It makes logical sense that China would understate its gold aspirations. If you had the means to acquire hundreds, or even thousands, of tons of gold, you’d want to do so as stealthily as possible in order to avoid tipping off the market. If your strategic objective was to dramatically boost gold reserves over a period of several years, you wouldn’t want to see the price rise – at least not while you’re still accumulating. And if you had no ethical qualms about interfering in the market, you’d want to rig prices lower so you could obtain more ounces. Chinese officials are more than willing to manipulate markets, whether through subterfuge, deceit, or outright force.
The lessons of ignoring history are likely to be learned once again... the hard way.
If you were a shareholder of a Greek bank, you wouldn’t lose sleep over your relationship with your regulator. In that context, the statement of the 12 July Euro Summit may have come as a shock—particularly the bit about the new program for Greece having to include "the establishment of a buffer of EUR 10 to 25bn for the banking sector in order to address potential bank recapitalisation needs and resolution costs." You could be forgiven for thinking—where did that come from?
As the strong dollar prices out the South American buyers who have been largely responsible for Miami's booming condo market, developers look East for a savior.
"...the 'Ice Age' of low rates and low growth for a long time – as predicted by many analysts and economists – won’t happen. Instead, a crisis will cause a crash on Wall Street. The banks will go broke. The credit system will seize up. People will line up at ATMs to get cash and the cash will quickly run out. This will provoke the authorities to go full central bank retard. They will flood the system with “money” of all sorts. The ice will melt into a tidal wave of hyperinflation."
Jim Rogers: China is The Future, Whether We Like it or Not. What China Means for the World. If North and South Korea Unite Japan will suffer much. Ideas for investment in Myanmar and North Korea.
The morphing of “terrorism” and “domestic dissent” into an all encompassing and convenient category known as “domestic terrorists” or “domestic extremists” has been a long time coming. It has always been our contention, and continues to be, that the oligarchs who have funneled all of the wealth to themselves since the 2008 banker bailouts know exactly what they are doing. They also know that it will eventually result in severe domestic unrest during the next cyclical downturn. As such, the agenda has been to utilize the entirety of the intelligence-industrial-military complex created by the “war on terror” against the domestic population once it recognizes how badly it has been looted.
Remember when evil North Korean hackers were blamed by everyone in the administration for penetrating the firewall of one of the wealthiest, most sophisticated, most secretive multi-national corporations in what now everyone realizes was an epic publicity, not to mention, punking stunt? Well, now that Kim Jong-Un has served his purpose, and the Interview has generated far more revenue than it would have otherwise (but not before North Korea got to troll the US, showing it too has lost all respect for the leader of the free world after it called Obama "A monkey in a tropical jungle") it is time to milk The Interview for some more propaganda talking points. And sure enough, here comes the Seattle-based cyber security firm Taia Global, which according to the NY Daily News as cited by the Mail has analyzed the "data" and concluded that not so Lil' Kim was right (the FBI was wrong) and it wasn't North Korea after all. So who was it? Why the evil Russians of course.
We’ve been keeping the long lost idea of our long lost society alive by squeezing our own children wherever we can, and telling them that if they only work hard enough, they can be whoever they want to be. But they can’t, that notion is also long lost. When you keep home prices artificially high, homeowners don’t suffer as much, even if they bought at insanely high prices, but the suffering is switched to potential buyers, who remain just that, potential, while they live in their mom’s basements for years. A surefire way to kill a society while everyone’s eagerly awaiting the growth that is just around the corner and will forever remain there. Take it from your kids. Take it from somewhere else in the world. And that’s where we’re now passing a barrier: there’s no-one to take it from anymore.
- "Soaring consumer confidence" - How the Economy Is Stoking Voter Anger at Incumbent Governors (WSJ)
- Euro zone deflation worries shield German Bunds from upbeat Fed (Reuters)
- Greece’s Euro Dilemma Is Back as Minister Sees Volatility (BBG)
- Ukraine gas supplies in doubt as Russia seeks EU payment deal (Reuters)
- Sterling Lads Chats Show FX Traders Matching Fix Orders (BBG)
- NATO Tracks Large-Scale Russia Air Activity in Europe (WSJ)
- U.K. SFO Charges Ex-Tullett Prebon Broker in Libor-Rigging Probe (BBG)
- Jerusalem on edge after shooting of rabbi (FT)
- Israeli police kill Palestinian suspected of shooting far-right activist (Reuters)
- Samsung seeks smartphone revamp to arrest profit slide (Reuters)
The surge in foreigners buying up U.S. real estate has been well documented in recent years. Of all this buying, no nation has demonstrated a bigger increase in purchases than China. In fact, it is estimated that 24% of all foreign purchases of domestic real estate this year have come from China, up 72% from last year. In some California communities, 90% of real estate buyers are from China. Yes, 90%. Naturally, many of them are buying multi-million dollar homes in “all cash” transactions. Well it appears that one of those communities is the 57,000 person Los Angeles suburb known as Arcadia. The suburb had a relatively insignificant Asian population of 4% in 1980, but it is now 59%.
We have been discussing the widespread belief in "the narrative of central bank omnipotence" for a number of months (here and here most recently) as we noted "there are no more skeptics. To update Milton Friedman’s famous quote, we are all Bernankians now." So when Saxobank's CIO and Chief Economist Steen Jakobsen warns that "the mood has changed," and feedback from conference calls and speaking engagements tells him, there is a growing belief that the 'narrative of the central banks' is failing, we sit up and listen.
Maybe what we want and what we need has been confused. Maybe the thin veneer of ebullient hollow markets has been confused for the real activity of real companies. Maybe the theatre of a Wise Man with an Answer has been confused for intellectually honest leadership. Maybe theoretical certainty has been confused for practical humility. The problem with sparking renewed economic growth in the West is that domestic politics in the West do not depend on economic growth. What we have in the US today, and even more so in Europe (ex-Germany), are not the politics of growth but rather the politics of identity.
“At This Point You Just Have to Laugh”. In every important respect, the Fed and the ECB and their brethren are no longer central banks at all. They are Ministries of Markets, no different from a Ministry of Industry or – even more eerily similar – the Ministry of Culture you would find in most European governments. At this point the Narrative hegemony is complete. There’s no longer even a cursory bow to the idea that fundamentals matter. So I’m calling a top. Not a top in markets, because I honestly have no idea what’s going to happen next. But I’m calling a top in the Narrative of Central Bank Omnipotence because it has, in fact, reached its asymptotic limit of influence and belief.
- Global stocks bounce on sign ECB could launch ABS program (Reuters)
- Putin unveils Ukraine ceasefire plan, France halts warship (Reuters)
- Poroshenko Flummoxes Investors With About-Face on Truce (BBG)
- No Free Lunch for Companies as IRS Weighs Meal Tax Rules (BBG)
- Turkey Struggles to Halt Islamic State 'Jihadist Highway' (WSJ)
- Lego Becomes World's Largest Toy Maker on Movie Success (WSJ)
- U.N. says $600 million needed to tackle Ebola as deaths top 1,900 (Reuters)
- Goldman Sachs Named 'Stabilization Agent' for Alibaba Stock Offering (WSJ)