Germany & China Strengthen Alliance Along With Russia

"Today an acclaimed money manager told KWN that Germany has yet again strengthened its alliance with China.  Stephen Leeb also said that as the China/German relationship strengthens, Germany’s relationship with the United States is rapidly declining.  All of this is good news for Russia, who is more than happy watch this unfold.

Leeb:  “I was floored by the comments made on Merkel’s visit to she just concluded to China.  The German leader went to China for several days and many trade agreements were signed in what turned out to be an extremely friendly visit.  The president of China left Merkel saying he wished Germany luck against Brazil in the World Cup and called Germany an ‘important strategic partner.’....

“The significance to me is in comparing Merkel’s relationship with China, where she goes there for several days and gets to speak with students, etc., and in the end concludes that ‘Any international situation should involve China.’

And when you contrast that with what she said on her last trip to the United States, she said, ‘Stop the spying.’  A couple of days ago they just found an individual in the German intelligence that was spying on her.  Perhaps the U.S. is spying on her because of her closeness to not only Russia, but also to China, and her distancing herself from the United States.

Eric, it appears that the German/Russian/Chinese connection is getting stronger and stronger and the U.S. is becoming more distant.  It feels like the world is changing in front of us.  Don’t be surprised to see gold and silver being the ultimate safe havens, but also gold being sure to play a part in the new reserve currency in the East.  This means the price of gold will soar as that begins to unfold.  We are very close to that point of inflection, Eric, and every news story of any importance that I see proves that is the case.”

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/7/9_Germany_%26_China_Strengthen_Alliance_Along_With_Russia.html

Why China Considers Itself The Center Of The World

"China is not only the world’s most populated country, it also boasts the planet’s oldest civilization — an agricultural-based society formed on the Yellow River 5,000 years ago. During this long period — practically all of recorded human history — China was essentially an isolated country, cut off from other peoples by a vast ocean to the east, jungles to the south, towering mountain ranges to the west and freezing steppes to the north.

It has never formed a lasting, friendly relationship with a distant country. For two millennia the Chinese empire was its own universe, sucking in Korea, Vietnam and other neighbors, while exacting tributes from others, including Japan. Its unbroken culture spread itself over many centuries throughout East Asia, where its influence is manifest in music, dance, paintings, religion, philosophy, architecture, theater, societal structure, administration and, above all, language and literature.

Westerners who, in the second half of the twentieth century, may have seen China as a Third-World, relatively backward nation in terms of crude technology, sparse infrastructure, appalling hygiene, rampant pollution, outdated politics and inadequate communication fell into the trap of misjudging, underestimating and misunderstanding the power and impact of the Chinese people on their neighbors and now, the world at large.

China sees herself as Chung-Kuo — the middle kingdom, the center of the universe and the world’s oldest culture and society. A visitor from the Tang Dynasty (China’s golden age) would still see its legacy intact in the streets and fields of China today..."

at http://www.businessinsider.com/understanding-chinese-perspectives-2014-7#ixzz36zyOUbQp

18 Signs That The Global Economic Crisis Is Accelerating As We Enter The Last Half Of 2014

"The following are 18 signs that the global economic crisis is accelerating as we enter the last half of 2014...

#1 The Bank for International Settlements has issued a new reportwhich warns that "dangerous new asset bubbles" are forming which could potentially lead to another major financial crisis.  Do the central bankers know something that we don't, or are they just trying to place the blame on someone else for the giant mess that they have created?

#2 Argentina has missed a $539 million debt payment and is on the verge of its second major debt default in 13 years.

#3 Bulgaria is desperately trying to calm down a massive run on the banks that threatens of spiral out of control.

#4 Last month, household loans in the eurozone declined at the fastest rate ever recorded.  Why are European banks holding on to their money so tightly right now?

#5 The number of unemployed jobseekers in France has just soared to another brand new record high.

#6 Economies all over Europe are either showing no growth or are shrinking.  Just check out what a recent Forbes article had to say about the matter..."

at http://theeconomiccollapseblog.com/archives/18-signs-that-the-global-economic-crisis-is-accelerating-as-we-enter-the-last-half-of-2014

The Almighty Dollar Is In Peril As The Global ‘De-Dollarization’ Trend Accelerates

"As the Obama administration continues to alienate almost everyone else around the entire planet, an increasing number of prominent international voices are starting to question why the U.S. dollar should be so overwhelmingly dominant in global trade.  In previous articles, I have discussed Russia's "de-dollarization strategy" and the fact that Gazprom is now asking their large customers to start paying in currencies other than the dollar.  But this is not just a story about Russia any longer.  As you will read about below, China and South Korea have just signed a major agreement to facilitate trade with one another using their own national currencies, and even prominent French officials are now talking about the need to use the dollar less and the euro more.  John Williams of shadowstats.com recently said that things have never "been more negative" for the U.S. dollar, and he was right on the mark.  The power of the almighty dollar has allowed all of us living in the United States to enjoy an extremely high standard of living for decades, but as that power now fades it is going to have profound implications for the U.S. economy.  In future years the value of the dollar will go down substantially, all of the imported goods filling our stores will become much more expensive, and it is going to cost the federal government a lot more to borrow money.  Unfortunately, with the stock market hitting all-time record highs and with the mainstream media endlessly touting an "economic recovery", most Americans are not paying any attention to these things..."

at http://theeconomiccollapseblog.com/archives/the-almighty-dollar-is-in-peril-as-the-global-de-dollarization-trend-accelerates

Bubbles, Bubbles Everywhere

"Is there any doubt that we are living in a bubble economy?  At this moment in the United States we are simultaneously experiencing a stock market bubble, a government debt bubble, a corporate bond bubble, a bubble in San Francisco real estate, a farmland bubble, aderivatives bubble and a student loan debt bubble.  And of course similar things could be said about most of the rest of the planet as well.  In fact, the total amount of government debt around the world has risen by about 40 percent just since the last recession.  But it is never sustainable when asset prices and debt levels increase much faster than the overall level of economic growth.  History has shown us that all financial bubbles eventually burst.  And when these current financial bubbles in America burst, the pain is going to be absolutely enormous.

You know that things are getting perilous when even the New York Times starts pointing out financial bubbles everywhere.  The following is a short excerpt from a recent NotQuant article...

The New York Times points out that just about everything on Earth is expensive by historical standards.   And then asks the seemingly obvious question:  Does that make it a bubble?

Welcome to the Everything Boom — and, quite possibly, the Everything Bubble. Around the world, nearly every asset class is expensive by historical standards. Stocks and bonds; emerging markets and advanced economies; urban office towers and Iowa farmland; you name it, and it is trading at prices that are high by historical standards relative to fundamentals. The inverse of that is relatively low returns for investors.

“Quite possibly?”  We’re not sure what definition of the word “bubble” they’re using.   But in our book when the price of literally everything blasts upwards, obliterating the previous ceilings of historical benchmarks, it’s a pretty good indication that you’re in a bubble.

Of course when most people think of financial bubbles the very first thing they think of is the stock market.  And without a doubt we are in a stock market bubble right now.  The Dow has risen more than 10,000 points since the depths of the last recession.  And it is nearly 3,000 points higher than it was at the peak of the last stock market bubble in 2007 when our economy was far stronger than it is now...

But of course these stock prices do not reflect economic reality in any way whatsoever.  Our economy has not even come close to recovering to the level it was at prior to the last financial crisis, and yet thanks to massive Federal Reserve money printing stock prices have soared to unprecedented heights.

At some point a massive correction is coming.  No stock market bubble lasts forever.  For a whole bunch of technical reasons why serious market turmoil is on the horizon, please see a recent Forbes article entitled "These 23 Charts Prove That Stocks Are Heading For A Devastating Crash".

The bubbles in the financial markets have become so glaring that even the central bankers are starting to warn us about them.  For example, just consider what the Bank for International Settlements is saying...

The Bank for International Settlements has warnedthat “euphoric” financial markets have become detached from the reality of a lingering post-crisis malaise, as it called for governments to ditch policies that risk stoking unsustainable asset booms.

While the global economy is struggling to escape the shadow of the crisis of 2007-09, capital markets are “extraordinarily buoyant”, the Basel-based bank said, in part because of the ultra-low monetary policy being pursued around the world. Leading central banks should not fall into the trap of raising rates “too slowly and too late”, the BIS said, calling for policy makers to halt the steady rise in debt burdens around the world and embark on reforms to boost productivity.

In its annual report, the BIS also warned of the risks brewing in emerging markets, setting out early warning indicators of possible banking crises in a number of jurisdictions, including most notably China.

“Particularly for countries in the late stages of financial booms, the trade-off is now between the risk of bringing forward the downward leg of the cycle and that of suffering a bigger bust later on,” it said.

Sadly, just like in 2007, most people are choosing not to listen to these warnings..."

at http://theeconomiccollapseblog.com/archives/bubbles-bubbles-everywhere

The International System for orderly Sovereign-Debt restructuring may be broken

"Like individuals, corporations, and other private firms that rely on bankruptcy procedures to reduce an excessive debt burden, countries sometimes need orderly debt restructuring or reduction. But the ongoing legal saga of Argentina’s fight with holdout creditors shows that the international system for orderly sovereign-debt restructuring may be broken.

Individuals, firms, or governments may end up with too much debt because of bad luck, bad decisions, or a combination of the two. If you get a mortgage but then lose your job, you have bad luck. If your debt becomes unsustainable because you borrowed too much to take long vacations or buy expensive appliances, your bad behavior is to blame. The same applies to corporate firms: some have bad luck and their business plans fail, while others borrow too much to pay their mediocre managers excessively.

Bad luck and bad behavior (policies) can also lead to unsustainable debt burdens for governments. If a country’s terms of trade (the price of its exports) deteriorate and a large recession persists for a long time, its government’s revenue base may shrink and its debt burden may become excessive. But an unsustainable debt burden may also result from borrowing to spend too much, failure to collect sufficient taxes, and other policies that undermine the economy’s growth potential."

at http://www.roubiniblog.com/2014/07/the-international-system-for-orderly.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+NourielRoubiniBlog+%28Nouriel+Roubini+Blog%29

China Is Going To Push Gold, Silver & Oil Dramatically Higher

"Leeb:  “Eric, right now the new dynamic is Germany, China, Russia, and India becoming the new economic leaders in the world.  There will also be a new economic bloc involving China, Russia, and Germany....

“A major Russian gold producer, Polyus Gold, is now in discussions with the Chinese about getting loans because they need money to produce their gold.  They have one of the largest deposits in the world and they have turned to the Chinese to help fund their gold production.

My guess is that Polyus will be funded to some extent by China and the Chinese will end up with some sort of stake in that mine.  It will be interesting to see whether the Chinese will accept payment for their loans in gold, yuan, or rubles.  I guarantee you the Chinese will take payment in physical gold.

Gold will end up being the currency the Chinese elect to take as repayment for their loan to Polyus.  Despite the propaganda, the Chinese are accumulating gold as fast as they can, and they are making it more difficult for the West to see how they are doing it and how much gold they are accumulating.

It used to be that gold just came in through Hong Kong and we got a report.  Now gold is coming in through Shanghai,and Russia.  Who knows how many other ways the Chinese are accumulating gold?  It’s impossible to keep track of how much gold the Chinese are accumulating.  Obviously the Chinese are very serious about building up their gold reserves as fast as they can.

I also want to mention once again that Germany wants a portion of its gold back from the United States.  In my opinion this is part of the planned alliance between Germany, Russia, and China.  This is a sign that the world is moving toward a currency where gold is going to play a much more prominent role.

The role for gold will be much bigger than the Bank for International Settlements wanted gold to play.  Every day the role the BIS plays is getting smaller, and with every ounce of gold the Chinese, Russians, Indians, and Germans accumulate, the BIS becomes weaker.  This means that Western banks have less control.

The largest company in France, Total, essentially just said, ‘There is no reason to pay for oil in dollars.  Pay for it in euros.’  That is another sign of the dollar’s demise.  A year or two ago no European would have had the guts to say something like that, but now they are saying it.  And if it is going to be paid for in euros, then make it the German mark because that is by far the most important currency in the euro basket.

So day by day, story by story, you are seeing this point of inflection coming closer and closer.  The message for your readers is they have got to own gold.  This is becoming a world where you should not be as diversified as you once were.  You should be overweighting gold in your portfolio, and you have to have energy in your portfolio.  That means owning physical silver as well.  So own gold, silver, and energy.  Those should be the bulk of everyone’s portfolio at this point in history.”

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/7/8_China_Is_Going_To_Push_Gold,_Silver_%26_Oil_Dramatically_Higher.html

China’s Arab March

"BEIJING – The growing bloodshed in Iraq and Syria is being watched as keenly in China as anywhere else in the world. Indeed, the greater Middle East is becoming an ever greater focus of Chinese foreign policy.

At the just-concluded sixth ministerial conference of the China-Arab States Cooperation Forum, held in Beijing, Chinese President Xi Jinping called upon his Arab counterparts to upgrade their strategic relationships with China, by deepening bilateral cooperation in areas ranging from finance and energy to space technology. This reflects China’s broader goal – established partly in response to America’s “pivot” toward Asia – of rebalancing its strategic focus westward, with an emphasis on the Arab world.

Of course, economic ties between China and Arab countries have been growing stronger for more than a decade, with the trade volume increasing from $25.5 billion in 2004 to $238.9 billion in 2013. China is now the Arab world’s second-largest trading partner, and the largest trading partner for nine Arab countries. Within ten years, the volume of China-Arab trade is expected to reach $600 billion. Engineering contracts and investment have also enhanced ties.

Under Xi’s leadership, China is attempting to reshape its relationships with Arab countries according to its new “march west” strategic framework. The most notable component of this strategy is the “Silk Road economic belt,” which is to run along the ancient Central Asian Silk Road and the modern maritime Silk Road – an initiative that Xi promoted heavily at the recent meeting in Beijing.

This effort highlights China’s goal of establishing hub-and-spoke relationships with key developing economies around it. To this end, Prime Minister Li Keqiang has proposed an economic corridor linking China to Pakistan, and has spoken of other corridors running through Bangladesh, India, and Myanmar.

Unsurprisingly, energy has been a key factor in economic ties with the Arab world. From 2004 to 2013, China’s crude oil imports from Arab countries grew by more than 12% annually, on average, reaching 133 million tons per year. And China’s “march west” strategy furthers its goal of safeguarding access to these resources. As the director of the State Council’s Development Research Center, Li Wei, pointed out in February, at the current rate, China will be consuming 800 million tons of oil annually, and importing 75% of its petroleum, by 2030..."

at http://www.project-syndicate.org/commentary/minghao-zhao-lauds-china-s-efforts-to-deepen-its-ties-to-arab-countries#d8PreKAvoqWkG7aU.99

12 Numbers About The Global Financial Ponzi Scheme That Should Be Burned Into Your Brain

"When Americans think about the financial crisis that we are facing, the largest number that they usually can think of is the size of the U.S. national debt.  And at over 17 trillion dollars, it truly is massive.  But it is actually the 2nd-smallest number on the list below.  The following are 12 numbers about the global financial Ponzi scheme that should be burned into your brain...

-$1,280,000,000,000 - Most people are really surprised when they hear this number.  Right now, there is only 1.28 trillion dollars worth of U.S. currency floating around out there.

-$17,555,165,805,212.27 - This is the size of the U.S. national debt.  It has grown by more than 10 trillion dollars over the past ten years.

-$32,000,000,000,000 - This is the total amount of money that the global elite have stashed in offshore banks (that we know about).

-$48,611,684,000,000 - This is the total exposure that Goldman Sachs has to derivatives contracts.

-$59,398,590,000,000 - This is the total amount of debt (government, corporate, consumer, etc.) in the U.S. financial system.  40 years ago, this number was just a little bit above 2 trillion dollars.

-$70,088,625,000,000 - This is the total exposure that JPMorgan Chase has to derivatives contracts.

-$71,830,000,000,000 - This is the approximate size of the GDP of the entire world.

-$75,000,000,000,000 - This is approximately the total exposure that German banking giant Deutsche Bank has to derivatives contracts.

-$100,000,000,000,000 - This is the total amount of government debt in the entire world.  This amount has grown by $30 trillion just since mid-2007.

-$223,300,000,000,000 - This is the approximate size of the total amount of debt in the entire world.

-$236,637,271,000,000 - According to the U.S. government, this is the total exposure that the top 25 banks in the United States have to derivatives contracts.  But those banks only have total assets of about 9.4 trillion dollars combined.  In other words, the exposure of our largest banks to derivatives outweighs their total assets by a ratio of about 25 to 1.

-$710,000,000,000,000 to $1,500,000,000,000,000 - The estimates of the total notional value of all global derivatives contracts generally fall within this range.  At the high end of the range, the ratio of derivatives exposure to global GDP is about 21 to 1.

Most people tend to assume that the "authorities" have fixed whatever caused the financial world to almost end back in 2008, but that is not the case at all.

In fact, the total amount of government debt around the globe has grown by about 40 percent since then, and the "too big to fail banks" have collectively gotten 37 percent larger since then.

Our "authorities" didn't fix anything.  All they did was reinflate the bubble and kick the can down the road for a little while.

I don't know how anyone can take an honest look at the numbers and not come to the conclusion that this is completely and totally unsustainable.

How much debt can the global financial system take before it utterly collapses?

How recklessly can the big banks behave before the house of cards that they have constructed implodes underneath them?

For the moment, everything seems fine.  Stock markets around the world have been setting record highs and credit is flowing like wine.

But at some point a day of reckoning is coming, and when it arrives it is going to be the most painful financial crisis the world has ever seen.

If you plan on getting ready before it strikes, now is the time to do so."

at http://theeconomiccollapseblog.com/archives/12-numbers-about-the-global-financial-ponzi-scheme-that-should-be-burned-into-your-brain

The United States Of Debt: Total Debt In America Hits A New Record High Of Nearly 60 Trillion Dollars

"What would you say if I told you that Americans are nearly 60 TRILLION dollars in debt?  Well, it is true.  When you total up all forms of debt including government debt, business debt, mortgage debt and consumer debt, we are 59.4 trillion dollars in debt.  That is an amount of money so large that it is difficult to describe it with words.  For example, if you were alive when Jesus Christ was born and you had spent 80 million dollars every single day since then, you still would not have spent 59.4 trillion dollars by now.  And most of this debt has been accumulated in recent decades.  If you go back 40 years ago, total debt in America was sitting at about 2.2 trillion dollars.  Somehow over the past four decades we have allowed the total amount of debt in the United States to get approximately 27 times larger.  This is utter insanity, and anyone that thinks this is sustainable is completely deluded.  We are living in the greatest debt bubble of all time, and there is no way that this is going to end well.  Just check out the chart..."

at http://theeconomiccollapseblog.com/archives/the-united-states-of-debt-total-debt-in-america-hits-a-new-record-high-of-nearly-60-trillion-dollars

Faber : The Media doesn't like Gold

"Investors are shunning gold "because the media doesn't like gold" Faber said by phone Tuesday from Thailand. "Nobody at CNBC owns gold. Nobody at Bloomberg owns gold. Gold is being constantly talked down by the media, and Fed officials, and economists, who also don't own any gold. They're all stocked up in equities.""When people talk about people who are optimistic about gold, they call them 'gold bugs.' A bug is an insect. I don't call equity bugs 'cockroaches.' Do you understand? There is already a negative connotation with the expression of 'gold bug.'"

at http://www.marcfabernews.com/2014/06/faber-media-doesnt-like-gold.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+MarcFaberBlog+%28MARC+FABER+BLOG%29#.U6HVE_na6m4

The Bubble is Back

"For all those analysts (including this one) who thought the debt binge of the previous decade marked end of the Age of Leverage, well, not so fast. It turns out that memories are short and government printing presses are powerful, and this combination has turned the “Great Deleveraging” into a minor speed bump on the road to something even more extreme. As the following chart illustrates, the growth in total US debt flattened in 2009 and 2010, with government borrowing more-or-less offsetting a decrease in consumer and business loans. But now the trend is once again onward and upward across the board.

Prudent Bear’s Doug Noland publishes a quarterly analysis of the Fed’s Z.1 report of US credit market activity. This is always a must-read, but last Friday’s was truly extraordinary. Among other big, ominous trends, Noland notes the following:

• Total (financial and non-financial) Credit jumped $484bn during Q1 to a record $59.399 TN, or 347% of GDP.

• Total Non-Financial Debt (NFD) expanded at a 5.0% rate.

• Corporate borrowings grew at a robust 9.3% pace

• Federal government debt mounted at a 7.1% rate

• Consumer credit rose at a 6.6% rate

• Household net worth surged $7.98 TN, or 10.8%, over the past year.

• Over the past four years, household holdings of financial assets have surged $22.0 TN, or 49%, to a record $67.2 TN.

What’s happening? The short answer is that zero interest rates have finally begun to work their magic. Corporations, for instance, are using the proceeds from low-rate bonds to buy back stock on a vast scale. See Zero Hedge’s Here’s the mystery and completely indiscriminate buyer of stocks in the First Quarter.

And now cheap credit is leading consumers to start buying cars and using plastic. Here’s an excerpt from a Financial Sense article asking how US consumer spending could be rising while incomes are not:..."

at http://dollarcollapse.com/credit-bubble-2/the-bubble-is-back/

Strange Headlines & Possible Panic In A Major Global Market

"...Bizarre Headline #1 – Our friend, Wall Street icon, Jeff Saut of Raymond James wrote yesterday that we seem to be living in a "Bizarro World" where everything is opposite of normal expectations.  He began his piece with this very apt quote from the HBO series The Newsroom:

 

We stood up for what was right. We fought for moral reasons. We passed laws, struck down laws for moral reasons. We waged wars on poverty, not poor people. We sacrificed, we cared about our neighbors, we put our money where our mouths were and we never beat our chests. We built great big things, made ungodly technological advances, explored the universe, cured diseases, and cultivated the world’s greatest artists and the world’s greatest economy. We reached for the stars, acted like men, we aspired to intelligence, we didn’t belittle it, and it didn’t make us feel inferior. We didn’t identify ourselves by who we voted for in the last election and we didn’t scare so easy. We were able to be all these things and do all these things because we were informed, by great men, men who were revered.

 

                            . . . Jeff Daniels, delivering a biting soliloquy on American decline (HBO’s The Newsroom)

 

In the last few days, I've seen several headlines that certainly seemed bizarre to me.  Here is one from today's Financial Times:

 

Fed looks at exit fees on bond funds

Federal Reserve officials have discussed whether regulators should impose exit fees on bond funds to avert a potential run by investors, underlining concern about the vulnerability of the $10tn corporate bond market.

Officials are concerned that bond funds are becoming “shadow banks”, because investors can withdraw their money on demand, even though the assets held by the funds can be hard to sell in a crisis. The Fed discussions have taken place at a senior level but have not yet developed into formal policy, according to people familiar with the matter.

 

Considering surcharge to prevent panic withdrawals?  What kind of panic might start if word leaks out before the surcharge is set.

 

Bizarre Headline #2 – Also from the FT:

 

Central banks shift into shares as low rates hit revenues

Central banks around the world, including China’s, have shifted decisively into investing in equities as low interest rates have hit their revenues, according to a global study of 400 public sector institutions.

“A cluster of central banking investors has become major players on world equity markets,” says a report to be published this week by the Official Monetary and Financial Institutions Forum (Omfif), a central bank research and advisory group. The trend “could potentially contribute to overheated asset prices”, it warns.

Central banks are traditionally conservative and secretive managers of official reserves. Although scant details are available of their holdings Omfif’s first “Global Public Investor” survey points out they have lost revenues in recent years as a result of low interest rates – which they slashed in response to the global financial crisis.

The report, seen by the Financial Times, identifies $29.1tn in market investments, including gold, held by 400 public sector institutions in 162 countries.

 

And Michael Lewis thinks markets are rigged by high frequency trading.

 

There are several more weird headlines but they will have to wait for another day."

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/6/17_Strange_Headlines_%26_Possible_Panic_In_A_Major_Global_Market.html

Marc Faber’s Chilling Warnings About The United States

"Faber:  “Well I think we have had in the 70’s rapidly escalating commodity prices, and in some cases they went up much more than what we’ve seen so far in the last ten years.  Of course the financial position of the US is much worse than what we had in the 70’s....

“In the 70’s, total credit as a percent of the economy was just at 140%, we’re now at 379% and we have the unfunded liabilities which we didn’t have at that time.  So I would say the financial position of the US has continuously worsened over the last 30 years.

If you print money everything will go up ... and now the money printing doesn’t go into housing because we have an oversupply of housing, but it goes into equities and for Mr. Bernanke unfortunately into commodities.  And this is lifting the cost of living of the median household, of the typical household in the US. ..."

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/6/18_Marc_Fabers_Chilling_Warnings_About_The_United_States.html

Here Is The Chart That Has The Central Planners Concerned

"With global stock markets hitting new recent and in some cases all-time highs, the spread between the bulls and bears is in incredibly dangerous territory as shown in the remarkable sentiment chart below.  Bullish sentiment is at extremes as the markets have traded near highs...

The spread between the bulls and bears narrowed fractionally to 45.2%, from 45.4% a week ago. Recent readings have been above 35% signaling elevated risk and the last four differences were above 40%. It was 46.4% at the end of 2013 and stocks sold off to start this year. By early February the difference had narrowed to 24.4%. The last favorable spread occurred in August 2013 at 13.4%, close to the 10% (or less) reading that allows for broad buying. Bears haven't outnumbered bulls (negative spread) since October 2011."

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/6/18_Here_Is_The_Chart_That_Has_The_Central_Planners_Concerned.html

Sentiment Chart

Russian Companies Plan to Denominate More Trade in Renminbi

"The lead story in tonight’s Financial Times is Russian companies prepare to pay for trade in renminbi, on how Russian companies are seeking to protect themselves from the impact of possible increasing US sanctions against Russia by denominating more of their foreign transactions in the renminbi and other non-dollar currencies.

The critical question is: how serious a development is this? The short answer is that there is less here than there appears to be. In general, the eagerness to see a declining and increasingly aggressive and inept hegemon get its comeuppance has led a lot of commentators to look forward to the demise of the dollar. However, changes of currency regimes are protracted affairs that typically entail a great deal of instability.

Nevertheless, the US’s deliberate and heavy-handed use of its influence over the international payment system to engage in economic warfare is leading countries like Russia and China to look more seriously than they would have otherwise into to building up independent payment and financing networks. Here, the Rothchilds were far shrewder players. Precisely because they knew their ability to make and break governments would lead to resentment and challenges, they went to some lengths to reduce the visibility of their role in state affairs.

Key sections of the Financial Times’ account:

Russian companies are preparing to switch contracts to renminbi and other Asian currencies amid fears that western sanctions may freeze them out of the US dollar market, according to two top bankers..."

at  http://www.nakedcapitalism.com/2014/06/russian-companies-plan-denominate-trade-renminbi.html

Thanks Draghi: Spanish 10 Year Yield Slides Below US

"Earlier today something happened which we haven't seen since a very brief period of time in 2010, and then going all the way back to 2007: Spanish 10 Year bond yields tumbled below those on US 10 Year Treasurys.

So is this an indication that the Spanish bond market is suddenly safer, and more credible than that of the US? Of course not. All we are seeing is merely the manifestation of the latest ECB carry trade pushing local banks not to lend the ECB's cheap money out to consumers, but to engage in yet another Draghi-subsidized carry trade..."

at http://www.zerohedge.com/news/2014-06-09/thanks-draghi-spanish-10-year-yield-slides-below-us

Deutsche Warns Markets Have Left The "Complacency" Phase, Have Entered Full Blown "Mania"

"With a closing P/E ratio over 17 and a VIX under 11, Deutsche Bank's David Bianco is sticking with his cautious call for the summer. Their preferred measure of equity market emotions is the price-to-earnings ratio divided by the VIX. As of Friday's close, this sentiment measure has never been higher and is in extreme "Mania" phase. Deutsche's advice to all the summertime-'chasers' - "wait for a better entry."

Via Deutsche Bank,

We find the current PEs demanding.

S&P median PE at 18.9, non-financial PE at 18.1 and trailing PE at 17.5 are all elevated vs. history.

And the P/E to VIX ratio suggests we have shifted from compacency into mania...

at http://www.zerohedge.com/news/2014-06-09/deutsche-warns-markets-have-left-complacency-phase-have-entered-full-blown-mania

What Is Driving The Market Right Now According To Mainstream Media

"We are sure somewhere deep in the bowels of mainstream media's list of 'personalities', they will find a bullish (contrarian) excuse for the fact that such a mainstream media channel as CNN has expressed the emotion driving the market right now is... "Extreme Greed." For the rest of the 'irrational' investing public (who were all selling last month), it is time to watch in awe as yet another self-created spectacle of insanity unfolds (with no one seeing it coming).

Via CNN Money

CNN Money's model consists of 7 indicators...

We can only imagine the Fed is in full panic mode by now...

The Fed realizes investors do not act rationally... blowing up their models entirely..."

at http://www.zerohedge.com/news/2014-06-09/what-driving-market-according-mainstream-media-extreme-greed

Jim Rogers Warns about The Artificial Ocean of liquidity

"What worries me the most is that for five or six years, all the major central banks have been printing huge amounts of money. It's the first time in recorded history that we have the Japanese, British, European and Americans all printing money at the same time. So we have this artificial ocean of liquidity, which is making markets do well, but it's not doing much for the economy worldwide. When it ends, we will all pay a terrible price..."

at http://jimrogers1.blogspot.com.tr/2014/06/jim-rogers-warns-about-artificial-ocean.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+blogspot/WOHK+(Jim+Rogers+Blog)