Archive - Aug 31, 2014 - Story

The entire Ukraine conflict could be resolved tomorrow morning if Kiev, and its western support, would pledge to stop waging war on the Donbass. And give it a separate status, either within Ukraine or in a separate state. After half a year+ of warfare, how else could you resolve this crisis? Only through more bloodshed, that’s how. But our western leadership is simply too trigger happy for comfort.... These clowns are dragging us into war. And yes, maybe it would be a good idea for you to tell them that you don’t want them to. Before your kids, or their friends, their neighbors, start dying in some far away ugly theater they should never have been part of. Is peace impossible in Ukraine today? No. Not at all. But it is as long as the west keeps its hopes for conquering the Donbass alive. It should have known that from the start, and perhaps it did, and started this crusade anyway, because the grand prize it’s after is Russia itself. Over our dead bodies.

A record-breaking surge in monthly credit creation and a trillion Yuan of QE-lite was enough to provide a glimmer of hope into the tumbling Chinese economy for one or maybe two months but with the real estate market continuing to free-fall, it should be no surprise that China's PMIs finally catch down to the erstwhile reality simmering under the surface in the ultimate centrally-planned economy. China's official government PMI dropped from 30-month highs, missed expectations and the early month flash print, to less exuberant 51.1 reading (with Steel industry new orders totally collapsing) with both medium- and small-companies printing contractionary sub-50 levels. Then (after Japan's PMI beat - of course it did as hard data crashes worst on record), HSBC China PMI also missed, printing a slightly expansionary 50.2 Showing, as BofA warns "the two PMIs both show that the current recovery is relatively weak and choppy..." and RBS adds "we expect the government to interpret such an outlook as challenging its growth target and to take more, and more significant, measures to support growth."

France is its own worst enemy. It believes in old virtues and ideas from a time gone by. Dirigisme, the French version of socialist capitalism, has failed. It’s time for a 21st century revolution in France.

The enemy of your enemy is your... frenemy; and so it is across the Middle East as the WSJ notes the spread of The Islamic State has united many parties once at odds with each other to become 'strange bedfellows'.

The US is moving closer to alienating key regional allies (Egypt, Saudi Arabia, and the UAE) in order to support Turkey’s and Qatar’s objectives in Libya, without defining the strategic goals for the US and the West.

September is the hottest month of the year for gold prices, rising on average 3% over the past 20 years. As the yellow metal tests hovers off 2-month-lows, Bloomberg notes that "Indian jewelers and dealers will be stocking up in the coming weeks," ahead of the festival period, which runs from late August to October (andis followed by the wedding season) when bullion is bought for part of the bridal trousseau or in jewelry form as gifts from relatives. As GoldCore's Mark O'Byrne notes, "a lot of traders are aware of this trend towards seasonal strength... They tend to buy and that creates momentum."

For close to 300 years, inflation in the US remained very subdued. Small spurts occurred around major wars (Revolutionary, Civil, WW1, etc), but after each, inflation quickly trended back down to its long-term baseline. If you lived during this stretch of time, your money had roughly the same purchasing power your great-grandfather's did. That is, until the "Nixon shock" in 1971, when the dollar's remaining ties to gold were severed. Then inflation exploded. And the inflationary moon-shot has continued since, up to present day. So, we've become used to a system in which our money loses purchasing power over the years. For anyone aged 50 or younger, it's pretty much all we've ever known. But it doesn't have to be this way.

Curious what the political positions are of the various, and all too numerous some would say, religions and churches in America? This new graph, courtesy of Tobin Grant, maps the ideologies of 44 different religious groups using data comes from Pew’s Religious Landscape survey. This survey included 32,000 respondents. It asked very specific questions on religion that allow us to find out the precise denomination, church, or religion of each person.

As the weekend's celebration of 'labor' in America continues, the following cartoon seemed to sum it all up perfectly...

If Japan’s results and programs hold any true difference, it is only that they are further down the same road than the rest of us. As Japanification continues in the US and Europe, we are gaining good observations about what lays ahead until the political will to use that same textbook time and time again is exhausted, or, more likely, removed.

Vladimir Putin, who has repeatedly said that he does not favor the break-up of Ukraine - but only greater autonomy for the East, appears to have changed course rather dramatically today. In a speech broadcast on Russian TV, the Russian leader stated "we need to immediately begin substantive talks... on questions of the political organisation of society and statehood for southeastern Ukraine." As The Washington Post reports, use of the word "statehood" reflects a major shift in Kremlin policy towards 'Novorossiya' - it would be a direct challenge not only to Kiev but also to Western European nations and the United States, which have been trying to force Moscow to back down. While not directly addressing the latest round of sanctions chatter, Putin concluded, perhaps ominously, "they should have known that Russia cannot stand aside when people are being shot almost at point-blank."

Probably the 'oddest' headline of the day but in yet another show of disdain towards US military might, the Islamist militia group known as "Dawn Of Libya" has 'secured' an annex of the U.S. embassy in Tripoli. As Reuters reports, the United States evacuated its embassy in Tripoli on July 26, driving diplomats across the border into Tunisia; but a YouTube video showed the breach of the vacated diplomatic facility by an armed group, with fighters seen milling around a swimming pool. A rebel takeover of the compound would now deliver another symbolic blow to U.S. policy toward Libya, which Western governments fear is teetering toward becoming a failed state.

A Ukraine military spokesman has confirmed that some sailors were killed and more injured when 2 Ukraine Coast Guard cutters came under attack by artillery from onshore near the village of Bezimenne (close to the Russian Border). This is believed to be the first such incident since the conflict began.

As President Obama prepares to unleash his new 'strategery' to deal with ISIS, Syria, Putin... and so on, we thought a subtle reminder of the real cost of war was prescient...

The global economic downturn of 2008, in particular its monetary facet, readily invites comparison between the troubles of the modern world and those of the Roman Empire; just as Western currencies have declined precipitously in value since their commodity backing was removed in stages starting roughly a century ago, Roman currencies were also troubled, and present a cautionary tale. The Roman coin in use through most of the empire was the denarius, which demonstrated a persistent decline in value, starting from the time of transition from Republic to Empire, and continuing until its decimation during the Crisis of the Third Century AD. Although efforts by Diocletian taken after the monetary collapse are commonly associated with Roman economic reform, there were other efforts by earlier, lesser known emperors that suddenly and unexpectedly improved the silver content and value of the denarius. Firsthand accounts and archeological findings provide sufficient detail to allow examination of these short, if noteworthy, periods of voluntary restorative policies – and their architects.