Having recently explained (in great detail) why QE4 (and 5, 6 & 7) were inevitable (despite the protestations of all central planners, except for perhaps Kocharlakota - who never met an economy he didn't want to throw free money at), we found it fascinating that no lessor purveyor of the status quo's view of the world - Citigroup's chief economist Willem Buiter - that a global recession is imminent and nothing but a major blast of fiscal spending financed by outright "helicopter" money from the central banks will avert the deepening crisis. Faced with China's 'Quantitative Tightening', the economist who proclaimed "gold is a 6000-year old bubble" and cash should be banned, concludes ominously, "everybody will be adversely affected."
The idea of a change towards a domestic consumption-driven economy is being revealed as a woeful disaster. You can’t magically turn into a consumer-based economy by blowing bubbles first in property and then in stocks, and hope people’s profits in both will make them spend. Because the whole endeavor was based from the get-go on huge increases in debt, the just as predictable outcome is, and will be even much more, that people count their losses and spend much less in the local economy. While those with remaining spending power purchase property in the US, Britain, Australia. And go live there too, where they feel safe(r). I fear for the Chinese citizen. Not so much for Xi and Li. They will get what they deserve.
"Time is now rapidly running out," warns The Telegraph's John Ficenec as the British paper takes a deep dive into the dark realities behind the mainstream media headlines continued faith in central planning. Sounding very "Zero Hedge", Ficenec warns that from China to Brazil, the central banks have lost control and at the same time the global economy is grinding to a halt. It is only a matter of time before stock markets collapse under the weight of their lofty expectations and record valuations.
Governments from around the world admit they carry out false flag terror. People are slowly waking up to this whole con job by governments who want to justify war. More people are talking about the phrase “false flag” than ever before.
The ongoing deterioration in fundamentals, economics and technicals suggest that risk currently outweighs the potential reward for now. With respect to the technical front, the ongoing deterioration in relative strength, momentum, and breadth, combined with a compression of price action, have only been witnessed at more important market peaks in the past. "Bull markets" do not die on their own. Their death is generally dictated by the onset of an unexpected catalyst that creates enough "panic selling" to spark a liquidation cycle. Does the current situation in China rise to such a level? Maybe. It is an issue we began discussing this past June, and there may be a danger in dismissing the issue too quickly.
Varoufakis Tells All: Tsipras Was "Dispirited" With "No" Vote, Referendum Was Meant As "Exit Strategy"Submitted by Tyler Durden on 08/05/2015 13:40 -0400
"I could tell [Tsipras] was dispirited. It was a major victory, one that I believe he actually savoured, deep down, but one he couldn’t handle. He knew that the cabinet couldn’t handle it. It was clear that there were elements in the government putting pressure on him. Already, within hours, he had been pressured by major figures in the government, effectively to turn the no into a yes, to capitulate."
"Ilias Zagoraios, the chief prosecutor of the Athens First Instance Court, has asked Greece’s cyber crime unit to investigate whether the public revenues service was hacked as part of an effort to create a parallel payment system under ex-Finance Minister Yanis Varoufakis," Kathimerini reports.
If Greece does find it has a legal basis to criminally charge Varoufakis with treason merely for preparing for a Plan B, then it brings up an interesting question: if Varoufakis was a criminal merely for preparing for existing the Euro, then comparable treason charges should also be lobbed against none other than Varoufakis' nemesis - Eurogroup president and Dutch finance minister Jeroen Dijsselbloem.
Chinese Gold reserves jump 604 tons from 1,054 tons last reported in 2009 to 1,658 tons. Many gold observers ask: "Is that it"? Since 2009 China has mined over 2,000 tons of gold and imported over 3,300 tons of gold through Hong Kong*. Where did it all go?
The high debt to GDP and the gross financing needs resulting from this analysis point to serious concerns regarding the sustainability of Greece's public debt. A very substantial re-profiling, such as a long extension of maturities of existing and new loans, interest deferral, and financing at AAA rates would allow to cater for these concerns from a gross financing requirements perspective, though they would still leave Greece with very high debt-to-GDP levels for an extended period.
"The International Monetary Fund has sent its strongest signal that it may walk away from Greece’s new bailout programme. Under its rules, the IMF is not allowed to participate in a bailout if a country’s debt is deemed unsustainable and there is no prospect of it returning to private bond markets for financing. The IMF has bent its rules to participate in previous Greek bailouts, but the memo suggests it can no longer do so," FT reports.
In the final act of what has become a modern Greek tragedy, lawmakers will now be forced to choose between "approving" what is effectively a German overthrow of the Greek government, or face the collapse of the banking system and an economic depression of unimaginable propotions.
"The idea was that with Greece out, Germany would be more likely to provide the financial support the eurozone needed because the German people would no longer perceive aid to Europe as a bailout for the Greeks. At the same time, a Grexit would be traumatic enough that it would help scare the rest of Europe into giving up more sovereignty to a stronger banking and fiscal union."
"Prove You're Not A False Prophet!"; Tsipras Lambasted At Fire And Brimstone European Parliament SessionSubmitted by Tyler Durden on 07/08/2015 08:11 -0400
Facing a new “deadline” to submit a viable proposal to EU creditors and keep Greece in the eurozone, Greek PM Alexis Tsipras faced friends and enemies at the European Parliament in Strasbourg on Wednesday, where there was no shortage of fireworks from both sides of the Grexit debate.