Archive - Jun 18, 2014

Well that didn't take long. Home prices are not the only thing surging in Britain as Reuters reports British spot wholesale gas prices climbed over 7% after Ukraine and Russia failed to agree on the price of future gas deliveries. Britain gets around 5% of its gas from Russian sources and a mild winter and spring have prompted utilities to inject more gas into storage than usual. One analyst notes "as yet flows through Ukraine to Europe have not been disrupted but the market has become increasingly concerned that they will," and now, following the explosion in the largest gas transit pipeline in Europe, disruptions have begun.

When it comes to the Benghazi embassy killings, the administration will kindly request that Americans focus all their negative energy on this (very bearded) face: the one belonging to the repetedly interviewed by US press alleged "masterming" of the deadly Benghazi attack, Ahmed Abu Khatallah (profiled previously) who for nearly two years was hiding in plain sight in Libya, and who has finally, after extensive Google searches on his current whereabouts by the CIA, been found and captured (a process CNN described as "a large group of trappers quietly snaring rare and dangerous prey") and is being brought back to the US to be waterboarded until Hillary Clinton's book sales finally pick up.

• Levin Hearing Ups Volume in High-Frequency Call to Action (BBG)
• Ukrainian President Fires Central Bank Chief (BBG)
• Argentina Plans Debt Swap (WSJ)
• Fed Decision Day Guide From Dot Plots To Exit Strategy (BBG)
• World Bank Economist: China May Face US-Style Financial Crisis (WSJ)
• Premier Li says no hard landing for China, expects medium to high growth (Reuters)
• Putin Talks Peace With Ukraine Leader After Gas Pipe Fire (BBG)
• Poll Shows Erosion in President's Support (WSJ)
• U.S. mortgage applications plunge in latest week (Reuters)
• Ex-Goldman director goes to prison, still owes $13.9 million fine (Reuters)

it is suddenly not fun being a Fed president (or Chairmanwoman) these days: with yesterday's 2.1% CPI print, the YoY rate has now increased for four consecutive months and is above the Fed's target. Concurrently, the unemployment rate has also dipped well below the Fed’s previous 6.5% threshold guidance, in other words the Fed has now met both its mandates as set down previously. There have also been fairly unambiguous comments from the Fed’s Bullard suggesting that this is the closest the Fed has been to fulfilling its mandates in many years. Finally, adding to the "concerns" that the Fed may surprise everyone were BOE Carney’s comments last week that a hike “could happen sooner than the market currently expect." In short: continued QE here, without a taper acceleration, merely affirms that all the Fed is after is reflating the stock market, and such trivial considerations as employment and inflation are merely secondary to the Fed. Which, of course, we know - all is secondary to the wealth effect, i.e., making the rich, richer. But it is one thing for tinfoil hat sites to expose the truth, it is something else entirely when it is revealed to the entire world.

Pensions throughout the western world are in peril due to the pension Ponzi scheme. Powerful forces of both the inflation caused by 100 years of the Federal Reserve debasing the dollar and a possible deflationary crisis due to massive levels of debt globally will be a double whammy which will hit traditional investments such as stocks, property and bonds. Without an allocation to gold, you are not going to have a comfortable retirement ?