Only one question matters for global investors - Where is the helicopter? Helicopter money will be raining from the skies in Japan, the Eurozone, the UK and even in the USA. This form of reflation will likely work and in due course work too much. Few things are binary in investment, but this huge decision to be taken in Berlin is the biggest binary event for investors this analyst has yet come across.
In the face of a clear lack of trust in Japanese leadership, local investors are buying gold to store in Switzerland. The reason: they are increasingly worried about confiscation which is why they are storing it half way around the globe. The number of buyers jumped 62% in the first six months from the second half of 2015, Atsuko Sato Whitehouse, head of Japanese markets at the London-based investment service, said this week.
“The government is allowing speculation by providing cheap financing,” Andy Xie exclaimed, China “is riding a tiger and is terrified of a crash. So it keeps pumping cash into the economy. It is difficult to see how China can avoid a crisis.”
"We're dealing now in very early days a crisis which has got a way to go. If we went back on the gold standard and we adhered to the actual structure of the gold standard as it exited prior to 1913, we'd be fine. Remember that the period 1870 to 1913 was one of the most aggressive periods economically that we've had in the United States, and that was a golden period of the gold standard."
There is one chart that shows that underneath the placid surface of the S&P not all is well. The chart is the following, and demonstrates the substantial recent selloff in US bank stocks, which have been a near-flawless 'canary in the coalmine' ahead of major market inflection points, and which have successfully predicted most major crashes inthe past several decades.
A defining characteristic of socialism in all its forms in all places and at all times is a relatively small political elite (and its “private sector” cronies) that lives lavishly by plundering its population, destroying its economy, imposing a regime of equality of poverty and misery; and turning almost everyone into a dependent on the state for survival. The latest glaring example of the disgusting and immoral corruption of socialism’s one percenters is Venezuela, a country that has “long been the darling of the [socialist] Left."
"If ever there was a time to invoke the Havenstein experience, it is now.... We should be invoking Havenstein to identify the present flaw in institutional thinking around current monetary policy, specifically negative rates. In other words, the lesson here is that, unfortunately, people believed in the efficacy of a completely irrational policy because it was put in place by a qualified and experienced policymaker- this instead of questioning the common sense merit of its possible outcome."
Once a nation no longer produces essential goods and services, and depends on financial games or commodities to pay for industrial goods and food produced elsewhere, it becomes vulnerable to a collapse in the financial games and the commodity markets that made it all too easy to succumb to de-industrialization.
Extreme shortages of food and power continue to ravage the country of Venezuela, and ordinary people have been paying the price. With triple-digit inflation, that “price” is expected to continue to soar even higher. Even scarier is the estimated pace of acceleration – by 2017, the IMF expects Venezuelan hyperinflation to climb to a whopping 1,642%. Our brains have trouble computing numbers of this magnitude, so we created today’s infographic to put things in perspective.
Less than a month ago, when looking at Nigeria's deplorable economic and reserve situation, we predicted that "Nigeria Currency Devaluation Looms As FX Forwards Crash To Record Lows." Ealier today this prediction came true when Nigeria’s central bank finally threw in the towel when it announced that the it will allow the Naira exchange rate to be market-driven, setting the stage for a devaluation of the currency, and unleashing the latest bout of hyperinflation.
"We want to pull out the physical gold... We want to take this gold and we want to store it. We believe that having the physical gold in the vault makes a lot more sense than selling it at these prices. Gold is ready to move. We believe it’s going to continue to rise... we’re going to be storing our gold and holding it for the long-term."
The level of Chinese cross-border M&A chasing after US targets is literally off the charts. Notably, China has accounted for 26% of global cross-border activity YTD, which is nearly 3x higher than the next highest year. At $28 bn YTD, US-inbound deal flow from Chinese acquirers is already a record level and nearly 2x last year’s volumes
"China and other countries do not want to be in a situation where all their international assets are in effect dependent on the US. Of course the US would not want to renege on its debts, but if some awful conflagration occurred, then all China’s assets in the US might be annulled."