'The Chinese Century'

"Joe Stiglitz:

The Chinese Century: ...2014 was the last year in which the United States could claim to be the world’s largest economic power. China enters 2015 in the top position, where it will likely remain for a very long time, if not forever. In doing so, it returns to the position it held through most of human history. ...

The areas where the United States remains competitive with China are not always ones we’d most want to call attention to. The two countries have comparable levels of inequality. ... China outpaces America in the number of people executed every year, but the U.S. is far ahead when it comes to the proportion of the population in prison... China overtook the U.S. in 2007 as the world’s largest polluter, by total volume, though on a per capita basis we continue to hold the lead. The United States remains the largest military power... (not that we have always used our military power wisely). But the bedrock strength of the U.S. has always rested less on hard military power than on “soft power,” most notably its economic influence. That is an essential point to remember. ...

The economic interests of China and the U.S. are intricately intertwined. We both have an interest in seeing a stable and well-functioning global political and economic order. Given historical memories and its own sense of dignity, China won’t be able to accept the global system simply as it is, with rules that have been set by the West, to benefit the West and its corporate interests, and that reflect the West’s perspectives. We will have to cooperate, like it or not—and we should want to. In the meantime, the most important thing America can do to maintain the value of its soft power is to address its own systemic deficiencies—economic and political practices that are corrupt, to put the matter baldly, and skewed toward the rich and powerful. ...

[There's quite a bit more in the article.]"

at http://economistsview.typepad.com/economistsview/2014/12/the-chinese-century.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+EconomistsView+%28Economist%27s+View%29

The $9 TRILLION Crash Your Broker Doesn't Even Know About

"The financial world focuses far too much on stocks. The stock market, despite being at record highs (meaning record market capitalizations) remains one of the smallest, and least sophisticated markets on the planet.

Consider that stocks, even at current lofty levels, have a global market capitalization of slightly over $60 trillion.

In contrast, the global bond market is well over $100 trillion.

And the global currency market trades OVER $5.3 trillion per day.

It is currencies, not stocks, where the most significant moves occur. The currency markets are the largest, most liquid markets in the world. They are always first to move when things change. Stocks are the DUMB money compared to currencies.

So who cares?

Everyone should care, because, globally, the world is awash in borrowed money… most of it in US Dollars.

When you BORROW in US Dollars you are effectively SHORTING the US Dollar. So when the US Dollar rallies… you have to cover your SHORT or you blow up.

I’ve written before about this problem. Last month I projected that the US Dollar carry trade (borrowing in US Dollars to finance other investments) was the largest carry trade in the world. At that time I believed the US Dollar carry trade is believed to be north of $3 trillion.

I was WRONG… WAY, WAY WRONG. It’s MANY MULTIPLES LARGER THAN THAT.

Off-shore lending in US dollars has soared to $9 trillion and poses a growing risk to both emerging markets and the world's financial stability, the Bank for International Settlements has warned.

SOURCE: the TELEGRAPH.

The US Dollar carry trade is north of $9 trillion… literally larger than the economies of Germany and Japan COMBINED.

And the US Dollar is rallying… HARD.

The fact that Oil is imploding at the same time this happens is not coincidence. Oil producers and explorers were financing their projects using what? BORROWED DOLLARS.

This is going to begin seeping into emerging markets and other assets soon. Imagine what the world would look like it $9 trillion worth of shorted Dollars had to be covered? Imagine the SELL PRESSURE this would induce in all other assets.

Just like 2008.

If you’ve yet to take action to prepare for the second round of the financial crisis, we offer a FREE investment report Financial Crisis "Round Two" Survival Guide that outlines easy, simple to follow strategies you can use to not only protect your portfolio from a market downturn, but actually produce profits.

You can pick up a FREE copy at:

http://www.phoenixcapitalmarketing.com/roundtwo.html

Best Regards

Phoenix Capital Research"

at http://www.zerohedge.com/news/2014-12-08/9-trillion-crash-your-broker-doesnt-even-know-about

World in a Box

"Of all the problems with fiat currency, the most basic is that it empowers the dark side of human nature. We’re potentially good but infinitely corruptible, and giving an unlimited monetary printing press to a government or group of banks is guaranteed to produce a dystopia of ever-greater debt and more centralized control, until the only remaining choice is between deflationary collapse or runaway inflation. The people in charge at that point are in a box with no painless exit.

Prudent Bear’s Doug Noland describes the shape of today’s box in his latest Credit Bubble Bulletin:

Right here we can identify a key systemic weak link: Market pricing and bullish perceptions have diverged profoundly both from underlying risk (i.e. Credit, liquidity, market pricing, policymaking, etc.) and diminishing Real Economy prospects. And now, with a full-fledged securities market mania inflating the Financial Sphere, it has become impossible for central banks to narrow the gap between the financial Bubbles and (disinflationary) real economies. More stimulus measures only feed the Bubble and prolong parabolic (“Terminal Phase”) increases in systemic risk. In short, central bankers these days are trapped in policies that primarily inflate risk. The old reflation game no longer works."

at  http://dollarcollapse.com/the-economy/world-in-a-box/

Bankers, Media, Governments & Anti-Gold Propaganda

"On the heels of continued volatility in global markets, today one of the top economists in the world sent King World News a powerful piece discussing the increased anti-gold propaganda emanating from banks, media, and Western governments.  Below is the fantastic piece from Michael Pento.

December 6 (King World News) - Bankers, Media, Governments & Anti-Gold Propaganda

Gold is hated more than ever by both governments and the financial services community. This is because it has now become imperative to keep the illusion of confidence in sovereign debt and paper currencies. To that end, a gentleman by the name of Willem Buiter, Citigroup’s chief economist, shot into the media spotlight by writing a note on the day before Thanksgiving stating his belief that gold is in a 6,000 year-old bubble...."

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/12/8_NWO_Gangs_Pushing_The_World_To_The_Brink.html

US Treasury Warns Investors Underestimate "Potential For A Market Reversal", Take "Low Volatility For Granted"

"It was about a year ago when, in its inaugural annual report, the Treasury's Office of Financial Research issued its first tentative warning about the lack of market liquidity. To wit: "Impaired trading liquidity — the inability to execute large trades without having a significant impact on market prices — could aggravate some of the threats already discussed... Liquidity has become increasingly concentrated, with large, investment-grade bonds showing the strongest liquidity, while some smaller, high-yield issues have become less liquid... The growth in exchange-traded funds within the corporate bond market increases the potential to weaken market liquidity during periods of market stress."..."

at http://www.zerohedge.com/news/2014-12-04/us-treasury-warns-investors-underestimate-potential-market-reversal-take-low-volatil

It's All Coming To An End, Bill Gross Warns

"Say what you want about Bill Gross, but the legendary bond investor is absolutely spot on in the following paragraph from his latest, December, investment outlook:

How could they? How could policymakers have allowed so much debt to be created in the first place, and then failed to regulate their own system accordingly? How could they have thought that money printing and debt creation could create wealth instead of just more and more debt? How could fiscal authorities have stood by and attempted to balance budgets as opposed to borrowing cheaply and investing the proceeds in infrastructure and innovation? It has been a nursery rhyme experience for sure, but more than likely without a fairytale ending.

Here is the full letter (link):..."

at http://www.zerohedge.com/news/2014-12-04/its-all-coming-end-bill-gross-warns

Draghi: We Have Nothing To Fear But Gold-Buying Itself

"ECB head Mario Draghi made it clear where the real battle is taking place in the world this morning. When asked what form QE would take, his response was to the point... "On what sorts of assets should be included in QE... we discussed all assets BUT gold" and gold dropped, right on cue.

Not really sure which assets we discussed but definitley not gold!!

And the result...

*  *  *

So to summarize, the ECB will willingly take on Greek bank CDOs, Italian 3rd lien espresso shop loans, Spanish condo HELOCs, and Portuguese Used-Car ABS... but not - never - gold.

*  *  *

It appears we now know who the enemy really is... not deflation but the dreaded barbarous relic, gold.

Perhaps this is why, as Kyle Bass so eloquently noted:

"Buying gold is just buying a put against the idiocy of the political cycle. It's That Simple"

Q.E.D."

at http://www.zerohedge.com/news/2014-12-04/draghi-we-have-nothing-fear-gold-buying-itself

Plummeting Oil Prices Could Destroy The Banks That Are Holding Trillions In Commodity Derivatives

"Could rapidly falling oil prices trigger a nightmare scenario for the commodity derivatives market?  The big Wall Street banks did not expect plunging home prices to cause a mortgage-backed securities implosion back in 2008, and their models did not anticipate a decline in the price of oil by more than 40 dollars in less than six months this time either.  If the price of oil stays at this level or goes down even more, someone out there is going to have to absorb some absolutely massive losses.  In some cases, the losses will be absorbed by oil producers, but many of the big players in the industry have already locked in high prices for their oil next year through derivatives contracts.  The companies enter into these derivatives contracts for a couple of reasons.  Number one, many lenders do not want to give them any money unless they can show that they have locked in a price for their oil that is higher than the cost of production.  Secondly, derivatives contracts protect the profits of oil producers from dramatic swings in the marketplace.  These dramatic swings rarely happen, but when they do they can be absolutely crippling.  So the oil companies that have locked in high prices for their oil in 2015 and 2016 are feeling pretty good right about now.  But who is on the other end of those contracts?  In many cases, it is the big Wall Street banks, and if the price of oil does not rebound substantially they could be facing absolutely colossal losses..."

at http://theeconomiccollapseblog.com/archives/plummeting-oil-prices-destroy-banks-holding-trillions-commodity-derivatives

Is The U.S. & London Based Gold Scheme Coming Unraveled?

"Today one of the top names in the gold world covered the all-important question, is the U.S. and London based gold and silver Ponzi scheme finally beginning to come unraveled?  This is another trip down the rabbit hole of negative gold lease rates, backwardation, and corruption at the highest levels of the banking industry..."

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/12/3_Is_The_U.S._%26_London_Based_Gold_Scheme_Coming_Unraveled.html

Is Another Popular Metals Dealer Losing People’s Money?

"John Embry of Sprott Asset Management:  “Investors are doing the right thing by attempting to buy physical gold and silver at these depressed price levels.  But it’s absolutely critical that the dealer with whom people are placing orders can guarantee you almost immediate delivery.

I think the gold and silver paper market is one of the greatwar Ponzi schemes on earth.  So if you are going to buy physical, make sure the entity you are buying it from has it immediately available for shipment.  If they are telling it’s going to be many weeks or months, I would run the other way because there is absolutely no excuse for that.”

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/12/4_Is_Another_Popular_Metals_Dealer_Losing_Peoples_Money.html

Hathaway - Banks Scrambling To Find Metal To Cover Shorts

"With tremendous chaos taking place around the globe and incredible volatility in the gold, silver, and oil markets, today one of the greats in the gold world told King World News that the bullion banks are now scrambling to find metal in order to cover their shorts.  John Hathaway of Tocqueville Asset Management also said that many bullion banks’ balance sheets may be in great peril if gold and silver prices begin a massive surge.

Hathaway:  “It’s so hard to know in the short-term where the price of gold is headed, but it just seems to me that this is all a process of bottoming.  When you look at the bigger picture, you’ve got an inverse relationship between financial assets and gold.  I see the market is at record highs but underneath that you see technical deterioration.  You also see the U.S. Dollar Index moving higher and this is pushing more funds into stocks because of index buyers and capital flight from Europe and Japan.

And I think the opposite of that trade is for gold to be under pressure.  But we are reaching an inflection point where those trends will reverse and investors will start to lose confidence in financial assets, the Fed, and central banks in general...."

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/12/2_Hathaway_-_Banks_Scrambling_To_Find_Metal_To_Cover_Shorts.html

Mystery Gold Buyer Took On & Crushed All Paper Shorts

"As we head into the tail end of 2014, today an acclaimed money manager spoke with King World News about the historic trading in the gold, silver, and oil markets.  Stephen Leeb also discussed a mystery buyer who propped up the gold market and took on and eventually crushed all paper shorts after Sunday’s vote in Switzerland.

Leeb:  “What caught my attention was the trading in the gold market on Sunday evening (early Asian trading).  This trading followed the huge fall in oil and oil stocks on Friday.  It also followed the no vote in Switzerland.  But after gold’s initial decline on Sunday evening, gold just straight-lined for what seemed like 6 hours.  Some entity was in there buying every ounce of gold that was being offered for sale....

“And that entity continued to buy every ounce of gold available until the gold market then began to reverse course and rally in a huge way.  This rally was happening even with what seemed like every possible negative news item in place.  So the gold market surprised many people.

And in the midst of the plunge in oil prices, China has ramped up their purchases and is storing the excess crude anywhere they can.  China has also begun doing military drills with Iran and they strengthening their relationship with Saudi Arabia.

At the same time, India’s leader, Modi, has decided to invest in Russia’s energy industry.  This is a huge slap in the face of the United States for Modi to be negotiating with Russia.  So what you are seeing here, Eric, is a coalescing of the East.  And for what it’s worth, China is getting what it wants.  They are getting a strong Eastern bloc and a Silk Road, plus Germany, together..."

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/12/3_Mystery_Gold_Buyer_Took_On_%26_Crushed_All_Paper_Shorts.html

Gold Selling for at least 50% over Spot in Asia-Rob Kirby

"By Greg Hunter’s USAWatchdog.com   (Early Sunday Release)

A few months ago, financial analyst Rob Kirby said the gold price was ready to go up. In the international market, where it is sold by the ton–it has. Kirby explains, “For large amounts of bullion in the Asian market, the pricing mechanism has completely and utterly divorced itself from the fraudulent paper prices that are being reflected in the exchanges in the Western world.

In the Asian market, if you could find . . . physical bullion . . . as cheap as spot plus 50%, you’d be doing really, really, really well . . . and you’d be hard pressed to find serious tonnage at that price in Asia.” 

Kirby, who specializes in acquiring large amounts of physical gold for clients, sees physical gold bullion selling for at least “50%” over spot, which would put the price of gold in Asia at least $1,800 per ounce.   Kirby also says, “Prices being paid right now in Asia make a mockery of the prices being shown in COMEX and the LBMA (London Bullion Market Association).  These paper markets have divorced themselves from the laws of economics.  The paper gold price and the paper silver price has utterly stood economics on its ear because rudimentary economics tells you as demand increases, prices are supposed to increase.  Simple supply and demand dictate this.  The precious metals market in the Western world is the only market in the world where increased demand means a lower price, if you want to believe that.”

Kirby contends fraud is the only way to explain skyrocketing demand and plunging prices and says,“So, we’re all being treated to a colossal fraud, and the people perpetrating this fraud are the controllers of the western financial system and the people behind U.S. dollar hegemony.They are pulling a massive, massive fraud on humanity, and it’s not sustainable.  It will ultimately break down.”

at http://usawatchdog.com/gold-selling-for-at-least-50-over-spot-in-asia-rob-kirby/

Wild Metals Trading & Shocking Reason Dutch Got Their Gold

"On the heels of one of the wildest days of metals trading in history, today one of the most respected veterans in the gold world stunned King World News when he spoke about the real reason he believes the Dutch got their gold back from the Federal Reserve.  He also covered the incredible action in gold and silver.

James Turk:  “What a wild day this has been, Eric. The volatility and the huge price swings remind me of the 1970s, but here is the important point. After getting smashed in the frenzied selling in the aftermath of the defeat of the Swiss Gold Initiative, both gold and silver had key upside reversals...."

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/12/1_Wild_Metals_Trading_%26_Shocking_Reason_Dutch_Got_Their_Gold.html

Wild Trading Action In Gold & Silver Stuns Market Participants

"After a remarkable day of trading in the gold and silver markets, today the man who made one of the greatest market calls in history told King World News that the wild trading action in gold and silver has stunned market participants, and a historic buy signal has just taken place.  Below is the incredible interview from Ben Davies.

Davies:  “Eric, I was interviewed on CNBC yesterday with Chris Powell.  We were talking about surreptitious behavior in the gold and silver markets, particularly last Friday and early Monday.  We were on for about 15 minutes but unfortunately there wasn’t a long clip.  So I wanted to tell the King World News readers globally my viewpoint in light of the incredibly volatile action we have just witnessed and the quite deliberate call I made in last week’s KWN interview.  The wild trading action in gold and silver has stunned market participants and caught the shorts completely off guard...

“But we strongly believe as a firm that the gold market has bottomed.  Silver has finally given me the egregious bullish divergence that I was looking for.  We saw a 6 percent downdraft in a totally illiquid market in early Asian trading on Monday -- just asinine price movement..."

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/12/2_Wild_Trading_Action_In_Gold_%26_Silver_Stuns_Market_Participants.html

It Wasn't The Swiss: Continuing Plunge In GOFO Means No Easing Of Worst Gold Shortage In Over A Decade

"Yesterday, when we commented on what was largely a pre-determined outcome of the Swiss gold referendum, we said that there still "is the question of what happens to the tension in the gold swap market: as noted last week, the 1 Month GOFO rate had tumbled to the most negative in over a decade. It was not clear if this collateral gold squeeze was the result of Swiss referendum overhang or due to other reasons. The market's reaction on Monday should answer those questions."
Well, a few hours ago we got the GOFO update for the "day after" and the answer is clear: it wasn't fear of the Swiss referendum after all because the 1 Month GOFO just crashed even deeper into negative territory with the entire curve through 6M now red, and with 12 month GOFO just 0.6 bps away from negative for the first time. At this rate, tomorrow's update will suggest that big institutions expect the gold swap shortage to persist through the end of 2015!
Also, judging by the gold reaction, which is about $50 from the overnight lows, someone else appears to have noticed that the rather shocking shortage of synthetic gold among institutions, which is finally seeping through into that whole "price discovery" process, where supply and demand actually matter.

Bottom line: whatever caused the record scramble for rehypothecated gold, it wasn't fears about the outcome of the Swiss referendum. Something else spooked the precious metal a month ago, and as seen on the chart above, things have only gotten progressively worse since then.
Source: LBMA"

at http://www.zerohedge.com/news/2014-12-01/what-happened-gold-correlation

What Happened To The Gold Correlation?

"Submitted by Jim Quinn via The Burning Platform blog,
The correlation between gold and the national debt was clear for 13 years. It made perfect sense in a free market. You can’t print more gold. It is a relatively scarce metal that has represented wealth for centuries. Fiat currency can be printed at will by corrupt bankers and politicians. Every paper currency ever created eventually reached its intrinsic value of ZERO, as human beings always take the easy way in attempting to create wealth.



So what happened in 2013? The national debt has gone from $16.5 trillion to $18 trillion, but the price of gold has dropped from $1,750 to $1,200. Is gold no longer a store of value? Is creating $2.5 billion per day in new debt now the path to long term prosperity and wealth accumulation? If gold is no longer insurance against the corrupt machinations of bankers and politicians, then why are China and Russia accumulating as much physical gold as they can get their hands on?
There seems to be only one logical explanation for the abrupt break in the correlation between gold and the national debt. The free market has been manipulated to artificially suppress the price of gold. A rising gold price reveals the inflationary monetary policies of the Fed and the outrageous spending of politicians. The Fed and their owners on Wall Street, with the approval of their captured political hacks in D.C., are using the paper markets, derivatives, and lack of market transparency to keep the price of gold from rising.
The bankers are winning for now. Can they suppress the price of gold forever? Can they prop up the stock market forever? Does history provide even one example of a fiat currency that did not ultimately reach its true intrinsic value?
Are you going to bet on Grandma Yellen or gold?"

at http://www.zerohedge.com/news/2014-12-01/what-happened-gold-correlation

Silver Soars 17% From Intraday Lows: Biggest Swing On Record; Gold Tops $1210 (+$70 Off Lows)

"Silver is up over 17% from its intraday lows today - this is the biggest positive swing since our data began. All the previous major swings have been downshifts, most recently in September 2011 (-22% and -18% over 2 days). Volume is very high also. Gold is back above $1,210,up over $70 from its intraday lows...

The biggest intraday positive swing on record... ($16.82 is next test for SIlver at 50DMA)

And gold and silver are exploding... (gold has broken above its 50DMA at $1205)

Silver & Gold are back above pre-OPEC decision leak levels...

at http://www.zerohedge.com/news/2014-12-01/silver-soars-17-intraday-lows-biggest-swing-record-gold-tops-1210-70-lows

We Are Closing In On Absolute Panic In The Gold Market

"On the heels of the news that more European central banks are coming under enormous pressure to repatriate their gold held abroad, today Egon von Greyerz said we are closing in on absolute panic in the gold market.  Below are his comments about the stunning ramifications of what is transpiring.

Greyerz:  “Eric, I think 2015 will be the year when the world finally discovers that the emperor has no clothes because there is a total disconnect between reality and financial markets around the globe.  We have stagnant growth and there is no net investment anywhere in the West, and there is no investment in infrastructure in the West.  Private debts are at record highs and public debts are even bigger, and none of this will ever be repaid.  This is the backdrop even as financial markets hit new all-time highs...."

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/11/28_We_Are_Closing_In_On_Absolute_Panic_In_The_Gold_Market.html

Historic & Unprecedented Events Unfolding In The Gold Market

"Today one of the wealthiest people in the financial world spoke with King World News about the historic and unprecedented events that are now unfolding in the gold market.  Rick Rule, who is business partners with Eric Sprott, also discussed why other countries becoming so concerned that the U.S. gold is gone, and why this is sparking panic on the part of some countries to get their gold back before all hell breaks loose.

Eric King:  “Rick, you’ve heard the news about Marine Le Pen sending the letter to the French central bank demanding their gold be repatriated back to France, and to also put a halt to any future gold sales.”

Rule:  “I personally think that having control of one’s own gold is a prudent thing to do.  The topic of repatriating gold is getting a lot of play in Europe as a consequence of the Swiss referendum, which you reminded me is coming up on Sunday.

 

And I think there is an undercurrent, an intelligent undercurrent frankly, of voters in Europe, particularly older voters, who remember that times aren’t alway good.  Who believe this (gold) is part of their national patrimony, it’s part of their wealth, why should we store it in a repository that doesn’t subject itself to an audit?  Why don’t we keep it ourselves?...."

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/11/29_Historic_%26_Unprecedented_Events_Unfolding_In_The_Gold_Market.html