center in Washington. During his speech, he stressed that every American is responsible for preparing for disasters, and that includes “having an evacuation plan” and “having a fully stocked disaster supply kit”. These are basic steps that I have been encouraging people to do for years, but if they won’t listen to me, perhaps they will listen to the man currently residing in the White House.
- Dollar Bubble: The Three Reasons The US Dollar Will Soon Crash
The Dollar Vigilante’s Senior Analyst, Ed Bugos, is a genius… but he’s also somewhat of a recluse. While we have gotten access to his incredible written insights for the last six years in The Dollar Vigilante newsletter, he has always shied away from the public spotlight. Until now! Ed has decided that we are at such a crucial point in history that he is going to come out of his shell and speak more publicly about the current state of affairs in finance, money and economics. He spoke publicly for the first time at our TDV Internationalization and Investment Summit (you can see all the video presentations here) in Acapulco in February. And, I had the opportunity to sit down with him in Acapulco recently to discuss the three myths about the US dollar that most people don’t realize… yet. In this interview he talks extensively on what the great majority of the market is missing when it comes to the dollar. He believes the US dollar is currently the biggest bubble in the world and is about to pop.
- Record Low 4.7% Unemployment Rate Hides Ominous Signs
The May 2016 unemployment report on the surface sounds like great news. The unemployment rate dropped to an astoundingly low 4.7%. This is a -0.3 percentage point drop from last month and a level not seen since November 2007. Yet the statistics which make up the unemployment rate actually shows something terrible. The unemployment rate dropped because 664,000 people dropped out of the labor force with almost half a million no longer counted as unemployed. The labor participation rate dropped by -0.2 percentage points while the civilian participation rate did not change. One month is not a pattern , yet seeing record low participation rates is not the way to lower the unemployment rate. Many other economic indicators show a stalled economy and the unemployment appears to be catching up with the other first quarter bad economic news.
- What the EIA Doesn’t Tell Us When Comparing US Output to that of Russia & Saudi Arabia
On Monday of last week, the U.S. Energy Information Administration posted an article on their daily blog (Today in Energy) titled “United States remains largest producer of petroleum and natural gas hydrocarbons”.. The article featured a graph of our production of gas and oil vis a vis that of Russia and Saudi Arabia and went on to tell the familiar story about how fracking made it possible for our output of gas and oil to pass that of Russia in 2012, and that, as the headline indicates, we're still on top. As the week progressed, copies of the graphic from that post started showing up on other sites around the web, some to highlight the “we're number one” aspect that it showed, some to disparage the Saudis, who by the looks of that graph, barely come close.
- Housing Market Hyper-Bubble-Fabian Calvo
Real estate expert Fabian Calvo says cheap money flooding into the housing market means we are nearing the end of the road for the current housing boom. Calvo explains, “What they have come up with now, through the Obama Administration and many other projects, is they have these down payment assistance programs, which is the federal government giving money to these local agencies. So, in essence, it is a no-money-down loan to fuel this housing bubble, which is really starting to verge on a ‘hyper-bubble’ like we see in the stock market today. It’s amazing to see what is happening and see it all repeat again. It’s going to spill over into this election year, and we will continue to see prices go up. We have these cheap interest rates and cheap money that has no value that is creating this artificial boom. . . . We are at the last and final stage of this current housing cycle, and that’s where the prices will take off exponentially as will the access to cheap money.”
- Reporting on Trump Continues to be Unfair, Economy Getting Worse and South China Sea War Drums
It was trash Trump week as far as the mainstream media (MSM) is concerned. It covered the Trump University lawsuit wall to wall but not a peep about the ongoing criminal investigation on Hillary Clinton and her unprotected private server. One of the big stories ignored this week by the MSM is former Bill Clinton advisor and pollster Doug Schoen penning a Wall Street Journal Op-Ed piece titled “Clinton Might not be the Nominee.” The title says it all, and yet the MSM ignored this huge red flag raised by a top Democratic insider about Hillary Clinton’s viability as a Presidential candidate for the Democratic Party.
- The Federal Reserve's $4.3 trillion ticking time bomb
The Federal Reserve has a big problem if it wants to raise rates again. It will have to pay U.S. and foreign banks enormous sums of money instead of U.S. taxpayers. Not only would the Fed likely draw the ire of Congress, but it could also become a target of the next U.S. president—be it Clinton or Trump. That’s because the gangbuster profits of $90 billion (plus) per year that the Fed remits to the Treasury could easily dwindle to zero. According to several leading economists, it’s also possible that the Fed will become technically insolvent (though it always has the power to print its way out of such a disastrous state).
- Miami’s Condo Frenzy Ends With Inventory Piling Up in New Towers
Miami’s crop of new condo towers, built with big deposits from Latin American buyers and lots of marketing glitz, are opening with many owners heading for the exits. A third of the units in some newly built high-rises are back on the market, though most are listed for more than their owners paid in the pre-construction phase. At the current sales pace, it would take 29 months to sell the 3,397 condominiums available in the downtown area, according to South Florida development tracker CraneSpotters.com.
- How and Why You Should Stop Thinking in Dollars and Start Thinking in Gold
Whether intuitively or analytically, we all know that the dollar is not such a great form of money. That’s putting it lightly though. The dollar is a terrible form of money when you take a closer look. Those who have lived longer on this earth tend to grasp this reality more clearly. Like trying to walk up a downward-moving escalator, the momentum of a falling dollar is always against you. This becomes clearer when engaging in economic planning. Whether it’s starting a business, making an investment, saving for retirement, putting something away for a rainy day, or simply making ends meet on a week to week basis, all of us have to work against a falling dollar (or fill in the blank with your fiat currency of choice.) If that’s true, why do we keep using it?
- A Worrisome Pileup of $100 Million Homes
One of the latest symbols of the overinflated luxury housing market is a pink mansion perched above the Mediterranean on the French Riviera. The 13,000-square-foot property, built and owned by the fashion magnate Pierre Cardin, is composed of giant terra cotta orbs arranged in a sprawling hive. The home’s name befits its price. “Le Palais Bulles,” or “the Bubble Palace,” is being offered for sale at approximately $450 million.
- China Buying Sparks Bitcoin Surge
Chinese investors are pumping up bitcoin again, sending prices up nearly 16% in the past four days, just two years after the country was at the center of a boom and bust in the crypto-currency. The four-day surge in bitcoin since Friday has added $1.2 billion in market capitalization for all bitcoin in circulation, according to data from blockchain.info. On Monday, prices moved up as high as $525.49 per bitcoin, though that’s still well below the all-time high of about $1,151 in November 2013.
- China Is the Biggest Short…Ever!
Over the next 2 decades, there will be an average of 7.5 million fewer 0-55yr/old Chinese every year vs. an average annual increase of 9.5 million 55+yr/olds. And the wealthy minority of the elderly have stashed their reserves in a whole lot of expensive, vacant real estate that they intend to pass along (rent or sell) to the declining young population. What could go wrong since housing prices only go up…right!?! China, a story of a massive population and population growth. As the adult population growth began to wane, debt was substituted for the waning growth. Population growth turned to outright depopulation among the young, while all remaining population growth was among the “pig through the python” elderly.
- Personal Spending Spikes Most Since Aug 2009 As Fuel Costs Surge
Having disappointed in March (just +0.1% MoM), expectations for April's personal spending were sky high at +0.7% MoM, despite expectations of a 0.4% rise in incomes. Analysts were not disappointed as the headline spending print was a 7-year high +1.0% MoM spike driven by a 3.8% MoM surge in Energy spending. With income rising as expected at 0.4% MoM, and thanks to revisions, the savings rate tumbled to its lowest since 2015. Sustainable? The 2nd biggest spike in spending since 2005…
- Will You Ever Retire? Many Americans Won’t
Will you ever retire? More and more Americans will not. According to the latest data from the US Bureau of Labor Statistics, almost 20% of Americans 65 and older are still working. That’s the largest percentage of older Americans on the job since the early 1960s. With Baby Boomers hitting retirement age, it’s the largest number of Americans over 65 working ever. Surveys indicate a growing number of people plan to continue working past retirement. The number of Americans who said they intend to continue working “as long as possible” came in at 27%. A full 12% said they don’t plan to retire at all.
- ALERT: Whistleblower Andrew Maguire Says China Just Put A Huge Floor Under The Gold Market
On the heels of a big dollar decline and surge in the price of gold and silver, today whistleblower and London metals trader Andrew Maguire told King World News that China has just put a huge floor under the gold market! Andrew Maguire: “China now has gold investors’ backs. As a key part of its plan, China is building up gold reserves both by way of direct, unreported PBOC (People’s Bank of China) purchases, and much more importantly, openly encouraging citizens to build up their gold investments. I drew attention to a new push by Chinese officials a few weeks back after a contact alerted me to prime time television ads being run in China where the PBOC was openly encouraging its citizens to buy gold. This is no coincidence (Laughter). And those ads by the PBOC have been running ever since then. This gold accumulation push is part of a well structured plan by China that will protect its citizens against the inevitable global currency fallout. China is stealthily winning a financial war against the short-term thinking West.
- David Stockman: The Next President Will Inherit a Recession
Over the last few weeks, the mainstream has been fixated on the prospect an interest rate hike. Janet Yellen insists the economic fundamentals will support a hike. Pundits keep talking about a “strong economy.” But David Stockman recently appeared on Fox Business with Neil Cavuto and said the next president will inherit a recession.
- Consumer confidence lowest since late 2015
Consumers confidence fell in May to the lowest level since late 2015 as Americans turned slightly more pessimistic about overall business conditions and the job market, a survey shows. The consumer confidence index dropped to 92.6 from a revised 94.7 in April, the nonprofit Conference Board said Tuesday. That’s the lowest level since November and well below the postrecession high of 103.8 set in early 2015. Economists polled by MarketWatch had expected the index to increase. Although Americans continue to be cautious about the economy almost seven years into a recovery, their spending habits show that they are somewhat more upbeat than the confidence report suggests. In April, for example, consumer spending rose at the fastest rate since 2009.
- Dallas Fed manufacturing unexpectedly shrinks in May
Manufacturing activity in Dallas shrank in May after improving in the prior two months. The index of general business activity fell to -20.8. Economists had forecast an improvement to -8 from -13.9 in April, according to Bloomberg. New orders plunged 20 points after turning positive in the previous month. The gauges of capacity utilization and shipments also fell back below zero.
- Illinois Budget Debacle Proves Politicians Can’t Fix the Problems They Create
The US faces a massive debt problem. We all know it. But politicians and government officials are either unwilling or incapable of doing anything about it. David Stockman mentioned the burden of debt in a recent interview with Neil Cavuto on Fox Business: “We have $63 trillion of total debt in this economy. The public sector – county, state, and local – is nearly $25 trillion. And we’re getting old. The Baby Boomers are retiring, 10,000 a day. In another 5 or 10 years we’re going to have a massive increase in the retired population. How do you fund all that? Who’s going to pay the taxes?” Despite the glaring magnitude of the problem, government officials seem content to keep their heads buried in the sand and ignore it until it’s too late. Even when they acknowledge it, they seem utterly incapable of effectively dealing with the issue.
- Alan Greenspan: “We're Running To A State Of Disaster”
Back in March, the former Fed chairman said that we're in trouble because “productivity is dead in the water, and real capital investment is way below average because business people are very uncertain about the future.” Greenspan went on to add that entitlement programs are crowding out capital investment, and thus crowding out productivity.” Alan Greenspan is back delivering more warnings about the state of the global economy, hammering home the same key points made back in March.
- More in Debt Than Puerto Rico, the Virgin Islands Rejects Rescue
Congress’s plan to throw a lifeline to Puerto Rico is making waves in the U.S. Virgin Islands. The measure that passed a House committee last week would allow for a federal control board to oversee the finances — and potentially restructure the debt — of any U.S. territory, even though Puerto Rico is the only one now asking for help. Virgin Islands Governor Kenneth Mapp and Rep. Stacey Plaskett have blasted the bill, warning that it may tarnish its standing with investors. That concern is already starting to materialize: Returns on its securities are trailing the $3.7 trillion municipal market for the first time since 2011.
- Switzerland rejects proposals for unconditional basic income by overwhelming majority
Switzerland has voted by an overwhelming majority to reject proposals for a universal basic income, according to projections based on a partial count of the vote. Had it passed, anyone legally residing in Switzerland would have received a basic income of 2,500 Swiss Francs (£1,755) every month whether they worked or not. Supporters for the basic income had said that half the work done in Switzerland is unpaid such as housework and care in the community. They stated that such income would help this work become “more valued”. Critics attacked the concept as there was no plan of how to fund the costly policy, something supporters said was the responsibility of the Swiss parliament.
- The Evidence Is In——-For-Profit College Students Have Huge Debts And Lower Incomes
Go to college, study hard, get a good paying job – that’s the mantra heard by most students across America as they wind down their high school careers. Intuitively taking out loans just to go to college because everyone says so isn’t a good idea, and a new study by the NBER finds that in fact, students who left for-profit schools during the 2006-2008 timeframe were worse off after attending. A key factor, as the WSJ reports, is that most of these students never earned a degree, they dropped out. Making matters worse, and certainly contributing to the fact that over 40% of student borrowers don’t make payments, is the fact that these students borrowed to attend the colleges.
- It Starts: Apartment Glut in San Francisco & New York City
On Wednesday, mega-landlord Equity Residential – which “owns or has investments in 314 properties consisting of 78,351 apartment units” and whose chairman and founder is the ultimate real-estate market timer Sam Zell – warned for the second time since the end of April about apartment rental revenues. This time, it blamed a flood of new supply in two cities – the craziest, most ludicrously priced housing markets in the US: New York and San Francisco. Turns out newly signed leases aren’t meeting expectations in those cities, and they’re dragging down the company’s overall national results.
- Has Fed Policy Pumped Up Another Real Estate Bubble?
The more things change, the more they stay the same. After pumping up a real estate bubble in the years leading up to the most recent economic crash, it appears the central bankers and government policymakers may have managed to orchestrate a repeat performance. Real estate mogul Sam Zell appeared on CNBC recently and hinted that a real estate bubble might be about to pop. The chairman of Equity Group Investments and of apartment mega-landlord Equity Residential said the market for apartment and office buildings in some markets have already peaked.
- US Manufacturing Weakest Since 2009: “No Comfort For Those Looking For A Rebound”
Following China's drop, Japan's plunge, and Brazil's crash, US Manufacturing PMI slipped once again to 50.7 – its weakest since September 2009 amid ” subdued client demand and heightened economic uncertainty.” New orders bounce is over as it fell to its weakest since Dec 2015 and worse still input costs are surging to 9 month highs as employment suggest payrolls will remain under pressure. ISM Manufacturing data improved marginally – leaving 50% of the last 10 months in contraction and 50% in expansion. The improvement seesm based on a rise in prices paid and customer inventories – hardly a positive sustainable trend. As Markit concludes, “for those looking for a rebound in the economy after the lacklustre start to the year, the deteriorating trend in manufacturing is not going to provide any comfort.” ISM and PMI Manufacturing indices had recoupled in the last 2 months after ISM's big plunge.
- Construction spending plunges 1.8% in April
Construction spending tumbled in April, due in part to a decline in residential spending, the Commerce Department said Wednesday. The 1.8% decline was well below forecasts of a 0.7% gain from economists polled by MarketWatch. The monthly data followed an upward revision to March data of about 1.5%. Weakness in April was widespread. Residential construction declined 1.5%, while public construction spending fell 2.8%. Outlays for highways were down 6.6%.
- Fed Beige Book sounds subdued about economy
A key report about the U.S. economy released Wednesday offered a subdued take, leaving open the question of whether the Federal Reserve will raise interest rates this summer. The Federal Reserve’s Beige Book indicated that most districts were seeing the same “modest” or “moderate” growth through the end of May that has been the hallmark of the unspectacular expansion. One contact in Philadelphia, citing no change in drab, so-so conditions, described activity as “disappointingly stable.”
- U.S. Auto Sales Took A Nosedive in May
The U.S. auto industry took a nosedive in May, with General Motors, Ford, and other manufacturers reporting lower U.S. vehicle sales for the month due to weak demand for sedans and fewer selling days. Ford, which on Wednesday reported a 6% drop to 235,997 vehicles from a year earlier, estimated a sales decrease of about 8% for the U.S. industry in May. GM, the largest U.S. automaker, said its sales fell 18% to 240,450 vehicles, a steeper decline than analysts had expected. The sales reports spooked investors who have been on the lookout for weakness in the cyclical auto industry, which has been on an upswing since the Great Recession.
- Losing Ground In Flyover America——Wanting For Work, Buried In Debt
The flyover zones of America are wanting for work and buried in debt. That’s the legacy of three decades of Washington/Wall Street Bubble Finance. The latter has exported jobs, crushed the purchasing power of main street wages and showered the bicoastal elites with the windfalls of financialization. The graph below depicts the main street side of this great societal swindle at work. There are currently 126 million prime working age persons in the US between 25 and 54 years of age. That’s up from 121 million at the beginning of 2000. Yet even as this business cycle is rolling over, the 77.1 million employed full-time from that pool is still 1.2 million below its turn of the century level and accounts for only 61% of the population. On top of that, average real hourly wages have fallen by 7% (based on the Flyover CPI), as well. It might be wondered, therefore, as to how real consumption expenditures rose by $3.1 trillion or 38% during the same 16-year period?
- Since 2014 The US Has Added 455,000 Waiters And Bartenders, And Lost 10,000 Manufacturing Workers
When Obama made another TV appearance earlier this week, taking credit for the Fed's reflation of the stock market as somehow indicative of an economic “recovery” (“fiction peddlers” not allowed in the crowd), he once ignore the underlying “facts” behind said recovery: here is another way of showing the unprecedented transformation in the US labor pool: since December 2014, the US has added 455,000 waiters and bartenders, while losing 10,000 manufacturing workers. Behold: “Obama's recovery.”
- US created 38,000 jobs in May vs. 162,000 expected
Job creation tumbled in May, with the economy adding just 38,000 positions, casting doubt on hopes for a stronger economic recovery as well as a Fed rate hike this summer. The Labor Department also reported Friday that the headline unemployment fell to 4.7 percent. That rate does not include those who did not actively look for employment during the month or the underemployed who were working part time for economic reasons. A more encompassing rate that includes those groups held steady at 9.7 percent.
- Americans Not In The Labor Force Soar To Record 94.7 Million, Surge By 664,000 In One Month
So much for that much anticipated rebound in the participation rate. After it had managed to rise for 5 months in a row through March, hitting the highest level in one year, the disenchantment with working has returned, and the labor force participation rate promptly slumped in both April and May, sliding 0.4% in the past two months to 62.60%, just shy of its 35 year low of 62.4% hit last October. This can be seen in the surge of Americans who are no longer in the labor force, who spiked by 664,000 in May, hitting an all time high of 94.7 million. As a result of this the US labor force shrank by over 400,000 to 158,466K, down from 158,924K a month ago, and helped the unemployment rate tumble to 4.7%, the lowest level since 2007. Adding the number of unemployed workers to the people not in the labor force, there are now over 102 million Americans who are either unemployment or no longer looking for work.
- The Biggest Short Ever—-China’s Impaled On An Aging Population, 50 Million Overvalued Empty Apartment Units and Staggering Debt
As simply put as possible…over the next 2 decades, there will be an average of 7.5 million fewer 0-55yr/old Chinese every year vs. an average annual increase of 9.5 million 55+yr/olds. And the wealthy minority of the elderly have stashed their reserves in a whole lot of expensive, vacant real estate that they intend to pass along (rent or sell) to the declining young population. What could go wrong since housing prices only go up…right!?!
- Why Is There Suddenly Such A Huge Push For ‘Mark Of The Beast’ Technology?
We always knew that it was coming. All over the world, governments and big corporations are pushing us toward a fundamentally different way of doing things. They insist that this new way will be more safe, more secure and more efficient. They are telling us that we should embrace new technology and be open to new ways of buying and selling. And they assure us that new methods of identification will not be intrusive and will simply allow them to crack down on criminals such as identity thieves, tax evaders and terrorists. But could it be possible that there is more going on here than we are being told? Could it be possible that we should actually be highly alarmed by this huge push for “Mark of the Beast” technology?
- US Services Economy ‘Bounce' Dies – ISM/PMI Near “Weakest Expansion Since The Recession”
The brief April bounce in US Services economy has died as PMI slipped back to 51.3 as Markit warns “the service sector reported one of the weakest expansions since the recession.” This weakness was followed by ISM Services which plunged to its lowest since Feb 2014, crushing the hopes of the April bounce. Employment plunged into contraction and New Orders tumbled, with the surveys pointing to GDP growing at an annualised rate of just 0.7-8% in the second quarter. Bye bye April bounce!!
- Buy Gold for What It Does; Not for Its Price
Will the Fed raise rates? Will it hold steady? What will the next move mean for gold? Investor and creator of Things that Make You Go Hmmm Grant Williams doesn’t really care. He’s going to buy gold regardless. In fact, during an interview at the Mauldin Strategic Investment Conference, Williams said he doesn’t really pay attention to the price of the yellow metal: “I think what the Fed does could have short-term impact, but I don’t buy gold around it. I don’t buy gold at $1,100 because I think it’s going to $1,200, I buy it for what it does, not what the price is, the price is the last consideration for me.”
- Fed, again, left with egg on its face as recovery falters
All that hawkish Fed talk in recent weeks, as well as the market's knee-jerk reaction, seemed kind of silly after Friday's dismal jobs report. Expectations for a summer rate hike fell into a sinkhole Friday after the Labor Department reported that nonfarm payrolls grew by just 38,000 in May, amounting to the worst monthly jobs growth in five years. A decline in the unemployment rate to 4.7 percent came only because 664,000 Americans fell out of the workforce.
- This Is What The Tap Water Looks Like In Venezuela
One week ago, we showed what the maximum amount of money one can take out of a Venezuela ATM machine looks like: the good news, one still doesn't need a wheelbarrow to transport it (if only for the time being: with hyperinflation now rampant, it's only a matter of time); the bad news: this is the equivalent of $25. Now, thanks to AP's Hannah Dreier, we get a glimpse at the other kind of socialist “liquidity” and step aside Flint, because Caracas has some funky orange stuff flowing out of the tap to offer to those who are thirsty after a day of rioting against a entrenched, dictatorial regime. It appears that Venezuela's Guri dam, which is so empty it caused the country to give public workers a “five day weekend” as it can't generate enough electricity to keep the country running, has finally run dry.
- How a summer of shocks threatens to bring mayhem to the markets
Two words are back on the lips of every investor in the City. “Event risk” has begun to dominate trading floor conversations, as a slew of central bank decisions, legal rulings, and political upheavals threaten to bring an end to the calm that has descended upon the markets. After a brief break from the turbulence that dominated the start of the year, when fears over the strength of the global economy and the idea of a sharp slowdown in China unnerved money managers, volatility is set to return to the scene. Mellow May is now expected to give way to what industry veterans are already calling “flaming June”, as a calm start to the month is to be followed by shifts throughout currencies, stocks and bonds. Experts say that they expect June to be a “big month” for the markets, and that things are unlikely to settle down any time soon.
- BHS to close as rescue talks end in failure
The battle to save BHS has ended in failure, after administrators concluded no buyer could be found and told 11,000 staff they would be out of work within weeks. It is the biggest collapse in British retail since Woolworths closed its doors in 2008, and the latest sign of a brutal shake-out triggered by the insurgency of online rivals and an influx of more stylish budget fashion brands.
- Austin Reed To Close All Stores By End Of June
Austin Reed is to close all 120 of its stores by the end of June, affecting approximately 1,000 staff. Administrators said no viable offers were found for the business, including the store estate. However, five concessions which operate within Boundary Mills outlets, along with Austin Reed's brand, have been acquired by Edinburgh Woollen Mill. The clothing chain had a rich history, and famous customers in its heyday included Sir Winston Churchill and Elizabeth Taylor. Peter Saville, joint administrator at AlixPartners, said: “We have explored all options to sell the business since our appointment and continued to trade the business with the support of the secured creditors in what is clearly an extremely challenging retail environment.
- Evidence grows of an end to the house price boom
Signs of faltering demand in the housing market are prompting estate agents and analysts to suggest England’s house price boom may be ending. Paul Smith, chief executive of the Haart agency — which has more than 100 branches — said: “We believe the nation has now neared the limit in terms of price rises.” Inquiries declined in April at their second-highest rate since 2008, according to the Royal Institution of Chartered Surveyors — a trend that Mike Prew, equity analyst at investment bank Jefferies, said “signals this slowdown could morph into a period of sustained house price deflation”. Drops in this Rics measure are strongly correlated with price falls about a year later, Mr Prew added.
- Be Your Own Central Bank And Buy Gold
Gold is becoming more and more acceptable in the investment community and especially since interest rates have approached zero and in some countries even gone negative. Until recently no portfolio manager would have mentioned gold and even less recommended it. Since the beginning of the year, soon after some called gold just a useless and worthless rock going down to at least $400, a list of hedge fund managers came out with bullish calls for gold and indicated they have been buying. After years of denigrating gold, the investment profession is starting to discover the liquidity trap and acknowledge the value of cash and, more specifically, gold and its place in a diversified portfolio. It remains that gold, as a percentage of global financial assets in 2015, represented only 0.58% vs 2.74% in the ‘80s and 5.00% in the ‘60s.
- Austerity policies do more harm than good, IMF study concludes
A strong warning that austerity policies can do more harm than good has been delivered by economists from the International Monetary Fund, in a critique of the neoliberal doctrine that has dominated economics for the past three decades. In an article seized on by Labour’s shadow chancellor, John McDonnell, the IMF economists said rising inequality was bad for growth and that governments should use controls to cope with destabilising capital flows. The IMF team praised some aspects of the liberalising agenda that was ushered in by Ronald Reagan and Margaret Thatcher in the 1980s – such as the expansion of trade and the increase in foreign direct investment. But it said other aspects of the programme had not delivered the expected improvements in economic performance. Looking specifically at removing barriers to flows of capital and plans to strengthen the public finances, the three IMF economists came up with conclusions that contradicted neoliberal theory. “The benefits in terms of increased growth seem fairly difficult to establish when looking at a broad group of countries,” they said.
- Young people now more likely to live with parents than partners
For the first time in modern history, more 18-to-34-year-olds live with their parents than in any other living arrangement, according to a Pew Research Center report released Tuesday. In 2014, nearly one-third of young adults lived in their parents’ home, a bigger group than those living with a spouse or romantic partner, living alone or with roommates, or living as single parents. While millennials moving back with their parents have been the butt of jokes and hand-wringing for several years, and the recession of 2009 played a part in their doing so, this shift spans more than one generation. It has been decades in the making, a result of deep-rooted societal transformations in education, work and family building.
- California’s $64 Billion Bullet Train To Nowhere Gets Delayed … Again
In the late 1800s, it took railroad companies six years to lay 1,907 miles of track for what was to become the Transcontinental Railroad (or as Barack Obama calls it, the Intercontinental Railroad). Building that railroad line required tunneling through mountains — at one foot a day — building bridges — including one that spanned 700 feet — and doing all the work almost entirely by hand. As best, it will now take seven years for California to lay 119 miles of track — on relatively flat ground in the middle of nowhere. That news came from a contract revision that the Obama administration approved late last week. Instead of finishing the first leg of what is supposed to be a High-Speed Rail service from San Francisco to San Diego by 2018, the new deadline is 2022, which will be seven years after the January 2015 groundbreaking. Even when completed, the first leg will only run from Madera (population 63,105) down to Shafter, a small town north of Bakersfield. Not exactly a heavy transportation corridor.
- Millions of “Subprime Consumers” Getting Credit Cards; What Could Go Wrong?
We’ve said before that the growing level of debt in the US is the elephant in the room we are going to have to address at some point. We’ve talked about the massive government debt and the drag it puts on the US economy. We’ve talked about the crushing weight of student loan debt – increasing at a rate of about $2,726 per second. We’ve talked about the mounting corporate debt, doubling since 2008. And then there is personal debt.
- Jeweler Tiffany posts steepest sales drop since financial crisis
Tiffany & Co (TIF.N) reported its biggest drop in quarterly sales since the peak of the global financial crisis as a strong dollar discouraged tourists from buying its high-end jewelry and eroded revenue from markets outside the United States. The company's shares fell as much as 3 percent in morning trading on Wednesday. In the Americas region, Tiffany's sales at stores open more than a year plunged 10 percent in the first quarter. Analysts on average had expected a 9.1 percent decline, according to research firm Consensus Metrix. “Decline in customer share is evident among most shopper segments, including more affluent households,” research firm Conlumino's Chief Executive Neil Saunders said. “It is especially pronounced among affluent younger shoppers where the brand is seen as representing ‘old world luxury'.”
- Puerto Rico Default Is Coming and It’s Just the Tip of the Iceberg
Good morning Puerto Rico. Default is coming. Legislation moving in Congress would set up an oversight board to guide the US territory through what essentially amounts to bankruptcy. It would not expend federal funds to bail out Puerto Rico, but would allow the island’s government to pay back debtors at less than 100%. This is just a taste of things to come.
- Abercrombie & Fitch chairman says some customers are too afraid to shop – and it's destroying sales
Abercrombie & Fitch just took a major hit. The brand saw comparable sales decline 8% for this quarter, compared to a 9% decline this time last year. The parent company, which includes a brand for children and Hollister, saw comparable sales fall 4%. The main problem plaguing Abercrombie? Challenges abroad. Chairman Arthur Martinez told Business Insider that the company was “disproportionately affected” by the lack of tourists in flagship stores and international stores. He also said people in European markets are worried about personal safety following recent terrorist attacks, and that that would deter them from going out and shopping. He referenced that that terrorism fears, coupled with other factors, was “feeding into an air of caution” for consumers.
- U.S. states stung by drop in April income tax revenue
U.S. state personal income taxes tumbled in the key revenue month of April due to lower investment returns from weaker equities and energy prices in 2015, a Reuters analysis of state data found. This April, personal income tax (PIT) revenue fell by an average of 9.88 percent compared to the same month last year in the 32 U.S. states and Puerto Rico for which Reuters has data. Taxes on wages and investment income are a top revenue source for the 43 states that collect it. April is the most important revenue month because it contains the tax filing deadline and the tendency of taxpayers who owe money to wait until the last minute to pay. Personal income taxes make up slightly more than a third of states' total general fund revenue, and sales taxes comprise roughly another third. Collections have been volatile in recent years, including 2013's “April Surprise,” which delivered unexpectedly high revenues to states as taxpayers sold investments to dodge an increase in federal taxes.
- Miner Sees Silver Price Surging Ninefold as Global Gadgets Boom
A major Japanese electronics maker approached First Majestic Silver Corp. for the first time last month seeking to lock in future stock, a sign of supply concerns that could boost the metal’s price ninefold, according to the best-performing producer of the metal. “For an electronics manufacturer to come directly to us — that tells me something is changing in the market,” said Keith Neumeyer, chief executive officer of First Majestic, the top stock in Canada and among its global peers this year. “I think we’ll see three-digit silver,” he said, predicting the metal could surge to $140 an ounce by as early as 2019. That’s a bold forecast. While silver has rallied 19 percent this year to leapfrog gold as the best-performing precious metal, it settled lower Wednesday at $16.26 an ounce on the Comex in New York and reached a record of just under $50 in 2011. The highest projection among analysts surveyed by Bloomberg is $57 an ounce in 2019.
- Manufacturing Recession Goes Global as Demand Withers
The “strong dollar” has been blamed for the manufacturing doldrums in the US that started over a year ago. But then manufacturing in other countries should boom, or at least not decline, but that’s not the case. Manufacturing is sick and weakening in just about every major economy! References to 2009 and the Global Financial Crisis keep popping up in the latest spate of reports because that’s how bad it has gotten.
- Hedge Funds Are Betting Record Amounts on Meltdown of Australian Banks and Housing Bubble
It has been called the “widow maker trade,” based on how short sellers have been dealt with over the past few years. The fundamentals have been inviting: Australia has been in a fully blooming housing bubble. Households are the most indebted in the world, based on debt to disposable income. To maintain the housing bubble, the central bank slashed interest rates to record lows (1.75%). The government wants to keep the bubble going for as long as possible. So regulators close their eyes, according to media reports, to questionable or even illegal lending practices. Home prices, after soaring for years, are clearly unsustainable. But just because it’s a bubble doesn’t mean it has to implode on schedule. It will implode, as all bubbles do, but on its own time. If short sellers get the timing wrong, they’ll get run over by market euphoria. Hence, “widow maker trade” for betting against the housing bubble by shorting the banks. The biggest four banks in Australia are special creatures. Total assets of Commonwealth Bank of Australia (CBA), Australia & New Zealand Banking Group (ANZ), Westpac Banking Corp (WBC), and National Australia Bank (NAB) amount to 220% of Australia’s GDP!
- Ultimate Market Timer Sam Zell: “Know What the Problem Is?”
“No one has ever accused me of not being a realist,” Sam Zell told CNBC. The chairman of Equity Group Investments and of apartment mega-landlord Equity Residential was talking about the markets for office and apartment buildings in some major cities that have already peaked. “Overall we’ve come off this extraordinary period of liquidity and this extraordinary period of low interest rates,” he said. “I think we’re unlikely to see a repeat of that going forward, and I think we’re going to see more supply in what had been pretty tight markets.” And he has been selling. Back in 2007, he once again proved his sense of market timing. As the commercial property bubble was already teetering, he sold Equity Office Properties Trust to Blackstone for $23 billion, not including $16 billion in debt. Then prices crashed, and commercial property defaults hit the banks. As the dust was settling at the end of the Great Recession, he went on a shopping spree. Now he’s selling again, unloading multifamily properties at peak prices on a massive scale just when a multi-year construction boom is flooding the market with new supply.
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Latest News From May 27, 2016 to June 2, 2016:
- Fresh Mainstream Nonsense on Gold Demand
We and many others have made a valiant effort over the years to explain what actually moves the gold market (as examples see e.g. our article “Misconceptions About Gold”, or Robert Blumen’s excellent essay “Misunderstanding Gold Demand”). Sometimes it is a bit frustrating when we realize it has probably all been for naught. This was brought home to us again in a recent missive posted at Kitco, which discusses an RBC research note on gold. In a way, it is actually quite funny. The post at Kitco is titled “Gold’s ‘One-legged’ Rally Is Cause of Concern”. We can assure you it is not of “concern” to us. But we did wonder why the rally was supposedly “one-legged”, so we decided to read on.
- The Fed Has Tightened Policy A Lot More Than You Think
Federal Reserve Chair Janet Yellen and her colleagues have tightened monetary policy by a lot more than their benchmark interest rate increase would suggest. It's just that they've done it in the shadows. The so-called shadow federal funds rate rose about 300 basis points from the middle of 2014 through the end of last year as the central bank tapered, then ended its asset purchase program and prepared the way for its single rate increase in December. The shadow rate's increase helped fuel a rise of the dollar that depressed U.S. exports and economic growth, according to James Hamilton, an economics professor at the University of California at San Diego.
- China’s Rolling Boom-Bust Cycle
There is a mysterious figure making regular appearances in China’s government mouthpiece “People’s Daily”, which simply goes by the name “authoritative person” (AP). This unnamed entity always tends to show up with bad news for assorted speculators, by suggesting that various scenarios associated with monetary and/ or fiscal stimulus are actually not in China’s immediate future.
- Saudi Arabia Considers Paying Contractors With IOUs
Saudi Arabia is considering using IOUs to pay outstanding bills with contractors and conserve cash, according to people briefed on the discussions. As payment from the state, contractors would receive bond-like instruments which they could hold until maturity or sell on to banks, the people said, asking not to be identified because the information is private. Companies have received some payments in cash and the rest could come in the “I-owe-you” notes, the people said, adding that no decisions have been made on the measures.
- Regulators Warn 5 Top Banks They Are Still Too Big to Fail
The nation’s top bank regulators have added an unexpected voice to the growing chorus of critics worried that the biggest American banks, nearly eight years after the financial crisis, are still too big to fail. The Federal Reserve and the Federal Deposit Insurance Corporation said on Wednesday that five of the nation’s eight largest banks — including JPMorgan Chase and Bank of America — did not have “credible” plans for how they would wind themselves down in a crisis without sowing panic. That suggests that if there were another crisis today, the government would need to prop up the largest banks if it wanted to avoid financial chaos.
- The Consequences Of $50 Oil
On Thursday Brent crude rose above $50 while the WTI rose to $49.85. The rise in prices came after the EIA reported a dramatic fall in U.S. inventories. The weekly drop of 4.2 million barrels, far more than the 2 million that was expected, triggered a sharp rise in a market which had been growing increasingly bullish, sending the Brent price above $50 on Thursday morning. It is the first time in seven months that the price has reached this level. It’s a recovery that came much more quickly than analysts expected. Since reaching a low of $27 in January, both Brent and WTI have risen by nearly 80 percent, an impressive achievement considering the general slump in commodities. Concerns from the Energy Information Agency (EIA) that the world would “drown in over-supply” in 2016 have been allayed.
- Russia and China buy tons of gold getting ready for dollar collapse
Russia and China buy gold to get rid of the weakening dollar. The weakening of the US dollar will become even more noticeable. Increasing their gold reserves, Moscow and Beijing make their economies stronger, the Spanish newspaper El Pais wrote. According to the publication, central banks of Russia and China have been buying a lot of gold recently. During the past 15 months China has increased its gold reserves by 70% to 1,700 tons, becoming the world's sixth country with largest reserves of gold. Russia's gold reserves have grown by 21 percent to 1,460 tons. During the crisis, the price of gold grows, El Pais says. Demand for gold remains stable. From 2009 to 2015, China was buying 6-8 tons of gold a month, but in the summer of 2015, the country doubled its appetite for the precious metal. Russia started buying gold in 2015, increasing purchases against the backdrop of falling oil prices.
- China has conducted a ‘war' – not trade – with steel, experts say
Despite China signaling moves to cut its excess steel production capacity, industry chiefs say the country has declared a metals “war” that has had a “devastating” impact for the rest of the world's industry. Overcapacity in the steel industry has been a thorn in the side of the sector in recent years, pushing prices down and making it harder for some steel companies to survive. China's low-cost metal producers have been widely cited as the main culprit for the glut. In particular, the world's second largest economy has been accused of “dumping” cheap steel on to global markets, due to a slowdown in domestic demand, in a bid to gain market share. However Beijing has denied any wrongdoing and has said that its costs are lower than other producers.
- Central Bankers put Ponzi and Madoff to Shame
Charles Ponzi must be turning in his grave! His pyramid scheme in 1920 guaranteed returns of 50% in 50 days and 100% in 100 days. And initial investors clearly achieved these returns but most of them were too greedy to cash in. His total scheme “only” lost $20 million ($225 million in today’s money) for the investors. In comparison, Madoff cost his investors $18 billion. At least Ponzi became famous for his achievement. So far Madoff has not achieved fame. But both Ponzi and Madoff were small time crooks compared to governments and central banks today. Because whether we take, Japan, China, the EU or the USA, they have all created Ponzi schemes which are exponentially bigger than what Ponzi did. Admittedly no government is promising the 50% return that Ponzi did or Madoff’s 10-12%. Instead they are giving investors of their “Ponzi” bonds the illusion that they will receive the capital back. To paraphrase Mark Twain, investors are neither going to get the return ON their money nor the return OF their money, at least not in real terms.
- Peter Schiff: June Rate Hike Immaterial; Rate Cuts and Quantitative Easing Up Next
Will the Federal Reserve raise rates in June? Peter Schiff says it’s immaterial. Peter appeared on CNBC’s Fast Money and created a firestorm when he said he sees this as a repeat of what happened at the end of last year and suggested everybody knows the Fed is at the end of its tightening cycle.#
- China's Largest Bank is Quiety Cornering the Market for London Physical Gold
We have followed the ownership changes of London's massive vaults with keen interest ever since our December 2014 article when we reported that Deutsche Bank's gold vaule was for sale in “Massive 1,500 Ton Gold Vault For Sale In The Heart Of London, One Previous Owner, Asking £4,500,000 O.B.O.” The fate of that particular vault was revealed earlier this year when Reuters reported that none other than China's largest bank, ICBC Standard Bank, was buying the lease on Deutsche Bank's London gold and silver vault, “enlarging its footprint in the city's bullion market”. The Chinese and South African lender is aiming to fill the gap left by Western banks, which are retreating from commodities to cut costs and reduce regulatory burden. “They (ICBC Standard Bank) have taken on the lease for the vault,” the first source said. Deutsche Bank's vault became operational in June 2014 and has a capacity of 1,500 tonnes. It was built and is managed by British security services company G4S. “The figure that was initially talked about may have been around $4 million, but it's way lower now,” a second source said, without disclosing the figure paid for the vault.
- Trump: ‘Who the Hell Cares if There’s a Trade War?’
Donald Trump responded on Thursday to conservatives critical of his proposal to impose a tariff on imported goods, characterizing them as “dummies” at a New Jersey fundraiser for Gov. Chris Christie. “These dummies say, ‘Oh, that’s a trade war.’ Trade war? We’re losing $500 billion in trade with China. Who the hell cares if there’s a trade war?” Trump rhetorically asked the audience. “Think of it,” the presumptive Republican nominee added. “$500 billion and they’re telling me about a trade war.”
- BNN Advisor: Automated advice shakes up the investment industry
There’s a “new” player who’s changing the landscape for the entire investment advisor industry. It’s the emergence of the robo-advisor, and while these online advisors manage about $50 billion dollars in assets globally today, that number is expected to balloon to $2 trillion in the next four years. With our panel of advisors, BNN examines these new online tools that use software to help investors build their portfolios.
- The CME Admits Futures Trading Was Rigged Under Old System
Ask any trader what they believe to be the hallmark feature of any “rigged market” and the most frequent response(in addition to flagrant crime of the type supposedly demonstrated every day by Deutsche Bank and which should not exist in a regulated market) will be an institutionally bifurcated and legitimized playing field, one in which those who can afford faster, bigger, more effective data pipes, collocated servers and response times – and thus riskless trades – outperform everyone else who may or may not know that the market is legally rigged against them. Think of it as baseball game for those who take steroids vs a ‘roid free game, only here the steroids are perfectly legal for those who can afford them. Or like a casino where the house, or in this case the HFTs, always win. However, as it turned out, the vast majority of the public had no idea that a small subset of the market was juicing, despite our constant reports on the topic since 2009, until the arrival of Michael Lewis' book Flash Boys, which explained the secret sauce that made all those HFT prop shops into unbeatable “trading titans”: frontrunning.
- David Dayen’s ‘Chain of Title' Confirms What You Always Suspected: The Game is Rigged
Chain of Title should be required reading in every college-level business ethics class in America. At a time when “business ethics” is an oxymoron, perhaps the current generation that adores Bernie Sanders might better understand the dangers big banking monopolies hold. David Dayen’s newly released non-fiction book, Chain of Title, unearths a system with the power and collateral to stonewall millions of homeowners from obtaining one very simple answer: Who owns my mortgage? If you haven’t been able to wrap your head around why the federal government has failed to prosecute one banker for the foreclosure crisis there is a very simple answer that Chain of Title alludes to. The federal government has a dark secret: the trusts are empty and the falsified notes cannot be traced back to their true owners so they must be “recreated” if a default occurs. This means that the investors, the pensions and the trusts own nothing. It also means that the banks now own everything- including the U.S. federal government. It hardly matters that we have separation of powers if the bankers and elite control all three branches.
- MELTDOWN 2016? China Set To Implode GLOBAL Economy LATE SUMMER (Again)… INSIDER SAYS GET PREPARED NOW! Brexit… Soros Buying Up Massive Amounts Of Gold Bullion
China’s Communist Party goes way of Qing Dynasty as debt hits limit. Nobody rings a bell at the top of the credit supercycle, to misuse an old adage. Except that this time somebody very powerful in China has done exactly that. China watchers are still struggling to identify the author of an electrifying article in the People’s Daily that declares war on debt and the “fantasy” of perpetual stimulus. Written in a imperial tone, it commands China to break its addiction to credit and take its punishment before matters spiral out of control. If that means bankruptcies must run their course, so be it. The 11,000 character text – citing an “authoritative person” – was given star-billing on the front page. It described leverage as the “original sin” from which all other risks emanate, with debt “growing like a tree in the air”.
- Wells Fargo launches 3% down payment mortgage
First-time buyers and low- to moderate-income buyers have largely been sidelined by today's housing recovery. The common cry is too-tight credit. Lenders have kept the credit box restrictive because they are gun-shy from the billions of dollars in buy backs and judicial settlements stemming from the mortgage crisis that they still face today. Now, the nation's largest lender, Wells Fargo, says it is opening that box with a new low down payment loan — a loan it claims is low-risk to the bank.
- Understanding Societal Collapse: Warnings From Venezuela's Crisis
As we write about the risks of our over-indebted economy, of our unsustainable fossil fuel-dependent energy policies, and our accelerating depletion of key resources, it's not a far leap to start worrying about the potential for a coming degradation of our modern lifestyle — or even the possibility of full-blown societal collapse. Sadly, collapse is not just a theoretical worry for a growing number of people around the world. They're living within it right now.
- 25 Years, $13 Billion Lost: Connecticut Income Tax Continues To Fail
Twenty-five years ago, amid economic turmoil and a looming budget crisis that put legislators at each other’s throats, the then-governor of Connecticut made a fateful decision. Unsure of the best way to dig Connecticut out of its financial hole, Governor Lowell Weicker implemented an income tax. The Nutmeg State would certainly come to rue that day. Of course, Governor Weicker did not anticipate that the adoption of an income tax would send the state into a tailspin. In fact, as he announced his plans on May 15, 1991, he said, “I feel great.” In 2015, however, Connecticut taxpayers are feeling less than great. Despite Governor Weicker’s promises – that the income-tax revenue would be spent responsibly, that the additional dollars would correct Connecticut’s financial course – the new tax only led to further disarray and decline.
- What happens when you're deported to Britain?
A widowed mother-of-five who has lived in Australia for most of her life is facing deportation to the UK. What awaits her when she gets off the plane, asks Claire Bates. Kelly Webb, 30, hasn't seen Britain since she moved to Australia at the age of two. But she has a British passport, so could be sent back to the UK after serving a prison sentence for burglary. It's not an unusual situation. In 2015, 71 out of the 134 deported prisoners helped by the charity Prisoners Abroad had been residents of Australia, Canada or the US for many years. The charity is the first point of call for prisoners facing deportation, and guides clients through the resettlement process.
- Is The Market Priced For A Summer Rate-Hike?
Last November, capital markets were discounting a rate hike five months later, based on Fed Funds futures. Same story today. Last November, the S&P 500 was trading near 2100. Same story today. Last November, VIX levels were around 14. Same story today. Last November, instead of waiting five months, the Fed hiked rates one month later; the S&P dropped by 10% over the next eight weeks… And as BofAML's Savita Subramanian warns, hiking during a profits recession usually hasn't ended well. Admittedly, other factors contributed to the decline, but history is rhyming, and BofAML thinks a rate hike this summer could drive some downside. While Fed Funds futures prior to mid-May implied little to no chance of a summer hike, the release of the latest FOMC meeting minutes have shifted futures to a 30% probability of a June hike and a 50% probability of a July hike.
- BSI Shut by Singapore as Swiss Start Probe; EFG Takes Over Bank
Singapore is closing Swiss bank BSI SA’s unit in the city-state and Switzerland began criminal proceedings against the firm, as investigations into a troubled Malaysian state fund reverberate throughout the private bank’s international operations. The Monetary Authority of Singapore said it will withdraw BSI Bank Ltd.’s license for breaches of money laundering rules and impose S$13.3 million ($9.6 million) in financial penalties on the BSI unit for 41 breaches, including its failure to conduct due diligence on high-risk accounts and monitor suspicious customer transactions. Singapore authorities have also referred six senior BSI executives to the public prosecutor, including the private bank’s former chief executive officer in the city state and his deputy.
- Core Durable Goods Orders Slump As Inventories Decline For 4th Straight Month
Core Durable Goods Orders tumbled 0.8% MoM and 6.7% YoY – down 15 of the last 18 months. However, following drastic revisions across the entire time series and thanks to a surge in military spending (+3.7%) and non-defense aircraft (+64.9% – bringing back memories of Boeing's aberration from a year or two back) the headline Durable Goods print rose 3.4% MoM. More worrying for GDP enthusiasts is the 0.2% decline in durable goods inventories in April for the 4th straight month. Not a pretty picture under the hood….
- Building robot McDonald's staff ‘cheaper' than hiring workers on minimum wage
A former McDonald's CEO is warning that robots will take over jobs at the huge enterprise – because it's cheaper than employing humans. He said that buying highly skilled robotics is cheaper than employing people at the fast food restaurant. The worrying forecast comes as he warns huge job losses are imminent, and that it's ‘common sense' to replace humans in the workplace.
- Richmond Fed Crashes Into Contraction From 6 Year Highs, Biggest Drop In History
Having spiked mysteriously to 6 year highs in March (from 4 year lows in Feb), Richmond Fed's manufacturing survey crashed back into contraction in May (printing -1 against =14 prior and +8 expectations). Weakness was broad-based across the entire set of subcomponents with New Orders plunging, shipments crashing, employees and workweek tumbling, and worse still future employment and capex expectations dropped precipitously. The drop in the last 2 months is the largest in the 23 year history of the survey.
- Negative interest rates spark record gold rush as demand for safe deposit boxes jumps
Investors snapped up gold at a record pace in the first three months of 2016 as global growth fears intensified and central banks slashed interest rates deeper into negative territory. Concerns that Britain could leave the EU also triggered a spike in demand across Europe where ” investors were plagued by lingering Brexit fears,” according to the World Gold Council.
- DEUTSCHE BANK: The Fed is probably screwed
The Federal Reserve wants to do two things right now: Prepare markets for future interest rates hikes & Raise interest rates. But the problem, according to Deutsche Bank's global economics team, is that by preparing markets for future interest rate hikes the Fed potentially hampers its ability to actually carry out those hikes in the future. Said another way, the Fed appears stuck in a negative feedback loop wherein suggestions that higher rates are coming create the unsettled conditions that ultimately force the Fed to keep rates right where they are. And so on.
- Oil Price Tops $50 As Canada Fires Fuel Recovery
The barrel price of Brent Crude oil, which is seen as the global benchmark of oil industry performance, has reached $50 for the first time in 2016 as supply problems due to wildfires in Canada continue to have an impact. The oil industry has been in turmoil over the past several years, with the price of Brent Crude hitting 13-year lows of less than $28 a barrel in February amid concerns of a global oversupply and disruption in the world markets. The $50 milestone was reached in the early hours of the morning during Asian trading following the news that US inventories of oil had fallen in response to disruption in Canada. Wildfires in the country have resulted in a cut in oil output by up to a third. The value was later holding strong at $50.16.
- Should I Be Worried About Gold Confiscation?
One of the common questions we hear from gold buyers is, “Is it possible that the government might come after my gold and confiscate it?” In a time when the governments are waging a war on cash, it’s not hard for people to imagine that a war on gold is next. There is some precedence for this, after all. On April 5, 1933, Franklin D. Roosevelt’s Executive Order 6102 “[forbade] the Hoarding of gold coin, gold bullion, and gold certificates within the continental United States.” Americans who owned gold were told to deliver their gold to the bank and in exchange receive paper dollars of equivalent value, $20.67 per ounce at the time.
- Former McDonalds CEO Crushes The Minimum Wage Lie: “It's Cheaper To Buy A Robot Than Hire At $15/Hour”
While this should come as no surprise to any rational non-establishment-teet-suckling economist (and certainly not to our readers), former McDonalds' CEO Ed Rensi continued his crusade against the naive “solution” to poor living standards that has been peddled by a clueless administration in the form of a higher federal minimum wage, and after he patiently explained one month ago that “the $15 minimum wage demand, which translates to $30,000 a year for a full-time employee, is built upon a fundamental misunderstanding of a restaurant business just do the math” Rensi found that nobody has still done the math. Which is perhaps why the ex-CEO reappeared on Fox Business yesterday to explain to Maria Bartiromo that as fast-food workers across the country vie for $15 per hour wages, many business owners have already begun to take humans out of the picture, McDonalds most certainly included.
- US Government Quietly Cuts Historical Capex Data By Billions Of Dollars
While Wall Street looked upon today's Durable Goods report with caution, noting the substantial beat in the headline print which was entirely as a result of a surge in nondefense aircraft orders (read Boeing) which soared by 65%, there was substantial weakness below the surface especially in the core capex print, the capital goods orders nondefense ex-aircraft, which disappointed significantly, sliding 0.8% on expectations of a 0.3% rebound. However, that was just part of the story. A far bigger part was missed by most because as always Wall Street was focused on the sequential change, and not on the absolute number. As it turns out, the Department of Commerce decided to quietly revise all the core data going back all the way back to 2014. In doing so it stripped away about 4% from the nominal dollar amount in Durable Goods ex-transports, where the March print was slashed from $154.7 Billion to $148.3 Billion…
- Russia's ‘Iron Man' robot soldier is country's latest terrifying war weapon
Meet Ivan the Terminator – Russia's robotic answer to Iron Man that could be about to change military warfare forever. The terrifying new robot soldier is the latest in the country's list of high-tech weaponry as it competes with the US and China in the artificial intelligence stakes. According to Russian newspaper Komosomolskaya Pravd, the droid is designed “to replace the person in the battle or in emergency areas where there is a risk of explosion, fire, high background radiation, or other conditions harmful to humans. “The development of a special military robot is one of the priorities of military construction in Russia.” The Iron Man machines are remotely controlled, but there are fears that they could become completely autonomous in the future.
- Ottawa posts $2B deficit for fiscal year as income tax revenue falls in March
The federal government posted a deficit in line with what was projected in its spring budget as personal and corporate income tax revenue fell in March. According to its preliminary estimates, the Finance Department said today there was a $2 billion deficit for the government's latest fiscal year. However, that was before any year-end adjustments as well as a $3.7 billion commitment to benefits for veterans. The spring budget had projected a $5.4 billion deficit for the 2015-16 fiscal year. The final results are expected to be released in the fall, but the Finance Department said the results were “broadly in line” with what was projected in the budget. For March, the last month of the fiscal year, the government posted a $9.4 billion deficit compared with a deficit of $3 billion in the same month last year. The shortfall came as government revenue fell $5 billion due to lower personal and corporate income taxes, offset in part by higher excise taxes and duties. Program spending increased $1.3 billion, while public debt charges gained $100 million.
- Paris and Berlin ready ‘Plan B’ for life after Brexit
European leaders have stepped-up secret discussions about a future union without Britain, drawing-up a “plan-B” focused on closer security and defence co-operation in the event of a UK vote to leave the EU. At several overlapping meetings in recent weeks — in Hanover, Rome and Brussels — EU leaders and their most trusted aides have discussed how to mount a common response to Brexit, which would be the bloc’s biggest setback in its 60-year history. More than a dozen politicians and officials involved at various levels have sketched out to the Financial Times the ideas for concerted action to “double down on the irreversibility of our union” — as well as the many internal divisions that stand in their way. Rather than attempt a sudden lurch to integrate the eurozone, Chancellor Angela Merkel of Germany and President François Hollande are instead eyeing a push to deepen security and defence co-operation, a less contentious initiative that has appeal beyond the 19-member euro area.
- Eurozone RUPTURE: Now SPAIN threatens to tear EU apart as banks LOSE €1.4BILLION in a day
ANIC over the stability of Spanish banks hit fever pitch yesterday, exposing yet another rupture in the financial system holding the eurozone together. Banco Popular, one of the Spain's leading financial firms, caused mayhem after admitting that it needed billions to bolster its balance sheet. Shocked investors dumped shares in the firm, with the bank stock's value plunging by 24 per cent this morning, after the cash call and plans to issue another 2 billion shares. It resulted in €1.4billion being wiped off the value of the bank's share price.
- Venezuela Stepping Up Gold Selling as Petrodollars Dry Up
Venezuela has ratcheted up efforts to sell off its gold holdings and raise the cash needed to fund imports and pay back debts after the collapse in oil throttled the economy. The country cut its gold reserves by 16 percent in the first quarter, following a 24 percent reduction in 2015, according to data from the International Monetary Fund. The 1.38-million ounce reduction was the largest by any central bank since Switzerland sold 3.2 million ounces in the third quarter of 2007, and coincided with continued increases in gold reserves in mainland China.
- New financial MELTDOWN set to sink EU as German banks lose £14,292,610,000.00 in 90 DAYS
EUROPE'S biggest economy was plunged into fresh chaos tonight amid warnings a new financial crisis in Germany could destroy the EU. Shares in Germany's two biggest lenders – Deutsche Bank and Commerzbank – fell sharply again as panic gripped global markets. They have now seen their combined market value plummet by more than £14BILLION in the past three months. Deutsche Bank shares fell by nearly four per cent to close at an all-time low amid turmoil not seen since the depths of the financial crisis in 2009. Meanwhile shares in Commerzbank, Germany's second biggest lender, fell even further, by 4.65 per cent, to close at their lowest level in nearly two-and-a-half years.
- Q1 2016 Canadian Silver Maple Sales Surge To Highest Record Ever
The Royal Canadian Mint just published its Q1 2016 Report, and the silver bullion coin sales figures were stunning to say the least. Not only did sales of Canadian Silver Maple Leafs surpass its previous record during the third quarter last year, it did so by a wide margin. Why is this such a big deal? Because Q1 2016 sales of Silver Maples topped the Q3 2015 record, without surging demand and product shortages. Last year, there was a huge spike in silver retail investment demand due to the supposed “Shemitah” or the collapse of the broader stock markets. Investors piled into silver in a big way as they perceived a year-end market crash was inevitable.
- Outrage as EU chief calls for EURO ARMY commanded by Brussels to take on Russia and IS
BRUSSELS’ top bureaucrat came under fire yesterday after calling for a European army to be set up as part of a common foreign and security policy. Jean-Claude Juncker – backed by leading German politician’s – said a “euro-army” commanded by Brussels would provide a “more credible” response to threats, including from Russia. But his comments sparked a storm of protest in Britain, where eurosceptic campaigners have long warned of Brussels’ ambitions for its own defence force. Ukip MEP and defence spokesman Mike Hookem said: “Ukip have been ridiculed for years and branded scaremongers for suggesting that the UK’s traditional parties were slowly relinquishing control of our defence and moving toward a European Army. “However, yet again, UKIP’s predictions have been proved correct.
- Gold Prices Should Rise Above $1,900/oz -“Get In Now!”
Gold prices are likely to rise above $1,900/oz in the next phase of the bull market and investors should “get in now,” Chief Market Analyst of the Lindsey Group, Peter Boockvar told CNBC’s “Futures Now” yesterday. “This is just the beginning of a new bull market in the metals,” Boockvar believes. Ultimately, Boockvar believes that the 2011 highs of around $1,900 for gold are not only reachable, but surpassable, as he reasoned that bull markets historically exceed the previous bull market peak at some point. As Boockvar sees it, it’s just a matter of when.
- And Another Week Of Selling: “In 2016, Equity Funds Have Lost The Largest Ever Outflow For The Asset Class”
For many weeks in a row now we have been asking, mostly jokingly, how with everyone else (both retail and “smart money”) selling, and with stock buybacks sharply lower in recent months, is the market higher. Specifically, who is buying? This question is no longer a joke. After this week's 17th consecutive outflow by “smart money” funds (mostly on the back of surging hedge fund redemption), moments ago we got the latest Lipper fund flow data. It was, as BofA put it, “unambiguous risk-off weekly flows.” As BofA also put it: “Equities continued to experience outflows and lost $3.32bn (-0.1%) last week, their 4th consecutive decline. Year-to-date, equity funds have lost $58.6bn (-0.6%), the largest ever dollar outflow in any 22 week period for the asset class”
- Japan’s Abe points to 2008 crisis as G7 leaders debate global risk
Group of Seven leaders voiced concern about emerging economies at a summit in Japan on Thursday as their host, Prime Minister Shinzo Abe, made a pointed comparison to the 2008 global financial crisis but not all his G7 partners appeared to agree. The G7 leaders did agree on the need for flexible spending to spur world growth but the timing and amount depended on each country, Deputy Chief Cabinet Secretary Hiroshige Seko told reporters, adding some countries saw no need for such spending.
- Bank of Montreal to cut 4% of workforce, memo says
Bank of Montreal (BMO.TO) will shed around 4 per cent of its 46,000 workforce as part of a drive to cut costs, staff were told in a memo on Wednesday after the lender reported a decline in quarterly profit. Chief Executive Bill Downe said the move, which will see around 1,850 jobs go, was a response to changing customer behavior and the advent of new digital technologies. “We have taken this step to position the bank for what lies ahead – and to account for the structural changes underway in the financial services industry,” Downe said in the memo seen by Reuters.
- World’s 16 biggest banks, including RBC, ordered to face Libor lawsuits in ruling court warns could ruin them
Sixteen of the world’s largest banks including JPMorgan Chase & Co. and Citigroup Inc. must face antitrust lawsuits accusing them of hurting investors who bought securities tied to Libor by rigging an interest-rate benchmark, a ruling that an appeals court warned could devastate them. The appellate judges reversed a lower-court ruling on one issue — whether the investors had adequately claimed in their complaints to have been harmed — while sending the cases back for the judge to consider another issue: whether the plaintiffs are the proper parties to sue, in part because their claims, if successful, provide for triple damages that could overwhelm the banks.
- Lufthansa to suspend flights to Venezuela
The German airline, Lufthansa, has announced that it will suspend flights to Venezuela from 18 June due to economic difficulties in the country. The company also said currency controls in Venezuela made it impossible for airlines to convert their earnings into dollars and send the money abroad. Venezuela's economy has been hit hard by a sharp drop in the price of oil – the country's main source of income. Venezuela has high inflation and severe shortages of basic goods. In a statement, Lufthansa said that it “will be forced to suspend our service between Caracas and Frankfurt as of 18 June”. It noted that the demand for international flights to Venezuela had dropped in 2015 and in the first quarter of the current year. However, it said it hoped to restore services in the near future.
- MELTDOWN 2016? China Set To Implode GLOBAL Economy LATE SUMMER (Again)… INSIDER SAYS GET PREPARED NOW! Brexit… Soros Buying Up Massive Amounts Of Gold Bullion
China’s Communist Party goes way of Qing Dynasty as debt hits limit. Nobody rings a bell at the top of the credit supercycle, to misuse an old adage. Except that this time somebody very powerful in China has done exactly that. China watchers are still struggling to identify the author of an electrifying article in the People’s Daily that declares war on debt and the “fantasy” of perpetual stimulus. Written in a imperial tone, it commands China to break its addiction to credit and take its punishment before matters spiral out of control. If that means bankruptcies must run their course, so be it. The 11,000 character text – citing an “authoritative person” – was given star-billing on the front page. It described leverage as the “original sin” from which all other risks emanate, with debt “growing like a tree in the air”.
- How Bad Are The US Computer Systems? An 8” Floppy Disc Houses Nuclear Coordinate Data
If you thought that $80 billion a year would be a sufficient enough budget for the US government to systematically upgrade its computer systems, think again. In a report released by nonpartisan congressional investigators found that about $60 billion of the government's $80 billion IT budget goes straight to maintenance just to keep the aging technology running, not to modernization according to ABC News.
- FRANCE STRIKE: ‘The Workers Fight Back’
All over France strikes and demonstrations are taking place. People are protesting against the French government’s attempt to reform labour laws which would make it easier to hire and fire workers. French labour laws have always been seen as an obstacle to progress by the ruling class due to the modest protection they afford workers. Since the popular front of 1936 and in particular the National Council of the Resistance formed after the liberation in 1945, French worker made significant gains. These ‘acquis sociaux’ or social gains are now being brutally rolled back by a powerful oligarchy bent on driving down the price of labour and increasing the profits of capitalists.
- This Is How Much Your Health Insurance Payment Is About To Jump By
It's official: years of warnings that Obamacare will lead to dramatic increases in healthcare premiums are about to be validated. As the WSJ writes, big health plans stung by losses in the first few years of the U.S. health law’s implementation are seeking hefty premium increases for individual plans sold through insurance exchanges in more than a dozen states. To be sure, we have extensively covered the imminent danger of rising healthcare prices as a result of Obamacare's intrusive intervention in the insurance sector; however now that this is about to become mainstream information, we expect consumers to hunker down and save even more in anticipation of what is about to be a shock price increase for millions of middle-class American families. As the WSJ reports, the insurers’ proposed rates for individual coverage in states that have made their 2017 requests public largely bear out health plans’ grim predictions about their challenges under the health-care overhaul. According to the insurers’ filings with regulators, large plans in states including New York, Pennsylvania and Georgia are seeking to raise rates by 20% or more.
- Former IMF economist asserts that gold is money as good as government bonds
GoldCore's Mark O'Byrne this week calls attention to commentary written this month by Harvard economics professor Kenneth Rogoff recommending that countries diversify their foreign exchange holdings away from the government bonds of developed countries and into gold. Rogoff's argument seems to be that with interest rates already effectively at zero or below, there's nothing to be gained through the purchase of such bonds, while gold is a “low-risk asset” that offers the possibility of capital appreciation. But then Rogoff makes what from anyone else would be considered the rookie mistake of asserting that “gold does not pay interest,” as if gold isn't leased for interest by Western governments every day in huge amounts and as if gold leasing isn't a primary mechanism of gold price suppression by those governments, the governments whose bonds Rogoff acknowledges are becoming less attractive as investments.
- We Need New Labels: I Propose “100% Robot Made”
Yesterday, Apple’s iPhone maker, Foxconn announced an immediate cut of 60,000 workers to be replaced by robots. Today, Adidas announced the first ever 100% robot-made shoe. “Speedfactory”. Deutsche Welle, Germany’s international broadcaster, reports Adidas Shoe Manufacturing Will Return to Germany. That’s the good news. For manufacturing job seekers, the bad news is the shoes will be 100% robot made.
- Billionaires Are Wrong on Gold
Recently the mainstream media has reported that several billionaires are concerned about global financial markets and have purchased significant amounts of gold to protect their portfolios. Take Stan Druckenmiller, the famed hedge fund manager who managed money for George Soros as the lead portfolio manager for Quantum Fund. He and Soros famously ‘broke the Bank of England' when they shorted the British pound sterling in 1992, reputedly making more than $1 billion in profits. He has reportedly used over $323 million of his own money to invest in gold. This is approximately a 30% allocation in his $1-billion family fund. His belief in gold can be attributed to his criticism of the Federal Reserve's massive money printing and near-zero interest rates. Ongoing low rates will drive both central banks and investors into gold.
- Switzerland About to Vote on “Free Lunch” for Everyone
In early June the Swiss will be called upon to make a historic decision. Switzerland is the first country worldwide to put the idea of an Unconditional Basic Income to a vote and the outcome of this referendum will set a strong precedent and establish a landmark in the evolution of this debate. The Swiss Basic Income Initiative in a demonstration in front of parliament. As we have previously reported (see “Swiss Parliament Shoots Down Socialist Utopia” for details), Switzerland’s parliament has already rejected the idea, with even the socialists voting against it (proving that they are still in possession of most of their marbles and quite likely in possession of an abacus as well).
- Wow. Congress wants to prohibit the Fed from bailing out bankrupt states.
Just days ago, in the midst of the Puerto Rico debt morass, 24 members of Congress introduced the “No Bailouts for State, Territory, and Local Governments Act.” The title pretty much sums it up. Congress knows there’s a massive wave of defaults looming at the city and state level. Detroit and Puerto Rico are just the tip of the iceberg. Aside from a few top performers like Alaska, South Dakota, and Wyoming (which, ironically, have no state income tax), many US states have atrocious finances. Illinois and Maine, for example, have dangerously low levels of cash relative to the debts and obligations they have to pay.
- Oil Prices Likely in Mid-$30s-$40s Per Barrel After OPEC Meet
Oil prices are likely to fall after the Organization of Petroleum Exporting Countries (OPEC) summit in Vienna next week and then stabilize between around $35 to $45 per barrel, Trends Research Institute head Gerald Celente told Sputnik. Energy ministers of the once powerful oil cartel are set to meet in Vienna on June 2, less than two months after a failure of the April meeting with non-OPEC countries in Doha that sought to freeze oil output at January levels in a bid to shore up prices.
- EU referendum: Ex-military officers fighting for EU exit
EU policies are undermining the UK's combat effectiveness, a dozen former senior military officers have warned. Speaking out in favour of Britain leaving the EU, they said that Nato, and not the EU, should remain the cornerstone of Europe's defence. Among the group is General Sir Michael Rose, whose name was originally on a letter organised by Downing Street supporting UK membership of the EU. The Remain campaign says membership of the EU and Nato is not contradictory.
- Will Deutsche Bank Survive This Wave Of Trouble Or Will It Be The Next Lehman Brothers?
If you have been waiting for “the next Lehman Brothers moment” which will cause the global financial system to descend into a state of mass panic, you might want to keep a close eye on German banking giant Deutsche Bank. It is approximately three times larger than Lehman Brothers was, and if the most important bank in the strongest economy in Europe were to implode, it would instantly send shockwaves rippling across the entire planet. Those that follow my work regularly know that I started sounding the alarm about Deutsche Bank beginning last September. Since that time, the bad news from Deutsche Bank has not stopped pouring in. They announced a loss of 6.8 billion euros for 2015, Moody’s just downgraded their debt to two levels above junk status, and they have been plagued by scandal after scandal. In recent months they have gotten into trouble for trying to rig precious metal prices, for committing “equity trading fraud” and for their dealings in mortgage-backed securities.
- Yet ANOTHER Billionaire Warns About Coming Chaos … Maybe There’s Something to This Trend?
Is there something in the water that billionaires drink? Because yet ANOTHER one just warned about coming market and economic chaos this morning! Sam Zell is his name, and real estate is his game. Zell has founded or invested in multiple public and private real estate firms from his home base in Chicago over the years, and is now worth an estimated $4.8 billion. As a guest host on CNBC today, he offered nothing but cold water and harsh reality for the starry-eyed optimists. Specifically, he said “holding a lot of cash right now doesn’t seem like a terrible opportunity” … added that we’re in the “ninth inning” of the economic cycle … and warned that recession was right around the corner.
- The CME Admits Futures Trading Was Rigged Under Old System
Ask any trader what they believe to be the hallmark feature of any “rigged market” and the most frequent response(in addition to flagrant crime of the type supposedly demonstrated every day by Deutsche Bank and which should not exist in a regulated market) will be an institutionally bifurcated and legitimized playing field, one in which those who can afford faster, bigger, more effective data pipes, collocated servers and response times – and thus riskless trades – outperform everyone else who may or may not know that the market is legally rigged against them. Think of it as baseball game for those who take steroids vs a ‘roid free game, only here the steroids are perfectly legal for those who can afford them. Or like a casino where the house, or in this case the HFTs, always win.
- Moody's downgrades Deutsche Bank's ratings
Moody's Investors Service has today downgraded the ratings of Deutsche Bank AG and affiliates, including the bank's long-term deposit rating, to A3 from A2, its senior unsecured debt rating to Baa2 from Baa1, its standalone baseline credit assessment (BCA) to ba1 from baa3, and its counterparty risk assessment to A3(cr) from A2(cr). Deutsche Bank's short-term ratings and short-term counterparty risk assessments were also downgraded to Prime-2 from Prime-1 and to Prime-2(cr) and Prime-1(cr), respectively. Today's rating action reflects the increased execution challenges Deutsche Bank faces in achieving its strategic plan. Moody's also downgraded the ratings of US–based Deutsche Bank Trust Corporation and its trust company affiliates. These trust companies' long-term deposit ratings were downgraded to A2 from A1, their long-term issuer ratings were downgraded to Baa2 from Baa1, their standalone baseline credit assessment was downgraded to baa1 from a3; their long-term and short-term counterparty risk assessments were downgraded to A3(cr) from A2(cr) and to Prime-2(cr) and Prime-1(cr) respectively. The Prime-1 short-term deposit ratings of these trust companies were affirmed.
- Forget a Dollar Collapse…This Is a Much Bigger Threat to Your Wealth Right Now
It's an immediate threat to your wealth right now…and it's another sign we're headed for a major financial crisis. What we're covering today stems from the Fed's “monetary experiment” that began in 2008. As you may know, that year, the Fed dropped its key interest rate to effectively zero. It then started borrowing and printing trillions of dollars. This experiment has been nothing short of a disaster. Over the past eight years, the Fed's pumped $3.5 trillion into our financial system. And our national debt has more than doubled.
- These Investing Legends Have Never Been More Bearish on U.S. Stocks
George Soros is investing like a crisis is around the corner. You’ve probably heard of Soros. Thanks to his legendary track record, he’s one of the world’s most well-known investors. From 1969 to 2001, he generated average annual returns of 20%…nearly beating the S&P 500 2-to-1. Soros also famously “broke the Bank of England” in 1992. These days, he runs Soros Fund Management, which manages about $10 billion.
- Why China’s Banks Are Toast—-Losses May Hit $1.2 Trillion, 60% Of Total Bank Capital
Yesterday, when reporting on the latest development in China’s ongoing under-the-table stealth nationalization-cum-bailoutof insolvent enterprises courtesy of a proposed plan to convert bad debt into equity, we noted that while China has already managed to convert over $220 billion of Non-performing loans into equity, concerns – both ours and others’ – remained. As Liao Qiang, director of financial institutions at S&P Global Ratings in Beijing, said coercing banks to become stakeholders in companies that could not pay back loans will further weigh down profits this year. Instead of underpinning stability at banks, the efforts undermine it. That said, while many have voiced their pessimism about China’s latest attempt to sweep trillions in NPLs under the rug, there had been no comprehensive analysis of just how big the impact on China’s banks, economy or financial system would be as a result of this latest Chinese strategy. Until now.
- Another Shoe Falls—–U. S. Service Sector Now At Stall Speed
Markit’s Services PMI fell to just 51.2 in May, dropping a rather large 1.6 points from 52.8 in April. That meant the combined US Composite PMI, which puts together both manufacturing and services, was barely above 50, registering just 50.8. As with all PMI’s the distinction around 50 is unimportant, what matters is the direction and for more than a single month. On that count, services reflect what we have seen in manufacturing: that the “rebound” in March and April was nothing more than a small relative improvement after the liquidation-driven start to the year. The economy didn’t get better, it for a few months just failed to get worse.
- The Hidden Side of Wall Street’s “Mischief”
Wall Street gets a bad rap. Much of it is deserved, but not necessarily for the reasons you might expect. You see, to many, Wall Street’s suit-clad warriors appear to be nothing more than money-sucking leeches… draining the pockets of Americans’ hard-earned dollars through their fees, commissions and kick-backs. Whether this is a fair characterization or not, Wall Street’s worst give haters plenty of ammo. About this time last year, the United States Justice Department vowed to fine Wall Street banks something like $5.8 billion for rigging currency and interest rate markets. A long scroll of instant message conversations confirmed that many Wall Street insiders were coordinating this mischief. The most arrogant of the bunch even went so far to pontificate: “If you ain’t cheating, you ain’t trying.”
- Our National Debt Will Grow to $31 Trillion by 2023
It just seems like human nature to ruin a good thing. As much as I am a strong proponent of free market capitalism, and against complex regulations and central planning, I understand government’s role in all this. Capitalism and democracy teamed up in the late 1700s to form the big bang in economics, or what I call “When Harry met Sally.” They’re opposites that balance each other – capitalism rewards people for their contributions, and democracy ensures that greed doesn’t take over. We took Adam Smith’s theory of the “invisible hand,” limited government and laissez faire politics… and combined it with Alexander Hamilton’s doctrine of a stronger government to enhance capitalism. We invested in common infrastructures, established a central bank with uniform monetary policies, and implemented financial and legal systems – things free market capitalism can’t do alone. That’s why, together, these two ideologies complement each other – so long as they don’t get in each other’s way.
- China's Credit-Fuelled Economy Is “Gyrating Like A Spinning-Top That's Out Of Momentum”
China's hard landing has already begun, warns economist Richard Duncan as the nation's credit-fuelled economic boom ended in 2015 and a protracted slump lies ahead. He has published a series of videos explaining why China’s economic development model of export-led and investment-driven growth is now in crisis leaving “China’s economy resembles a spinning top that is running out of momentum. It is wobbling and gyrating erratically.”
- The Relationship Between The United States And China Is Officially Going Down The Tubes
What happens when the two largest economies on the planet start fighting a trade war with one another? Well, we are about to find out. As you will see below, the U.S. has gone “nuclear” on China in a trade dispute over steel, and the Chinese response is likely to be at least as strong. Meanwhile, events in the South China Sea have brought tensions between the Chinese government and the Obama administration to a boiling point. The Obama administration strongly insists that China does not have a legal right to those islands, and in China there is now talk that it may ultimately be necessary to confront the United States militarily in order keep control of them. Most Americans may not realize this, but the relationship between the United States and China is officially going down the tubes, and this is likely to have very significant consequences during the years to come. Let’s start with the trade war that has erupted. About a week ago, we learned that the Obama administration had decided to “go nuclear” on China by imposing a 522 percent duty on cold-rolled steel from China that is used in certain kinds of manufacturing…
- The One World Religion Cometh: Pope Francis Warmly Welcomes Top Islamic Cleric To The Vatican
When Pope Francis met with Sheikh Ahmed al-Tayeb on Monday, he told him that “our meeting is the message“. So precisely what kind of “message” was Pope Francis attempting to convey? Sheikh Ahmed al-Tayeb is the Grand Imam of Cairo’s Al-Azhar Mosque, and some have described him as “the highest figure in Sunni Islam“. The Daily Mail said that the meeting between these two men was a “historic bid to reopen dialogue between the two churches”, and as you will see below this is yet another in a long series of attempts by Pope Francis to build bridges between Catholicism and various other faiths. In the end, what are we to make of all of this? Could it be possible that Pope Francis is laying the groundwork for the “super world church” and the coming one world religion that David Wilkerson and so many others have warned about? Pope Francis made sure that when he embraced Sheikh Ahmed al-Tayeb there would be plenty of reporters there to document the moment. The following is an excerpt from a Daily Mail article entitled “Pope embraces grand imam at historic Vatican meeting in a bid to bring the Catholic and Muslim churches together“…
- The Market Has Barely Corrected — And That’s A Problem
The S&P 500 index closed last Friday at exactly 2,052.32 points. This means that for the year, the equities benchmark has only gained 0.6%. In other words, this is a horizontal market. Fundamentally, the blue chips have been stymied by a very tough earnings season. In particular, the laggard that is the retail sector continues to contradict data that the economy is in a recovery mode. Internationally, China's slowdown — both in their exports as well as in their consumer market — has dragged the global economy. But a little appreciated technical factor may be foretelling a sharp correction in the major indices.
- Big Banks Get More Protection But Not Their Clients
We have explained how the next worldwide financial crisis will be solved by looting savers’ bank accounts, in order to save the big banks. The European Bank Recovery and Resolution Directive (BRRD) shall take care of that, and the idea is gaining ground in other countries. This will to protect big banks come what may, even if it means ruining their clients, reached a new phase. In the United States the Fed just allowed a defaulting bank to keep its clients’ collateral. In other words, when a fund, such as a hedge fund, transacts with a bank on derivatives, it must put up a guarantee toward said bank, some sort of “collateral”, generally Treasuries, a recognised and liquid asset. This is quite normal since derivatives may generate losses, and the bank wants some insurance. But if that bank is about to implode, it will be allowed to keep that collateral, even though the transaction itself does not generate any losses! This is what the Fed just decided.
- Saudi Arabia’s Economic Plan Shows It’s Just Not That Into OPEC
Saudi Arabia, one of the founders of OPEC, is sounding the group’s death knell. The world’s biggest crude exporter has already undermined OPEC’s traditional role of managing supply, instead choosing to boost output to snatch market share from higher-cost producers, particularly U.S. shale drillers, and crashing prices in the process. Now, under the economic plan known as Vision 2030 promoted by the king’s powerful son, Deputy Crown Prince Mohammed bin Salman, the government is signaling it wants to wean the kingdom’s economy off oil revenue, lessening the need to manage prices. Moreover, the planned privatization of Saudi Arabian Oil Co. will make the nation the only member of the Organization of Petroleum Exporting Countries without full ownership of its national oil company.
- We Have Entered The Looting Stage Of Capitalism — Paul Craig Roberts
Having successfully used the EU to conquer the Greek people by turning the Greek “leftwing” government into a pawn of Germany’s banks, Germany now finds the IMF in the way of its plan to loot Greece into oblivion. The IMF’s rules prevent the organization from lending to countries that cannot repay the loan. The IMF has concluded on the basis of facts and analysis that Greece cannot repay. Therefore, the IMF is unwilling to lend Greece the money with which to repay the private banks. The IMF says that Greece’s creditors, many of whom are not creditors but simply bought up Greek debt at a cheap price in hopes of profiting, must write off some of the Greek debt in order to lower the debt to an amount that the Greek economy can service.
- ALERT: Legend Pierre Lassonde Just Predicted Price Of Gold To Soar Above $10,000
With the price of gold and silver pulling back and consolidating recent gains, today legendary Pierre Lassonde spoke with King World News and predicted for the first time ever that the price of gold will soar above $10,000. Lassonde is arguably the greatest company builder in the history of the mining sector. He is past president of Newmont Mining, former chairman of the World Gold Council and current chairman of Franco Nevada. Lassonde is one of the wealthiest, most respected individuals in the gold world, and as always King World News would like to thank him for sharing his wisdom with our global readers during this critical period in these markets.
- 50-Year Veteran Warns This Twisted Fantasy Is About To Come To A Frightening End
With the war in the gold and silver markets continuing to rage, today a 50-year market veteran warned this twisted fantasy is about to come to an end. John Embry: “Eric, this Fantasyworld we are living in gets more ridiculous by the minute. However, it is not terribly surprising when one considers the depth of the global systemic problems. I thought Egon’s KWN interview was exceptional and should be required reading for anyone who thinks what we are experiencing in markets today is sustainable. When one realizes the powers that be are essentially impotent beyond providing unlimited quantities of liquidity, issuing bogus economic statistics, and manipulating markets in order to create the impression that things are fine, one recognizes that investors can’t be too careful here. The Dow’s powerful rally today just amps up the volatility for that index and a sharp increase in volatility often proceeds a major change in market direction. So I think the stock market players best be careful.
- PUBLIC WORRIED: A Staggering $100 Billion Has Flowed Out Of Stocks So Far This Year
With continued uncertainty in global markets, two of the greats weighed in with their thoughts on what to expect next as nearly $100 billion has flowed out of the U.S. stock market so far this year. From Art Cashin: On The Mortality Of Bull Markets – One of the key commentaries going around Wall Street these days begins with “Bulls markets don’t die of old age….” That is then followed by the speaker’s choice of bull market mortality, e.g. euphoria, etc. I wonder if bull markets might die of some other cause, like perhaps starvation. My friend and fellow trading veteran, Jim Brown over at Option Investors cites Bank of America in noting that “year to date equity outflows were approaching $100 billion“. Such outflows had been more than offset by corporate buybacks. Those have now slowed dramatically. Outflows should be watched carefully.
- Here’s why (and how) the government will ‘borrow’ your retirement savings
According to financial research firm ICI, total retirement assets in the Land of the Free now exceed $23 trillion. $7.3 trillion of that is held in Individual Retirement Accounts (IRAs). That’s an appetizing figure, especially for a government that just passed $19 trillion in debt and is in pressing need of new funding sources. Even when you account for all federal assets (like national parks and aircraft carriers), the government’s “net financial position” according to its own accounting is negative $17.7 trillion. And that number doesn’t include unfunded Social Security entitlements, which the government estimates is another $42 trillion. The US national debt has increased by roughly $1 trillion annually over the past several years.
- Peak Petro-State – The Oil World In Chaos
Pity the poor petro-states. Once so wealthy from oil sales that they could finance wars, mega-projects, and domestic social peace simultaneously, some of them are now beset by internal strife or are on the brink of collapse as oil prices remain at ruinously low levels. Unlike other countries, which largely finance their governments through taxation, petro-states rely on their oil and natural gas revenues. Russia, for example, obtains about 50% of government income that way; Nigeria, 60%; and Saudi Arabia, a whopping 90%. When oil was selling at $100 per barrel or above, as was the case until 2014, these countries could finance lavish government projects and social welfare operations, ensuring widespread popular support. Now, with oil below $50 and likely to persist at that level, they find themselves curbing public spending and fending off rising domestic discontent or even incipient revolt.
- 6 Giant Corporations Control The Media, And Americans Consume 10 Hours Of ‘Programming’ A Day
If you allow someone to pump hours of “programming” into your mind every single day, it is inevitable that it is eventually going to have a major impact on how you view the world. In America today, the average person consumes approximately 10 hours of information, news and entertainment a day, and there are 6 giant media corporations that overwhelmingly dominate that market. In fact, it has been estimated that somewhere around 90 percent of the “programming” that we constantly feed our minds comes from them, and of course they are ultimately controlled by the elite of the world. So is there any hope for our country as long as the vast majority of the population is continually plugging themselves into this enormous “propaganda matrix”?
- A Spirit Of Violence And Civil Unrest Is Rising In America
It was only a matter of time before our deeply divided nation was going to start coming apart at the seams. Waves of anger, frustration, violence and civil unrest are starting to sweep across the United States, and political rallies for Republican presidential candidate Donald Trump have become a focal point for releasing some of that energy. The angry mob that threw rocks, bottles and burning T-shirts at police and Donald Trump supporters on Tuesday night wanted to get the attention of the national media, and they got it in droves. Now that the election is less than five months away, this kind of scene is going to be repeated over and over, and this is something that I warned about back in March. Millions upon millions of our young people have fully embraced the radical left, and they have already made it exceedingly clear that they are not afraid to use violence to advance their cause.
- Criminal Bankers Threaten Entire World Economy-Helen Chaitman
Helen Davis Chaitman was the lead attorney representing the victims of the $65 billion Bernie Madoff scam. Madoff had help form JP Morgan Chase Bank, and what she found out was stunning. Chaitman explains, “JP Morgan Chase was the subject of a criminal complaint . . . it was charged with a criminal violation of the Bank Secrecy Act, which is a felony violation. JP Morgan Chase disgorged a small percentage of the profits it made on the Madoff relationship, and the government called it quits. Nobody was fired. Nobody disgorged bonuses, they just went on doing other crimes.”
- All Electronic Assets Wiped Out in Fall Crash
Financial analyst Bix Weir has laid out a timeline for the next financial collapse that he says is underway. Bix explains, “It’s happening now, and it has been happening since the beginning of the year. Some of the big things on the time line and one of the bigger things to watch is the Deutsche Bank (DB) implosion. That’s going to be gigantic because Deutsche Bank is the largest derivative holder in the world. Their stock is plummeting, and they are begging for tier 1 capital. It’s all happening right now. The question is what is the day that Deutsche Bank throws up its arms and says we’re insolvent? We are many times insolvent, and that would just destroy the European markets. It will also destroy the U.S. markets because our biggest banks are invested in the sovereign debt of European countries. That’s how it is going to start, and I believe the end of the end will be the Deutsche Bank implosion. . . .This is why Deutsche Bank is paying huge interest rates now because they need to raise their tier 1 capital. They have to raise tier 1 capital before they report for the second quarter. They are in massive trouble. Their tier 1 capital is being destroyed by all these losses and lawsuits. Didn’t they lose $7 billion euros last year? . . . They need massive amounts of capital . . . and they are willing to pay 5% interest just to get past the second quarter. That’s the amazing thing. . . . Deutsche Bank is going to be gone by the end of the third quarter.”
- As Boomers Retire, Mom-and-Pop Businesses Convert to Co-ops to Save Jobs
Susanne Ward and her husband, Patrick Reilley, moved from California to Maine in 1992 with plans of starting their own business. They decided on a used bookstore and coffee house, as they felt both good coffee and good books were in short supply in their new neighborhood. Located in the city of Rockland, Rock City (named for the limestone quarries that fueled the city’s growth in the 1800s) became a focal point in town for the artistic crowd, but Ward and Reilley struggled to find quality coffee that was reasonably priced. Within three years, they’d moved into a bigger space that could house the bookstore, cafe, and a space to roast their own coffee blend, which they began wholesaling. In 1999, they opened a roastery a few blocks south of the cafe outside of Rockland’s historic district, producing and selling their blend, which also supplied Rock City.
- After Losing $11 Billion on $9.4-billion Nokia Buy & Axing 27,650 Jobs, Microsoft Dumps Consumer Smartphones
Microsoft entered the final-final or pre-final-final episode of its Nokia saga. Its press release on Wednesday explained that it would “streamline” its smartphone hardware business. It would throw in the towel on smartphones for consumers and try to carve out a niche in corporate smartphones. It would be accompanied by more bloodletting. With its usual big-money genius, Microsoft had acquired Nokia’s mobile-phone business and patents In September 2013. Nokia’s credit rating was junk. Its market share had collapsed. It had lost over $4 billion the prior year. But its smartphones were using the Windows Phones operating system. The original terms of the deal called for a purchase price of $5.4 billion. This soon ballooned to a new purchase price of $7.2 billion. To make the deal go down better, Microsoft promised $600 million in annual cost savings within 18 months.