"We continue to think Greece has the potential to return to the headlines, and we do not rule out the prospect of “Grexit” returning... We note the more fragile European political environment (Dutch referendum, UK’s EU referendum, likely snap elections in Spain, key elections in France and Germany in 2017) compared to previous episodes, and the possibility that the increased noise around Greece could potentially influence the UK referendum on EU membership. Furthermore, the ongoing migration crisis in which Greece plays a central role is exacerbating tensions at both domestic and European levels."
The rules of the game are changing. Those stuck within the old paradigm of mainstream finance face huge threats to their retirement....and quite possibly even their current standard of living.
Under the auspices of "protecting clients from criminal activity," JPMorgan Chase has decided to impose capital controls on . As WSJ reports, following the bank's ATM modification to enable $100-bills to be dispensed with no limit, some customers started pulling out tens of thousands of dollars at a time. This apparent bank run has prompted Jamie Dimon to cap ATM withdrawals at $1,000 per card daily for non-customers. Of course, we are sure this is just another 'storm in a teacup' as why would anyone complain about a bank withholding people's money when they are assuredly tax evaders, terrorists, drug dealers and human traffickers.
We cannot be sure what shape the next crisis will take, although it seems likely that it will be yet another “deflation scare”, mainly caused by falling asset prices. However, we do know what the last crisis of the current system will look like. It will entail a crumbling of the public’s faith in fiat money and the institutions that issue and administer it.
It is our mission to rebut any mainstream article that spreads misinformation about gold and/or shows a gross misunderstanding of monetary history. Matt O’Brien argues in the Washington Post that a “gold-backed dollar would have been a much more volatile one” and that “[gold]…has nothing to do with the price of food or housing.“ We show in a few simple charts why Matt O’Brien’s arguments are misguided, misinformed and just plain wrong.
With all of Europe and the U.S. closed for holiday, what little market action there was overnight came out of Asia, where China once again was engaged in its last hour "National Team" market manipulation, which saved the SHCOMP from a red close after the now traditional last hour buying spree pushed the Shanghai Composite from red on the session an hour before close to near the highs of the day.
Munich Re planning to store tens of millions of euros in bank notes in its vaults might be the start for a very slow bank run...
"If central banks do not achieve their medium-term inflation targets through NIRP, they may have to adopt other policy measures: looser fiscal policy and even helicopter money are possible in scenarios beyond QE and negative rates.
The financial world is growing increasingly crazy-looking. What is alarming is that central banks are brandishing these new tools without any viable evidence or theory that they will even work. This itself presupposes that central banks have any idea of what “work” might even mean in this brave new context. It used to be said, ‘Don’t fight the Fed’. Now as investors, if we want to protect our capital, we are all obligated to fight the Fed, and its international cousins, with whatever we have.
"We believe the epicenter of the problem is the Chinese banking system and its coming losses. Once analysts, politicians, and investors alike realize the sheer size of the impending losses and how they compare to the current levels of reserves, all focus will swing to the banking system."
Another "no brainer" bites the dust. Ferrari is halted limit down in Milan trading and is crashing in US trading - now down over 40% from its "successful" IPO day highs...
"Experience in other countries that have entered into this territory should sober you up on the likely economic and inflation impact. No country that has gone into negative rates has experienced major shifts in its growth and inflation profile – minor, yes; major, no. As a consequence every dip into negative rates has been followed by additional moves."
"... if the negative interest rate continues for longer or goes deeper, commercial banks may have to set negative interest rates on deposits, which would expand not only the tax on commercial banks, but also on depositors (households and companies). This could lead to a ‘silent bank run’ via a shift of deposits to cash (banknotes), which in turn damages the sound banking system by enlarging the leakage of funds from the credit creation mechanism in the banking system."
"You get the sense that there is a broader market issue here...Complacency about the risks of contagion from the weakest segments of high yield is reminiscent of sentiment regarding subprime debt in mid-2007."