Belgium

Good Thing Debt Doesn't Matter! </sarc>

While redistributive social spending in the US is indeed different from many other countries, the overall magnitude is actually greater (both proportionally and in absolute terms) in the US than in almost all other countries measured. One can argue that the way that the wealth is redistributed through public policy in the US is "wrong" or "suboptimal." But, to argue that there is less redistribution as a result of public policy in the US than elsewhere is simply wrong.

Where is the “hyperinflation”?

Based on the overnight market prints which are an oddly reddish shade of green, it took algos about 12 hours to realize that the reason they soared for most of October, namely hopes of an easier Fed which were launched with the terrible September jobs report and continued with increasingly worse US economic report in the past month, can not be the same reason they also soared yesterday after the announcement of a more hawkish than expected Fed statement which envisioned a stronger US economy and a removal of foreign considerations, which even more curiously took place on even worse data than the Fed's far more dovish September statement.

Complacency seemed ready to set back in, with Glencore stock recently rising as high as its recent equity offering price of 125p. And then today we noticed that not only is Glencore's CDS back above 700 bps, the widest it has been in three weeks, but that another mining company has fallen into the market's crosshairs, this time Belgium-based (with Zurich HQ) Nyrstar NV, Europe's largest refined-zinc producer, whose stock crashed the most since its initial public offering in 2007, while it bonds tumbled to a yield of 19%, suggesting a default may be imminent.

"[Putin] hopes that when its ally Iran re-enters the global oil and gas market, Russia will somehow share in the profits, perhaps through new pipelines across Syria. He also wants to stop the Saudis from establishing export routes in Syria. Now that Russian energy supremacy in Europe also is at stake, Putin's determination to resolve the Syrian conflict on his terms can only grow."

While to many Quantitative Tightening is a novel concept, the reality is that China (+ Euroclear) have been dumping Treasurys and liquidating reserves since January when total holdings peaked at $1.6 trillion last summer, and have since declined to $1.38 trillion. It means that China has sold a quarter trillion dollars worth of Treasurys in the past year, in the process offsetting what would have been about 25% of the Fed's QE3.

Much of the political thinking about violence in the United States comes from unfavorable comparisons between the United States and a series of cherry-picked countries with lower murder rates and with fewer guns per capita. This is, in turn, supposed to fill Americans with a sense of shame and illustrate that the United States should be regarded as some sort of pariah nation because of its murder rate. However, politically, historically, and demographically, the US has little in common with these nations.

As part of a global investigation into how much physical gold central banks have stored at what location and how much is leased out, we submitted the local equivalent of a Freedom Of Information Act (FOIA) request at the central bank of Belgium (NBB) to obtain information about the amount of Belgian official gold reserves, the exact location of all gold bars, the type of gold accounts NBB holds at the Bank Of England (BOE) and how much is leased out and to whom. The outcome of this research was not what we had expected...

A few years ago, in response to national outcry, the government of Venezuela took steps to fix this problem. There was too much death, too much crime. So they imposed strict gun control laws to stop the murderers and thieves. The end result? Violent crime actually increased. And Caracas is now one of the most dangerous cities in the world. But across the Andes is another city that used to be one of the most dangerous in the world - Bogota.

"The Saudi population, especially the younger people, are growing restless because they see what is happening in the world through social media of which they are among the highest users - that’s the only means they have to communicate. So the situation inside the country is also very fragile and the foreign policy conducted by the current regime is very perilous. It is only a matter of time because the Gulf States are ruled by oligarchies who maintain control through bribery and the sword. So this is a challenging time for the Gulf States despite all the public commentary suggesting they are immune to the uprisings."

Overnight we got a second confirmation of China's golden appetite, when the PBOC announced that China's official gold holdings had risen again in August, increasing by 520,000 troy ounces, or 16.2 tons (which is more than 3 times the entire registered gold inventory in the Comex vault system), and bringing the new total to 54.5 million ounces, or 1,694 tons of gold. In dollar terms, Chinese gold holdings rose from $59.2 billion at the end of July to $61.8 billion. The punchline: in a month in which China sold a record $107 billion notional in Treasurys, it had no qualms about rotating the sale proceeds into gold.

Neoliberal economics is blind to reality and serves to justify the destruction of the economic prospects of the Western World. It remains to be seen if Russia and China can develop a different economics or whether these rising superpowers will fall victim to the “junk economics” that has destroyed the West. With so many Chinese and Russian economists educated in the US tradition, the prospects of Russia and China might not be any better than ours. The entire world could go down the tubes together.

Europeans are caught between being compelled to help - on what is truly a humanitarian catastrophe - and dealing with the uncertain consequences of bringing in such a large number of people. Part of that anxiety relates to the fact that the majority of those migrants adhere to Islam, where its relationship with Europe has been uneasy for many centuries. However, framing the debate in religious terms is too simplistic and overlooks some important facts. Whatever your view is, one thing is clear: Europe will never be the same again.

The long awaited day is finally here by which we, of course, mean the day when nobody has any idea what the Fed will do, the Fed included. Putting today in perspective, there have been just about 700 rate cuts globally in the 3,367 days since the last Fed rate hike on June 29, 2006, while central banks have bought $15 trillion in assets, and vast portions of the world are now in negative interest rate territory.