en Watch Live: Draghi Speaks At Euro Parliament, Makes Case For More Easing <p>In today's only major risk event, at 3pm CET (9am ET) Mario Draghi will hold his quarterly hearing before the European Parliament, and his final scheduled appearance before next week’s monetary-policy decision, in which the ECB president will be pressed about his plans for stimulus withdrawal. And, as has been the case in recent months, Draghi will respond that while euro-area data has been improving (this week may show the strongest economic confidence in a decade and the lowest unemployment since 2009) Draghi can still point to consumer prices that are struggling to lift off.<br /><a href=""><img src="" width="500" height="281" /></a></p> <p>“Draghi will explain that the improvement in the economy is not sufficient at this point to make sure that the improvement in the inflation outlook is self-sustained,” said Philippe Gudin, chief European economist at Barclays <a href="">quoted by Bloomberg</a>. “We are still far from the point at which we could see inflationary pressures materializing.”</p> <p>At the same time, Draghi’s hearing at the European Parliament’s Economic and Monetary Affairs Committee is another opportunity to tout the euro area’s recovery, and the "favorable impect" of the ECB’s €2.3 trillion bond-buying program, which has ballooned the ECB's balance sheet to the biggest in the world.</p> <p>On the other hand, Draghi’s four-year inflationary campaign has so far failed to put price growth on a self-sustaining path toward the ECB’s goal of just under 2% and if anything, there are hints that the target is receding further into the future. Economists predict that data due Wednesday will show the inflation rate fell to 1.5 percent in May from 1.9 percent. More worryingly for the central bank, core inflation is slated to slow to 1 percent. Additionally, <strong>a key missing element in the ECB’s inflation mix is wages, </strong>which have been rising very slowly despite falling unemployment, even in countries like Germany where joblessness is at a record low.</p> <p>“We have discussed quite extensively why wage increases are relatively subdued, but in my view this is a matter of some time lag,” Governing Council member Ewald Nowotny said on Monday. “If the upswing gets more consolidated, we can expect higher wage dynamics, which means that also core inflation might get stronger.”</p> <p>And just like in the US, as many of the jobs created since the crisis are short-term or part-time, the labor market may have greater spare capacity than official measures suggest, leading workers to opt for more hours before higher salaries. A pick-up in real wages may have to wait until the beginning of next year, when many collective contracts will come up for re-negotiation.</p> <p>According to <a href="">Bloomberg</a>, that’s all reason for Draghi to stick to his rhetoric of patience and caution. </p> <p>“He’s not yet sufficiently confident on the durability of the inflation recovery, and there are few signs of an improving core-inflation outlook,” said Anatoli Annenkov, senior economist at Societe Generale in London. “I doubt his message will change much compared to recent appearances.”</p> <p>“I think he has to be quite dovish,” Peter Rosenstreich, head of market strategy at Swissquote, said on Bloomberg Television on Monday. “There’s growing expectation that inflation is building and that the time for unorthodox extreme monetary policy is now coming to an end.”</p> <p>Draghi's prepared remarks can be found <a href="">at the following link</a>, and the key highlights are below. As expected, despite the so-called recovery, Draghi is convinced that much more easing is necessary:</p> <ul> <li>DRAGHI SAYS AN EXTRAORDINARY AMOUNT OF MONETARY POLICY SUPPORT, INCLUDING THROUGH OUR FORWARD GUIDANCE, IS STILL NECESSARY </li> <li>DRAGHI SAYS EURO-AREA UPSWING IS INCREASINGLY SOLID</li> <li>DRAGHI SAYS DOWNSIDE RISKS TO GROWTH ARE FURTHER DIMINISHING</li> <li>DRAGHI SAYS SOME OF THE TAIL RISKS HAVE RECEDED 'MEASURABLY'</li> <li>DRAGHI SAYS EURO AREA STILL NEEDS VERY ACCOMODATIVE CONDITIONS</li> <li>DRAGHI SAYS ECB FIRMLY CONVINCED<strong> EURO AREA STILL NEEDS SUPPORT</strong></li> </ul> <p>Because recovery?</p> <p><em>Watch Draghi's speech live below</em></p> <p><iframe src="" width="500" height="281" frameborder="0"></iframe></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="1280" height="853" alt="" src="" /> </div> </div> </div> Barclays Business Central bank Consumer Prices Economy Economy of the European Union Euro Eurogroup European Central Bank European Parliament European Parliament’s Economic and Monetary Affairs Committee Eurozone Ewald Nowotny Germany Governing Council Group of Thirty Inflation Inflationism Macroeconomic policy Macroeconomics Mario Draghi Monetary Policy Monetary policy Money recovery Unemployment Mon, 29 May 2017 13:04:49 +0000 Tyler Durden 596873 at Italian Stocks Tumble, Yields Jump On Sudden Fears Of Early Elections <p>Despite a promise <a href="">last week </a>by Italian Industry Minister, Carlo Calenda, that Italy would not have early elections this autumn, Italian stocks have tumbled to one month lows and the Italian bank sector is down 3% in Monday trading, its biggest one-day loss in nearly 4 months, with traders citing rising risks that the euro zone's third largest economy could head to early elections in the autumn. </p> <p>The reason for the sudden concern is that in an <a href="">interview on Sunday </a>former Prime Minister Matteo Renzi suggested that Italy's next election should be held at the same time as Germany's, adding this made sense "from a European perspective." Germany will vote on Sept. 24, while Italian elections are scheduled for May 2018, but speculation is mounting that Italians could head to the polls in the autumn. Renzi, leader of the ruling center-left Democratic Party, told Italy's newspaper Il Messaggero that his party "would not ask for early elections, but is not afraid of them either".</p> <p><strong>After regaining the leadership of his PD party in late April, Renzi has favored early elections. </strong>He told Il Messaggero that it may be possible to reach an accord on a voting system modeled alongside Germany's proportional model, as suggested by former center-right prime minister Silvio Berlusconi. </p> <p>"In theory yes, but we must be cautious," Renzi said. "The German system would be a step forward in overcoming the current stalemate, but it's not a solution to all problems. Having a coalition in power is very risky."</p> <p>The possibility of a victory for the anti-establishment 5-Star Movement, which recent polls put neck and neck with PD at around 30 percent, has made Italy the biggest risk for the euro zone in the eyes of some investors.</p> <p>Commenting on the market's reaction to Renzi's statement, LC Macro Advisers' founder Lorenzo Codogno said that "the latest news out of Italy seems to suggest that a new electoral law is indeed in the making. <strong>The four major parties appear to converge towards the so-called German system, i.e. a purely proportional system with a 5 percent entry threshold</strong>." Quoted by Reuters, Codogno also added that "<strong>the risk of early elections has suddenly increased to 60 percent, in my view. </strong>A hung parliament is thus the most likely outcome (95 percent probability)."</p> <p>Adding to the stakes, Italy's 5-Star Movement voted over the weekend in favour of a proportional electoral system, raising the chances of an unprecedented autumn parliamentary election <a href="">according to Reuters</a>. </p> <p><strong>On Sunday, 5-Star's supporters overwhelmingly backed a proportional law modelled on that of Germany, in which parties must win at least 5 percent of the national vote to get into parliament. </strong>It called for a national election on Sept. 10. That means Italy's four most popular parties, including the ruling Democratic Party (PD), have now signaled a willingness to support a voting law based on proportional representation (PR). </p> <p>Italy must hold an election by May of next year; it has never had a parliamentary election later than the month of June. In addition it must present a budget with an estimated €17 billion in spending cuts or extra revenue in October, and pass it by the end of the year.</p> <p>To be sure, president Sergio Mattarella, the only figure with the power to dissolve parliament, has said elections should only be held after parliament has passed a new electoral law to harmonize voting systems for the Chamber of Deputies and the Senate. For an autumn vote, he may also demand a budget agreement among the main parties, a Reuters source said.&nbsp; However, recent developments may force the president to revise the schedule: "<strong>There's a budget to pass, but if the (electoral law) agreement holds, I believe there will be an election in the autumn," </strong>a source close to the president said on Monday. The willingness of all the major parties to vote on a new electoral law "makes an autumn vote more probable," a government source also told Reuters, "but things will be more clear in 10 days' time".</p> <p>An early vote would allow the ruling Democratic Party (PD) to avoid taking full responsibility for the 2018 budget, and could hand a new government a mandate to tackle the country's chronic growth problems, shore up its struggling banking sector, and push for more help to manage the ongoing migrant crisis. </p> <p>It would, however, also mean a more unstable government, with polls showing a PR system would not produce a clear winner, and post-vote alliances look unwieldy. As a result Italian stocks fell more than those in other European markets on Monday due to worries over an early vote, with the FTSE MIB sliding to nearly&nbsp; one month lows.</p> <p><a href=""><img src="" width="500" height="263" /></a></p> <p>Spooked by the Renzi comments, Italian bonds were also sold with BTP futures extending their slide in thin liquidity, and the 10y yield now higher by 8bps to 2.18% the biggest spike in 2 months.</p> <p><img src="" width="500" height="262" /></p> <p>The biggest loser, however, was the Italian bank stock sector, which slid by 3%, its biggest drop in 4 months.</p> <p><a href=""><img src="" width="500" height="263" /></a></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="963" height="506" alt="" src="" /> </div> </div> </div> 5-Star Movement Democratic Party Democratic Party Electoral systems Germany Government Italy Italy Maria Elena Boschi Matteo Renzi Newspaper Next Italian general election PD party Politics Politics of Italy Proportional representation Renzi Cabinet Reuters Senate Silvio Berlusconi Mon, 29 May 2017 12:43:16 +0000 Tyler Durden 596865 at MeMoRiaL Day 2017: ORDiNaRY PeoPLe IN EXTRaORDINaRY TiMeS [REPOST} <p style="text-align: center;">WB7</p> <p style="text-align: center;"> I originally posted this piece on Memorial Day 2017. Some of you old timers may remember Fringe ZH Lowbrow @aristarchan. Ari as I called him was a good guy. He made inteliigent posts, particularly in the Fukushima related threads. He had a good sense of humor he was always happy to share information. Sadly, the last time I communicated with Ari was about 4 years ago and he was srtruggling with a terminal medical condition, I never heard from him again.</p> <p style="text-align: center;">Since my original post both my parents have been put to final rest in a peaceful US military cemetary. If I were back home I would be sticking flags into the ground this weekend.</p> <p style="text-align: center;">Last night Tyler suggested I report these pictures taken by Ari during his tour of duty in Vietnam.</p> <p style="text-align: center;">To Ari, Mom, Dad and any other final rested brothers and/or sisters of the ZH Community who served their country in good faith with the best of intentions, I take my hat off and give you a Banzai7 salute.&nbsp;</p> <p style="text-align: center;">&nbsp;</p> <p style="text-align: center;">&nbsp;</p> <p style="text-align: center;">MEMORIAL DAY 2011: ORDINARY PEOPLE IN EXTRAORDINARY TIMES</p> <p style="text-align: center;">"How do you fucking pussies do it?"</p> <p>When I was I kid (and many say I still am), Memorial Day was the day that I put on my Boy Scout uniform, joined the rest of the troop and went to march in the local parade together with all of the veterans wearing their dusty uniforms and medals, local reservists wearing their crispy uniforms, various high school bands and charity organizations. We would all March down our local "Main Street" to an American legion outpost and lay a wreath in honor of all the brave souls lost in foreign wars. </p> <p>Later we would all go home to have our tasty barbecues.</p> <p>I was never enlisted in the military and the sophistication of my views of war has evolved over the years. But one thing remains constant for me. I was one of the many lucky ones who did not have to go to Vietnam.</p> <p>Consequently, my concept of what it was like for those who did have to go consists primarily of Life Magazine and TV images, books and movie scenes. I have also been to Hanoi and looked at what is in the war museums there.</p> <p>I have known many Vietnam vets over the years. Some were clearly scarred and struggling to reacquire "normality." Others you would never guess until they would mention it in passing. </p> <p>In every instance it was impossible to try to grasp what it was like.</p> <p>Now I have no intention of turning out a political statement here and I would appreciate it if everyone reading this would recognize as much.</p> <p> What I am presenting is a very unique opportunity for everyone to literally see what a member of our community saw when he lived through the experience. I am speaking of Aristarchan.</p> <p>I few weeks back Ari tweet/published a batch of scanned photos that he took during his service in the US Army and deployment to Vietnam.</p> <p>As many of you know, street photography is one of my avid pursuits. In street photography, you spend hours hoping you will stumble &nbsp;across what the great photographer Henri Cartier-Bresson called: the "decisive moment."&nbsp;</p> <p>My way of gauging the "decisive" nature of a photograph is the innate ability to put the viewer in a trance. A state of wonderment and captive attention.</p> <p>I looked at Ari's photos and was immediately entranced. These were not just war snap shots. These were a slew of "decisive moments" captured by the eye of an ordinary enlisted man on the streets of war. They were also not taken with any kind of agenda or profit motive.</p> <p>You look at the photos and contemplate, what the experience was like for one of many "average Joes" put in the uncommon situation that is war.</p> <p>Enough said by me.</p> <p> I asked Ari to pick a few images I could post on Memorial Day and scribble a few words to go with them. I told him that I did not want to publish a political statement on Memorial Day and preferred to avoid any graphic content. With regard to the latter, I just feel there is plenty already out there and it has a voyeuristic tendency to visually hijack the viewers attention from the subtler human dimension I am referring to. &nbsp;</p> <p>Here they are...</p> <p style="text-align: center;"><img src="" alt="Bassack" title="Bassack" width="425" height="412" /></p> <p>BASSACK: </p> <p>The one true line I remember from Apocalypse Now was: never get off the Goddamn boat. But, it was our job. At first, one took things in graded degrees of exposure. One, leaving base....that is a little risky, since you are going into Indian country. Two, heading down a river...very risky, since you are essentially a sitting duck. Three, getting off the Goddamn boat. There, you are on your own. Calling in an air strike on a position in heavy jungle was almost as risky as engaging the enemy, since accuracy was not something you could count on. A lot of guys (me included), leaving that little slice of home - the ramp, would sit down in the water and relieve their boiling bowels. In that position, war is not heroic. This is 1968, in a Bassack River tributary. [@Aristarchan]</p> <p style="text-align: center;">&nbsp;</p> <p style="text-align: center;"><img src="" alt="Two Tour" title="Two Tour" width="608" height="640" /></p> <p style="text-align: left;">TWO TOUR: </p> <p style="text-align: left;">Willie, you have seen this pic before. This is the eyes of a man who has learned to enjoy killing. He was an ear taker. This pic was taken in the U-Minh Forest. I guess some people can get so into what they are doing, they lose control of what makes them human. The eyes never lie. I avoided people like this like the plague unless in a firefight. In base, they were crazy, looking for fights and abusive and violent. In the field - in a firefight - they were good. Even insanity has it's uses.</p> <p style="text-align: left;">&nbsp;</p> <p style="text-align: center;"><img src="" alt="VN" title="VN" width="950" height="629" /></p> <p style="text-align: left;">HIDE SKINNER: </p> <p style="text-align: left;">Ok Bill, here is the first ( the messed up one). It was taken on December 4th, 1969 in Dinh Tuong Province. We were on S&amp;D, and came up against the 502 battalion of the NVA. This pic was taken as we assaulted a bunker complex at the apex of a series of canals making up the Rach Ruong. This guy we called "hide skinner." He was under heavy machine gun fire from a bunker. I had just rolled off the boat and crawled through the mud toward the main canal, and I was lying in an intersecting canal with my head just above water trying to avoid the snap and whine of bullets overhead, and snapped this pic as he looked at me. Later, another battalion of Army, and one from the Marines joined us, along with helicopter gunships. It was one hell of a fray. I have never been so fucking scared in my life.</p> <p style="text-align: center;">&nbsp;</p> <p style="text-align: center;"><img src="" alt="Snakes" title="Snakes" width="662" height="665" /></p> <p style="text-align: left;">SNAKES:</p> <p style="text-align: left;">Yeah, snakes were a part of things, but not that much. Some guys were scared to death of them - feared them more that the VC. And, a lot of guys got bit. Most snakes would move on if you let them, but crawling under a low canopy in a muddy canal at did cross your mind. I hated the tree vipers that would hang down from the limbs at night. This is Roy McDow, who found this Python curled up in his bunk. It is still alive.</p> <p style="text-align: center;"><img src="" alt="Chris" title="Chris" width="434" height="640" /></p> <p style="text-align: left;">CHRIS NOEL:&nbsp;</p> <p>Chris Noel entertaining the troops. This was in Dong Tam in 1969. She was one of the most prevalent entertainers of the era, spending a lot - too much - time in Vietnam. Later, she was hospitalized for what is now called, PTSD. She was one brave lady, and I always admired her for going to places a lot of other folks would not. And, she stuck with us when it seemed everyone else had abandoned us as baby-killing monsters.</p> <p style="text-align: center;"><img src="" alt="TT" title="TT" width="600" height="480" /></p> <p style="text-align: left;">TIGER TRAP:</p> <p style="text-align: left;">Thanks, Bill. An FYI, "Hide Skinner" got killed two months later in the U-Minh Forest. He walked through a gate with a wired grenade on it ( he fucking should have known better), and it blew his mid-section out. He bled to death while medics tried to grab hold of the artery in his abdomen and shut off the blood flow. The whole time he screamed for his mother. A tough killer reduced to a dying child. I was reduced to lying down inside the treeline crying. </p> <p style="text-align: left;"> This pic was taken - I think, in late 1968 in the Delta. The point man, Waverly Grearson, had fallen into a Tiger Trap - a boobytrap. In the bottom of it was bamboo sticks sharpened to points. When we pulled him out, he had one ft. stakes driven through his boots and into his feet and legs. He died three weeks later from tetanus. The VC would dip these things in cow piss and dung. I snapped this pic running back to where it happened. I was on trail, so missed what happened.</p> <p style="text-align: left;">&nbsp;</p> <p style="text-align: center;"><img src=";ik=64adbddc55&amp;view=att&amp;th=13034c6f839b0ac0&amp;attid=0.1&amp;disp=inline&amp;zw" alt="GH" title="GH" width="1024" height="768" /></p> <p style="text-align: left;">GOING HOME:</p> <p style="text-align: left;">This pic tells a lot about the war in Vietnam. Helicopters, red clay, dust, bush, scared men, weapons and constant movement. The sound of a helicopter today - in a movie or in reality, puts my head on a swivel. What a lot of war movies miss, even the ones who try to portray war in a frail-human light, is the constant, low-level, subconscious terror when one one is not in battle....but sitting back at camp, or on leave, knowing you have to go back. It gnaws on you like going back to the dentist every day and having the same tooth drilled after day. A Navy SEAL once told me, on a boat in the Bassack: "I have a lot of respect for you Army guys, you have no training or inclination for this war, you walk through the bush talking, smoking, farting, coughing and thinking about home. You are constantly terrified. We, on the other hand, consider this our life. It is normal. How do you fucking pussies do it?"</p> <p style="text-align: left;">[WB7: I want to mention that Ari sent me two other photos that I decided not to post for the reasons I state above. One is a picture of a Vietnamese soldier with his head blown off and the other is a "body count" score board with Ari's reflections on the official rules of engagement.</p> <p style="text-align: left;">With regard to the "pussy" observation, I have one minor anecdote to add. When I was at the National War Museum in Hanoi, which is really a celebration of Vietnamese victory over the American imperialists, I was struck by two things. First, how much the Vietnamese like Americans. Second, I had a brief conversation with one of the curators who was also a war veteran. One of the things he said was he bears no grudge against the enlisted men he fought. It was their country and so they knew very well what kind of hell it is to live and fight in their jungles and swamps. He said they were ceaselessly amazed at how much of that shit the "pampered" Americans could handle. &nbsp;</p> <p style="text-align: left;">Thank you Ari for sharing these images and thoughts.</p> <p style="text-align: left;">Let us all remember the personal sacrifices and struggles made by all ordinary men and women in the extraordinary experience that is war.</p> <p style="text-align: left;">Happy Memorial Day 2011</p> <p style="text-align: left;">WB7]</p> Aristotle and Dante Discover the Secrets of the Universe Awake Main Street Music industry Reality United States Army US Army Mon, 29 May 2017 12:14:04 +0000 williambanzai7 596864 at Key Events In The Coming Busy Week: US Payrolls; Eurozone Inflation And Fed Speakers <p>Focus in this holiday-shortened week will turn to US data, especially NFP, Fed speakers and Eurozone inflation. UK PMIs will also draw attention as elections approach. We also get GDP data from Canada, Sweden and Switzerland. In EM, there are MP meetings in Brazil &amp; Israel. On Monday, with US, UK and Chinese markets closed, Euro FX and bond markets will be on Mario Draghi alert on Monday as the ECB president speaks to the European parliament.</p> <p><strong>NFP, Fedspeak, Eurozone inflation</strong></p> <p>After the FOMC Minutes and a mixed finish to US data last week (Q1 GDP revised higher though durables weighed on 2Q GDP), attention turns squarely to upcoming US data this week, particularly Friday's payrolls report. The U.S. jobs report Friday should bolster the case for a rate hike, with a gain of 180,000 jobs expected.</p> <p>With a June hike 80% priced, any Fed commentary will also be carefully parsed for clues that the Fed is comfortable with this pricing. With the blackout period looming, the Fed only has next week to push back against - or indeed affirm - market expectations if they so choose. After the FOMC minutes, most banks have brought forward their base case for June &amp; September Fed hikes this year.</p> <p>The June ECB meeting is also fast approaching, and expectations are that we will see a change in language, signaling a hawkish shift. This week's Eurozone inflation data will therefore draw increased attention. BofA economists expect inflation to drop to 1.4% in May, from 1.9% in April, with core also expected to move 20bp lower, to 1.0% in May. Also in Europe, Euro-area data this week may show the strongest economic confidence in a decade on Tuesday. The preliminary headline inflation rate for the region will come on Wednesday.</p> <p>The EIA is due to release its monthly supply reports Wednesday.</p> <p><strong>The week ahead in Emerging Markets</strong></p> <p>There are monetary policy meetings in Brazil and Israel. Brazil’s central-bank decision on Wednesday will probably see a cut of 75 to 100 basis points from the current 11.25 percent, according to economists. China’s May manufacturing PMIs on Wednesday could indicate that the nation’s 2017 growth has already peaked. </p> <p><strong>Daily calendar, via DB<br /></strong></p> <p>As noted before, with markets closed in both the UK (Bank Holiday) and US (Memorial Day) today it’s an unsurprisingly quiet start to the week with M3 money supply growth for the Euro area in April the only data due. </p> <p>We kick off Tuesday in Japan where the April retail sales and employment data is due. In Europe tomorrow we get Q1 GDP in France, CPI in Germany in May and confidence indicators for the Euro area in May. Over in the US tomorrow we’ll get personal income and spending for April along with the PCE core and deflator readings, followed by the March S&amp;P/Case-Shiller house price index reading, May consumer confidence reading and May Dallas Fed manufacturing activity index print. </p> <p>Turning to Wednesday, the overnight data in Asia comes from China where the official May PMIs are due. In Japan we’ll get industrial production and housing starts. In Europe on Wednesday we get May CPI in France, Germany unemployment in May, April money and credit aggregates in the UK and the May CPI report for the Euro area. In the US on Wednesday we’ll get the Chicago PMI for May and April pending home sales print. </p> <p>Thursday kicks off in Japan again where Q1 capex data will be released along with the final manufacturing PMI revision. Manufacturing PMIs dominate the European session on Thursday with final readings due in the Euro area, Germany and France along with a first look at the periphery and UK. In the US we’ll also get the manufacturing PMI along with Q1 unit labour costs and nonfarm productivity, May ADP report, initial jobless claims, May ISM manufacturing and April construction spending. </p> <p>It’s a quiet end to the week in Europe on Friday with PPI for the Euro area in April the only data due. In the US it’s all eyes on the May employment report, while we’ll also get the April trade balance print.</p> <p>Away from the data we’re light on Fedspeak this week with Williams (today), Brainard (Tuesday), Kaplan (Wednesday) and Williams and Powell (Thursday) the only scheduled speakers. Over at the ECB we’ll hear from Nowotny and Draghi (today), Liikanen (Tuesday) and Villeroy (Thursday). The BoJ’s Harada also speaks on Thursday. Other things to note this week are UK PM May’s televised Q&amp;A tonight with opposition leader Jeremy Corbyn and the China-EU summit beginning on Tuesday in Brussels.</p> <p><em>Below is a visual summary of the week's key events:</em></p> <p><a href=""><img src="" width="500" height="961" /></a></p> <p>* * * </p> <p><strong>Finally, looking only as the US, </strong>the key economic releases this week are the ISM manufacturing report on Thursday, the employment report on Friday and PCE inflation and consumer confidence on Tuesday and trade on Friday. In addition, there are several scheduled speaking engagements by Fed officials this week. The Beige Book for the June FOMC period will be released on Wednesday.&nbsp; </p> <p><a href=""><img src="" width="500" height="542" /></a></p> <p><em>More from Goldman </em></p> <p><span style="text-decoration: underline;"><strong>Monday, May 29 </strong></span></p> <ul> <li>Memorial Day. There are no data releases and equity and bond markets are closed. </li> </ul> <p><span style="text-decoration: underline;"><strong>Tuesday, May 30 </strong></span></p> <ul> <li><strong>8:30 AM Personal income, April (GS +0.5%, consensus +0.4%, last +0.2%): Personal spending, April (GS +0.6%, consensus +0.2%, last flat); PCE price index, April (GS +0.16%, consensus +0.2%, last -0.2%); Core PCE price index, April (GS +0.12%, consensus +0.1%, last -0.1%); PCE price index (yoy), April (GS +1.65%, consensus +1.7%, last +1.8%); Core PCE price index (yoy), April (GS +1.49%, consensus +1.5%, last +1.6%):</strong> Based on the Q1 GDP revision and inputs from various price indices, we estimate that the core PCE price index rose 0.12% month-over-month in April and rose 1.65% from a year ago. Additionally, we expect that the headline PCE price index rose 0.16% and rose 1.65% from a year earlier, and we note the possibility that the headline measure rounds down to 1.6% on a year-over-year basis. We estimate a 0.5% increase in April personal income and a 0.6% drop in April personal spending (nominal, mom sa), and we note scope for upward revisions to March personal spending growth.</li> <li><strong>09:00 AM S&amp;P/Case-Shiller 20-city home price index, March (GS +1.3%, consensus +0.9%, last +0.7%):</strong> We expect the S&amp;P/Case-Shiller 20-city home price index to rise 1.3% in the March report following a 0.7% increase in the prior month. The measure still appears to be influenced by seasonal adjustment challenges, and we place more weight on the year-over-year increase, which rose to 5.8% from 5.6% in February.</li> <li><strong>10:00 AM Conference Board consumer confidence, May (GS 119.8, consensus 119.8, last 120.3):</strong> We forecast that the Conference Board consumer confidence index declined 0.5pt to 119.8 in May after retrenching in April from the cycle high in March. Our forecast reflects mixed consumer surveys in the month, as well as a sharp drop in the stock market that has now more than reversed.</li> <li><strong>10:30 AM Dallas Fed manufacturing index, May (consensus +15.0, last +16.8)</strong></li> <li><strong>01:00 PM Fed Governor Brainard (FOMC voter) speaks:</strong> Federal Reserve Governor Lael Brainard will give a speech on the economy and monetary policy at a New York Association for Business Economics luncheon at the Cornell Club in New York. Audience Q&amp;A is expected.</li> </ul> <p><span style="text-decoration: underline;"><strong>Wednesday, May 31 </strong></span></p> <ul> <li><strong>08:00 AM Dallas Fed President Kaplan (FOMC voter) speaks:</strong> Dallas Federal Reserve President Robert Kaplan will participate in a moderated Q&amp;A as a part of the C. Peter McColough Program on International Economics at the Council of Foreign Relations in New York City. Both audience and media Q&amp;A is expected.</li> <li><strong>09:45 AM Chicago PMI, May (GS 58.0, consensus 57.0, last 58.3):</strong> We expect the Chicago PMI to edge down to 58.0 in May, following a 0.6pt increase to 58.3 in the month prior. However, the index is likely to remain at a level consistent with growth in the manufacturing sector.</li> <li><strong>10:00 AM Pending home sales, April (GS +1.2%, consensus +0.4%, last -0.8%):</strong> We expect pending home sales to rebound 1.2% in April. Regional housing data released so far suggest a bit of slowing year-to-date, but this is likely to be offset by calendar effects due to the timing of the Easter holiday. In the March report, pending home sales pulled back 0.8%, partially due to unseasonably cold weather in March. We have found pending home sales to be a useful leading indicator of existing home sales with a one- to two-month lag.</li> <li><strong>02:00 PM Beige Book, June FOMC meeting period:</strong> The Fed’s Beige book is a summary of regional economic anecdotes from the 12 Federal Reserve districts. The last Beige Book reported that activity continued to expand across more districts. Labor markets continued to tighten, and wage pressures broadened; while consumer spending was more mixed, manufacturing activity expanded and the energy sector improved further. In the June Beige Book, we look for additional anecdotes related to the state of consumption, price inflation, and wage growth.</li> <li><strong>08:10 PM San Francisco Fed President Williams (FOMC non-voter) speaks:</strong> San Francisco Fed President John Williams will give a speech at the Bank of Korea Conference on Global Economic and Financial Challenges. Audience and media Q&amp;A is expected.</li> </ul> <p><span style="text-decoration: underline;"><strong>Thursday, June 1 </strong></span></p> <ul> <li><strong>08:00 AM Fed Governor Powell (FOMC voter) speaks:</strong> Federal Reserve Governor Jerome Powell will give a speech titled “Thoughts on the Normalization of Monetary Policy” at the Economic Club of New York’s breakfast meeting. Audience Q&amp;A is expected.</li> <li><strong>08:15 AM ADP employment report, April (GS +185k, consensus +180k, last +177k)</strong>: We expect a 185k increase in ADP payroll employment in May, reflecting a boost from the stronger headline payrolls growth in April utilized in the ADP model. We expect an additional modest boost from net strength in the financial and economic indicators also used in the model. The ADP report introduced methodological changes last fall and now offers more details by sector. While we believe the ADP employment report holds limited value for forecasting the BLS’s nonfarm payrolls report, we find that large ADP surprises vs. consensus forecasts are directionally correlated with nonfarm payroll surprises.</li> <li><strong>08:30 AM Nonfarm productivity (qoq saar), Q1 final (GS -0.4%, consensus -0.5%, last -0.6%); Unit labor costs, Q1 final (GS +2.8%, consensus +2.9%, last +3.0%):</strong> We estimate Q1 non-farm productivity will be revised up 0.2pp to -0.4% in the second vintage, well below the 0.75% trend achieved on average during this expansion. We expect unit labor costs – compensation per hour divided by output per hour – for Q1 to be revised down by 0.2pp to 2.8% (qoq saar).</li> <li><strong>08:30 AM Initial jobless claims, week ended May 27 (GS 240k, consensus 238k, last 234k): Continuing jobless claims, week ended May 20 (consensus 1,920k, last 1,923k):</strong> We estimate initial jobless claims rose 6k to 240k in the week ended May 27. We see few notable outliers in the state-level data from last week. Continuing claims – the number of persons receiving benefits through standard programs – have trended down further in recent weeks, suggestive of additional labor market improvement that we expect to continue.</li> <li><strong>09:45 AM Markit flash US manufacturing PMI, May final (consensus 52.5, last 52.5)</strong></li> <li><strong>10:00 AM ISM manufacturing, May (GS 55.2, consensus 54.6, last 54.8)</strong>: Regional manufacturing surveys were mixed in May, and we expect ISM manufacturing to rebound 0.4pt to 55.2 following a sizeable 2.4pt decline in the prior month. The Philly Fed (+16.8pt to +38.8) and Kansas City Fed (+1pt to +8) manufacturing sector surveys both strengthened, while the Richmond Fed (-19pt to +1) and Empire State (-6.2pt to -1.0) surveys both declined notably. Our manufacturing survey tracker—which is scaled to the ISM index—stands at 55.2 in May, down from 56.3 in April.</li> <li><strong>10:00 AM Construction spending, April (GS +0.6%, consensus +0.5%, last -0.2%):</strong> We expect construction spending to bounce back 0.6% in April, following a 0.2% decline in March that was driven primarily by weaker nonresidential building. We expect the fading effects of unfavorable weather earlier this year to boost construction spending in April.</li> <li><strong>05:00 PM Total vehicle sales, May (GS 16.8mn, consensus 17.0mn, last 16.8mn):</strong> Domestic vehicle sales, May (GS 13.3mn, consensus 13.2mn, last 13.1mn)</li> </ul> <p><span style="text-decoration: underline;"><strong>Friday, June 2 </strong></span></p> <ul> <li><strong>8:30 AM Nonfarm payroll employment, May (GS +160k, consensus +180k, last +211k); Private payroll employment, May (GS +150k, consensus +180k, last +194k); Average hourly earnings (mom), May (GS +0.2%, consensus +0.2%, last +0.3%); Average hourly earnings (yoy), May (GS +2.5%, consensus +2.6%, last +2.5%); Unemployment rate, May (GS 4.4%, consensus 4.4%, last 4.4%):</strong> We estimate nonfarm payrolls increased 160k in May, a moderate slowdown from April’s +211k pace and somewhat below the three-month moving average of +175k. Our forecast reflects some softening in service sector employment surveys, a return to normal weather, and potential labor market constraints.</li> <li>While labor market fundamentals remained broadly stable – featuring a further decline in continuing jobless claims – recent weakness in the ISM- and regional service sector employment components suggest hiring demand may be slowing at the margin. Additionally, May is also an important hiring month, and labor supply constraints in some geographies and industries may pose additional downside risk. Offsetting these concerns, the end of the federal hiring freeze in Mid-April suggests a possible above-trend reading in federal government employment.</li> <li>We estimate the unemployment rate remained stable at 4.4%, based on our expectation that household employment will hold on to its sharp year-to-date gains. Finally, we expect average hourly earnings to increase 0.2% month over month and 2.5% year-over-year, reflecting the interaction of firming wage growth with unfavorable calendar effects.</li> <li><strong>08:30 AM Trade balance, April (GS -$46.2bn, consensus -$45.5bn, last -$43.7bn): </strong>We estimate the trade deficit widened by $2.5bn in April. The Advance Economic Indicators report last week showed a sharp widening in the goods trade deficit, and we forecast a similar widening in the broader trade balance in this week’s report.</li> <li><strong>12: 45 PM Philadelphia Fed President Harker (FOMC voter) speaks:</strong> Philadelphia Federal Reserve President Patrick Harker will give a speech on the economic outlook and the Philly Fed’s Economic Growth and Mobility Project at the Pennsylvania Economic Association’s 2017 conference. Audience Q&amp;A is expected.</li> </ul> <p><em>Source: Goldman, BofA, DB</em></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="722" height="339" alt="" src="" /> </div> </div> </div> Bank of Japan Bank of Korea Beige Book Bond Brazil Business Case-Shiller Chicago PMI China Conference Board Conference Board Consumer Confidence Consumer confidence Consumer confidence index Continuing Claims Cornell Club in New York Council of Foreign Relations CPI Dallas Fed Dallas Fed Dallas Federal Reserve Economic Club of New York Economic indicator Economy European Central Bank European Parliament European Union Eurozone Federal Open Market Committee Federal Reserve Federal Reserve System flash France Germany Headline inflation Housing Starts Inflation Initial Jobless Claims ISM Israel Japan John Williams Kansas City Fed M3 Macroeconomics Markit Monetary Policy Money Supply New York Association New York City Nonfarm payrolls Pennsylvania Economic Association Personal consumption expenditures price index Personal Income Philadelphia Fed Philadelphia Federal Reserve Philly Fed Richmond Fed S&P/Case San Francisco Fed San Francisco Fed Structure Switzerland Trade Balance Trade Deficit Unemployment US Federal Reserve Mon, 29 May 2017 12:02:13 +0000 Tyler Durden 596863 at What's going on with bitcoin? <p><strong><span style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><a href="">What's going on with bitcoin?</a></span></strong></p> <p><span style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif;"><span style="font-size: 16px;"><br /></span></span></p> <ul style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"> <li>Bitcoin hits $2,700, a 500 fold increase in five years and doubling in price since May 1st.</li> <li>Previous surges - in 2011 and 2013 - have been followed by dramatic crashes</li> <li>Significant premiums seen in Asia, over USD price</li> <li>Total cryptocurrency market cap reached over $90bn, last week</li> <li>Market remains small and volatile</li> <li>Comparisons between bitcoin and gold are old, invalid and misleading</li> <li>Both bitcoin and gold offer opportunities to diversify away from corrupt financial system</li> </ul> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><img src="" width="1280" height="720" style="height: auto; max-width: 100%; display: block; margin-left: auto; margin-right: auto;" class="aligncenter size-full wp-image-10194" /></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong><span style="text-decoration: underline;">What’s going on with bitcoin?</span></strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong>Introduction</strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">Last week the bitcoin price hit $2,700. A 500-fold increase in five years and a doubling in price since the start of the month.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">Most people are aware of bitcoin tangentially, few are really conscious of it day-to-day and even fewer people are actually&nbsp;<em>in&nbsp;</em>bitcoin. Other significant cryptocurrencies, such as Ether and Ripple have also been going great guns and these are even less prominent in the public domain.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">If something such as bitcoin with such a small market cap and very little public awareness is doubling in price in less than a month, what does it mean? Why is it behaving like this? Is it in a bubble? Is it a scam? Does it means that you should be getting in on the act? And what does it mean for its contemporaries, such as gold?</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">We take a brief look at why the price has been climbing, what this means for the future of cryptocurrencies and, most importantly, what this says about gold.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><img src="" width="1738" height="728" style="height: auto; max-width: 100%; display: block; margin-left: auto; margin-right: auto;" class="aligncenter size-full wp-image-10192" /></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong>Why the spike in the bitcoin price?</strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">I was asked this question recently on question-and-answer site&nbsp;<a href="">Quora</a>. I include the answer below, with some edits and further information. It does not focus on specific events but instead on both the short and long-term drivers of the bitcoin price. It should be noted that whilst the price of bitcoin has fallen back from it’s highs of last week, it has not taken the same tumble it has done previously following price-spikes.</p> <ol style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"> <li><strong>FOMO</strong>&nbsp;(aka Fear of Missing Out) and&nbsp;<strong>hype</strong>&nbsp;- there are some who are worried that they missed getting in on bitcoin every time it has climbed like this and they want in, in order to profit from what could be a bubble or to profit from further climbs. Like most investment opportunities or just trends elsewhere, people are always searching for the next big thing. Inevitably this leads to speculation and a feedback loop…</li> <li>This leads to the increased&nbsp;<strong>number of trades</strong>, which economics tells us will drive up the price. In early 2013 the number of bitcoin trades was around 40k, today it is closer to 330k. According to the Cambridge Center for Alternative Finance, speculation is the biggest driver for the recent price climb.</li> <li><strong>Acceptance&nbsp;</strong>- as the currency is accepted in more places, this is further sign of validation. This is not good for the price just because there will be more transactions, but it is good for the price as it means more key stakeholders in the financial, banking, legal and regulatory industries will be paying attention.</li> <li>Policy changes - with each policy change that is in favour of bitcoin this brings&nbsp;<strong>validation</strong>&nbsp;to the currency and the overall blockchain network. One of the biggest examples of policy change recently has been in Japan, where the government formally recognised the currency.</li> <li>Following on from above,&nbsp;<strong>future expectations:&nbsp;</strong>The more the currency is accepted, the harder it is to control and for governments to ignore. This gives more faith in the future of the currency, which drives demand based on future expectations not just the current environment.</li> <li><strong>Economies of scale&nbsp;</strong>- as we see more policy changes, more payment processors accepting bitcoin, more news stories etc covering the rising price then the overall market for bitcoin becomes more stable. Each time we have a price climb like this (I can think of two earlier ones) the marketplace is increasingly stable (n.b. I say marketplace and not price) this gives consumers more confidence that bitcoin isn’t going to just disappear</li> <li><strong>First mover advantage -&nbsp;</strong>this isn’t news, in the same way 21 million bitcoins isn’t news, but the fact that bitcoin was the first currency does give it an increasing advantage as early adopters have sought to ensure and protect the strong community, ecosystem and industry that supports bitcoin activity. Again, this is gives new adopters confidence.</li> <li><strong>Hackers -&nbsp;</strong>We’re all aware now of the horrendous attacks that have happened around the world. The most recent of which demanded payment in bitcoins. Many may see this as bad press for the cryptocurrency but in response to this (there are rumours that) large organisations are buying up bitcoin in preparation for future attacks.</li> <li><strong>Obstacles for arbitrage&nbsp;</strong>- usually when there is a big spread between currency markets traders capitalise on the arbitrage opportunity. In bitcoin where there are major premiums on the bitcoin price in both Japan and South Korea, over the US Dollar price, regulatory and legal barriers are preventing traders who buy USD priced bitcoins from selling them in Asian markets, quickly enough to meet surging demand. This drives the price further.</li> </ol> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">Before I go on to the other reasons why the bitcoin price is rising, gold investors should note that the following reasons for bitcoin’s price climb are exactly the same reasons why gold has value and climbs in price.</p> <ol style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"> <li><strong>It’s being treated like an actual currency -&nbsp;</strong>this where all the usual stuff applies that we normally refer to when we talk about fiat currencies, gold and silver. Bitcoin is another currency that gets traded according to demand for other currencies and perceptions surrounding them, this is affected by:</li> </ol> <ul style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"> <li>Geopolitical risks - in the UK alone consider terrorist attacks, Brexit uncertainty, UK elections. Then consider North Korea etc</li> <li>Demand for the dollar - investigations and rumours surrounding Trump are not helping.</li> <li>Global debt concerns - Greek debt concern is now a thing again (it has always been a thing but it gets pushed to the sidelines occasionally).</li> <li>China - for many people this is the big reason why the price is climbing. China has been struggling for a while now, with the Shanghai Composite down by 10% and bitcoin demand climbing as a flight of safety away from the yuan. However, Chinese bitcoin trade volume is only 10%, compared to around 90% back in January.</li> </ul> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong>But what about gold?</strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">I have written and tweeted extensively about the gold versus bitcoin issue. In short, I believe that it is a non issue in terms of the fact that I do not believe they are competing assets. I’m in the minority, as the mainstream continue to compare the two assets. This is inevitable given the reasons for both bitcoin’s creation and for some investors are to mimic gold’s unique combination of characteristics.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><img src="" width="1400" height="787" style="height: auto; max-width: 100%; display: block; margin-left: auto; margin-right: auto;" class="aligncenter size-full wp-image-10193" /></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">Many on Twitter have accused those of us who believe that they are not competing assets, as trying to prop up gold and that we’re in denial about bitcoin usurping gold as the ultimate reserve currency. This isn’t the case at all, both gold and bitcoin are alternative assets. Despite this, physical gold is the clear safe haven on account of it’s history, physicality, proven value and reduced-exposure to modern technologies.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">As explained above, some of bitcoin’s price performance can be attributed to geopolitical events, however a CoinDesk survey at the beginning of the year shows that only a small percentage of those surveyed pointed to macroeconomic factors as the reason for the price climb, many in the crypto world still consider technological improvements within the ecosystem to be the greater support for higher prices.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">This suggests that for now, gold remains the ultimate safe haven when it comes to great geopolitical and financial issues. Bitcoin’s volatility makes it difficult to for investors to place their faith in the currency due to the uncertainty of whether or not it will still ave value (let alone where it’s price will be) in a year from now. With physical gold there is far more certainty both in terms of its value and its security, when stored in a segregated, allocated manner.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">As we wrote back in&nbsp;<a href="">January</a>:</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><em>Currently bitcoin plays a different role to gold. For want of an analogy, bitcoin is more the cash, whilst gold is more the savings. It is likely that we will see those looking at securing their wealth across both assets. This is likely to be done in a similar way that we see gold investors also buy silver, and divide holdings between stored bars and coins kept at home.</em></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><em>It is possible for us to take any asset and demonstrate staggering returns over a perfectly chosen period. The fact is that for now, the bitcoin investment market is too new and under reported to know what role the currency may play.</em></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><em>…owning bitcoin directly can bring its own security risks and this is something there is little education and understanding about.</em></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><em>In contrast, holding gold as part of a balanced portfolio and as a safe haven asset has been part of the public consciousness for centuries and remains understood by many today – especially in Asia.</em></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong>Conclusion - Nothing to see here</strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">Speculation and volatility is bitcoin’s weakness at present, or so believe the mainstream. It is worth remembering that speculation in and of itself is not a bad thing. Cryptocurrency markets should not be criticised for the fact that this is going on. Speculation is the product of a free market, it is also evidence of organic growth and a growing user base. Spikes such as these do a great job of drawing in awareness of the space in the early years.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">Unsurprisingly supporters of cryptocurrencies remain un-phased by this latest fall in price. As with those who invest in gold, it is the wider outlook, the ecosystem and the real value which gives supporters confidence that there is little to worry about here.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">All markets have a dynamic where by seasoned traders and speculators use price spurts to lock in profits, as new demand enters the market (generally thanks to a small price increase, announcement or geopolitical event) the price is bid up and profits are taken. The difference with bitcoin and the like is that they are much, much smaller and newer markets and so we see far greater volatility.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">We shouldn’t be surprised by the mainstream’s distaste or uncertainty surrounding the currency, in fact we should be hardened and assured by it. This is the same treatment we see for gold, something which humanity has held faith in for thousands of years.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">The attention towards bitcoin and its recent price performance is not only validation for itself but also for gold and silver. Whilst bitcoin’s price rise might mainly be down to speculation it is also thanks to a growing desire to hold investments outside of the financial system. This, validates the role of precious metals. In time, we will see speculators become investors and investors become diversifiers. This is good for those holding gold and silver, as explained in&nbsp;<a href="">January</a>:</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><em>Increasingly, gold and bitcoin may be&nbsp;seen as very much complementary assets, but bitcoin buyers should be aware of the volatility of bitcoin and of how speculative it remains today. Those considering buying should only own a very very small percentage of their wealth in bitcoin. While gold and silver can constitute as much as 20% of a diversified portfolio – bitcoin should be less than 3% or 4% of one’s wealth.</em></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><em>Also, if buying bitcoin, it is prudent&nbsp;to apply the same logic to owning&nbsp;bitcoin as they do for gold – diversify, own the currency in the safest ways possible – including some offline in secure ‘cold’ storage and monitor the wider political, financial and monetary environment.</em></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong>News and&nbsp;Commentary</strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><a href=""><strong>Here's What It Would Take for Gold to Hit $2,000 (</strong></a></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><a href=""><strong>Hedging Against Political Volatility With Gold (</strong></a></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><a href=""><strong>Government Silver Sales Have Totally Dried Up… WHY? (</strong></a></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><a href=""><strong>Gold's Days of Glory Beginning As Dollar's Are Ending (</strong></a></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><a href=""><strong>RBC's Louney Says Gold Exposure Is Key Amid Risky Markets (</strong></a></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><a href=""><strong>Gold steady near 4-week highs as geopolitical worries support (</strong></a></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><a href=""><strong>Gold books highest settlement in a month, 3rd straight weekly rise (</strong></a></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><a href="" rel="attachment wp-att-5047"><img src="" alt="7RealRisksBlogBanner" width="822" height="430" style="height: auto; max-width: 100%;" class="alignnone wp-image-5047" /></a></p> <table class="mce-item-table" style="border-style: dashed; border-color: #bbbbbb; color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;" width="431"> <tbody> <tr> <td style="font-family: inherit; font-size: inherit; border-top: 1px dashed #bbbbbb; border-bottom: 1px dashed #bbbbbb; border-left: 1px dashed #bbbbbb; border-right-style: dashed; border-right-color: #bbbbbb;" width="431"><strong><a href="*W3c1h-f2yFG_PW19WP1M5kdPLx0/*W65XS2h17yWxXW4TYMFp2mTHmw0/5/f18dQhb0S66-6tQRn0L_FxRSwVK2W4_p94n4-GjnKW6tYdCn3lfV8kV-jQ-X7vDSgnW8YxPwn7K2zJxW8Fb0YM3fFKSNW2lBjs771l7nxW7CK3561s_ppDW4kKkP65Sbs-0VFwDd45MBppHW1G4SZm3s8YyNN2GDPd8J0L9tW7h1cRM6twFYbW131lrg77jyTtW3DBscq8g1RyzW6x0kZn8cq2qJW19g83v6Gm9MDN7Wbvss4bKDhW25Z4C049bLP6Vjyltj93rsVhW6JkBXr2b3QB4V_K63j2jLZBRW2G4Pwd86v5fXVCDgNw2dG0lDW2vdDGL8516WdW34jPTW1xkD3GN6sZRP5-vxg9W6m1yf41BvRC6W5vzwyC2KqQ24W8vCXCM5qnvfrVJ4fHj6k-whXW76-C7y31lN42W2RMd147p1dzKW8WcfY65vWccxW5jrXx75FCP0GW3MNR2Y4q2BwXW19R8rX8Dwk0fVY7v4b2DH0HMVMS0ks57VdNWW4VCMVK5HKDclW89fpZl56QxBkW78w6SD7B5H6ZW8NhMCV2GZ9hpW4tJ4wj6YTPhbW6VXYn-82s59gW8WBB9760kp7zf4FL4KJ02">Avoid&nbsp;Digital&nbsp;&amp; ETF&nbsp;Gold&nbsp;– Key&nbsp;Gold&nbsp;Storage Must Haves</a></strong></td> </tr> </tbody> </table> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong>Gold Prices (LBMA AM)</strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">29 May: USD 1,265.00, GBP 983.41 &amp; EUR 1,127.87 per ounce<br />26 May: USD 1,265.00, GBP 983.41 &amp; EUR 1,127.87 per ounce<br />25 May: USD 1,257.10, GBP 969.48 &amp; EUR 1,119.57 per ounce<br />24 May: USD 1,251.35, GBP 963.29 &amp; EUR 1,119.58 per ounce<br />23 May: USD 1,259.90, GBP 969.62 &amp; EUR 1,119.17 per ounce<br />22 May: USD 1,255.25, GBP 967.17 &amp; EUR 1,123.07 per ounce<br />19 May: USD 1,251.85, GBP 962.17 &amp; EUR 1,122.03 per ounce</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong>Silver Prices (LBMA)</strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">29 May: USD 17.29, GBP 13.45 &amp; EUR 15.41 per ounce<br />26 May: USD 17.29, GBP 13.45 &amp; EUR 15.41 per ounce<br />25 May: USD 17.15, GBP 13.23 &amp; EUR 15.29 per ounce<br />24 May: USD 17.03, GBP 13.14 &amp; EUR 15.22 per ounce<br />23 May: USD 17.14, GBP 13.22 &amp; EUR 15.25 per ounce<br />22 May: USD 16.95, GBP 13.04 &amp; EUR 15.10 per ounce<br />19 May: USD 16.77, GBP 12.90 &amp; EUR 15.02 per ounce</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong><br />Recent Market Updates</strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong><a href="">-&nbsp;Silver Bullion In Secret Bull Market</a></strong><br /><strong><a href="">-&nbsp;Should I Invest My Fortune in Gold? Inaugural Lecture by Dr Brian Lucey</a></strong><br /><strong><a href="">-&nbsp;Gold and Silver Bullion Now Treated As Money In Arizona</a></strong><br /><strong><a href="">-&nbsp;Manchester Attack Sees Asian Stocks Fall, Gold Firm</a></strong><br /><strong><a href="">-&nbsp;James Rickards: Gold’s “Decisive Turn Around” – “Next Stop Is $1,300 Or Higher”</a></strong><br /><strong><a href="">-&nbsp;Gold and Silver Bullion Coins See Sales “Explosion” In UK On “Wave Of Political Turmoil”</a></strong><br /><strong><a href="">-&nbsp;Gold Investment Is the Ultimate Guide for Tech Investors In 500 Words</a></strong><br /><strong><a href="">-&nbsp;Gold Spikes On Heavy Volume On Trump, U.S. Political “Mess”</a></strong><br /><strong><a href="">-&nbsp;Cyber Wars Could Crash Markets and Threat To Humanity – Rickards and Buffett</a></strong><br /><strong><a href="">-&nbsp;Cyber Attacks Show Vulnerability of Digital Systems and Digital Currencies</a></strong><br /><strong><a href="">-&nbsp;History of Gold – Interesting Facts and Changes Over 50 Years</a></strong><br /><strong><a href="">-&nbsp;U.S. Gold Exports To China and India Surge In 2017</a></strong><br /><strong><a href="">-&nbsp;The Dream of the Central Banker</a></strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong><a href="" target="_blank">Access Award Winning Daily and Weekly Updates Here</a></strong></p> Alternative currencies B+ Bitcoin Bitcoin Business Cambridge Center for Alternative Finance China CoinDesk Cryptocurrencies Currency Digital currency ETC Finance India Japan Legality of bitcoin by country or territory Money North Korea payment processors Precious Metals Reserve Currency Reuters SSE 50 Twitter Twitter Virtual currency law in the United States Volatility Yuan Mon, 29 May 2017 11:46:11 +0000 GoldCore 596862 at Gold Data Science, Report 28 May, 2017 <p>The price of gold went up $12 this week, and that of silver $0.50. That’s not bad for gold and silver owners, and not good for the vast majority who are all-in on the dollar (though they don’t think of it that way).</p> <p>Since we began publishing this Supply and Demand Report four and a half years ago, there have been several constants. One, we have focused on the supply and demand fundamentals, and the mechanics of the market.</p> <p>Two, we have tried to show that short-term price moves are usually random. For example, we have documented many spike ups followed by let-downs whenever the Fed Chairman went on TV. And we all know that the long-term price trend is up (the mirror of the falling dollar). However, neither random short-term bursts nor the long-term trend is actionable for trading. In between, there is the fundamental which tends to pull the market price either up or down, depending on market conditions.</p> <p>Three, there is no gain when the gold price goes up. This is because gold is not going anywhere. If you bought 100oz of gold 20 years ago, then you still have 100oz of gold now (minus storage costs). Sure, it’s worth more dollars but those dollars are worth proportionally less (and if you sell, the tax man will take a big chunk).</p> <p>This may seem like mere semantics, but it’s an important principle. It’s the dollar which is volatile. And its gyrations can only get worse.</p> <p>Therefore, wealth should be measured in gold ounces or grams. We recommend you periodically take the dollar value of your assets, and divide it by the current price of gold. If the dollar value goes up, but the gold value is down, which are you going to believe? One is the numeraire extraordinaire that man has valued for thousands of years, and the other is the elastic dollar managed by a central bank whose stated policy is devaluation at two percent per annum (a target they cannot accurately hit).</p> <p>You <strong>can</strong> make gains in gold if you bet successfully on the price moves in both directions. If you buy when the price is lower and sell when it’s higher, you will end up with more gold. The trick is to make sure you buy the gold again, otherwise you will have given up your gold and got only paper in exchange.</p> <p>And you can make gains in silver, as silver goes up and down as measured in gold terms. Most people call this the gold-silver ratio. </p> <p> Four, we have included charts generated from software developed by Keith. The data was the highest quality possible in that environment, and the best available.</p> <p>The first three will remain the same, but number four is changing. We are now launching a software platform that is the culmination of Keith’s development of the arbitrage theory of markets since 2010, his model of the gold market, and four generations of software (two by him, and two by our VP of Software, Rudy Mathieu).</p> <p>We had to solve some Big Data problems, as we licensed 21 years of tick history data from Thomson Reuters. It is over 2 terabytes—big enough that you can’t handle it with a conventional database. We had to solve some Data Science problems too. Data from the real world is messy (and in some historical time periods, incomplete). </p> <p> We believe we now have the cleanest data, and hence the best signal, bar none. Our software platform makes it possible for us to see the full breadth of the market dynamics and to drill deep as well. We will be showing many new graphs, including the <a href="" target="_blank">Gold Forward</a> rate (GOFO) with both bid and offer. </p> <p> In this Report, we include the new graphs, generated by the new software. You will notice that we show the bid prices of the metals. There is no such thing as a single price (except in the case of a fix, like the gold fix). There are always two prices in a live market. We believe that the bid is a better measurement of what a thing is worth. It is the price you would be paid, if you sold it.</p> <p style="text-align: center;"><a href="" rel="attachment wp-att-6046"><img src="" alt="letter-may-28-prices" width="898" height="498" class="size-full wp-image-6046 aligncenter" /></a><em></em></p> <p style="text-align: center;"><em>Click <a href="">here</a> for 3 year and 21 year versions of the chart above.</em></p> <p> Next, this is a graph of the gold price measured in silver, otherwise known as the gold to silver ratio. It moved down 1.5 points this week.</p> <p>In this graph, we show both bid and offer prices. If you were to sell gold on the bid and buy silver at the ask, that is the lower bid price. Conversely, if you sold silver on the bid and bought gold at the offer, that is the higher offer price.</p> <p style="text-align: center;"><a href="" rel="attachment wp-att-6048"><img src="" alt="letter-may-28-ratio" width="899" height="498" class="size-full wp-image-6048 aligncenter" /></a><em></em></p> <p style="text-align: center;"><em>Click <a href="">here</a> for 3 year and 21 year versions of the chart above.</em></p> <p> <em>For each metal, we will look at a graph of the basis and cobasis overlaid with the price of the dollar in terms of the respective metal. It will make it easier to provide brief commentary. The dollar will be represented in green, the basis in blue and cobasis in red.</em></p> <p>Here is the gold graph. </p> <p style="text-align: center;"><a href="" rel="attachment wp-att-6050"><img src="" alt="letter-may-28-gold-near" width="899" height="498" class="size-full wp-image-6050 aligncenter" /></a><em></em></p> <p style="text-align: center;"><em>Click <a href="">here</a> for 3 year and 21 year versions of the chart above.</em></p> <p> The bid price of the dollar is calculated from the offer price on gold (as buying gold is just selling the dollar). </p> <p> We see a small rise in the basis (i.e. abundance) and drop in cobasis (i.e. scarcity), while the dollar dropped 2mg (i.e. the price of gold went up). </p> <p> Our calculated fundamental price fell a few dollars (you can view the chart <a href="">here</a>) although our new software platform calculates a higher value than the old. It’s important to look at why. </p> <p> The reason is on this graph of the continuous basis both from the old software (with the old data provider) as well as the new.</p> <p style="text-align: center;"><a href="" rel="attachment wp-att-6052"><img src="" alt="letter-may-28-gold-comparison" width="988" height="453" class="size-full wp-image-6052 aligncenter" /></a></p> <p>The new basis (abundance) is a bit lower and the new cobasis (scarcity) is a bit higher, compared to the old. That’s why our calculated fundamental price is higher.</p> <p>Which is more accurate? While we still have more work to do validate the new, we would bet an ounce of fine gold against a soggy dollar bill that the new values are more accurate for two reasons. One, the raw data is better. Two, the new software is better. Is it possible there is a bug? Of course, but we would not expect a bug to result in a tighter spread.</p> <p>The absolute value of the fundamental prices of the old and new software/data are different. However, the direction (and approximate size) of the move this week is the same.</p> <p>Now let’s look at silver.</p> <p style="text-align: center;"><a href="" rel="attachment wp-att-6049"><img src="" alt="letter-may-28-silver-near" width="900" height="498" class="size-full wp-image-6049 aligncenter" /></a><em></em></p> <p style="text-align: center;"><em>Click <a href="">here</a> for 3 year and 21 year versions of the chart above.</em></p> <p> In silver, there is almost no change in the July basis or cobasis.</p> <p>However, the market price is up. And so it’s not surprising that our calculated fundamental price is up as well (both old and new).</p> <p>Here is the corresponding graph comparing the old and new continuous silver bases.</p> <p style="text-align: center;"><a href="" rel="attachment wp-att-6051"><img src="" alt="letter-may-28-silver-comparison" width="998" height="439" class="size-full wp-image-6051 aligncenter" /></a></p> <p>The difference is even more pronounced in silver. Whereas in gold, the basis came down 10bps and the cobasis up 13bps (on May 26). In silver, the basis came down 34bps and the cobasis up 45bps. The cobasis is now much closer to a mirror image of the basis. It will never be perfect, which is just how the math works out.</p> <p>Recall that basis = future(bid) – spot(ask), and cobasis = spot(bid) – future(ask). If there is a bid-ask spread (and there is), then the cobasis will be more negative than the basis is positive. On Friday, the old basis and cobasis are 1.44% and -1.74%, respectively. The new are 1.10% and 1.30%, which are closer both in absolute and percentage terms.</p> <p>What is the new silver fundamental saying? Well, remember that technical analyst we’ve been writing about since the beginning of May? Well let’s just say that the new silver fundamental calculation definitely does not suggest that one ought to have shorted silver or ought to be shorting it now.</p> <p><em>Keith will be speaking at the </em><a href="">Mining Investment Europe</a><em> event in Frankfurt in mid-June. He will be in London the week of June 19, and in New York the week of June 26. If you’re interested in attending a Monetary Metals seminar on GOFO and transparency in the gold market in either city, or to meet with Keith to discuss gold investment, please click </em><a href="">here</a><em>.</em></p> <p>© 2017 <a href="">Monetary Metals</a></p> Business Commodity markets Economic history of the Netherlands Economy Finance Foreign exchange market Gold as an investment Gold fixing Market Conditions Money None Precious metals Reuters Silver as an investment Stock market Transparency United States dollar US Federal Reserve Mon, 29 May 2017 11:29:16 +0000 Monetary Metals 596861 at Markets Wrap: Stocks Flat In Quiet Session With US, UK And China Closed For Holiday <p>U.S. markets are closed for the Memorial Day holiday, and with UK and Chinese markets also closed for various holidays, it has been a quiet start to the week, with S&amp;P futures essentially unchanged, trading at&nbsp; 2,415, up 0.06%, a new all time high. </p> <p>European stocks opened marginally lower in quiet trading but have since erased the dip to trade little changed, while shares in British Airways owner IAG dipped in early Spanish trading as the airline pushed to recover from a massive technology failure that disrupted hundreds of flights. The Stoxx Europe 600 Index was flat at 391.24, down 0.03%. Italian assets underperformed after Renzi comments on early elections, with banks selling off and bund/BTP spread widening. BTP futures have extended their slide in thin liquidity, with the 10y yield now higher by 7bps fueled by Renzi comments and supply concession. The Italian FTSE MIB fell 2% with traders citing rising risks that the euro zone's third largest economy could head to early elections in the autumn. "The latest news out of Italy seems to suggest that a new electoral law is indeed in the making," LC Macro Advisers' founder Lorenzo Codogno says. "The four major parties appear to converge towards the so-called German system, i.e. a purely proportional system with a 5 percent entry threshold."</p> <p>In Asia, South Korea's Kospi fell for the first time in seven sessions, slipping from an all time high. North Korea tested another missile although the launch had little impact on risk assets.Australian bonds pared opening gains and slip into negative after sluggish 20-year auction; 10-year yield rises two basis points; ASX 200 down. Nikkei little changed; Chinese developers surge in Hong Kong.&nbsp; Chinese developers lifted the Hang Seng Index, with China Evergrande Group surging to a record in Hong Kong. Bunds have meandered through the session with a speech from the ECB president Mario Draghi at 2:00pm BST in focus, but volumes are also especially light. </p> <p><strong><em>Global Equities Wrap:</em></strong></p> <ul> <li>S&amp;P futures: 2415: +0.06%</li> <li>Stoxx 600: 391.12, -0.06%</li> <li>NIkkei -0.02%</li> <li>Hang Seng +0.24%</li> <li>Kospi -0.14%</li> <li>ASX -0.78%</li> </ul> <p>The EUR has drifted higher against the USD, paring back some of the losses seen in the Asia-Pacific region after the Fed's Williams said three highes in 2017 made sense and balance sheet normalization should begin this year. The pound posted the biggest gain among G-10 currencies, though the bounce wasn’t enough to erase Friday’s plunge when polls showed the coming election may be closer than expected. South Africa’s rand reversed a rally after President Jacob Zuma <a href="">survived a bid </a>by some members of his party to remove him from office.</p> <p>Oil trades back under $50/bbl as boost in U.S. drilling activity threatens OPEC’s efforts to reduce a global supply glut. On Friday Baker Hughes revealed U.S. explorers added 2 rigs to 722, highest level since April 2015. After the market was unimpressed with accord Thursday to prolong output limits, Saudi Arabia’s Energy Minister Khalid Al-Falih said the strategy is working, global stockpiles will drop faster in 3Q </p> <p>“It’s huge inventories around the globe that are really keeping a lid on prices, combined with the ability of those agile U.S. producers who scramble back into action should the oil price rise,” says Michael McCarthy, chief market strategist at CMC Markets in Sydney .</p> <p>As <a href="">Bloomberg notes</a>, despite the longest winning streak for U.S. stocks since February and record highs posted by equities globally, the ongoing bond rally hints at an undercurrent of investor caution. With the fate of the Trump administration’s pro-growth stimulus plans uncertain, the dollar is one of the weakest-performing major currencies this year, even as the Federal Reserve prepares for more rate hikes. Gauging the ability of the global economy to withstand rising borrowing costs will be key for traders.</p> <p>“The U.S. economy is about as close to the Fed’s dual-mandate goals as we’ve ever been,” Federal Reserve Bank of San Francisco President John Williams said in Singapore on Monday. “<strong>With the attainment of our dual-mandate goals close at hand, it’s more important than ever for monetary policy to work toward what I like to call a ‘Goldilocks economy’ -– an economy that doesn’t run too hot or too cold</strong>.”</p> <p><em><strong>Key overnight/weekend highlights</strong></em></p> <ul> <li>In the US, the Trump Twitter-feed has been active on the Russian question. German Chancellor Merkel, whose country was described as "bad, very bad" by US President Trump, has suggested that Europe may not be able to rely on the US. North Korea has fired a ballistic missile. Markets basically have ignored it all.</li> <li>US Fed President Williams believes three is a magic number when it comes to rate increases this year (in total). A June rate hike is widely expected, but it is the nature of the quantitative policy plan that offers the most interest.</li> <li>North Korea fires a ballistic missile into Sea of Japan; neighbors protest</li> <li>G-7 pledges to keep markets open, fight protectionism</li> <li>South Africa’s Zuma said to survive ANC proposal to remove him</li> <li>ECB President Draghi is due to speak today, and it seems rather unlikely that his addiction to easing will be challenged. However, it is not necessarily clear whether Draghi's dovishness represents the ECB's views, and the central bank may shift tone this summer.</li> <li>In the UK, the weekend opinion polls showed the Conservative Party's lead reduced, but not as drastically as some of last week's polls had suggested. The prime minister and the leader of the opposition are being interviewed today</li> </ul> <p><strong><em>Top Market News</em></strong></p> <ul> <li>Merkel Signals New Era for Europe as Trump Smashes Consensus</li> <li>Payment Delays Soar as EU’s Small Businesses Offer Reality Check</li> <li>Draghi’s Riddle of Missing Inflation Makes Case for ECB Patience</li> <li>Greece needs clear roadmap for the debt, SYRIZA MEP Papadimoulis</li> <li>Rio Tinto Hires At Least 5 Metals Analysts in Singapore: Reuters</li> <li>Hang Seng Bank, Bank of East Asia Lift H.K. Mortgage Rates: HKEJ</li> </ul> <p>In global markets, the Stoxx Europe 600 Index was little changed as of 11:29 a.m. in London. IAG dropped 2.2 percent. S&amp;P 500 futures rose by less than 0.1 percent after the underlying gauge closed at a record high on Friday. The Korean Kospi fell for the first time in seven sessions, slipping from a record, after North Korea tested yet another ballistic missile, its 9th for the year.</p> <p>In currencies, the GBP rose 0.3% after the biggest weekly decline since November. The euro was little changed at $1.1184. The Bloomberg’s Dollar Spot Index edged lower by less than 0.1 percent. The rand fell 0.5 percent after erasing a gain of 1.8 percent. The yen was little changed at 111.35 per dollar. </p> <p>In rates, the yield on 10-year Treasuries was 2.25 percent at the end of last week. Cash trading on the securities is closed for the day. The yield on 10-year Italian bonds jumped seven basis points after former Prime Minister Matteo Renzi raised the prospect of an early election.</p> <p>West Texas oil fell 0.4 percent to $49.61 a barrel. OPEC underwhelmed investors with its production-cut extension deal last week, while Baker Hughes said Friday that U.S. explorers added two oil rigs to take the count to 722, the highest level since April 2015. Gold edged higher by less than 0.1 percent to $1,267.33 an ounce. </p> <p>* * * </p> <p><strong>Jim Reid concludes the overnight wrap</strong></p> <p>A happy long weekend to all our readers in the UK and US today. It’s been an extended weekend made all the better by Arsenal lifting the FA Cup on Saturday. A rare moment of joy in what has otherwise been a fairly depressing season for Arsenal fans. So with a number of markets closed today it’s likely to be a fairly quiet day ahead with Mario Draghi’s speech this afternoon being the highlight but there are a few interesting releases to look forward to over the remainder of the week. In terms of data we’ll be able to test the European inflation pulse this week with May CPI reports scattered over the next few days. The US calendar is slated with a number of releases which should help to sharpen up Q2 GDP forecasts and it’ll conclude with the May employment report and all-important payrolls print on Friday.</p> <p>All that to look forward to but before we get there we’ve got a couple of important snippets to note from the weekend. The first is the G-7 meeting which finished on Saturday and appears to be best remembered for an unusually short sixpage final statement which was less than a third of the length of last year’s statement. Discussions over climate change and specifically the Paris accord appears to have been the main talking point with the US taking a separate stance and Merkel saying after the meeting that discussions with Trump had been “very unsatisfying” and that there “was no indication that the US will stay in the Paris agreement”. Trump has since said that the US will make a final decision on the Paris accord this week. The discontent and lack of common ground between the G-6 and US has perhaps been even further exaggerated by comments from Merkel since. Speaking at a campaign rally in Munich yesterday the Chancellor said that “the times in which we can fully count on others are somewhat over, as I have experienced in the past few days” and that “we Europeans must really take our destiny into our own hands”.</p> <p>The other story to highlight is here in the UK where opinion polls continue to show a tightening gap in the race for next month’s General Election between the Conservative and Labour parties. After a YouGov/Times poll last Thursday revealed that the gap for the Tories had shrunk to just 5% at 43%-38%, the same pollster yesterday showed the gap as widening back, albeit modestly, to 7% at 43%-36%. Still, that is down from as high as 19% earlier this month. It is however worth noting that we are seeing some reasonable divergence between pollsters now. Indeed since the YouGov/Times poll last week, we have had 5 further opinion polls (including the aforementioned one yesterday) with the lead for the Tories ranging anywhere from 5% to 14%. Those polls have the Conservatives between 43% and 46%, and Labour between 32% and 38%. It does appear that methodological differences can mostly explain the wide ranging forecasts. </p> <p>For those polls with narrower leads, namely YouGov and ORB, the polls assign probabilities based wholly or primarily on the self-reported likelihood of casting a ballot. Those showing a bigger lead, namely ICM and ComRes polls, based turnout on historical figures for demographic groups. As the FT highlights this would have improved accuracy in most previous elections but does risk coming unstuck if voter behaviour changes significantly.</p> <p>That all said there is no doubt that these polls are being closely watched especially with there being just 10 days until the election now. The possibility of a hung parliament through the loss of a Tory majority, or a Tory majority that fails to dilute the hard Brexit wing are outcomes seemingly not out of reach. Sterling took a knock on Friday (-1.07%) and was down -1.78% over the week for its worst weekly performance since November. It’s worth noting that PM May and Labour’s Corbyn are due to take part in a live TV Q&amp;A tonight at 8.30pm BST so that should be one to watch given the political weather of the last week.</p> <p>In FX markets this morning the impact from Merkel’s comments and the G-7 meeting over the weekend has been fairly muted with the Euro down only -0.15% as we go to print. Meanwhile Sterling (+0.15%) is actually a little stronger in the early going versus the Dollar. In equity markets, with China out it’s been fairly quiet with the Nikkei (+0.16%), Hang Seng (+0.10%) and Kospi (+0.44%) a little higher, but the ASX (-0.56%) in the red. Unsurprisingly volumes are well below the usual daily average. It’s worth also adding that North Korea conducted another missile test early this morning however it appears to have been largely ignored in markets.</p> <p>Quickly recapping Friday’s session now where, with markets already mostly packed up for the long weekend, the focus was largely on the economic data in the US. Most significant was the second release of Q1 GDP which saw growth revised up more than expected to +1.2% qoq (vs. +0.9% expected) from +0.7% in the initial flash estimate. That pushed the YoY rate up to +2.0% from the +1.9% previously reported. The core PCE reading was also revised up to +2.1% qoq. Growth in capex was revised up while both government purchases and inventories made a less negative contribution than first predicted. We also got a first look at corporate profits which revealed a -1.9% qoq decline, although the YoY rate of +3.7% still appears fairly solid. The BEA also cited special factors impacting the corporate profits figure in Q1 including legal settlements and that stripping these out, profits would have been flat in QoQ terms.</p> <p>Away from that other data in the US and particularly indicators for Q2 growth appeared less encouraging. While headline durable goods declined less than expected in April (-0.7% mom vs. -1.5% expected), ex-transportation orders fell -0.4% mom (vs. +0.4% expected) following a big upward revision to the March reading while core capex orders were reported as being unchanged in April versus expectations for a +0.5% mom uplift. The Atlanta Fed revised down their Q2 growth forecast by four-tenths to 3.7% while the NY Fed’s measure is at 2.2% from 2.3%. Finally the University of Michigan consumer sentiment reading for May was revised down to 97.1 from 97.7 following downward revision to both current conditions and expectations. However 1y inflation expectations were left unchanged at 2.6% while 5-10y inflation expectations were revised up one-tenth to 2.4%.</p> <p>Closer to home there was very little data of significance in Europe although it is worth highlighting that manufacturing confidence in Italy slipped from a near 10- year high, while consumer confidence also tumbled 2pts in May and to the lowest in over 2 years. European sovereign bond markets were actually fairly well bid on Friday although that was largely attributed to a bit of month end positioning with yields down anywhere from 2bps to 5bps generally. On the other hand 10y Treasury yields ended just 0.9bps lower at 2.247%. There was a bit of Fedspeak to note but it didn’t move the dial with Williams reiterating the need for a gradual and well communicated balance sheet unwind.</p> <p>Meanwhile in equity land European bourses mostly finished in the red, albeit on very low volumes. The Stoxx 600 ended -0.20% to finish the week pretty much unchanged. The FTSE 100 (+0.40%) did however get a boost from the weaker Pound, while over in the US the S&amp;P 500 (+0.03%) eked out another record high and in doing so rose for the 7th consecutive session which matches the longest streak this year set back in February. Amazingly the S&amp;P 500 has now gone 231 sessions without retracing 5% from the peak. That is the longest run since 1996 and the sixth longest since the 1950s. The record is 394 consecutive sessions set back in the mid 90s so there is still some way to go to match that.</p> <p>To this week’s calendar now. As noted before, with markets closed in both the UK (Bank Holiday) and US (Memorial Day) today it’s an unsurprisingly quiet start to the week with M3 money supply growth for the Euro area in April the only data due. We kick off Tuesday in Japan where the April retail sales and employment data is due. In Europe tomorrow we get Q1 GDP in France, CPI in Germany in May and confidence indicators for the Euro area in May. Over in the US tomorrow we’ll get personal income and spending for April along with the PCE core and deflator readings, followed by the March S&amp;P/Case-Shiller house price index reading, May consumer confidence reading and May Dallas Fed manufacturing activity index print. Turning to Wednesday, the overnight data in Asia comes from China where the official May PMIs are due. In Japan we’ll get industrial production and housing starts. In Europe on Wednesday we get May CPI in France, Germany unemployment in May, April money and credit aggregates in the UK and the May CPI report for the Euro area. In the US on Wednesday we’ll get the Chicago PMI for May and April pending home sales print. Thursday kicks off in Japan again where Q1 capex data will be released along with the final manufacturing PMI revision. Manufacturing PMIs dominate the European session on Thursday with final readings due in the Euro area, Germany and France along with a first look at the periphery and UK. In the US we’ll also get the manufacturing PMI along with Q1 unit labour costs and nonfarm productivity, May ADP report, initial jobless claims, May ISM manufacturing and April construction spending. It’s a quiet end to the week in Europe on Friday with PPI for the Euro area in April the only data due. In the US it’s all eyes on the May employment report, while we’ll also get the April trade balance print.</p> <p>Away from the data we’re light on Fedspeak this week with Williams (today), Brainard (Tuesday), Kaplan (Wednesday) and Williams and Powell (Thursday) the only scheduled speakers. Over at the ECB we’ll hear&nbsp; from Nowotny and Draghi (today), Liikanen (Tuesday) and Villeroy (Thursday). The BoJ’s Harada also speaks on Thursday. Other things to note this week are UK PM May’s televised Q&amp;A tonight with opposition leader Jeremy Corbyn and the China-EU summit beginning on Tuesday in Brussels.</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="880" height="495" alt="" src="" /> </div> </div> </div> Angela Merkel Asia-Pacific ASX ASX 200 Atlanta Fed Bank of Japan Bond Borrowing Costs Business Case-Shiller Chicago PMI China conservative party Consumer Confidence Consumer Sentiment CPI Currency Dallas Fed Dallas Fed Donald Trump East Asia Economy Economy of the European Union Equity Markets Eurogroup European Central Bank European Union European Union Eurozone federal government Federal Reserve Federal Reserve Bank Federal Reserve Bank of San Francisco flash France FTSE 100 G-7 Germany Global Economy Group of Thirty Hang Seng 40 Hong Kong Housing Starts Initial Jobless Claims Italy Japan Jim Reid John Williams Kospi KOSPI Labor M3 Mario Draghi Michigan Monetary Policy Money Supply Nikkei Nikkei 225 North Korea NY Fed OPEC Organization of Petroleum-Exporting Countries Personal Income Reality S&P 500 STOXX Stoxx 600 the University of Michigan Trade Balance Trump Administration Unemployment University Of Michigan US Fed US Federal Reserve West Texas Yen Mon, 29 May 2017 11:02:47 +0000 Tyler Durden 596860 at "How Does This Ever End?" An Interview With Lacy Hunt <p>The US economy is struggling with too much debt at every level. A debt jubilee isn&rsquo;t going to solve it; and shifting demographics will likely make it worse. <strong>So, is America headed for two decades of lost growth like Japan? </strong>Dr. Lacy Hunt, who was interviewed by <a href="">Erik Townsend on the latter&#39;s MacroVoices podcast</a>, considers<strong> the endgame for the US economy... Well, we could get lucky, Hunt says.</strong></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&quot;The US economy could experience a modern equivalent of the California gold rush. In the 1820&#39;s and 1830&#39;s, we took on a lot of debt to finance the early canals, steamship lines railroads - it was over-investment, over consumption. The panic year was 1838. Martin Van Buren was president, he didn&#39;t know what was going on. By this, the country languished very badly for 11 years, <strong>and then gold was discovered it California, led to a huge surge in national income, people were very careful how they spent their income. </strong></p> </blockquote> <p><a href=""><img alt="" src="" style="width: 500px; height: 385px;" /></a></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&quot;We paid off the debt of the 1820&#39;s, 1830&#39;s, and the economy recovered. In 1873, we had another panic year brought on by too much debt that financed the railroads - remember we built the central line first and then the northern and southern routes, a lot of feeder road industries that supplied the railroads over-expanded and it was over-investment, over-consumption.The panic year hit. <strong>Grant was no more knowledgeable of what was going on than Van Buren had been in 1838. We had no central bank, the government continued to balance its budget. We had a prolonged period of austerity, but by the early 1890&#39;s, the problem had been solved, and we began to go on our merry way.&quot; </strong></p> </blockquote> <p>&quot;Irrational behavior&quot; on the part of US policy makers means our economy will grow to increasingly resemble Japan&#39;s over the long term...</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&ldquo;I think that our results will mirror Japan over time, certainly not on a quarter to quarter or annual basis, but they&rsquo;re public and private debt is just under 600% of GDP. <strong>Our total public and private debt is about 373%. They&#39;ve tried to solve an indebtedness problem by taking on more debt. There are many many examples of what has happened to extremely over-indebted economies.&quot;</strong></p> </blockquote> <p><a href=""><img alt="" src="" style="width: 500px; height: 372px;" /></a></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&nbsp;</p> </blockquote> <p>Hunt notes that there has been important recent work by Allen Taylor, also by a number of people in Europe. There is also work that&rsquo;s been done historically. For example, the leader of The Enlightenment, David Hume- his famous paper on public finance, written in 1752 reaches<strong> the conclusion that:</strong></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>...when a state has mortgaged all of its future liabilities, the state, by necessity, lapses into tranquility, languor, and impotence. </strong></p> </blockquote> <p>And there was Irvin Fisher&rsquo;s 1933 paper on the consequences of extreme over-indebtedness, including pointing out that</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&quot;one of the factors that will happen will be that <strong>the velocity of money will be very weak, </strong>and so there has been a tremendous amount of work. It&rsquo;s just generally speaking been ignored.&quot;</p> </blockquote> <p><a href=""><img alt="" src="" style="width: 500px; height: 386px;" /></a></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&nbsp;</p> </blockquote> <p>Hunt points to an excellent summary was published in 2010 by McKinsey Global Institute...</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&quot;They looked at 24 advanced economies that became extremely over-indebted. <strong>The indebtedness brought on a panic year, such as 1929, 1873, 2008, and they followed the process through to completion. </strong></p> <p>&nbsp;</p> <p><strong>It&rsquo;s a very long process, and what it shows is that an indebtedness problem cannot be solved by taking on additional debt.</strong></p> <p>&nbsp;</p> <p>McKinsey says specifically that multi-year sustained rise in the savings rate, what they term austerity, is needed to solve the problem, and of course, as we all know, in modern democracies, that option doesn&rsquo;t seem to exist.</p> <p>&nbsp;</p> <p><strong>So, we try to continue to use what has failed, and while we get transitory improvement in economic activity, the longer-term trend is to weaker and weaker economic performance.&quot; </strong></p> </blockquote> <p>Moving on, Townsend asks, <u><em><strong>is the secular bull market in bonds really over?</strong></em></u></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&quot;My view is that the secular low in long treasury bonds is not at hand - <strong>doesn&rsquo;t mean that rates cannot go up, they have gone up quite a number of times since 1990 when this bull run started, but they&rsquo;re not going to be able to stay up. The economy is too fundamentally weak.&quot; </strong></p> <p>&nbsp;</p> <p>&quot;The main consideration for believing that the trough is not at hand, <strong>is that nominal GDP growth and also the inflation rate is not yet at its secular low.</strong> There have been many transitory swings that will continue to be transitory swings, but thecritical factors that determines the nominal GDP of both working lower experiencing considerably slower growth and money supply,<strong> and at the same time the velocity of money is in a major downtrend.&quot; </strong></p> </blockquote> <p><a href=""><img alt="" src="" style="width: 500px; height: 386px;" /></a></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>&quot;In 1997, $1 of new M2 growth increased GDP by $2.20, and the first quarter of this year, it was down to $1.42.</strong> This reflects the fact that we have too much of the wrong type of debt. There are many other influences in velocity, but that&rsquo;s the critical factor.</p> <p>&nbsp;</p> <p>I think it&rsquo;s important to <strong>remember that the velocity of money is very volatile.</strong></p> <p>&nbsp;</p> <p>The old secular low was reached at 1.2 in 1946, and that was the year in which we saw the daily, weekly, and monthly lows in the 30 year bond yield. Now, if that is the key factor, not the only factor, but the key factor, which is driving the velocity of money downward, <strong>then velocity is going lower because in Europe, which has debt to GDP ratio 100 percentage points higher than the U.S., velocity is at one and in China and Japan, which are also more indebted than the United States, velocity is around 0.5 to 0.6.&quot;</strong></p> </blockquote> <p>So, Dr. Hunt explains, the US debt load willl continue to climb and velocity will continue to slow - <u><em>unless, of couse, &quot;we get lucky.&quot;</em></u></p> <p><em>The full interview courtesy of <a href="">MacroVoices is below</a>:</em></p> <p><iframe allowfullscreen="" frameborder="0" height="315" src="" width="560"></iframe></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="624" height="485" alt="" src="" /> </div> </div> </div> Austerity Bond Business China Credit Debt Debt-to-GDP ratio Demographics Economic policy Economy Economy of the United States European debt crisis Finance Fiscal policy Fisher Gross domestic product Japan M2 McKinsey McKinsey Global Institute Money Money Supply National debt of the United States Nominal GDP Savings Rate Mon, 29 May 2017 10:10:00 +0000 Tyler Durden 596847 at Manchester Innocence Lost - "Torture One Day, Passports The Next" <p><a href=""><em>Authored by Raul Ilargi Meijer via The Automatic Earth blog,</em></a></p> <p><strong>There are times when you have to talk about things when it appears most inopportune to do so, because they&rsquo;re the only times people might listen.</strong> Times when people will argue that &lsquo;this is not the right moment&rsquo;, while in reality it&rsquo;s the only moment.</p> <p>A solid 99% of people will have been filled, and rightly so of course, with a <span style="text-decoration: underline;"><strong>mixture of disgust, disbelief and infinite sadness </strong></span>when hearing of yet another attack on civilians in Europe, this one in Manchester. An equally solid 99% will have failed to recognize that while the event was unique for the city of Manchester, it was by no means unique for the world, not even at the time it happened.</p> <p>Though the footage of parents desperately trying to find their children, and the news that one of the dead was just 8 years old, <strong>touches everyone in more or less the same place in our hearts,</strong> by far most of us miss out on the next logical step. In a wider perspective, it is easy to see that parents crying for missing children, and children killed in infancy, is what connects Manchester, and the UK, and Europe, to parents in Syria, Libya, Iraq.</p> <p><em><strong>What&rsquo;s different between these places is not the suffering or the outrage, the mourning or the despair, what&rsquo;s different is only the location on the map.</strong></em> That and the frequency with which terror is unleashed upon a given population. But just because it happens all the time in other places doesn&rsquo;t make it more normal or acceptable.</p> <p>It&rsquo;s the exact same thing, the exact same experience, and still a vast majority of people don&rsquo;t, choose not to, feel it as such. Which is curious when you think about it. <strong>In the aftermath of a terror attack, the mother of a missing, maimed or murdered child undergoes the same heartbreak no matter where they are in the world</strong> (&ldquo;I hope the Russians love their children too&rdquo;). But the empathy, the compassion, is hardly acknowledged in Britain at all, let alone shared.</p> <p>Not that it couldn&rsquo;t be. Imagine that our papers and TV channels would tell us, preferably repeatedly, in their reports in the wake of an attack like the one in Manchester<strong> how eerily similar the emotions must be to those felt in Aleppo, Homs and many other cities. That would change our perception enormously. But the media choose not to make the connection,</strong> and the people apparently are not capable of doing it themselves.</p> <p>None of that changes the fact, however, that <strong>British lives are not more valuable than Syrian and Libyan ones.</strong> Not even when we&rsquo;ve gotten used to &lsquo;news&rsquo; about bombings and drone attacks executed for years now by US-led coalitions, or the images of children drowning when they flee the area because of these attacks.</p> <p><u><strong>The overall theme here is that 99.9% of people everywhere in the world are innocent, especially when they are children, but their governments and their societies are not. </strong></u>That doesn&rsquo;t justify the Manchester attack in any shape or form, it simply lays equal blame and condemnation for western terror attacks in the Middle East and North Africa, perpetrated by the people we elect into power.</p> <p>This is something people in the west pay no attention to. It&rsquo;s easier that way, and besides our media with great enthusiasm pave the way for our collective ignorance, by calling some other group of people &lsquo;terrorists&rsquo;, which while they&rsquo;re at it is supposed to justify killing some other mother&rsquo;s child.</p> <p>There&rsquo;s another thing that is also different: they didn&rsquo;t start. We did. The British and French terrorized the region for many decades, since the 19th century, even way before the Americans joined in. The presence of oil, and its rising role in our economies, caused them to double down on that terror.</p> <p>Yes, it&rsquo;s awkward to talk about this on the eve of a deadly attack, and it&rsquo;s easy to find arguments and rhetoric that appear to deflect responsibility. But at the same time this truly is the only moment we can hope that anyone will listen. And lest we forget, the UK carries an outsized share of the responsibility in this tragedy, both historically and in the present.</p> <p><strong><em>You can say things about the city coming together, or the country coming together, or &ldquo;not allowing terrorists to affect our way of life&rdquo;, but perhaps it should instead really be all the mothers who have children missing or dying, wherever they live, coming together. They all see their ways of life affected, and many on a daily basis.</em></strong></p> <p>Those mothers in Syria and Libya, who have been through the same hellhole as those in Manchester, are a lot closer to you than the politicians who send out jet fighters to bomb cities in the desert, or sell arms to individuals and organizations to control these cities for their own narrow personal gain, such as the governments of Saudi Arabia and Turkey.</p> <p><strong>The traumatized mothers in the desert are not your enemies; your enemies are much closer to home.</strong> Still, most of you will tend to react to fear and panic by looking for protection in exactly those circles that are least likely to provide it. The UK government under Theresa May, like those of Tony Blair, Gordon Brown and David Cameron before, is as cynically eager as their predecessors to send bombers into the desert, and sell arms to those living there.</p> <p><u><strong>We can illustrate all this with a few bits of news. </strong></u>First, the US-led coalotion, of which the UK is a substantial part, killed more civilians in Syria than at any time since they started bombing the country almost 3 years ago. They keep saying they don&rsquo;t target civilians, but to put it mildly they don&rsquo;t appear to go out of their way not to hit them. For instance, a single attack on Mosul, Iraq in March killed over 105 civilians. &lsquo;Collateral damage&rsquo; in these cases, and there are hundreds by now, is a very disrespectful term. Moreover, the files released by Chelsea Manning show US soldiers killing people &lsquo;with impunity&rsquo;.</p> <p style="margin-left: 20px;"><a href="" target="new"><span style="font-size: 13px; color: #ff2222; font-weight: bold;">Deadliest Month For Syria Civilians In US-Led Strikes</span> </a></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><em>US-led air strikes on Syria killed a total of 225 civilians over the past month, a monitor said on Tuesday, the highest 30-day toll since the campaign began in 2014. The Syrian Observatory for Human Rights said the civilian dead between April 23 and May 23 included 44 children and 36 women. The US-led air campaign against the Islamic State jihadist group in Syria began on September 23, 2014. &ldquo;The past month of operations is the highest civilian toll since the coalition began bombing Syria,&rdquo; Observatory head Rami Abdel Rahman told AFP. &ldquo;There has been a very big escalation.&rdquo; The previous deadliest 30-day period was between February 23 and March 23 this year, when 220 civilians were killed, Abdel Rahman said.</em></p> </blockquote> <p><strong>And it&rsquo;s not as if the British didn&rsquo;t or couldn&rsquo;t know what was going on.</strong> That was clear as early as 2003, when Tony Blair couldn&rsquo;t wait to join the Bush coalition to invade Iraq on the false premise of weapons of mass destruction. Before Libya was invaded, which led to Hillary&rsquo;s disgusting &lsquo;we came we saw he died&rsquo;, Gaddafi, the one who did die, warned Blair about what would happen. It indeed did, which makes Blair a guilty man.</p> <p style="margin-left: 20px;"><a href="" target="new"><span style="font-size: 13px; color: #ff2222; font-weight: bold;">Gaddafi Warned Blair His Ousting Would &lsquo;Open Door&rsquo; To Jihadis</span> </a></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><em>Muammar Gaddafi warned Tony Blair in two fraught phone conversations in 2011 that his removal from the Libyan leadership would open a space for al-Qaida to seize control of the country and even launch an invasion of Europe. The transcripts of the conversations have been published with Blair&rsquo;s agreement by the UK foreign affairs select committee, which is conducting an inquiry into the western air campaign that led to the ousting and killing of Gaddafi in October 2011. In the two calls the former British prime minister pleaded with Gaddafi to stand aside or end the violence. The transcripts reveal the gulf in understanding between Gaddafi and the west over what was occurring in his country and the nature of the threat he was facing.</em></p> <p>&nbsp;</p> <p><em>In the first call, at 11.15am on 25 February 2011, Gaddafi gave a warning in part borne out by future events: &ldquo;They [jihadis] want to control the Mediterranean and then they will attack Europe.&rdquo; In the second call, at 3.25pm the same day, the Libyan leader said: &ldquo;We are not fighting them, they are attacking us. I want to tell you the truth. It is not a difficult situation at all. The story is simply this: an organisation has laid down sleeping cells in north Africa. Called the al-Qaida organisation in north Africa &hellip; The sleeping cells in Libya are similar to dormant cells in America before 9/11.&rdquo;</em></p> <p>&nbsp;</p> <p><em>Gaddafi added: &ldquo;I will have to arm the people and get ready for a fight. Libyan people will die, damage will be on the Med, Europe and the whole world. These armed groups are using the situation [in Libya] as a justification &ndash; and we shall fight them.&rdquo; Three weeks after the calls, a Nato-led coalition that included Britain began bombing raids that led to the overthrow of Gaddafi. He was finally deposed in August and murdered by opponents of his regime in October.</em></p> </blockquote> <p>What they are guilty of is no more and no less than Manchester. <strong>No hyperbole, but a warning from Blair&rsquo;s own intelligence services back in 2003. </strong>The real weapons of mass destruction were not in Iraq, but in the White House and Downing Street no. 10. The CIA issued warnings similar to this.</p> <p style="margin-left: 20px;"><a href="" target="new"><span style="font-size: 13px; color: #ff2222; font-weight: bold;">British Intelligence Warned Tony Blair Of Manchester-Like Terrorism If The West Invaded Iraq</span> </a></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><em>Before the 2003 invasion of Iraq led by the U.S. and U.K., he was forcefully and repeatedly warned by Britain&rsquo;s intelligence services that it would lead to exactly this type of terrorist attack &mdash; and he concealed these warnings from the British people, instead claiming the war would reduce the risk of terrorism. We know this because of the Chilcot Report, the seven-year-long British investigation of the Iraq War released in 2016. The report declassifies numerous internal government documents that illustrate the yawning chasm between what Blair was being told in private and his claims in public as he pushed for war.</em></p> <p>&nbsp;</p> <p><em>On February 10, 2003, one month before the war began, the U.K.&rsquo;s Joint Intelligence Committee &mdash; the key advisory body for the British Prime Minister on intelligence matters &mdash; issued a white paper titled &ldquo;International Terrorism: War With Iraq.&rdquo; It began: &ldquo;The threat from Al Qaida will increase at the onset of any military action against Iraq. They will target Coalition forces and other Western interests in the Middle East. Attacks against Western interests elsewhere are also likely, especially in the US and UK, for maximum impact. The worldwide threat from other Islamist terrorist groups and individuals will increase significantly.&rdquo;</em></p> <p>&nbsp;</p> <p><em>And it concluded much the same way: &ldquo;Al Qaida and associated groups will continue to represent by far the greatest terrorist threat to Western interests, and that threat will be heightened by military action against Iraq. The broader threat from Islamist terrorists will also increase in the event of war, reflecting intensified anti-US/anti-Western sentiment in the Muslim world, including among Muslim communities in the West.&rdquo;</em></p> </blockquote> <p><strong>Not long behind Blair came David Cameron, </strong>a man after Tony&rsquo;s heart:</p> <p style="margin-left: 20px;"><a href="" target="new"><span style="font-size: 13px; color: #ff2222; font-weight: bold;">Cameron Brags Of &lsquo;Brilliant&rsquo; UK Arms Trade As EU Embargoes Saudi Arabia</span> </a></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><em>European ministers have embarrassed David Cameron by voting to impose an arms embargo on Saudi Arabia on the same day the British prime minister praised the UK for selling &ldquo;brilliant&rdquo; arms to the country. Speaking at a BAE Systems factory in Preston, the prime minister said the UK had pushed the sale of Eurofighter Typhoons to countries in the Middle East, including Oman and Saudi Arabia. [..] Cameron&rsquo;s speech in Preston came at the same time the European Parliament voted to impose an EU-wide ban on arms exports to Saudi Arabia, citing criticism from the UN of its bombing in Yemen. </em></p> <p>&nbsp;</p> <p><em>Asked at the talks how he was helping to export the planes, Cameron said: &ldquo;With the Typhoon there is an alliance of countries: the Italians, Germans and ourselves. We spend a lot of time trying to work out who is best placed to win these export orders. We&rsquo;ve got hopefully good news coming from Kuwait. The Italians have been doing a lot of work there. The British have been working very hard in Oman.&rdquo; The vote will not force EU members to comply with the ban, but will force the government to examine its relationship with Saudi Arabia. </em></p> <p>&nbsp;</p> <p><em>In the last year the British government has sold &pound;3 billion (US$4.18 billion) worth of arms and military kit to the Gulf state, as well as providing training to Saudi forces. A report released by Amnesty International on Friday called the ongoing trade with Saudi Arabia &ldquo;truly sickening,&rdquo; and urged governments to attend meetings in Geneva on Monday to discuss the implementation of the Arms Trade Treaty (ATT). The report names the UK, France, Germany, Italy, Montenegro, the Netherlands, Spain, Sweden, Switzerland, Turkey and the US as having issued licenses for arms to Saudi Arabia worth more than &pound;18 billion in 2015. </em></p> <p>&nbsp;</p> <p><em>The arms sold include drones, bombs, torpedoes, rockets and missiles, which have been used by Saudi Arabia and its allies for gross violations of human rights and possible war crimes during aerial and ground attacks in Yemen, the campaign group said. Control Arms Director Anna Macdonald said: &ldquo;Governments such as the UK and France were leaders in seeking to secure an ATT &ndash; and now they are undermining the commitments they made to reduce human suffering by supplying Saudi Arabia with some of the deadliest weapons in the world. It&rsquo;s truly sickening.&rdquo;</em></p> </blockquote> <p>British MPs from Cameron&rsquo;s own party didn&rsquo;t like it either, but <strong>what meaning does that have if it takes 5 years to issue a report, </strong>and moreover he can simply refuse to give evidence?</p> <p style="margin-left: 20px;"><a href="" target="new"><span style="font-size: 13px; color: #ff2222; font-weight: bold;">MPs Deliver Damning Verdict On David Cameron&rsquo;s Libya Intervention</span> </a></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><em>David Cameron&rsquo;s intervention in Libya was carried out with no proper intelligence analysis, drifted into an unannounced goal of regime change and shirked its moral responsibility to help reconstruct the country following the fall of Muammar Gaddafi, according to a scathing report by the foreign affairs select committee. The failures led to the country becoming a failed a state on the verge of all-out civil war, the report adds. The report, the product of a parliamentary equivalent of the Chilcot inquiry into the Iraq war, closely echoes the criticisms widely made of Tony Blair&rsquo;s intervention in Iraq, and may yet come to be as damaging to Cameron&rsquo;s foreign policy legacy. </em></p> <p>&nbsp;</p> <p><em>It concurs with Barack Obama&rsquo;s assessment that the intervention was &ldquo;a shitshow&rdquo;, and repeats the US president&rsquo;s claim that France and Britain lost interest in Libya after Gaddafi was overthrown. <strong>Cameron has refused to give evidence to the select committee</strong>. In one of his few reflections on his major military intervention, he blamed the Libyan people for failing to take their chance of democracy. </em></p> <p>&nbsp;</p> <p><em>The committee, which has a majority of Conservative members, did not have Chilcot-style access to internal papers, but took voluminous evidence from senior ministers at the time, and other key players such as Blair, the chief of the defence staff, Lord Richards, and leading diplomats. The result of the French, British and US intervention, the report finds, &ldquo;was political and economic collapse, inter-militia and inter-tribal warfare, humanitarian and migrant crises, widespread human rights violations, the spread of Gaddafi regime weapons across the region and the growth of Isil [Islamic State] in north Africa&rdquo;.</em></p> </blockquote> <p><u><strong>It seems obvious that if there were an impartial international body with the power to prosecute, Bush, Cheney, Blair, Cameron, Hillary etc. etc. (don&rsquo;t forget France) would be charged with war crimes. </strong></u>And Obama too: his &lsquo;shitshow&rsquo; comment must be seen in light of the &lsquo;we came we saw he died&rsquo; comment by Hillary Clinton, his Secretary of State. Think he didn&rsquo;t know what was happening?</p> <p>Another person who should be charged is Theresa May, Cameron&rsquo;s Home Secretary from May 2010 till July 2016, and of course Britain&rsquo;s present PM, who sells as much weaponry to Saudi Arabia as she possibly can while the Saudi&rsquo;s are shoving the few Yemeni&rsquo;s they leave alive back beyond the Stone Age. And then May has the gall to talk about humanitarian aid.</p> <p style="margin-left: 20px;"><a href="" target="new"><span style="font-size: 13px; color: #ff2222; font-weight: bold;">Theresa May Defends UK Ties With Saudi Arabia</span> </a></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><em>Theresa May has defended her trip to Saudi Arabia, saying its ties with the UK are important for security and prosperity. The prime minister is facing questions about the UK&rsquo;s support for the Saudi-led coalition which is fighting rebels in neighbouring Yemen. Labour Party leader Jeremy Corbyn said UK-made weapons were contributing to a &ldquo;humanitarian catastrophe&rdquo;. [..] Mrs May said humanitarian aid was one of the issues she would be discussing on her trip. &ldquo;We are concerned about the humanitarian situation &ndash; that&rsquo;s why the UK last year was the fourth largest donor to the Yemen in terms of humanitarian aid &ndash; &pound;103m. We will be continuing with that,&rdquo; she told the BBC.</em></p> <p>&nbsp;</p> <p><em>[..] <strong>Mr Corbyn called for the immediate suspension of UK arms exports to Saudi Arabia. He criticised the &ldquo;dictatorial Saudi monarchy&rsquo;s shocking human rights record&rdquo;</strong> and said the PM should focus on human rights and international law at the centre of her talks. &ldquo;The Saudi-led coalition bombing in Yemen, backed by the British government, has left thousands dead, 21 million people in need of humanitarian assistance and three million refugees uprooted from their homes,&rdquo; he said. &ldquo;Yemen urgently needs a ceasefire, a political settlement, and food aid, not more bombing. &ldquo;British-made weapons are being used in a war which has caused a humanitarian catastrophe.&rdquo;</em></p> </blockquote> <p>The one person who would probably not be in front of such a court is Jeremy Corbyn, opponent of May&rsquo;s in the June 8 elections. Though there is the issue that he never protested in much stronger terms as an MP. Still, if you have to pick one of the two, what is not obvious?</p> <p style="margin-left: 20px;"><a href="" target="new"><span style="font-size: 13px; color: #ff2222; font-weight: bold;">Theresa May Claims Selling Arms To Saudi Arabia Helps &lsquo;Keep People On The Streets Of Britain Safe&rsquo;</span> </a></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><em>Theresa May has staunchly defended selling arms to Saudi Arabia despite the country facing accusations of war crimes, insisting close ties &ldquo;keep people on the streets of Britain safe&rdquo;. Jeremy Corbyn called on the Prime Minister to halt those sales because of the &ldquo;humanitarian devastation&rdquo; caused by a Saudi-led coalition waging war against rebels in Yemen. The Labour leader spoke out after the Parliamentary committee charged with scrutinising arms exports said it was likely that British weapons had been used to violate international law. </em></p> <p>&nbsp;</p> <p><em>The Saudis stand accused of bombing multiple international hospitals run by the charity Médecins Sans Frontières, as well as schools, wedding parties and food factories. In the Commons, Mr Corbyn linked weapons sales to the ongoing refugee crisis, which he said should be Britain&rsquo;s &ldquo;number one concern and our number one humanitarian response&rdquo;. He added: &ldquo;That is why I remain concerned that <strong>at the heart of this Government&rsquo;s security strategy is apparently increased arms exports to the very part of the world that most immediately threatens our security.</strong></em></p> <p>&nbsp;</p> <p><em><strong>The British Government continue to sell arms to Saudi Arabia that are being used to commit crimes against humanity in Yemen </strong>, as has been clearly detailed by the UN and other independent agencies.&rdquo;</em></p> <p>&nbsp;</p> <p><em>But, in response, <strong>Ms May pointed out she had called on Saudi Arabia to investigate the allegations about Yemen</strong> when she met with the kingdom&rsquo;s deputy crown prince at the recent G20 summit in China. The Prime Minister dismissed Mr Corbyn&rsquo;s suggestion that &ldquo;what happened in Saudi Arabia was a threat to the safety of people here in the UK&rdquo;. Instead, she said: &ldquo;Actually, what matters is the strength of our relationship with Saudi Arabia. When it comes to counter-terrorism and dealing with terrorism, it is that relationship that has helped to keep people on the streets of Britain safe.&rdquo;</em></p> </blockquote> <p><strong>May&rsquo;s, and Britain&rsquo;s, utterly mad stance in this is perhaps best exemplified, in one sentence,</strong> by her comments during the speedy trip she made to Turkey, again to sell more arms to an at best highly questionable regime. Why do it, why drag your entire nation through the moral gutter for $100 million or a few billion? The military industrial complex.</p> <p style="margin-left: 20px;"><a href="" target="new"><span style="font-size: 13px; color: #ff2222; font-weight: bold;">Theresa May Signs &pound;100m Fighter Jet Deal With Turkey&rsquo;s Erdogan</span> </a></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><em>Theresa May issued a stern warning to Turkish president Recep Tayyip Erdogan about respecting human rights yesterday as she prepared to sign a &pound;100m fighter jet deal that Downing Street hopes will lead to Britain becoming Turkey&rsquo;s main defence partner.</em></p> </blockquote> <p>And once again, no, none of this justifies the Manchester bombing. Neither a government nor an extremist movement has any right to kill innocent people. But let&rsquo;s make sure we know that neither does.</p> <p><u><strong>There&rsquo;s another aspect to the story. MI6 had close links to the Libyan community in Manchester.</strong></u></p> <p style="margin-left: 20px;"><a href="" target="new"><span style="font-size: 13px; color: #ff2222; font-weight: bold;">&lsquo;Sorted&rsquo; by MI5: How UK Government Sent British-Libyans To Fight Gaddafi</span> </a></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><em>The British government operated an &ldquo;open door&rdquo; policy that allowed Libyan exiles and British-Libyan citizens to join the 2011 uprising that toppled Muammar Gaddafi even though some had been subject to counter-terrorism control orders, Middle East Eye can reveal. Several former rebel fighters now back in the UK told MEE that they had been able to travel to Libya with &ldquo;no questions asked&rdquo; as authorities continued to investigate the background of a British-Libyan suicide bomber who killed 22 people in Monday&rsquo;s attack in Manchester. </em></p> <p>&nbsp;</p> <p><em>Salman Abedi, 22, the British-born son of exiled dissidents who returned to Libya as the revolution against Gaddafi gathered momentum, is also understood to have spent time in the North African country in 2011 and to have returned there on several subsequent occasions. Sources spoken to by MEE suggest that the government facilitated the travel of Libyan exiles and British-Libyan residents and citizens keen to fight against Gaddafi including some who it deemed to pose a potential security threat. </em></p> <p>&nbsp;</p> <p><em>One British citizen with a Libyan background who was placed on a control order &ndash; effectively house arrest &ndash; because of fears that he would join militant groups in Iraq said he was &ldquo;shocked&rdquo; that he was able to travel to Libya in 2011 shortly after his control order was lifted. &ldquo;I was allowed to go, no questions asked,&rdquo; said the source. He said he had met several other British-Libyans in London who also had control orders lifted in 2011 as the war against Gaddafi intensified, with the UK, France and the US carrying out air strikes and deploying special forces soldiers in support of the rebels.</em></p> <p>&nbsp;</p> <p><em>&ldquo;They didn&rsquo;t have passports, they were looking for fakes or a way to smuggle themselves across,&rdquo; said the source. But within days of their control orders being lifted, British authorities returned their passports, he said. Many Libyan exiles in the UK with links to the LIFG [Libyan Islamic Fighting Group ] were placed on control orders and subjected to surveillance and monitoring following the rapprochement between the British and Libyan governments sealed by the so-called &ldquo;Deal in the Desert&rdquo; between then-British Prime Minister Tony Blair and Gaddafi in 2004.</em></p> <p>&nbsp;</p> <p><em>According to documents retrieved from the ransacked offices of the Libyan intelligence agency following Gaddafi&rsquo;s fall from power in 2011, British security services cracked down on Libyan dissidents in the UK as part of the deal, as well as assisting in the rendition of two senior LIFG leaders, Abdel Hakim Belhaj and Sami al-Saadi, to Tripoli where they allege they were tortured. </em></p> </blockquote> <p><u><strong>Torture one day, passports the other.</strong></u> Lovely. And it still gets better: MI6 didn&rsquo;t just have close contacts with Libyans in Manchester, it knew the alleged perpetrator&rsquo;s family, and used his father multiple times as on operative:</p> <p style="margin-left: 20px;"><a href="" target="new"><span style="font-size: 13px; color: #ff2222; font-weight: bold;">Manchester Attack as MI6 Blowback</span> </a></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><em>According to Scotland Yard, the attack on the crowd leaving the Ariana Grande concert at Manchester Arena, 22 May, has been perpetrated by Salman Abedi. A bankcard has been conveniently found in the pocket of the mutilated corpse of the &lsquo;terrorist&rsquo;. This attack is generally interpreted as proof that the United Kingdom is not implicated in international terrorism and that, on the contrary, it is a victim of it. </em></p> <p>&nbsp;</p> <p><em>[..] In 1992, Ramadan Abedi [Salman&rsquo;s father] was sent back to Libya by Britain&rsquo;s MI6 and was involved in a British-devised plot to assassinate Muammar Gaddafi. The operation having been readily exposed, he was exfiltrated by MI6 and transferred back to the UK where he obtained political asylum. He moved in 1999 to Whalley Range (south of Manchester) where there was already resident a small Libyan Islamist community. In 1994, Ramadan Abedi returned again to Libya under MI6&rsquo;s direction. In late 1995 he is involved in the creation of the Libyan Islamic Fighting Group (LIFG), a local branch of Al-Qaeda, in conjunction with Abdelhakim Belhadj. </em></p> <p>&nbsp;</p> <p><em>The LIFG was then employed by MI6 again to assassinate Gaddafi, for a payoff of &pound;100,000. This operation, which also failed, provoked heated exchanges within British Intelligence, leading to the resignation of one David Shayler. Other former members of the LIFG have also lived at Whalley Range, including Abedi&rsquo;s friend Abd al-Baset-Azzouz. In 2009, this last joined Al-Qaeda in Pakistan and became a close associate of its chief, Ayman al-Zawahiri. In 2011, al-Baset-Azzouz is active on the ground with the NATO operation against Libya. </em></p> <p>&nbsp;</p> <p><em>On 11 September 2012, he directs the operation against the US Ambassador in Libya, Christopher Stevens, assassinated at Benghazi. He is arrested in Turkey and extradited to the US in December 2014, his trial still pending. Nobody pays attention to the fact that Ramadan Abedi has linked LIFG members to the formation of Al-Qaeda in Iraq and, in 2011, he takes part in MI6&rsquo;s &lsquo;Arab Spring&rsquo; operations, and in LIFG&rsquo;s role on the ground in support of NATO. In any event, Abedi returned to Libya after the fall of Gaddafi and moves his family there, leaving his older children in the family home at Whalley Range.</em></p> <p>&nbsp;</p> <p><em>According to the former Spanish Prime Minister José Maria Aznar, Abdelhakim Belhadj was involved in the assassinations in Madrid of 11 March 2004. Later, he is secretly arrested in Malaysia by the CIA and transferred to Libya where he is tortured not by Libyan or American functionaries but by MI6 agents. He is finally freed after the accord between Saif al-Islam Gaddafi [Gaddafi&rsquo;s son] and the jihadists.</em></p> </blockquote> <p><strong>Luckily, perhaps the Brits are not that stupid:</strong></p> <p style="margin-left: 20px;"><a href="" target="new"><span style="font-size: 13px; color: #ff2222; font-weight: bold;">Half of Britons Blame UK&rsquo;s Foreign Wars for Terror Attacks at Home</span> </a></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><em>Slightly over a half of people in the UK agree that the nation&rsquo;s involvement in wars abroad has increased the terror threat to the country, a poll out Friday has showed. The survey found that 53% of 7,134 UK adults sampled by YouGov said they believed wars the UK supported or fought were in part responsible for terror attacks at home. [..] Labour leader Jeremy Corbyn, who made a speech earlier in the day to mark his return to general election campaigning, said UK&rsquo;s war on terror had not worked. He cited intelligence experts who said foreign wars, including in Libya, threatened the country&rsquo;s security.</em></p> </blockquote> <p><strong>If that is true, Theresa May obviously should have no chance of winning. </strong>May can and will try to use the horror of Manchester, and the subsequent pause in the campaign, to strengthen her position in the upcoming election, by playing on people&rsquo;s fear and making them believe she&rsquo;s in control. Even if the very attack itself makes clear that she&rsquo;s not. The Tories have already attacked Corbyn for saying their policies have failed; it was the wrong time to say that, according to them.</p> <p>But it&rsquo;s not. <u><strong>It&rsquo;s the very best time. This is when people pay attention. And having this discussion doesn&rsquo;t disrespect the victims of Manchester.</strong></u> If anything, it shows more respect than not having the discussion. Because you want to make sure this doesn&rsquo;t happen again, neither here nor there. And to achieve that, you have to look at why these things happen.</p> <p>An 8-year old child in Manchester, just like one in Mosul or Aleppo, is innocent. Yourself, perhaps not so much. <u><strong>The politicians you vote into power, and the media you read and watch to inform you, not a chance. Guilty as hell.</strong></u></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="293" height="168" alt="" src="" /> </div> </div> </div> al-Qaeda Barack Obama British government British intelligence Central Intelligence Agency China East Africa ETC European Parliament European Union France G20 Gaddafi family Germany International reactions to the death of Muammar Gaddafi Iraq Islam Islamic socialism Islamic State of Iraq and the Levant Italy Joint Intelligence Committee Kuwait Labour Labour Party Libyan Civil War Libyan intelligence LIFG Manchester Arena Mediterranean Middle East Middle East Muammar Gaddafi Netherlands None North Africa North Atlantic Treaty Organization Parliamentary committee Politics Politics Politics of Syria Reality Saif al-Islam Gaddafi Saudi Arabia Scotland Yard Switzerland Tony Blair Turkey U.K.’s Joint Intelligence Committee UK Government United Kingdom United Nations War White House White House Mon, 29 May 2017 10:00:00 +0000 Tyler Durden 596854 at In "Watershed Moment" Merkel Says Germany Can No Longer Rely On America <p>One day after Donald Trump <a href="">infuriated Angela Merkel </a>and the rest of his G-7 peers, when the US president refused to endorse the Paris climate treaty, prompting the German chancellor to say&nbsp; that “the whole discussion about climate has <em>been difficult, or rather very unsatisfactory</em>... here we have the situation that six members, or even seven if you want to add the EU, stand against one", Germany's prime minister made what many have dubbed, an "era-defining" statement.</p> <p>Speaking at a CDU election rally in Munich, <a href="">Merkel said that Europe </a>"<strong>must take its fate into its own hands</strong>" or as the AFP put it, "<em><a href="">Merkel warns US, Britain no longer reliable partners</a></em>."</p> <blockquote class="twitter-video"><p dir="ltr" lang="en">Video: Merkel's speech in Munich saying Europe can't rely on the US &amp; UK anymore &amp; "must take destiny in own hands"<a href=""></a></p> <p>— Rob S (@RobPulseNews) <a href="">May 28, 2017</a></p></blockquote> <script src="//"></script><p>Faced with a western alliance divided by Brexit and Donald Trump's presidency, <a href="">Merkel said </a>"die zeiten, in denen wir uns auf andere völlig verlassen konnten, sind ein Stück vorbei", or loosely translated <strong>"the times in which we could completely depend on others are on the way out" </strong>and added that "I've experienced that in the last few days." </p> <blockquote class="twitter-tweet"><p dir="ltr" lang="en">Merkel today: "The times in which [Germany] could fully rely on others are partly over. I have experienced this in the last few days."</p> <p>— Mathieu von Rohr (@mathieuvonrohr) <a href="">May 28, 2017</a></p></blockquote> <script src="//"></script><p>Merkel then said that while Germany and Europe would strive to remain on good terms with America and Britain, "<strong>we have to fight for our own destiny</strong>" and she also said that special emphasis was needed on warm relations between Berlin and newly-elected French President Emmanuel Macron.</p> <p>Her comments came after Trump said during the G-7 meeting he needed more time to decide if the US would continue backing the Paris climate deal, which has frustrated European diplomats<a href="">. A subseqent report by Axios</a>, Trump privately told multiple people, including EPA Administrator Scott Pruitt, that "he plans to leave the Paris agreement on climate change" which will likely further infurate his European allies.</p> <p>During his trip, Trump also echoed his past criticism of NATO allies for failing to meet the defensive alliance's military spending commitment of two percent of GDP. </p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>Observers noted that he neglected to publicly endorse the pact's Article Five, which guarantees that member countries will aid the others they are attacked. The omission was especially striking as he unveiled a memorial to the September 11, 2001 terrorist attacks against the US, the only time the mutual defense clause has been triggered. </p> </blockquote> <p>On Friday, Trump also described German trade practices as "bad, very bad," in Brussels talks last week, complaining that Europe's largest economy sells too many cars to the US.</p> <p>Reactions to Merkel's striking comment came pouring in from the likes of Edward Snowden who called her speech an "era-defining moment":</p> <blockquote class="twitter-tweet"><p dir="ltr" lang="en">This is an era-defining moment. <a href=""></a></p> <p>— Edward Snowden (@Snowden) <a href="">May 28, 2017</a></p></blockquote> <script src="//"></script><p>... the president of the Council on Foreign Relations. Richard Haass, who called it a "watershed moment"</p> <blockquote class="twitter-tweet"><p dir="ltr" lang="en">Merkel saying Europe cannot rely on others &amp; needs to take matters into its own hands is a watershed-&amp; what US has sought to avoid since WW2</p> <p>— Richard N. Haass (@RichardHaass) <a href="">May 28, 2017</a></p></blockquote> <script src="//"></script><p>... the editor of the Financial Times, calling it a"big moment in transatlantic relations"</p> <blockquote class="twitter-tweet" data-partner="tweetdeck"><p lang="en" dir="ltr">Big moment in transatlantic relations: Merkel says Trump&#39;s America no longer a reliable partner <a href=""></a> via <a href="">@welt</a></p> <p>&mdash; Lionel Barber (@lionelbarber) <a href="">May 28, 2017</a></p></blockquote> <script async src="//" charset="utf-8"></script><p>... and many others:</p> <blockquote class="twitter-tweet"><p dir="ltr" lang="en">Unprecedented fighting talk from Merkel as she says last few days have showed her that Europe cannot rely on US anymore. Wow. <a href=""></a></p> <p>— James Rothwell (@JamesERothwell) <a href="">May 28, 2017</a></p></blockquote> <script src="//"></script><blockquote class="twitter-tweet"> <p dir="ltr" lang="en">Wow. "Merkel warns US, Britain no longer reliable partners" <a href=""></a> <a href=""></a></p> <p>— Eric Geller (@ericgeller) <a href="">May 28, 2017</a></p></blockquote> <script src="//"></script><p>In short, it seems that the time for a New-er World Order may be at hand, and many are not too happy.</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="860" height="484" alt="" src="" /> </div> </div> </div> Angela Merkel Council on Foreign Relations Donald Trump Donald Trump Edward Snowden Emmanuel Macron Environmental Protection Agency European Union G-7 Germany Government North Atlantic Treaty Organization Politics Richard N. Haass Twitter Twitter United States Mon, 29 May 2017 09:27:05 +0000 Tyler Durden 596826 at