This is misguided and not in the U.S. national interest and could backfire spectacularly. After a period of relative calm, currency wars look set to escalate and will make owning gold important again in the coming months.
Even as the western media finally remembered over the weekend there was a Ukraine civil war going on following an advance by the Kiev army to retake some rebel strongholds in the Donbas region, with some curious what if anything Putin would do in retaliation, what Putin, or rather his envoy Sergei Lavrov were actually doing, was completely ignoring the Ukraine situation (where the West has long since conceded the loss of Crimea to the Kremlin) and instead focusing on securing the successful launch of the South Stream (remember: the second South Stream goes online, Ukraine becomes irrelevant). And since Russia already signed another historic agreement with Austria in June, which positioned the AAA-country (with some surprising emerging bank troubles subsequently) squarely against its fellow European peers, it was the turn of the other South Stream countries, namely Bulgaria.
Vladimir Putin commented at a German-Russian official function: “We value the accumulated potential of Russian-German relations and the high level of trade and economic cooperation. Germany, one of the European Union leaders, is our most important partner in enhancing peace, global and regional security.” We would contend that we are seeing a decisive shift in the political character of Eurasia as 'continental empires' are starting to challenge the monopoly of 'legal' international violence that the US has exercised for the last 25 years. Such struggles have the potential to become major regional problems, but what is intriguing is the emerging continental alliance between Russia and Germany - a combination of German industrial might and Russian raw materials and military strength would instantly create a colossus.
While the USA has been oddly quiet since Ukraine's President Poroshenko unilaterally ended the cease-fire, the Russians have not. This morning's "anti-terrorist" shelling of East Ukraine buildings stirred Russia's Prime Minister Medvedev to warn:
*MEDVEDEV SAYS POROSHENKO MADE MISTAKE ENDING CEASE-FIRE; PERSONALLY RESPONSIBLE FOR NEW DEATHS
*MEDVEDEV SAYS THERE MAY BE FULL FLEDGED GAS CRISIS BY FALL
Of course, Ukraine is 'fixed' - it must be: stocks are up. However, it appears a new round of violence (with little seeming room for negotiation) appears set to start as Ukraine moves ahead and Medvedev makes it clear there will be repercussions.
There are some out there in the economic world that believe that banknotes are detrimental to the health of the economy and that they are currently stifling the recovery of the markets. Their solution: burn the damn things and let them go up in smoke. Replace them with electronic money and then the central banks around the world will be able to do more than just providing alternatives that don’t work to revamping the financial markets and boosting economic growth.
Abe's honeymoon is over. Following nearly two years of having free reign to crush the Japanese economy with his idiotic monetary and fiscal policies - but, but the Nikkei is up - the market may have finally pulled its head out of its, well, sand, and after last night's abysmal economic data from Japan which saw not only the highest (cost-push) inflation rate since 1982, in everything but wages (hence, zero demand-pull) - after wages dropped for 23 consecutive months, disposable income imploded - but a total collapse in household spending, the USDJPY appears to have finally been dislodged from its rigged resting place just around 102. As a result the 50 pip overnight drop to 101.4 was the biggest drop in over a month. And since the Nikkei is nothing but the USDJPY (same for the S&P), Japan stocks tumbled 1.4%, their biggest drop in weeks, as suddenly the days of the grand Keynesian ninja out of Tokyo appear numbered. Unless Nomura manages to stabilize USDJPY and push it higher, look for the USDJPY to slide back to double digits in the coming weeks.
UPDATE: FIFA bites back and bans Uruguay's Luis Suarez for 4 months
As 12ET rolls around and USA's soccer team prepares to engage zee Germans with the goal of advancing to the FIFA World Cup's knockout stage, Bloomberg undertook an 'economic' face off to see just how the two powerhouse nations stack up. The result - a 4-0 win for Germany does not bode well for the soccer...
Putin Scores Another Historic Victory: Austria Signs South Stream Pipeline Deal In Defiance Of EuropeSubmitted by Tyler Durden on 06/25/2014 07:23 -0400
In the great chess-vs-checkers game, Putin just keeps steamrolling his clueless opposition.
An overview of the chess game being played out in Europe.
- The Man Who Broke the Middle East (Politico)
- Kerry presses Maliki as Iraq loses control of Syrian, Jordanian borders (Reuters)
- Hank Paulson takes on global warming next: The Coming Climate Crash - Lessons for Climate Change in the 2008 Recession (NYT)
- In Yellen We Trust Is Bond Mantra as Inflation Threats Dismissed (BBG)
- After port fraud, China's vast warehouse sector under scrutiny (Reuters)
- Draghi Says Unlimited Cash Through 2016 Is Rate Signal (BBG)
- Tapes Said to Reveal Polish Minister Disparaging U.S. Ties (NYT)
- CDC reassigns director of lab behind anthrax blunder (Reuters)
- BNP set to receive ban to transact in USD as part of $9 billion settlement (WSJ)
- GE Clears Last French Hurdle to Clinch Alstom Deal (BBG)
- Al Jazeera journalists jailed in Egypt, supporters stunned (Reuters)
- ISDA Asked to Rule If Argentina Credit-Default Swaps Triggered (BBG)
Liquefied natural gas (LNG) to Europe isn’t a get-rich-quick scenario for the impatient investor: It’s a long, strategic play for the sophisticated investor who can handle no small amount of politics and geopolitics along the way. When it comes to Europe, Russia’s strategy to divide and conquer has worked so far, but Gazprom is a fragile giant that will eventually feel the pressure of LNG. Robert Bensh is an LNG and energy security expert who has over 13 years of experience with leading oil and gas companies in Ukraine. He has been involved in various roles in finance, capital markets, mergers and acquisitions and government for the past 25 years. Mr. Bensh is the Managing Director and partner with Pelicourt LLC, a private equity firm focused on energy and natural resources in Ukraine.
Well this is awkward. A week after the Polish central bank was busted offering favors to the government (exposing its utter un-independence); the same Polish news magazine has obtained s ecret recording of Foreign Minister Radoslaw Sikorski saying that Poland's relationship with the United States was worthless. The Wprost news magazine said the recording was of a private conversation between Sikorski and Jacek Rostowski (finance minister) with such headlines as "you know that the Polish-US alliance isn't worth anything;" also describing Warsaw's attitude towards the United States using the Polish word "murzynskosc" - roughly translated as a negro slave - "It is downright harmful, because it creates a false sense of security ... Complete bullshit. We'll get in conflict with the Germans, Russians and we'll think that everything is super, because we gave the Americans a blow job. Losers. Complete losers." USA - making friends wherever they go.
Simple overview of the week ahead.
Fourth Largest Bulgarian Bank Seized After Bank Run: "Let's Not Tear Down Our House" Central Banker BegsSubmitted by Tyler Durden on 06/20/2014 10:57 -0400
The small, impoverished country of Bulgaria may not be in the Eurozone (even though its currency is pegged to the Euro), but it is in the European Union. Which is why we find it surprising that there has been relatively little mention that overnight the fourth largest Bulgarian bank, Corporate Commercial Bank (Corpbank) and which in recent weeks has made headlines due to the political exposure of one of its largest shareholders, was seized by the Bulgarian central bank following what Reuters reports was a run on the bank.
Putin's economic aide and the mastermind behind the Eurasian Economic Union, argues that Washington is trying to provoke a Russian military intervention in Ukraine, using the junta in Kiev as bait. If fulfilled, the plan will give Washington a number of important benefits. Firstly, it will allow the US to introduce new sanctions against Russia, writing off Moscow's portfolio of US Treasury bills. More important is that a new wave of sanctions will create a situation in which Russian companies won't be able to service their debts to European banks. Glazyev's set of countermeasures specifically targets the core strength of the US war machine, i.e. the Fed's printing press. Putin's advisor proposes the creation of a "broad anti-dollar alliance" of countries willing and able to drop the dollar from their international trade.... An anti-dollar coalition would be the first step for the creation of an anti-war coalition that can help stop the US' aggression.