International Monetary Fund

Whether it is in sympathy with the now relentless surge in the Shanghai Composite which tacked on another 2.44% overnight to close at a fresh multi-year high just shy of 4400, well more than double from a year ago, or because Mrs Watanabe was unable to read the latest Japan trade data whose first trade surplus in 3 years hinted that there will be no new easing by the BOJ any time soon, but overnight the Nikkei closed above 20,000 for the first time in 15 years, with "makers of chocolate, mayonnaise, potato chips and household appliances" helping lift the Tokyo market according to the WSJ. The now daily Asian euphoria however did not last long in the European session, and after opening higher, the Stoxx Europe 600 slipped into negative territory just an hour into trading, and was down 0.4% by midmorning, lead by a near 1% decline on Athens' mains stock index, which has since recouped losses stemming from the overnight report that the ECB is considering an up to 50% haircut on Greek bank collateral, a move that would wipe out the Greek financial sector with ease.

While the reality is that nobody has a clue what China's actual gold holdings are, the good news is that the answer is coming. As noted above, Chinese Premier Li Keqiang has asked the head of the International Monetary Fund to include China's yuan currency in its special drawing rights (SDR) basket.  If indeed China is serious about CNY inclusion in the SDR, it will finally have to reveal its cards, which would mean it finally will provide an update, with a 6 year delay, of just what its latest gold holdings are. As such, don't be surprised to wake up one morning to headlines blasting that Chinese gold holdings have gone up by 2x, 3x, 5x or (more x) since 2009, a long-overdue update which will catalyze the next major leg higher in the precious metal. 

We warned last week that capital controls were inevitable and it apears the first steps have been taken (very quietly):

*GREECE ISSUES DECREE: LOCAL GOVTS OBLIGED TO TRANSFER DEPOSIT RESERVES AT CENTRAL BANK

So, following the pension fund raid, the Greek government is now centralizing all Greek cash citing an “extremely urgent and unforeseen need.". One wonders if this is Krugman's "advice."

In a fiat currency system, perception is, by definition, everything. Paper money has no intrinsic value. So the people saving it and accepting it in exchange aren’t expressing faith in the money itself but in the competence and honesty — and power — of the institutions managing it. Let that faith erode and those slips of colored paper and ephemeral computer bits revert to their intrinsic value. And on the credibility front, the trends aren’t encouraging.

Hopes ran high among Europe's unelected bureaucratic oligarchy and the Troika of official creditors that the Greek government, after the ECB openly dropped hints of a Greek IOU currency in the immediate future, would finally relent over the weekend and admit that all of its promises to its voters were a lie and that the Tsipras government would finally pick up where the Samaras government left (and was booted) off. There was even a perfect venue: Washington D.C., where Varoufakis and Obama met for the first time just hours before. The hopes were promptly dashed after Greece, once again, said it would not "renege on election pledges to end austerity measures as creditors pressed for a compromise."

The science of economics has taken a decidedly wrong turn sometime in the 1930s. In the field of monetary science specifically, sober analysis has given way to broad-based support of central economic planning, with both policy makers and their advisors seemingly trying to trump each other with ever more lunatic proposals.

We've long argued that the implications of the shift away from a global economic order that has prevailed since the end of WWII are far reaching and may include the demise of what has largely been a unilateral political and economic system characterized by the dominance of US foreign policy and Western notions of politics and capitalism. Now, it appears as though de-dollarization and the end of US hegemony may have gone viral because, as The NY Times reports, a US “retreat” from the world order it has largely shaped was the unspoken topic de jour at this year’s spring meeting of the IMF and World Bank in Washington.

This may take you the entire weekend to digest, but if you are an unsecured creditor/lender (have a checking, savings or demand deposit account) to a euro zone bank, I would consider it your fiduciary responsibility to yourself to sit down and parse this piece with care and aplomb!

The endgame has indeed arrived. At the very least, the international elites seem to think success is within their grasp, for they now openly expose their own criminality. But they do so in a way that attempts to divert blame or to rationalize their actions as being for the "greater good." All signs and evidence point to what the IMF calls the "great global economic reset.”" The plans for this reset do not include U.S. prosperity or a thriving dollar.

• Fed Shies Away From June Rate Hike (Hilsenrath)
• Europe Stocks Fall Most in Three Weeks Amid Greece as Banks Drop (BBG)
• China Futures Tumble on Trust Curbs, Expansion of Short Selling (BBG)
• Oil slips below $64 as ample supplies weigh (Reuters)
• Fed officials lean all ways on rate hikes, data in focus (Reuters)
• Eurozone deflation eases in March (FT)

As we reported earlier, the former chief of the IMF Rodrigo Rato, who was succeeded in 2007 by another scandalous figure, Dominique Strauss-Khan, was recently put under investigation by Spanish authorities for money-laundering, benefiting from a tax amnesty to repatriate previously undeclared offshore funds. This is in addition to previous investigation into his role as chairman of Caja Madrid, the failed savings bank, and its successor Bankia. And, unlike every single JPM banker pretty much ever, moments ago Rato became the second former IMF head in several years (following DSK), to be placed under arrest.

Having generously (if not obliviously) stepped up to the plate to bail out Ukraine (with open-ended bond guarantees), US taxpayers are opening their wallets again - this time for Iraq. As Reuters reports, cheap oil has ravage Iraq's state finances just as the government faces rising military spending from the war it is waging against ISIS; and so it has decided to issue $5 billion in international bonds. However, Iraq is considering other ways to cover its budget deficit, including asking the IMF (i.e. US taxpayers) for relief funding and also requesting the controversial U.S. Export-Import Bank (US Taxpayers) finance the purchase of 10 planes from Boeing Co, which cost the government $500 million.

If you said these are all things that current or former IMF heads are or have been accused of, you are 100% correct.

"Greek officials have made an informal approach to the International Monetary Fund to delay repayments of loans to the international lender," FT reports. Knowing it faces the rather untenable choice between paying the IMF or paying public sector wages and pensions, Athens attempted to "shuffle" its payment schedule around to no avail. Yields on GGBs spiked as the now openly insolvent Greece stares into the drachma abyss. 

• Euro zone bond yields sink to historic lows (Reuters)
• Clinton Foundation to Keep Foreign Donors (WSJ)
• Russia says U.S. forced it to act on Ukraine (Reuters)
• Bankers to China's Rescue (BBG)
• Saudi Arabia Adds Half a Bakken to Global Oil Market in a Month (BBG)
• Valuations of Hong Kong's stock market operator go interstellar (Reuters)
• Switzerland Attracts Fewer Firms as Politics Hurt Business Image (BBG)