For quite some time, we have been predicting that the Russians and Chinese will, at some point, bring an end to the petrodollar system that has virtually guaranteed the US the position of having its currency be the world's default currency. This position has allowed the US, in recent decades, to go on a borrowing and currency-printing spree, the likes of which the world has never seen. But now, the US is broke, and its stature as the biggest boy has begun to wane. The other kids in the schoolyard are playing smart, whilst the US is still playing tough... and it's no longer working... The US is at war with China and Russia. It's an undeclared war, and it's monetary warfare, not military warfare.
There has been no forward progress in US hourly compensation over the last half century. How it is possible that the world’s richest and most technologically advanced economy ever, operating during a 50-year period that included the invention of the Internet … the triumph of capitalism in China and Russia … and a landing on the moon – that is the most bountiful half-century in human history – failed to make its most important component parts better off. And at the bedrock level, we find the explanation: Fed policies are dangerous claptrap.
Senior NSA Executive: NSA Started Spying On Journalists in 2002 … In Order to Make Sure They Didn’t Report On Mass SurveillanceSubmitted by George Washington on 06/14/2014 01:46 -0400
He also DEMOLISHES Intelligence Agencies’ Excuse for 9/11, Confirms They're Recording Our CONTENT, Explains They've Got "Dataddiction" ... and Confirms We're Living In a Police State
With the housing purchase market for everyone but the wealthiest stagnating (confirmed by today's sliding "plans to buy a home" indicator), forcing Americans to scramble for rental properties and pushing residential asking rents to fresh record high quarter after quarter, the same can not be said for the commercial sector. In fact quite the opposite: according to the WSJ the owners of the towering 3.1 million square foot One World Trade Center, which at last check was 55% leased, have been forced to cut asking rents by 10% from 75% to $69. Why? "The market's not there," said Mr. Durst, whose Durst Organization bought a stake in the tower from the Port Authority in mid-2011. "When we started in 2011, everybody expected the economy to take off, and obviously that hasn't happened."
Do not look at this chart if you remain of the opinion that everything is fine in the world. For the 3rd time in the last 4 months, world trade volumes dropped. The 0.5% fall in March - it must have been weathery all over the world? - continues the biggest plunge in global trade since May 2009. As WSJ reports, exports from developing economies in Asia recorded the largest decline, a drop of 4.5%. Central and Eastern Europe was the only region to record a rise in exports as the decline in trade flows is consistent with other evidence that suggests the global economy got off to a weak start this year. So, $12 trillion of global money printing and world trade is unable to sustain growth...
- The Fed can't print trade? World Trade Flows Fall in First Quarter (WSJ)
- PBOC’s Zhou Says China May Have Housing Bubble in ‘Some Cities’ (BBG)
- ECB's Weidmann - Reviving ABS market not task for central bank (Reuters)
- LOL: Fitch upgrades Greece by a notch to 'B'; outlook stable (Reuters)
- LOL x2: Spain Sovereign Debt Rating Upgraded by S&P (BBG)
- China Will Vet Tech Firms After Threatening U.S. Retaliation (BBG)
- US to claim victory over China in WTO car dispute (BBG)
- Obama urges Democrats to vote in midterms, attacks Republicans (Reuters)
- U.S. Military Pushes for More Disclosure on Drone Strikes (WSJ)
It is not too early to ask how the present US business cycle expansion, already more than five years old, will end. The history of the last great US monetary experiment in “quantitative easing” (QE) from 1934-7 suggests that the end could be violent. Autumn 1937 featured one of the largest New York stock market crashes ever accompanied by the descent of the US economy into the notorious Roosevelt Recession. As we noted previously - it's never different this time...
As Putin warned earlier in the week, they do not see the effectiveness of sanctions; but it seems he had something else in mind. By rolling back informal limits on Chinese investment, Putin has opened the door for significant capital inflows from his new best friend... and China has already agree to increase investment. While Putin is careful to note that the Chinese will not be allowed to invest in gold or diamond mining, or hi-tech projects, Russia hopes to lure cash from the world’s second-biggest economy into industries from housing and infrastructure construction to natural resources. Chinese President Xi Jinping and Russian President Vladimir Putin will meet in Shanghai May 20/21 and Chinese officials have already confirmed bilateral cooperation in the areas of investment and finance has made major progress as local currency settlement in two-way trade increases. Forget sanctions, just remove the US from the world trade equation...
...What’s left for the Empire of Chaos is to pray for chaos to keep spreading across Ukraine, thus sapping Moscow’s energy. And all this because the Washington establishment is absolutely terrified of an emerging power in Eurasia. Not one, but two – Russia and China. Worse: strategically aligned. Worse still: bent on integrating Asia and Europe. So feel free to picture a bunch of Washington angry old men hissing like juvenile delinquents: “I don’t like you. I don’t want to talk to you. I want you to die.”
Why does man have to go one better than everyone else every time? As soon as the biggest, the tallest, the highest, the something-est gets built and made, then it has to be toppled by something that is even bigger. One-upmanship is what man does best at times; going that little bit further, whether it be for good or for bad.
- Ukraine's leaders say have U.S. backing to take on 'aggressors' (Reuters)
- Goldman Sachs Stands Firm as Banks Exit Commodity Trading (BBG)
- Obama reassures Japan, other allies on China as Asia trip begins (Reuters)
- China Challenges Obama’s Asia Pivot With Rapid Military Buildup (BBG)
- Google’s Stake in $2 Billion Apple-Samsung Trial Revealed (BBG)
- No bubble here: Numericable Set to Issue Record Junk Bond (WSJ)
- 'Bridgegate' scandal threatens next World Trade Center tower (Reuters)
- Supreme Court Conflicted on Legality of Aereo Online Video Service (WSJ)
- Barclays May Cut 7,500 at Investment Bank, Bernstein Says (BBG)
Another quarter, and another attempt at predicting the future by the people whose predictions have become the biggest butt of all economics jokes, even more so than Paul Krugman columns. We are talking, of course, about the IMF's World Economic Outlook update.
As he visited clients around the nation, JPMorgan CIO Michael Cembalest noted a number of questions repeated... why can’t the US spend more on infrastructure? why can’t the US spend more on worker retraining? why is less money being spent on training, employment and related social services? why is energy spending falling? The answer, ne explains below, to all these questions is the same: these categories are declining since they are being squeezed out by the inexorable rise in entitlement payments.
The stock market really was rigged... “It’s 2009,” Katsuyama says. “This had been happening to me for almost two years. There’s no way I’m the first guy to have figured this out. So what happened to everyone else?” The question seemed to answer itself: Anyone who understood the problem was making money off it...
International discord over Ukraine does not bode well for the settlement of differences over the IMF’s future. Though the G7 is excluding Russia from its number, in retaliation for its action in Crimea, this does not amount to isolating Russia. There has been no suggestion that Russia be excluded from the G20. The USA and its allies have suspected that several other G20 members would not stand for it. This suspicion was confirmed yesterday when the BRICS foreign ministers, assembled at the international conference in The Hague, issued a statement condemning ‘the escalation of hostile language, sanctions and counter-sanctions’. They affirmed that the custodianship of the G20 belongs to all member-states equally and no one member-state can unilaterally determine its nature and character. In short, their statement read like a manifesto for a pluralist world in which no one nation, bloc or set of values would predominate.