http://www.zerohedge.com/fullrss2.xml/wp-content/plugins/uBillboard/%40colmoregan en Global Stocks, Futures Rally, Ignore Sharp Yuan Devaluation On Hopes Fed Is Right This Time http://www.zerohedge.com/news/2016-05-25/global-stocks-futures-rally-ignore-sharp-yuan-devaluation-hopes-fed-right-time <p>The single biggest event overnight was the PBOC's devaluation of the Yuan to the lowest since March 2011, setting the fixing at 6.5693, the highest in over 5 years and in direct response to a stronger dollar, which however if one looks at the DXY remains well below the recent highs in the 100 range, suggesting for China this is only just beginning.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/05/24/220160524_yuan1.png"><img src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/05/24/220160524_yuan1_0.png" width="600" height="301" /></a></p> <p>&nbsp;</p> <p>However, the fact that there was not more volatility in onshore and offshore overnight FX also comforted the market that at the same time as its was devaluing the PBOC was also intervening in the FX market, thus providing some assurance it would not allow runaway "risk off" sentiment prevail, nor would it promote another blitz round of capital outflows, leading to another gradual levitation in overnight risk.</p> <p>Whether the PBOC is successful <em>this time</em> happens remains to be seen, but for now algos and traders decided to ignore the loud warning signal by China, and focused on oil instead which after yesterday's sharp API inventory drop has pushed to fresh 7 month highs, higher by another 1% as the likely resumption of production by domestic producers is widely ignored. Instead, the market also focused on yesterday's new home sales, a data point with a 15% interval of confidence, as confirmation that the US economy is back on the mend, and thus any imminent rate hike by the Fed would be justified... just like in December. </p> <p>Trader sentiment confirmed as much: "Strong U.S. new home sales have added credence to the Fed’s claims that the U.S. economy may be strong enough for another rate hike in June or July,” said Angus Nicholson, a Melbourne-based market analyst at IG Ltd. “Japanese equities in particular are relishing the strong U.S. dollar."</p> <p>As a result, global equities rose to a two-week high amid increasing investor optimism that the world economy can withstand higher U.S. interest rates. Oil advanced and gold fell amid a retreat in the dollar. The MSCI All Country World Index climbed for a second day, European equities jumped, and futures signaled a higher opening for U.S. shares. Emerging-market stocks rose the most in six weeks, while South Korea’s won led currencies higher even as China set the yuan’s reference rate at the weakest level since 2011. Crude rallied above $49 a barrel as gold slid for a sixth day. Greek bonds increased, pushing the 10-year yield below 7 percent for the first time since November, after its creditors agreed to release bailout funds. The cost of insuring corporate debt against default fell to the lowest in almost a month.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2016/05/13/data%20shocks%20bbg.png"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2016/05/13/data%20shocks%20bbg_0.png" width="600" height="338" /></a></p> <p>&nbsp;</p> <p>Traders are now pricing in a one-in-three chance of higher borrowing costs in June. That’s up from 4 percent last Monday. July is the first month with more than even odds for a rate hike. Fed Chair Janet Yellen is scheduled to speak on Friday after European markets close.</p> <p>While recently the market was spooked by the prospect of an imminent rate hike, as Bloomberg adds "improving confidence in financial markets is tempering anxiety over the Federal Reserve’s plans to raise U.S. interest rates, potentially as soon as next month." Adding to the confidence, recent polls show growing support for the U.K. to remain in the European Union, the rally in commodities is damping the risk of deflation, and a measure of economic surprises in the world’s largest economies hit its highest level this year. Still, faith in global growth prospects has been easily shaken, with global equities failing to make any gains in 2016.</p> <p>"<strong>U.S. data is supporting the view that if we don’t see stellar growth, at least we don’t see a recession, and that’s a good thing," </strong>said Michael Woischneck, who oversees about 300 million euros at Lampe Asset Management in Dusseldorf, Germany. "If the Fed has the chance to hike again then it should take this opportunity as the market is very prepared. We also have a deal for Greece that has helped perceptions change in the European market."</p> <p>The Stoxx Europe 600 Index added 1.1% in early trading, with almost all industry groups climbing. Carmakers, insurers and banks posted the biggest gains. The equity measure closed above its 50-day moving average on Tuesday for the first time after slipping below it earlier this month. That sends a short-term bullish signal in technical analysis, according to Saxo Bank A/S trader Pierre Martin.</p> <p>The Hang Seng China Enterprises Index of mainland stocks listed in Hong Kong surged 2.8 percent, the most in more than a month. Benchmark gauges in South Korea, Taiwan, the Philippines, Russia and Dubai increased at least 1 percent.</p> <p>Futures on the S&amp;P 500 added 0.5 percent, indicating U.S. equities will extend gains after rising 1.4 percent on Tuesday. Investors will look to data on services output and house prices due Wednesday for signs of the health of the world’s biggest economy amid increasing bets that the Fed is confident enough to raise rates.</p> <p>The yield on 10-year U.S. Treasuries increased by one basis point to 1.87 percent, matching its average level for 2016. The U.S. is selling $34 billion of five-year securities on Wednesday after investors snapped up a $26 billion auction of two-year notes on Tuesday, leaving primary dealers with the lowest award at a sale of the debt in data going back to 2003.</p> <p>“The Treasury yield could end up a little bit above 2 percent” as the Fed raises rates, said Stephen Roberts, an economist at Laminar Group Pty, a Melbourne-based fixed-income adviser. “The U.S., of developed economies, has had the best of the economic recovery we’ve had since the global financial crisis.”</p> <p><strong>Markets snapshot</strong></p> <ul> <li>S&amp;P 500 futures up 0.4% to 2083</li> <li>Stoxx 600 up 0.9% to 347</li> <li>FTSE 100 up 0.5% to 6168</li> <li>DAX up 0.6% to 9899</li> <li>S&amp;P GSCI Index down 0.4% to 363.5</li> <li>MSCI Asia Pacific up 1.5% to 127</li> <li>Nikkei 225 up 1.6% to 16757</li> <li>Hang Seng up 2.7% to 20368</li> <li>Shanghai Composite down 0.2% to 2815</li> <li>S&amp;P/ASX 200 up 1.5% to 5373</li> <li>US 10-yr yield up less than 1bp to 1.87%</li> <li>German 10Yr yield down 1bp to 0.17%</li> <li>Italian 10Yr yield down 3bps to 1.45%</li> <li>Spanish 10Yr yield down 2bps to 1.56%</li> <li>Dollar Index up 0.02% to 95.59</li> <li>WTI Crude futures up 1% to $49.13</li> <li>Brent Futures up 1% to $49.11</li> <li>Gold spot down 0.5% to $1,222</li> <li>Silver spot up 0.2% to $16.25</li> </ul> <p><strong>Top Global News</strong></p> <ul> <li>Microsoft May Cut 1,850 Jobs as Nadella Pares Phone Ambitions: Company will incur about $950 million in new charges. Last week Microsoft sold its feature phone business to FIH</li> <li>Goldman Sachs Sees Malaysian Deals Evaporate Amid 1MDB Concerns: Once among top banks, Goldman was 18th in 2015 M&amp;A rankings. U.S. authorities said to subpoena ex-Goldman banker in probe</li> <li>CYBG Soars in London Trading as CEO Pledges to Eliminate Jobs: Clydesdale and Yorkshire bank owner to reduce expenses. Lender has gained more than 40% since its February IPO</li> <li>Exxon, Chevron Oppose Environmental Drive to Cut Big Oil’s Reach: Shareholders will vote on limiting oil and gas exploration. Money saved would be paid to investors in dividends, buybacks</li> <li>US Foods Seeks to Shake Off Failed Merger With $1 Billion IPO: Food distributor 1 of 2 national players in fragmented field. Owners KKR, CD&amp;R don’t plan to sell shares in offering</li> <li>China Said to Plan Asking U.S. on Timing of Fed Rate Increase: U.S.-China Strategic &amp; Economic Dialogue set for June 6-7. China said to be preparing for potential market, yuan impact</li> <li>U.S. Said to Investigate InBev Distribution Incentiv: Investigation over new incentives that encourage independent distributors to sell more of its own beer brands at expense of competing craft brews, Reuters reports, citing 2 unidentified people with knowledge.</li> </ul> <p><strong>Looking at regional markets, we start as usual in Asia where equities tracked the firm gains from Wall Street </strong>where strong New Home Sales data and advances in oil bolstered sentiment. Nikkei 225 (+1.6%) benefited from renewed press reports that Japanese PM Abe will delay the sales tax hike, while ASX 200 (+1.5%) was led higher by the uptick in energy in which WTI futures rose above USD 49/bbl to hit YTD highs. Chinese bourses conformed to the upbeat tone in the region with the Hang Seng (+2.8%) and Shanghai Comp (-0.2%) bolstered following another inter-bank liquidity injection and reports CSRC plans to open the futures market to investors abroad. 10yr JGBs traded higher<br />despite the risk-on sentiment in the region, as the BoJ were in the market to purchase over JPY 1.2trl in government debt. BoJ Governor Kuroda stated the BoJ is to be mindful of the balance sheet and later added they will ease further if FX impacts price goal. Kuroda further stated that there is currently not a big risk of JGB yield volatility. </p> <p><em>Asia Top News</em></p> <ul> <li>China Weakens Yuan Fixing to Lowest Since 2011 as Dollar Climbs: Reference rate was lowered by 0.3% to 6.5693/dollar</li> <li>Singapore Economy Gets Temporary Boost From Manufacturing: 1Q GDP +0.2% q/q vs est. +0.6%</li> <li>Mitsubishi Motors Corrects Last Year’s Earnings on Data Scandal: Charge reflects costs to compensate owners, Japan govt</li> <li>Toyota to Invest in Uber to Explore Ride-Share Partnership: Cos. enter into MOU</li> </ul> <p><strong>European equity markets have also carried through the overnight risk on sentiment to trade firmly in the green this morning </strong>(Euro Stoxx: +1.6%). Financials are among the best performers in Europe, particularly from the periphery given the overnight Greek deal. Elsewhere Marks &amp; Spencer are the worst performers in Europe today after their pre-market earnings and trade lower by around 9%. Fixed income markets have seen Bunds initially fall in tandem with the surge higher in equities, with the German benchmark trading firmly below 163.50 before staging a recovery heading into the North American open . Meanwhile, in the wake of the aforementioned Greek deal, Eurozone periphery yields have declined, with the Greek 10Y below 7% for the first time since November'15.</p> <p><em>Top European News</em></p> <ul> <li>UniCredit CEO Departure Puts Focus on Bank’s Capital Strategy: Chairman Giuseppe Vita to lead search for new CEO, bank says. Marco Morelli was approached for the role, person says</li> <li>Deutsche Bank Trading Woes Exposed in Slide Down Currency League: After topping Euromoney ranking for 9 years, lender slips to 4. Bank’s market share shrinks to 7.9%, from 14.5% a year earlier</li> <li>Bayer Says It’s Confident It Can Meet Monsanto Deal Demands: German company says it will address finance, regulatory issues. Monsanto rejected $62 billion offer, which it said was too low</li> <li>BASF Feels No Pressure as Rivals Plan $170 Billion of Deals: Chemical maker focused on operations, Asia chief Gandhi says. BASF’s strategy under CEO Bock has been consistent, he says</li> <li>Apollo Said to Seek $3.5 Billion to Scoop Up Bad European Debt: No better time for credit investors as banks hampered: Black. Strategy to target bad loans held by institutions under stress</li> <li>Greece Wins Pledge for Debt Relief as IMF Bows to Euro Proposal: MF makes ‘major concession’ in Eurogroup negotiations. First aid payment to be made in June to cover debt servicing</li> <li>Brexit Vote Could Extend U.K. Austerity by Two Years, IFS Says: IFS says quitting EU might add 40 billion pounds to borrowing. Economic damage would dwarf savings on payments to EU budget</li> <li>ECB Officials Say Euro Area Needs Coordinated Economic Policies: France’s Villeroy, Spain’s Linde comment at Madrid conference. Extraordinary monetary stimulus hasn’t yet restored inflation</li> </ul> <p><strong>In currencies, the biggest FX news overnight was China’s central bank weakened its currency fixing by 0.3 percent to 6.5693 per dollar, the lowest since March 2011. </strong>However, since the yuan in Hong Kong was little changed at 6.5650 and the onshore rate was down 0.05 percent to 6.5620, many have speculated that despite the sharp easing, the PBOC continues to intervene and will not the currency lead to a resumption in capital outflows. The Bloomberg Dollar Spot Index declined 0.1 percent, trimming this month’s advance to 3.4 percent. The yen was little changed near 110 versus the greenback after Goldman Sachs Group Inc. predicted the Japanese currency would slide 12 percent by this time next year.&nbsp; The MSCI Emerging Markets Currency Index climbed 0.2 percent. The won rose 0.9 percent, boosted by optimism that strength in the U.S. economy will shore up demand for South Korean exports. Malaysia’s ringgit strengthened 0.6 percent and Russia’s ruble gained for a second day to a one-week high.&nbsp; Forwards on the Nigerian naira soared as traders increased bets on Nigeria’s currency weakening, with rates on three-month contracts jumping 16 percent to 288 per dollar. The central bank voted to allow “greater flexibility” in the foreign-exchange market on Tuesday, signaling policy makers may abandon a currency peg they’ve held for 15 months.</p> <p><strong>In commodities, oil extended gains in New York from the highest closing price in seven months after U.S. industry data showed crude stockpiles declined, easing a glut. </strong>Inventories dropped by 5.14 million barrels last week, the American Petroleum Institute was said to report. Data from the Energy Information Administration Wednesday is forecast to show supplies fell. West Texas Intermediate rose 1.1 percent to $49.15 a barrel and Brent added 1.1 percent to $49.16. WTI closed at a premium to Brent Tuesday for the first time in almost two weeks. Gold dropped to the lowest level in almost seven weeks. Bullion for immediate delivery fell 0.5 percent to $1,220.81 an ounce. Most industrial metals declined, with nickel dropping 0.2 percent and aluminum losing 0.3 percent. Copper rose 0.6 percent to $4,630 a metric ton.</p> <p><strong>On today's US event calendar </strong>the early focus is on the April advance goods trade balance reading where some further widening of the deficit is expected mostly due to an expected recovery in imports. Away from that there will be further housing market data in the form of the FHFA house price index for March, while later this afternoon the flash May services (53.0 expected) and composite PMI’s are due out. Fedspeak wise we’ll hear from Harker again while Kashkari and Kaplan are also scheduled for talks. </p> <p><strong>Bulletin Headline Summary From RanSquawk and Bloomberg</strong></p> <ul> <li>European equities followed suit from their US and Asian counterparts to trade higher across the board with news of a Greek deal and energy markets also guiding price action</li> <li>GBP has once again been a key source of focus for FX markets with GBP/USD briefly breaking above 1.4650 before paring gains in recent trade</li> <li>Looking ahead, highlights include BoC Rate Decision, US Trade Balance, Services PM! and DOE U.S. Inventories, Fed's Harker, Kashkari and Kaplan</li> <li>Treasuries little changed in overnight trading as global equities rally along with oil; Treasury auctions continue with sale of $34b 5Y notes, WI 1.41%; last sold at 1.41% in April, first tail by a 5Y auction since January. </li> <li>Chinese officials plan to ask their American counterparts in annual talks next month about the chance of a Federal Reserve interest-rate increase in June, according to people familiar with the matter</li> <li>The ECB expanded the size of its debt-buying program in April by a third to €80 billion ($89 billion) a month and appears to be running out of securities eligible under its own rules</li> <li>ECB will aim to buy €5b-€10b worth of corporate bonds per month after it starts “small” in June, Reuters reports, citing several unidentified central bank people with knowledge of matter</li> <li>Brazil bond investors are dialing back their optimism after newly appointed Finance Minister Henrique Meirelles acknowledged that the country’s fiscal problems are much worse than anyone had imagined</li> <li>A meeting of euro-area finance ministers in Brussels paved the way for a €10.3 billion ($11.5 billion) aid payout to Greece but left important details to be hammered out after Germany’s federal election next year</li> <li>Greece’s bonds advanced, pushing 10-year yield below 7% for the first time since November, was as high as 19% last July</li> <li>Sovereign 10Y yields mixed; European, Asian equities higher; U.S. equity-index futures rise; WTI crude oil higher, precious metals mixed</li> </ul> <p><strong>US Event Calendar</strong></p> <ul> <li>7:00am: MBA Mortgage Applications, May 20 (prior -1.6%)</li> <li>8:30am: Advance Goods Trade Balance, April, est. -$60b (prior -$56.9b)</li> <li>9:00am: House Price Purchase Index q/q, 1Q (prior 1.4%)</li> <li>9:00am: FHFA House Price Index m/m, March, est. 0.5% (prior 0.4%)</li> <li>9:45am: Markit US Services PMI, May P, est. 53.0 (prior 52.8) <ul> <li>Markit US Composite PMI, May P (prior 52.4)</li> </ul> </li> </ul> <p><strong>Central Banks</strong></p> <ul> <li>9:00am: Fed’s Harker speaks in Philadelphia</li> <li>11:40am: Fed’s Kashkari speaks in Bismarck, N.D.</li> <li>1:30pm: Fed’s Kaplan speaks in Houston</li> </ul> <p><strong>DB's Jim Reid concludes the overnight wrap</strong></p> <p>Although credit spreads are generally wider in May on the back of very strong issuance, a number of major equity bourses returned back to positive territory for the month yesterday. Indeed the S&amp;P 500 (+1.37% yesterday, +0.52% MTD) and DAX (+2.18% yesterday, +0.18% MTD) were last positive for May on the 16th and the 10th respectively. The Stoxx 600 (+2.21%) actually went into positive territory (+0.77%) for first time this month following the biggest one day gain yesterday since April 13th. It was hard to pinpoint one particular trigger for yesterday’s rally but one theme which was constant on both sides of the pond was the strong performance for Banks. Indeed a contributor to this may have been some of the comments coming from ECB Supervisory Chief Daniele Nouy. Speaking at a conference in Madrid, Nouy made mention of the ECB still having a lot of work to do on addressing legacy assets and particularly non-performing loans but that the Bank ‘will fast come with certain proposals’. She also highlighted that she is comfortable with the current minimum capital requirements for banks in Europe. Indeed it was the peripheral bourses that outperformed yesterday with the FTSE MIB in particular rallying to the tune of +3.34% with the likes of Monte de Paschi, Banco Popolare, Intesa Sanpaolo and UBI up between 5% and 10%.</p> <p>Some of the commentary also pointed towards the latest bumper housing data in the US as helping to nudge rate expectations and yields a little higher and so in turn lending a helping hand in the rally for financials. In fairness much of the rally had already occurred prior to the data but in any case it helped to consolidate gains and was perhaps just evidence that investors are becoming a little more comfortable with the prospect of a possible rate move this summer. New home sales rose an impressive +16.6% mom in April which compared to expectations of just +2.4%. As a result the annualized rate rose to 619k from 531k which is the highest since January 2008 while the monthly surge was actually the biggest since 1992. That helped the US Dollar to strengthen +0.70% relative to the Euro while 10y Treasury yields edged up just shy of 3bps (2y yields were up a less impressive 1bp). By the end of play the odds of a move in June are now 34% (from 32%) with July consolidating around 54%.</p> <p>Meanwhile rising Oil prices did little to spoil the mood yesterday as WTI (+1.12%) ignored yesterday’s stronger Dollar and has in fact crept back above $49/bbl this morning (and testing the YTD highs) in Asia following a similar magnitude gain ahead of today’s US stockpile data. Elsewhere Gold (-1.75%) tumbled yesterday and is now down over 5% this month.</p> <p>Before we look at how markets have followed up in Asia, there’s been some positive news to come out of the Eurogroup meeting overnight following 11 hours of talks with the announcement that Greece’s creditors have come to an agreement on allowing for the release of €10.3bn of aid as well as committing to debt relief in later years. It appears that it is the IMF which has backed down somewhat from its previous harder stance with the agreement that the Fund will continue to participate in the nation’s rescue package too. Greek press Ekathimerini is reporting that conditional debt relief is to be granted from 2018 while a statement from the Chair of the meeting, Eurogroup President Dijsselbloem, said that ‘we achieved a major breakthrough on Greece which enables us to enter a new phase in the Greek financial assistance programme’. The finer details should get debated today but so far it looks like there are valid grounds for optimism that this is a big positive step in the right direction.</p> <p>Refreshing our screens this morning, the positive lead from the US and Europe yesterday has continued this morning in Asia where we’ve seen a decent rebound across the majority of bourses. The Hang Seng (+2.56%) is leading the way, while the Nikkei (+1.80%) is not far behind. In China the Shanghai Comp (+0.41%) and CSI 300 (+0.50%) are both higher while elsewhere the Kospi (+1.15%) and ASX (+1.73%) are also stronger. Credit markets are rallying too with the iTraxx Aus, Asia and Japan indices 3-5bps tighter. There’s also been some activity in FX markets this morning with the main news being that the PBoC has set the CNY fix at its weakest level since March 2011. Indeed the fix was set 0.34% weaker although the current spot rate this morning (around 6.562) is still below the levels reached in the volatile month of January when there was arguably alot more focus on where the PBoC was setting the reference rate for the currency.</p> <p>Back to yesterday, there was actually a reasonable amount of focus on some of the other chatter coming from the ECB yesterday. Vice-President Constancio said that in his view it is still too early to start discussing further stimulus from the ECB as a response to more challenging financial conditions. Constancio said instead that he prefers to hold tight to wait and see what the effects are of the latest round of measures from the Bank. Meanwhile the ECB’s latest edition of its semi-annual Financial Stability Review showed that a rise in political risk ‘poses a challenge to fiscal and structural reform implementation and, by extension, public debt sustainability’. The review went on to show that this in turn could put renewed pressure on vulnerable sovereigns while potentially contributing to contagion and re-fragmentation in the Euro area.</p> <p>Meanwhile, over in the UK a fresh EU UK referendum poll released late last night for the Times newspaper and run by YouGov showed an even running between the Remain and Leave camps at 41% each. The Bloomberg headline suggests that the poll covered the May 23rd and 24th period. The last YouGov/Times poll had been split at 44% to 40% in favour of Remain.</p> <p>Rounding off the other economic data that was released yesterday, in the US the only other release of note was the Richmond Fed manufacturing index for May which provided for further evidence of softness in the sector after dropping 15pts this month to -1 (vs. +8 expected). New orders were also down a significant 18pts. Prior to this in Europe, Germany had reported no change in its final Q1 GDP revision of +0.7% qoq. Meanwhile the May ZEW survey was released which revealed a 5.4pt increase in the current situation component to 53.1 (vs. 49.0 expected). The expectations survey however was down a disappointing 4.8pts to 6.4 (vs. 12.0 expected). It’s worth noting that our German Economists have now revised down their Q2 GDP forecast from 0.3% to 0.1% as they expect material payback for the Q1 strength. While they remain optimistic with regards to the labour market, they think that the impetus from low oil prices to real income is fading. In addition, the mild winter has allowed construction work to be pulled forward, albeit the payback might be limited by the strength of underlying construction demand.</p> <p>Looking at today’s calendar, this morning we’re kicking things off in Germany where shortly after this hits your emails the latest German consumer confidence data is out. We’re staying in Germany shortly after that when we’ll get the IFO survey for May where a modest increase in the business climate reading is expected. This afternoon in the US the early focus is on the April advance goods trade balance reading where some further widening of the deficit is expected mostly due to an expected recovery in imports. Away from that there will be further housing market data in the form of the FHFA house price index for March, while later this afternoon the flash May services (53.0 expected) and composite PMI’s are due out. Fedspeak wise we’ll hear from Harker again at 2.00pm BST while Kashkari (4.40pm BST) and Kaplan (6.30pm BST) are also scheduled for talks. It’s a busy day for ECB speak meanwhile with Villeroy, Schulz, Knot, Constancio and Praet all due to talk this morning. The EU finance ministers meeting also continues in Brussels today while Central Bank wise the only scheduled monetary policy meeting of note is the Bank of Canada this afternoon (no change expected).</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="964" height="483" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/220160524_yuan1.png?1464172912" /> </div> </div> </div> http://www.zerohedge.com/news/2016-05-25/global-stocks-futures-rally-ignore-sharp-yuan-devaluation-hopes-fed-right-time#comments Bond Borrowing Costs China Consumer Confidence Copper Creditors Crude Crude Oil Currency Peg default Dubai Equity Markets European Union Eurozone Federal Reserve fixed Futures market Germany goldman sachs Goldman Sachs Greece Hong Kong Housing Market Janet Yellen Japan Jim Reid KKR Market Share Markit Monetary Policy Monsanto New Home Sales Newspaper Nikkei non-performing loans Precious Metals RANSquawk Recession recovery Reuters Richmond Fed Saxo Bank Sovereigns Technical Analysis Trade Balance Volatility Yen Yuan Wed, 25 May 2016 10:43:55 +0000 Tyler Durden 561786 at http://www.zerohedge.com Precious Metals: Fake-Rally Ends, Hostage Markets Return http://www.zerohedge.com/news/2016-05-24/precious-metals-fake-rally-ends-hostage-markets-return <p>&nbsp;</p> <h1 style="margin-top: 0px; margin-bottom: 0.25em; padding: 0px; font-size: 24px; font-weight: normal; line-height: 1.15; font-family: Roboto, sans-serif; max-width: 90%;"><span style="text-decoration: underline;"><em><strong><a href="https://www.sprottmoney.com/blog/precious-metals-fake-rally-ends-hostage-markets-return-jeff-nielson.html">Precious Metals: Fake-Rally Ends, Hostage Markets Return</a></strong></em></span></h1> <p><span style="text-decoration: underline;"><em><strong><a href="https://www.sprottmoney.com/blog/precious-metals-fake-rally-ends-hostage-markets-return-jeff-nielson.html">Written by Jeff Nielson</a></strong></em></span></p> <p>&nbsp;</p> <p>&nbsp;</p> <p class="Textbody" style="margin: 0px 0px 1em; padding: 0px; line-height: 1.4em; font-family: Roboto, sans-serif; font-size: 15px;"><span style="margin: 0px; padding: 0px;" lang="EN-CA">Back at the beginning of 2009, we had a real rally in the precious metals sector. The price of gold increased by roughly 2 ½ times. Silver led the way, rising more than double that amount. And the precious metals miners soared much higher, leveraging the gains in metals prices – as they must do, in any legitimate rally.</span></p> <p class="Textbody" style="margin: 0px 0px 1em; padding: 0px; line-height: 1.4em; font-family: Roboto, sans-serif; font-size: 15px;"><span style="margin: 0px; padding: 0px;" lang="EN-CA">The rally occurred immediately&nbsp;<em style="margin: 0px; padding: 0px;">after</em>&nbsp;the Crash of ’08, the&nbsp;<a href="https://www.sprottmoney.com/blog/proof-that-the-top-01-create-crashes-jeff-nielson.html" style="margin: 0px; padding: 0px; color: #023761; text-decoration: underline; cursor: pointer;">manufactured crash&nbsp;</a>at the end of the Big Banks’ previous bubble-and-crash cycle. It occurred&nbsp;<em style="margin: 0px; padding: 0px;">after</em>&nbsp;a sharp, ruthless take-down of precious metals prices had established a clear “bottom” in those markets. That rally was terminated in 2011, by the Big Banks, in one of the most-obvious&nbsp;<a href="http://www.bullionbullscanada.com/index.php/commentary/silver-commentary/18874-the-silver-take-down-anatomy-of-a-crime" style="margin: 0px; padding: 0px; color: #023761; text-decoration: underline; cursor: pointer;">price-capping operations&nbsp;</a>in the history of markets.</span></p> <p class="Textbody" style="margin: 0px 0px 1em; padding: 0px; line-height: 1.4em; font-family: Roboto, sans-serif; font-size: 15px;"><span style="margin: 0px; padding: 0px;" lang="EN-CA">What has followed is 5+ years of what has previously been referred to as&nbsp;<a href="http://www.bullionbullscanada.com/index.php/commentary/silver-commentary/26508-fed-fraud-and-hostage-markets" style="margin: 0px; padding: 0px; color: #023761; text-decoration: underline; cursor: pointer;">“Hostage Markets”</a>: markets which were kept in a permanent choke-hold since that date, with prices grinding steadily lower and lower. This brings us to the beginning of 2016.</span></p> <p class="Textbody" style="margin: 0px 0px 1em; padding: 0px; line-height: 1.4em; font-family: Roboto, sans-serif; font-size: 15px;"><span style="margin: 0px; padding: 0px;" lang="EN-CA">At the beginning of this year; the price of gold did something which we had not seen for several years: it went up. At the beginning of this year; the mainstream media did something which we had not seen for several years: it began&nbsp;<em style="margin: 0px; padding: 0px;">praising</em>&nbsp;gold as an asset class – and announced that&nbsp;<a href="http://www.cnbc.com/2016/05/10/gold-has-entered-a-new-bull-market-jpmorgan.html" style="margin: 0px; padding: 0px; color: #023761; text-decoration: underline; cursor: pointer;">“a new rally”</a>&nbsp;had begun. The talking heads proclaimed that the “fundamentals” for gold were now bullish, and thus the price should start to steadily rise.</span></p> <p class="Textbody" style="margin: 0px 0px 1em; padding: 0px; line-height: 1.4em; font-family: Roboto, sans-serif; font-size: 15px;"><span style="margin: 0px; padding: 0px;" lang="EN-CA">There was never any reason to consider this to be a real, spontaneous rally, and several&nbsp;<a href="http://www.bullionbullscanada.com/index.php/commentary/silver-commentary/26690-silver-first-a-dive-then-a-spiral" style="margin: 0px; padding: 0px; color: #023761; text-decoration: underline; cursor: pointer;">strong arguments&nbsp;</a>to conclude that this was an&nbsp;<em style="margin: 0px; padding: 0px;">upward</em>&nbsp;price-fixing operation of precious metals prices, to set the stage for a larger, general crash, at the end of the current eight-year, bubble-and-crash cycle from the Big Bank&nbsp;<a href="http://www.sprottmoney.com/news/the-one-bank-revisited-jeff-nielson" style="margin: 0px; padding: 0px; color: #023761; text-decoration: underline; cursor: pointer;">crime syndicate</a>.</span></p> <p class="Textbody" style="margin: 0px 0px 1em 0.5in; padding: 0px; line-height: 1.4em; font-family: Roboto, sans-serif; font-size: 15px; text-indent: -0.25in;"><span style="margin: 0px; padding: 0px;" lang="EN-CA">1) Nothing at all has&nbsp;<em style="margin: 0px; padding: 0px;">changed</em>&nbsp;in precious metals markets (except the rhetoric of the mainstream media) versus the last 5+ years.</span></p> <p class="Textbody" style="margin: 0px 0px 1em 0.5in; padding: 0px; line-height: 1.4em; font-family: Roboto, sans-serif; font-size: 15px; text-indent: -0.25in;"><span style="margin: 0px; padding: 0px;" lang="EN-CA">2) Silver has failed to “lead the way”, as it must in any/all legitimate rallies.</span></p> <p class="Textbody" style="margin: 0px 0px 1em 0.5in; padding: 0px; line-height: 1.4em; font-family: Roboto, sans-serif; font-size: 15px; text-indent: -0.25in;"><span style="margin: 0px; padding: 0px;" lang="EN-CA">3) The Big Banks remain in complete control of all markets.</span></p> <p class="Textbody" style="margin: 0px 0px 1em; padding: 0px; line-height: 1.4em; font-family: Roboto, sans-serif; font-size: 15px;"><span style="margin: 0px; padding: 0px;" lang="EN-CA">Taking these reasons in order, mainstream propagandists have proclaimed that precious metals markets are now supported by bullish fundamentals. However, the “fundamentals” for gold and silver have remained equally bullish throughout the 5+ years where we were forced to endure Hostage Markets. In other words, any “reason” that could be made for gold and silver prices to rise now was equally valid, at all times over the past 5+ years.</span></p> <p class="Textbody" style="margin: 0px 0px 1em; padding: 0px; line-height: 1.4em; font-family: Roboto, sans-serif; font-size: 15px;"><span style="margin: 0px; padding: 0px;" lang="EN-CA">“Technical analysis” (a pseudo-science with little statistical validity) would argue that the reason we are supposedly seeing a rally in 2016 is because gold and silver have “built a base” over the past 5+ years, and thus are now “ready” for the next leg higher, in their long-term bull market. However, this argument only applies to asset classes which have&nbsp;<em style="margin: 0px; padding: 0px;">already risen to fair-market value</em>.</span></p> <p class="Textbody" style="margin: 0px 0px 1em; padding: 0px; line-height: 1.4em; font-family: Roboto, sans-serif; font-size: 15px;"><span style="margin: 0px; padding: 0px;" lang="EN-CA">In 2011, even after the large 2+ year rally in these sectors, neither gold nor silver was even close to any&nbsp;<a href="http://www.bullionbullscanada.com/index.php/commentary/silver-commentary/26595-1000oz-for-silver-today-a-starting-point" style="margin: 0px; padding: 0px; color: #023761; text-decoration: underline; cursor: pointer;">fair-market price&nbsp;</a>. As “monetary metals” the primary fundamental of gold and silver is that&nbsp;<strong style="margin: 0px; padding: 0px;">their prices&nbsp;<span style="margin: 0px; padding: 0px; text-decoration: underline;">must</span>reflect any/all increases in the supply of money</strong>&nbsp;(i.e. “inflation”).</span></p> <p class="Textbody" style="margin: 0px 0px 1em; padding: 0px; line-height: 1.4em; font-family: Roboto, sans-serif; font-size: 15px;"><a href="https://www.sprottmoney.com/blog/precious-metals-fake-rally-ends-hostage-markets-return-jeff-nielson.html" target="_blank" style="margin: 0px; padding: 0px; color: #023761; text-decoration: underline; cursor: pointer;"><img src="http://www.sprottmoney.com/media/magpleasure/mpblog/upload/c/7/c7465c261a1067af361ac383dfeccbda.png" style="margin: 0px 10px 5px 0px; padding: 3px; border: 1px solid #d0cbc1; vertical-align: bottom; max-width: 100%; width: 710.398px; height: auto; display: inline-block; transition: box-shadow 0.15s ease-in-out 0.3s;" /></a></p> <p class="Textbody" style="margin: 0px 0px 1em; padding: 0px; line-height: 1.4em; font-family: Roboto, sans-serif; font-size: 15px;"><span style="margin: 0px; padding: 0px;" lang="EN-CA">When B.S. Bernanke perpetrated his infamous “helicopter drop”, printing U.S.&nbsp;<a href="https://www.sprottmoney.com/blog/fractional-reserve-banking-is-pure-fraud-part-i-jeff-nielson.html" style="margin: 0px; padding: 0px; color: #023761; text-decoration: underline; cursor: pointer;">funny-money</a>&nbsp;at an astronomical rate, never before seen in any large economy in modern history, he ultimately&nbsp;<em style="margin: 0px; padding: 0px;">quintupled</em>&nbsp;the U.S. monetary base. The price of gold would have had to duplicate this quintupling, as a starting point, before one could even begin to consider this a fair-market price.</span></p> <p class="Textbody" style="margin: 0px 0px 1em; padding: 0px; line-height: 1.4em; font-family: Roboto, sans-serif; font-size: 15px;"><span style="margin: 0px; padding: 0px;" lang="EN-CA">At the beginning of the Bernanke helicopter-drop, gold was priced at roughly $800/oz. This meant that the price of gold would have had to rise to at least $4,000/oz (at a minimum) before it would/could be necessary for the market to “build a base” (to support even higher prices).</span></p> <p class="Textbody" style="margin: 0px 0px 1em; padding: 0px; line-height: 1.4em; font-family: Roboto, sans-serif; font-size: 15px;"><span style="margin: 0px; padding: 0px;" lang="EN-CA">While the price of silver did rise roughly proportionately in comparison to Federal Reserve funny-money creation, this was only because silver started the rally priced at roughly $8/oz – at a 100:1 price ratio versus gold. As educated readers are aware, the legitimate, long-term price ratio for gold and silver is 15:1, reflecting the natural occurrence of these metals in the Earth's crust. Thus the price of silver would have had to rise to over $50/oz (higher than its 2011 peak) just to be priced rationally versus gold&nbsp;<em style="margin: 0px; padding: 0px;">at the start of 2009</em>.</span></p> <p class="Textbody" style="margin: 0px 0px 1em; padding: 0px; line-height: 1.4em; font-family: Roboto, sans-serif; font-size: 15px;"><span style="margin: 0px; padding: 0px;" lang="EN-CA">In other words, in order for silver to (rationally) reflect Federal Reserve money-printing&nbsp;<em style="margin: 0px; padding: 0px;">and</em>&nbsp;the long-term price ratio versus gold, first the price of silver would have had to rise by a factor of roughly seven (just to be rationally aligned versus the price of gold), and then it would have had to increase by an additional factor of five – to mirror the Federal Reserve's&nbsp;<a href="https://www.sprottmoney.com/blog/fractional-reserve-banking-is-pure-fraud-part-iv-jeff-nielson.html" style="margin: 0px; padding: 0px; color: #023761; text-decoration: underline; cursor: pointer;">monetary insanity&nbsp;</a>.</span></p> <p class="Textbody" style="margin: 0px 0px 1em; padding: 0px; line-height: 1.4em; font-family: Roboto, sans-serif; font-size: 15px;"><span style="margin: 0px; padding: 0px;" lang="EN-CA">This means that the price of silver would have had to rise somewhere above $200/oz (in 2011), before there could be any rational argument that it was priced at fair-market value at that time. Thus, in 2011, when the prices of gold and silver were first capped, and then taken down, there was never any reason for that rally to have ended. The 5+ years of Hostage Markets which we saw with precious metals should have never occurred.</span></p> <p class="Textbody" style="margin: 0px 0px 1em; padding: 0px; line-height: 1.4em; font-family: Roboto, sans-serif; font-size: 15px;"><span style="margin: 0px; padding: 0px;" lang="EN-CA">Similarly, at the start of this fake rally, the gold/silver price ratio was at an&nbsp;<a href="http://www.bullionbullscanada.com/index.php/commentary/silver-commentary/23656-goldsilver-price-ratio-getting-silly-again" style="margin: 0px; padding: 0px; color: #023761; text-decoration: underline; cursor: pointer;">ultra-absurd level&nbsp;</a>of roughly 80:1, with silver priced at roughly $13/oz (USD). Even if already priced at a correct price ratio, the price of silver would have to lead the price of gold in any legitimate rally because the silver market is much, much smaller. However, at the ultra-compressed price ratio which existed at the beginning of 2016, if a legitimate rally had begun in precious metals markets, the price of silver would have exploded out of the starting blocks – leaving gold well behind in its wake.</span></p> <p class="Textbody" style="margin: 0px 0px 1em; padding: 0px; line-height: 1.4em; font-family: Roboto, sans-serif; font-size: 15px;"><span style="margin: 0px; padding: 0px;" lang="EN-CA">Instead, we saw the price of gold “rally” for the first two months of this year, while the price of silver lagged. Understand the arithmetic here. At an 80:1 price ratio,&nbsp;<strong style="margin: 0px; padding: 0px;">if only 1.5% of the money entering this sector went into silver, the price of silver would have had to rise at a faster rate than gold&nbsp;</strong>.</span></p> <p class="Textbody" style="margin: 0px 0px 1em; padding: 0px; line-height: 1.4em; font-family: Roboto, sans-serif; font-size: 15px;"><span style="margin: 0px; padding: 0px;" lang="EN-CA">In the real world, the quantity of investment dollars going into silver is roughly parallel to the quantity of dollars going into gold. Had a similar ratio of investor dollars entered the bankers “paper bullion” markets the price of silver would have had to rise&nbsp;<em style="margin: 0px; padding: 0px;">roughly 20 times faster/higher&nbsp;</em>than the price of gold during this supposed rally.</span></p> <p class="Textbody" style="margin: 0px 0px 1em; padding: 0px; line-height: 1.4em; font-family: Roboto, sans-serif; font-size: 15px;"><span style="margin: 0px; padding: 0px;" lang="EN-CA">The notion, in this “precious metals rally”, that&nbsp;<em style="margin: 0px; padding: 0px;">no one was buying silver</em>&nbsp;is patently absurd. The price of silver during most of this fake-rally wasn't merely improbable, it was impossible.</span></p> <p class="Textbody" style="margin: 0px 0px 1em; padding: 0px; line-height: 1.4em; font-family: Roboto, sans-serif; font-size: 15px;"><span style="margin: 0px; padding: 0px;" lang="EN-CA">Lastly, the Big Bank crime syndicate remains totally in control of what we call our “markets” (for lack of a better word). Currency prices remain&nbsp;<a href="http://www.bullionbullscanada.com/index.php/commentary/us-commentary/26658-the-world-of-currency-manipulation" style="margin: 0px; padding: 0px; color: #023761; text-decoration: underline; cursor: pointer;">fixed</a>&nbsp;(rigged). Equity market prices remain&nbsp;<a href="http://www.bullionbullscanada.com/index.php/commentary/us-commentary/26659-u-s-stock-bubble-has-finally-rolled-over" style="margin: 0px; padding: 0px; color: #023761; text-decoration: underline; cursor: pointer;">fixed</a>&nbsp;(rigged). Bond market prices remain&nbsp;<a href="http://www.sprottmoney.com/blog/the-impossible-co-bubbles-stocks-and-bonds-jeff-nielson.html" style="margin: 0px; padding: 0px; color: #023761; text-decoration: underline; cursor: pointer;">fixed</a>&nbsp;(rigged). Are we to believe that the banksters simply 'forgot' to continue their precious metals price-fixing – even as the mainstream media was shouting the word “rally” at the top of its lungs?</span></p> <p class="Textbody" style="margin: 0px 0px 1em; padding: 0px; line-height: 1.4em; font-family: Roboto, sans-serif; font-size: 15px;"><span style="margin: 0px; padding: 0px;" lang="EN-CA">Simply, the rise in the price of gold (and muted rise in silver) which has taken place this year could have only occurred with the tacit support – if not overt assistance – of the Big Bank crime syndicate. At the same time, it is common knowledge that the banksters are firmly committed to suppressing precious metals prices, at all times.</span></p> <p class="Textbody" style="margin: 0px 0px 1em 35.45pt; padding: 0px; line-height: 1.4em; font-family: Roboto, sans-serif; font-size: 15px;"><em style="margin: 0px; padding: 0px;"><span style="margin: 0px; padding: 0px;" lang="EN-CA">...central banks stand ready to lease gold in increasing quantities should the price rise.</span></em><span style="margin: 0px; padding: 0px;" lang="EN-CA">&nbsp;</span></p> <p class="Textbody" style="margin: 0px 0px 1em 70.9pt; padding: 0px; line-height: 1.4em; font-family: Roboto, sans-serif; font-size: 15px; text-indent: -0.25in;"><span style="margin: 0px; padding: 0px;" lang="EN-CA">– Testimony of Federal Reserve Chairman Alan Greenspan, July 24th 1998</span></p> <p class="Textbody" style="margin: 0px 0px 1em; padding: 0px; line-height: 1.4em; font-family: Roboto, sans-serif; font-size: 15px;"><span style="margin: 0px; padding: 0px;" lang="EN-CA">The bankers&nbsp;<a href="http://www.bullionbullscanada.com/index.php/commentary/gold-commentary/26684-the-real-alan-greenspan-past-and-present" style="margin: 0px; padding: 0px; color: #023761; text-decoration: underline; cursor: pointer;">“stand ready”</a>&nbsp;to suppress the price of gold. Always. Eternally. Thus when we saw precious metals prices start to rise steadily/modestly at the beginning of this year, while the bankers remain in complete control of our markets, it could only have been because they&nbsp;<em style="margin: 0px; padding: 0px;">wanted</em>&nbsp;prices to rise.</span></p> <p class="Textbody" style="margin: 0px 0px 1em; padding: 0px; line-height: 1.4em; font-family: Roboto, sans-serif; font-size: 15px;"><span style="margin: 0px; padding: 0px;" lang="EN-CA">Why? This question has&nbsp;<a href="https://www.sprottmoney.com/blog/precious-metals-markets-being-set-up-for-crash-jeff-nielson.html" style="margin: 0px; padding: 0px; color: #023761; text-decoration: underline; cursor: pointer;">already been answered&nbsp;</a>. The current eight-year, bubble-and-crash cycle manufactured by the Big Banks is nearing its end. When this&nbsp;<a href="http://www.bullionbullscanada.com/index.php/commentary/us-commentary/26568-the-next-crash-in-2016" style="margin: 0px; padding: 0px; color: #023761; text-decoration: underline; cursor: pointer;">Next Crash</a>&nbsp;is detonated, this crime syndicate obviously doesn't want precious metals to stand out as “safe havens” -- as all of their corrupt, paper assets are plunging in value.</span></p> <p class="Textbody" style="margin: 0px 0px 1em; padding: 0px; line-height: 1.4em; font-family: Roboto, sans-serif; font-size: 15px;"><span style="margin: 0px; padding: 0px;" lang="EN-CA">The problem: with gold and silver already at rock-bottom prices at the beginning of 2016, it would have been very difficult to crash those markets (along with everything else). Thus the banksters need to march gold and silver prices higher, to some modest level, before they were set up to be crashed along with all other asset classes.</span></p> <p class="Textbody" style="margin: 0px 0px 1em; padding: 0px; line-height: 1.4em; font-family: Roboto, sans-serif; font-size: 15px;"><span style="margin: 0px; padding: 0px;" lang="EN-CA">Now, the fake-rally appears to be at its end. This&nbsp;<a href="http://www.bloomberg.com/news/articles/2016-05-24/gold-holds-four-day-drop-as-fed-procession-signals-rate-rise" style="margin: 0px; padding: 0px; color: #023761; text-decoration: underline; cursor: pointer;">headline</a>&nbsp;has been repeated again and again and again and again in the mainstream media over the past several days.</span></p> <p class="Standard" style="margin: 0px 0px 1em 35.45pt; padding: 0px; line-height: 1.4em; font-family: Roboto, sans-serif; font-size: 15px;"><strong style="margin: 0px; padding: 0px;"><span style="margin: 0px; padding: 0px;" lang="EN-CA">Gold in Longest Slump since November as Fed Signals Higher Rates</span></strong></p> <p class="Standard" style="margin: 0px 0px 1em; padding: 0px; line-height: 1.4em; font-family: Roboto, sans-serif; font-size: 15px;"><span style="margin: 0px; padding: 0px;" lang="EN-CA">&nbsp;</span><span style="margin: 0px; padding: 0px;" lang="EN-CA">Translation: a Fed-head&nbsp;<em style="margin: 0px; padding: 0px;">talked</em>&nbsp;about raising interest rates, and the price of gold fell. It is a headline which could have been copied-and-pasted out of any mainstream publication, any week, during the 5+ years of Hostage Markets.</span></p> <p class="Standard" style="margin: 0px 0px 1em; padding: 0px; line-height: 1.4em; font-family: Roboto, sans-serif; font-size: 15px;"><span style="margin: 0px; padding: 0px;" lang="EN-CA">Now here is the important point. When precious metals began their real rally at the beginning of 2009, the Fed-heads were already promising to raise interest rates then, as well. In fact they were promising much more. The Federal Reserve solemnly promised to&nbsp;<strong style="margin: 0px; padding: 0px;">fully “normalize” interest rates&nbsp;</strong>– quickly and immediately – at the beginning of 2009. Not some token, 0.25% rate increase. Fully normalized interest rates: meaning a benchmark rate of at least 2 – 3%.</span></p> <p class="Standard" style="margin: 0px 0px 1em; padding: 0px; line-height: 1.4em; font-family: Roboto, sans-serif; font-size: 15px;"><span style="margin: 0px; padding: 0px;" lang="EN-CA">Precious metals markets ignored that talk. All through 2009; the Fed-heads “promised” to raise interest rates, and gold and silver prices rose. All through 2010; the Fed-heads “promised” to raise interest rates, and gold and silver prices rose. All through the first 4 months of 2011; the Fed-heads “promised” to raise interest rates, and gold and silver prices rose.</span></p> <p class="Standard" style="margin: 0px 0px 1em; padding: 0px; line-height: 1.4em; font-family: Roboto, sans-serif; font-size: 15px;"><span style="margin: 0px; padding: 0px;" lang="EN-CA">Then, suddenly, after 28 months of the Fed-heads “promising” to raise interest rates,&nbsp;<a href="http://www.bullionbullscanada.com/index.php/commentary/us-commentary/26079-the-boy-who-cried-exit-strategy" style="margin: 0px; padding: 0px; color: #023761; text-decoration: underline; cursor: pointer;">never keeping their promises&nbsp;</a>, and precious metals prices continuing to rise, we had this paradigm suddenly reverse, for no reason. After 28 months of consecutively telling the same lie; suddenly precious metals prices began falling steadily, via nothing more than the&nbsp;<em style="margin: 0px; padding: 0px;">same</em>&nbsp;Compulsive Liars telling&nbsp;<em style="margin: 0px; padding: 0px;">the same lie</em>&nbsp;– which had previously been completely ignored.</span></p> <p class="Standard" style="margin: 0px 0px 1em; padding: 0px; line-height: 1.4em; font-family: Roboto, sans-serif; font-size: 15px;"><span style="margin: 0px; padding: 0px;" lang="EN-CA">The precedent, over the past eight years, is unequivocal. In a real rally, precious metals prices are not deterred from rising via Compulsive Liars simply repeating the same lie, over and over and over. It is only in the realm of Hostage Markets where (supposedly) these markets “react” to the same lie (and same Liars) which they had previously ignored, for several years.</span></p> <p style="margin: 0px 0px 1em; padding: 0px; line-height: 1.4em; font-family: Roboto, sans-serif; font-size: 15px;"><span style="margin: 0px; padding: 0px;" lang="EN-CA">A Fed-head talks, and</span>&nbsp;precious metals markets fall. Readers are invited to call this paradigm of fraud anything that they want. But the one thing they can't call this is “a rally”.</p> <p>&nbsp;</p> <p>&nbsp;</p> <h1 style="padding: 0px; margin-top: 0px; margin-bottom: 0.25em; line-height: 1.15; font-size: 24px; font-weight: normal; font-family: Roboto, sans-serif; max-width: 90%;"><em style="margin: 0px; padding: 0px;"><span style="font-family: 'Lucida Grande', Verdana, sans-serif; font-size: 20.3333px; line-height: 17.3333px;">Please email with any questions about this article or precious metals</span></em><em style="line-height: 1.15; margin: 0px; padding: 0px;"><span style="font-family: 'Lucida Grande', Verdana, sans-serif; font-size: 20.3333px; line-height: 17.3333px;">&nbsp;</span><strong style="font-family: 'Lucida Grande', Verdana, sans-serif; font-size: 20.3333px; line-height: 17.3333px;"><span style="text-decoration: underline;"><a href="mailto:bgreen@sprottmoney.com?subject=From Zero Hedge Precious Metals: Fake-Rally Ends, Hostage Markets Return Article">HERE</a></span></strong></em></h1> <p>&nbsp;</p> <p>&nbsp;</p> <h1 style="font-size: 24px; padding: 0px; margin-top: 0px; margin-bottom: 0.25em; line-height: 1.15; font-weight: normal; font-family: Roboto, sans-serif; max-width: 90%;"><span style="text-decoration: underline;"><em><strong><a href="https://www.sprottmoney.com/blog/precious-metals-fake-rally-ends-hostage-markets-return-jeff-nielson.html">Precious Metals: Fake-Rally Ends, Hostage Markets Return</a></strong></em></span></h1> <p style="line-height: 20.8px;"><span style="text-decoration: underline;"><em><strong><a href="https://www.sprottmoney.com/blog/precious-metals-fake-rally-ends-hostage-markets-return-jeff-nielson.html" style="color: #000000;">Written by Jeff Nielson</a></strong></em></span></p> <p>&nbsp;</p> <p>&nbsp;</p> http://www.zerohedge.com/news/2016-05-24/precious-metals-fake-rally-ends-hostage-markets-return#comments Alan Greenspan B+ B.S. Bond Central Banks Federal Reserve fixed Monetary Base Precious Metals Testimony Wed, 25 May 2016 09:59:54 +0000 Sprott Money 561733 at http://www.zerohedge.com US Spy Plane Disrupts Civilian Flights While Spying On Russia http://www.zerohedge.com/news/2016-05-24/us-spy-plane-disrupts-civilian-flights-while-spying-russia <p>By now we are accustomed to hearing about US spy planes flying recon missions that are either infringing or extremely close to infringing on the borders of other countries - <a href="http://www.zerohedge.com/news/2016-05-18/chinese-fighter-jets-fly-within-50-feet-us-spy-plane-over-south-china-sea">especially Russian borders</a>.</p> <p>A <strong>US defense attache has been summoned by Russia&#39;s Defense Ministry</strong> to explain why a US spy plane was not only flying close to Russia&#39;s border on Sunday, <strong>but dangerously close to civilian aircraft as well</strong>. The US crew had not provided any information regarding its flight to air traffic controllers in the region, despite flying at the same altitude as scheduled civil aviation flights, and at least two passenger jets belonging to major European airlines were endangered by the then unknown aircraft according to Interfax. Planes headed to Switzerland from Japan even even reported visual contact with the US plane.</p> <p>It&#39;s also important to note that <span style="text-decoration: underline;">the spy plane had its transponders turned off</span>, <a href="http://www.zerohedge.com/news/2016-04-30/dont-fly-near-our-borders-us-spy-plane-again-intercepted-russian-jet">something that Russia explicitly said not to do</a> if the US is going to be sniffing around Russia&#39;s borders.</p> <p><em><a href="https://www.rt.com/news/344140-us-spy-plane-russia/">As RT reports</a></em></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><em>&ldquo;As the result of the unprofessional actions of the American plane crew, the hazard of a collision with civil aviation planes was created,&quot; Russia&#39;s Defense Ministry said, adding that it asked the US official to take measures to prevent such incidents from happening near Russia&#39;s borders in the future.</em></p> <p>&nbsp;</p> <p><em>At least two passenger jets belonging to major European airlines were endangered by the then-unknown aircraft over the neutral waters of the Sea of Japan on Sunday, Interfax reported.</em></p> <p>&nbsp;</p> <p><em>The &quot;unknown aircraft&quot; was flying at the altitude of some 11,000 meters (36,000 feet) and did not respond to air traffic control, the agency said citing its source. Russian air controllers had to immediately change the flight path of a KLM Boeing-777, which was in the same region en route from Japan to Holland.</em></p> <p>&nbsp;</p> <p><em><strong>Pilots from another airplane, operated by Swiss airlines, heading to Switzerland from Japan, even reported &quot;visual contact with a large four-engine aircraft, which was in direct proximity to their plane&quot; and sent no recognition signals</strong>, the source said. The flying altitude for the Swiss jet also had to be changed by the air traffic control.</em></p> </blockquote> <p>* * *</p> <p>Clearly the US needs to stop with these missions before someone gets hurt and an international incident is triggered, however knowing that will never happen, <strong><em>might we suggest that the US at least get to the point where its spying isn&#39;t detected every single time.</em></strong></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="291" height="154" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/220160524_spyplane.png?1464094671" /> </div> </div> </div> http://www.zerohedge.com/news/2016-05-24/us-spy-plane-disrupts-civilian-flights-while-spying-russia#comments Japan SPY Switzerland Wed, 25 May 2016 09:00:00 +0000 Tyler Durden 561713 at http://www.zerohedge.com Here's The Full List Of Organizations That Paid Hillary Clinton From 2013-2015 http://www.zerohedge.com/news/2016-05-24/heres-full-list-organizations-paid-hillary-clinton-2013-2015 <p><a href="http://libertyblitzkrieg.com/2016/05/23/heres-the-full-list-of-companies-organizations-that-paid-hillary-clinton-from-2013-2015/"><em>Submitted by Michael Krieger via Liberty Blitzkrieg blog,</em></a></p> <p><img alt="Screen Shot 2016-05-23 at 3.35.50 PM" class="alignnone wp-image-34460" height="189" src="http://libertyblitzkrieg.com/wp-content/uploads/2016/05/Screen-Shot-2016-05-23-at-3.35.50-PM.jpg" width="316" /></p> <p>In its&nbsp;article titled,&nbsp;<a class="postid-10205754" href="http://nypost.com/2016/05/22/how-corporate-america-bought-hillary-clinton-for-21m/">How Corporate America Bought Hillary Clinton for&nbsp;$21M</a>, <em>The New York Post</em> details&nbsp;the companies and organizations that paid Hillary in speaking fees from 2013-2015.</p> <p>The total comes to $21.7 million, which is a remarkable sum for one of the least charismatic and unimaginative&nbsp;orators the world has ever known.</p> <p>The <em><a href="http://nypost.com/2016/05/22/how-corporate-america-bought-hillary-clinton-for-21m/">New York Post</a>&nbsp;</em>reports:</p> <p><img alt="Screen Shot 2016-05-23 at 3.26.08 PM" class="alignnone size-large wp-image-34450" height="668" src="http://libertyblitzkrieg.com/wp-content/uploads/2016/05/Screen-Shot-2016-05-23-at-3.26.08-PM-950x1024.jpg" width="620" /></p> <p><img alt="Screen Shot 2016-05-23 at 3.19.03 PM" class="alignnone size-large wp-image-34448" height="650" src="http://libertyblitzkrieg.com/wp-content/uploads/2016/05/Screen-Shot-2016-05-23-at-3.19.03-PM-976x1024.jpg" width="620" /><br /><img alt="Screen Shot 2016-05-23 at 3.27.49 PM" class="alignnone size-large wp-image-34453" height="724" src="http://libertyblitzkrieg.com/wp-content/uploads/2016/05/Screen-Shot-2016-05-23-at-3.27.49-PM-877x1024.jpg" width="620" /><br /><img alt="Screen Shot 2016-05-23 at 3.28.30 PM" class="alignnone size-large wp-image-34454" height="683" src="http://libertyblitzkrieg.com/wp-content/uploads/2016/05/Screen-Shot-2016-05-23-at-3.28.30-PM-929x1024.jpg" width="620" /></p> <p><img alt="Screen Shot 2016-05-23 at 3.29.21 PM" class="alignnone size-large wp-image-34455" height="630" src="http://libertyblitzkrieg.com/wp-content/uploads/2016/05/Screen-Shot-2016-05-23-at-3.29.21-PM-1008x1024.jpg" width="620" /></p> <p><img alt="Screen Shot 2016-05-23 at 3.32.02 PM" class="alignnone size-large wp-image-34457" height="693" src="http://libertyblitzkrieg.com/wp-content/uploads/2016/05/Screen-Shot-2016-05-23-at-3.32.02-PM-916x1024.jpg" width="620" /><br /><img alt="Screen Shot 2016-05-23 at 3.32.35 PM" class="alignnone size-large wp-image-34458" height="375" src="http://libertyblitzkrieg.com/wp-content/uploads/2016/05/Screen-Shot-2016-05-23-at-3.32.35-PM-1024x619.jpg" width="620" /></p> <p>So are you ready?</p> <p><img alt="Screen Shot 2016-05-09 at 8.32.36 AM" class="alignnone wp-image-34003" height="187" src="http://libertyblitzkrieg.com/wp-content/uploads/2016/05/Screen-Shot-2016-05-09-at-8.32.36-AM-1024x466.jpg" width="411" /></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="364" height="219" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/220160524_clinton.png?1464093552" /> </div> </div> </div> http://www.zerohedge.com/news/2016-05-24/heres-full-list-organizations-paid-hillary-clinton-2013-2015#comments Corporate America New York Post Wed, 25 May 2016 08:15:32 +0000 Tyler Durden 561665 at http://www.zerohedge.com Switzerland Prepares To Vote On "Free Lunch" For Everyone http://www.zerohedge.com/news/2016-05-24/switzerland-prepares-vote-free-lunch-everyone <p><a href="http://www.acting-man.com/?p=44981"><em>Submitted by Claudio Gras via Acting-Man.com,</em></a></p> <h3><u><strong>Will the Swiss Guarantee CHF 75,000 for Every Family?</strong></u></h3> <p><strong>In early June the Swiss will be called upon to make a historic decision.</strong> Switzerland is the first country worldwide to put the idea of an <strong><em>Unconditional Basic Income (of $2,500 per month for every man, woman, and child for doing absolutely nothing) </em></strong>to a vote and the outcome of this referendum will set a strong precedent and establish a landmark in the evolution of this debate.</p> <p style="text-align: center;">&nbsp;</p> <p style="text-align: center;"><img alt="die-schweizer-initiative-fuer" class="aligncenter wp-image-44984" src="http://www.acting-man.com/blog/media/2016/05/die-schweizer-initiative-fuer.jpg" style="width: 600px; height: 400px;" /></p> <p style="text-align: center;">The Swiss Basic Income Initiative in a demonstration in front of parliament. As we have previously reported (see &ldquo;<a href="http://www.acting-man.com/?p=40317">Swiss Parliament Shoots Down Socialist Utopia</a>&rdquo; for details), Switzerland&rsquo;s parliament has already rejected the idea, with even the socialists voting against it (proving that they are still in possession of most of their marbles and quite likely in possession of an abacus as well).</p> <p><span id="more-44981">&nbsp;</span></p> <p><strong>The Swiss public will have to approve or reject a change in the constitution </strong>that would allow for the introduction of an Unconditional Basic Income (UBI), or a preset, monthly minimum income to be paid out by the government to every adult and child in the country if their income falls below a specific threshold. Even though details of this proposal have been few and far between, the most commonly cited amount of this guaranteed income would be 2,500 Swiss Francs for adults and 625 francs for children. <strong>The architects of the proposal stress that this government-guaranteed payment, unlike the current benefit programs, will be entirely &ldquo;no questions asked&rdquo;, i.e., it will not be means-tested and will apply to every person legally living in Switzerland.</strong></p> <p>Currently, these are all the details that the Swiss have at their disposal to make their decision. No plan has so far been put forward to specify how such a proposal would be financed, whether an increase in income tax or VAT will have to be enforced, which specific existing welfare programs it would replace or how the glaringly obvious exploitation possibilities of such a plan would be avoided, without any kind of means test &ndash; or without &ldquo;asking any questions&rdquo;, according to one of the campaign&rsquo;s catchphrases.</p> <p><strong>The main argument of the supporters of this initiative is that it would support the people that will, or already do, lose their jobs to automation and technological progress; a defensive move against &ldquo;the rise of the robots&rdquo; as they put it. </strong>They also claim that such a measure will give people the opportunity to grow, to learn and to pursue skills or professional goals that are now rendered prohibitive by their current meaningless and mundane jobs, that they are forced into in order to simply pay their bills. &ldquo;What would you do if your income were taken care of?&rdquo; asked the pro-UBI campaign in Geneva, with a poster that officially made it into the Guinness Book of Records as the world&rsquo;s largest.</p> <p>&nbsp;</p> <p style="text-align: center;"><img alt="Biggest poster ever" class="aligncenter wp-image-44983" src="http://www.acting-man.com/blog/media/2016/05/Biggest-poster-ever.jpg" style="width: 600px; height: 400px;" /></p> <p style="text-align: center;">Meet the world&rsquo;s largest poster ever. As to the answer to the question, a number of people would&nbsp; likely immediately proceed to party. The poster unfortunately fails to ask &ldquo;who is going to pay for it?&rdquo; &ndash; or better said,<em> who will be robbed at gunpoint to pay for it</em>.</p> <p style="text-align: center;">&nbsp;</p> <p>&nbsp;</p> <h3><u><strong>The Free Lunch &ndash; A Fantasy as Old as Methuselah</strong></u></h3> <p><strong>The promise of a free lunch is by no means a new thing in politics.</strong> Getting &ldquo;something for nothing&rdquo; is an age-old shiny trinket that has been dangled before the eyes of the public since time immemorial. In fact, it has appeared so excruciatingly often in our political history, for centuries on end, that one would think that it wouldn&rsquo;t work anymore; not in 2016, surely. And yet it does. <strong><em>UBI is the proof that there are still people who choose to believe that &ldquo;no strings attached&rdquo; freebies and gifts are promises one can rely on and build an economy on, especially when they are coming from their government and rulers.</em></strong></p> <p>However, there are always some strings attached to such gifts and if history has taught us anything on this matter, it is the distinction between a gift and a bribe. Unsavory political ideologies and catastrophic cultural philosophies often tend to make their debut in front of the public hidden inside a Trojan gift horse. <strong>Unrealistic yet enchanting promises have always been a reliable political tool and it has never been a big strategic challenge to corrupt the people by granting the majority something that was stolen from minorities.</strong></p> <p>&nbsp;</p> <p style="text-align: center;"><img alt="Robots" class="aligncenter wp-image-44987" height="480" src="http://www.acting-man.com/blog/media/2016/05/Robots-1024x768.jpg" width="640" /></p> <p style="text-align: center;">Another recent demonstration by UBI supporters in Switzerland &ndash; this one suggests that &ldquo;robots&rdquo; will actually pay for it all. This is based on a combination of the popular Luddite error that&nbsp; &ldquo;machines will make us all jobless&rdquo; (an idea proven consistently wrong since the early 19<sup>th</sup> century when the original Luddites went around to break machines, but who cares about evidence when changing the world is at stake!) and the fantasy that the world of Star Trek has already arrived, and machines will simply produce everything we need and want &ldquo;for free&rdquo; at the push of a button, in a kind of economic<em> perpetuum mobile</em>. Thus, we can now get serious about erecting the long dreamed of socialist Utopia &ndash; and this time, we&rsquo;re going to get it right, you just wait and see!</p> <p>&nbsp;</p> <p>We can easily spot the parallel in the promotion of Basic Income: Even though the architects of UBI in Switzerland, quite wisely, omit any reference to the realistic and structural aspects of their scheme, <u><strong>at the end of day, <em>someone</em> will have to pay for it. </strong></u><em>&ldquo;Tax the 1%!&rdquo;</em>, argue their international fellow travelers, which, rather predictably, makes UBI even more attractive to a large portion of the public. This whole discussion about UBI reminds us of the following quote by Thomas Jefferson:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><em>&ldquo;A government big enough to give you everything you want, is a government big enough to take away everything that you have.&rdquo;</em></p> </blockquote> <p>&nbsp;</p> <p style="text-align: center;"><img alt="Jefferson" class="aligncenter wp-image-44985" height="500" src="http://www.acting-man.com/blog/media/2016/05/Jefferson.jpg" width="414" /></p> <p style="text-align: center;">Thomas Jefferson knew a thing or two about the true nature of government. By accepting a &ldquo;free lunch&rdquo; offered by the government, one is no longer free, but becomes dependent on the whims of the ruling elite &ndash; which is of course precisely what the ruling elite wants. In other words, what happens in reality is <em>the exact opposite</em> of what the UBI supporters imagine will happen. They assert that a basic income distributed by the State will &ldquo;free people&rdquo;, as they will no longer be forced to deal with the drudgery of having to earn a living. Thus, in a quite Orwellian twist, dependency is marketed as &ldquo;freedom&rdquo;.</p> <p style="text-align: center;">&nbsp;</p> <p>&nbsp;</p> <h3><u><strong>The Cultural Argument for Collectivism</strong></u></h3> <p><strong>Key figures of the pro-UBI camp take pride in claiming that the main motivation behind the campaign is not economic but cultural.</strong> They say this proposal aims to make people think about the nature of life and work, it is a way to liberate them from the jobs they don&rsquo;t like but need, a status which the scheme&rsquo;s advocates, quite unhistorically, equate to the indignity of slavery. On top of this,<strong> they claim, UBI will help society survive the imminent unemployment apocalypse: </strong>they believe that with the help of automation and artificial intelligence 50% of all the existing jobs will be taken over within the coming decade by computers and machines.</p> <p>&nbsp;</p> <p style="text-align: center;"><img alt="Luddite" class="aligncenter wp-image-44986" height="500" src="http://www.acting-man.com/blog/media/2016/05/Luddite-682x1024.jpg" width="333" /></p> <p style="text-align: center;">The original Luddites were slightly less imaginative: instead of demanding a basic income, they simply went and smashed the machines they thought would take away their jobs. The underlying notion was simply anti-economic: it asserted that the very goal of economic activity, namely producing more with less, was somehow &ldquo;evil&rdquo;. Taken to its logical conclusion, this means one would have to reject civilization altogether and return to the &ldquo;noble savage&rdquo; life of cavemen and jungle dwellers bereft of tools (a life that would be nasty, brutish, very short and marked by a distinct lack of iPhones).</p> <p>&nbsp;</p> <p><strong>Such an argument might sound superficially rational,</strong> but it goes deeper than that: <u><em><strong>It presupposes that we as human beings see ourselves downgraded and equated to a machine, like just another cog that can be replaced at any time, in a system where man is literally defined as a human resource.</strong></em></u></p> <p>The truth is that it is indeed a cultural debate, far more than it is an economic one.<strong> The only conceivable aim of such a factually unhinged and unfounded proposal can be to gauge the mind-set of the Swiss people in this moment in time.</strong> The outcome of this referendum can provide a valuable insight into the Swiss mentality, and whether the Swiss&nbsp; actually prefer collectivism over individualism. Such a signal could serve as cue for a further escalation of government empowerment: After all, the collapsing centralized system is bound to show symptoms of desperation by &ldquo;doubling down&rdquo; and accelerating and maximizing its centralization efforts.<strong> Thus focusing on the symptoms and secondary effects is futile; a real difference can only be made by addressing the root cause, the system itself.</strong></p> <p>&nbsp;</p> <p style="text-align: center;"><img alt="socialism" class="aligncenter wp-image-44988" src="http://www.acting-man.com/blog/media/2016/05/socialism.png" style="width: 600px; height: 460px;" /></p> <p style="text-align: center;">Since the collapse of the Soviet system (of which many prominent Western economists asserted as late as the 1980s that it would eventually overtake capitalism and free markets &ndash; which goes to show how utterly blinded by ideology and statolatry the profession has become), most socialists have stopped making economic arguments in favor of socialism, realizing they are no longer credible. Instead they are now making moral and cultural arguments in favor of collectivism. Allegedly, although it will make us poorer, socialism is &ldquo;morally superior&rdquo; to the free market system. One might want to ponder the victims of the Chinese Cultural Revolution in this context &ndash; when the protection of individual rights is abandoned in favor of vague and pious notions of the &ldquo;collective good&rdquo;, things often tend to get real ugly very quickly.</p> <p>&nbsp;</p> <p><u><strong>Despite the economic <em>non-sequiturs</em> and the plain Utopianism that lie at the core of the idea of a Universal Basic Income, the concept seems to be gaining popularity worldwide. </strong></u>Canada is set to conduct an experiment with this idea later this year. The city of Utrecht in the Netherlands is launching a pilot program, Finland is planning a two-year trial and a British proposal is gathering interest, while the nonprofit group <em>Give Directly</em> will start providing a guaranteed income to 6,000 Kenyans this month in a decade-long scheduled program and track the results. The idea seems to be gaining traction due to the Western Left&rsquo;s efforts, however the polls in Switzerland are painting a dramatically different picture: the UBI initiative is projected to suffer a crushing defeat.</p> <p>&nbsp;</p> <h3><u><strong>A Bastion of Liberty</strong></u></h3> <p><strong>The Swiss have been voting counter-intuitively for years</strong>: When they held a referendum for or against six weeks of vacation, or when they were called upon to vote for an initiative advocating fewer working hours, or even when they made their choice on the issue of the minimum wage, they always delivered outcomes that seemed surprising to the rest of the West, especially the rest of Europe. Up to now, the Swiss have consistently rejected interference by the state when it came to such topics and have refused to grant more powers to their government. Even in recent years, when the trend in favor of aggressive state expansionism seems to be stronger than ever, Switzerland appears to still hold the line as the last bastion of liberty that remains standing.</p> <p><strong>So what is so different about the Swiss then?</strong> Switzerland is indeed very different, because it became a nation by its peoples&rsquo; own will, based on limited government, strong private property rights and a direct democracy founded on the principles of subsidiarity. This has always required open dialogue and being exposed to different ideas and values: <strong>Vigorous debate itself leads to an enlightened society. Thus, the essential difference lies in the nation&rsquo;s culture, mentality and philosophy.</strong></p> <p style="text-align: center;">&nbsp;</p> <p style="text-align: center;"><img alt="swiss-culture" class="aligncenter wp-image-44989" src="http://www.acting-man.com/blog/media/2016/05/swiss-culture.jpg" style="width: 601px; height: 275px;" /></p> <p style="text-align: center;">High up in the Swiss Alps, where they are playing strange instruments. The Swiss have always stood up for the rights of the individual against the State. They successfully defended themselves against the Hapsburg dynasty and other would-be conquerors, and attempts to introduce collectivist decay from within have been consistently rejected as well.</p> <p>&nbsp;</p> <p><strong>The Swiss have grown up in an environment in which the people were always able to decide for themselves, but they also have a long tradition of doubt and of dissent.</strong> Every critical issue is discussed and decided by the people, the actions of government are subject to the judgment of and limited by the citizenry. All viewpoints are heard, even anti-establishment voices have their say, and critical thinking provides the basis for society&rsquo;s future. However, this is only possible when people rely on their own mind to think about the issues individually and independently.</p> <p><u><strong>Switzerland is therefore quite a hostile terrain for those who wish to promote &ldquo;free lunches&rdquo; and &ldquo;no strings attached&rdquo; gifts.</strong></u> A long history of independent thinking, of consequential analysis and of government limitation, makes it very easy for the Swiss to see past the populism-fueled empty promises and the associated publicity stunts. <em><u><strong>The upcoming rejection of the UBI proposal on June the 5th will and should serve as a reminder that the Swiss still remain the exception to the rule.</strong></u></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="549" height="321" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/220160524_free.png?1464144878" /> </div> </div> </div> http://www.zerohedge.com/news/2016-05-24/switzerland-prepares-vote-free-lunch-everyone#comments Finland Netherlands Reality Switzerland Unemployment Wed, 25 May 2016 08:00:00 +0000 Tyler Durden 561760 at http://www.zerohedge.com China Is Executing To Plan: Foxconn Replaces 60,000 Workers With Robots http://www.zerohedge.com/news/2016-05-24/china-executing-plan-foxconn-replaces-60000-workers-robots <p>Last month <a href="http://www.zerohedge.com/news/2016-04-26/china-building-army-worker-robots">we discussed</a> the fact that officials had approved the latest Five Year Plan for China&#39;s economy. The ultimate goal of the plan is to overtake Germany, Japan, and the United States in terms of manufacturing sophistication by 2049, the 100th anniversary of the founding of the People&#39;s Republic of China.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user51698/imageroot/2016/05/24/20160524_robot1_0.JPG"><img height="401" src="http://www.zerohedge.com/sites/default/files/images/user51698/imageroot/2016/05/24/20160524_robot1_0.JPG" width="600" /></a></p> <p><strong>To make that happen, the government needs Chinese manufacturers to adopt robots by the millions</strong>. <strong>It also wants Chinese companies to start producing more of these robots, , and to enable that there is an <strong>initiative making billions of yuan available for manufacturers to upgrade to technologies including advanced machinery and robots.</strong></strong></p> <p>The manufacturing hub for the electronics industry, Kunshan, in Jiangsu province is proving that that initiative is well underway. As the South China Morning Post <a href="http://www.scmp.com/news/china/economy/article/1949918/rise-robots-60000-workers-culled-just-one-factory-chinas">reports</a>, <strong>thirty five companies, including Apple&#39;s key supplier Foxconn, spent a total of 4 billion yuan on artificial intelligence last year, and more companies are going to follow suit</strong>.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user51698/imageroot/2016/05/24/20160524_robot2_0.JPG"><img height="322" src="http://www.zerohedge.com/sites/default/files/images/user51698/imageroot/2016/05/24/20160524_robot2_0.JPG" width="600" /></a></p> <p>&nbsp;</p> <p>Spurred by the initiative and a desire to cut down on labor costs, <strong>Foxconn has reduced its workforce by a whopping 60,000 people thanks to the introduction of robots</strong>. Foxconn&#39;s headcount went from 110,000 down to 50,000<em> (adding to the mass layoffs that <a href="http://www.zerohedge.com/news/2016-03-01/chinas-mass-unemployment-wave-begins-six-million-workers-get-pink-slips">we have warned</a> will cause further social unrest in China).</em></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user51698/imageroot/2016/05/24/20160524_robot3_0.JPG"><img height="314" src="http://www.zerohedge.com/sites/default/files/images/user51698/imageroot/2016/05/24/20160524_robot3_0.JPG" width="600" /></a></p> <p>&nbsp;</p> <p>We&#39;re not sure how all of this will play out in the grand scheme of the Five Year Plan that was put together, but what is clear is that <strong>China is wasting no time in executing the early stages of the plan.</strong></p> <p>That is just the beginning.</p> <p><strong>The transition from human to robot workers may upend Chinese society.</strong> Some displaced factory workers could find employment in the service sector, but not all of the 100 million now employed in factories will find such jobs a good match. So a sudden shift toward robots and automation could cause economic hardship and social unrest. <strong><em>&ldquo;You can make the argument that robotic technology is the way to save manufacturing in China,&rdquo; says Yasheng Huang, a professor at MIT&rsquo;s Sloan School of Management. &ldquo;But China also has a huge labor force. What are you going to do with them?&rdquo;</em></strong></p> <p>For now, that question remains unanswered, but that won&#39;t stop from unleashing the biggest robotic revolution seen in recent years.</p> <p><strong>In an effort to minimize the social unrest that is already taking place, the country has said that as much as $23 billion will be set aside to cover the layoffs in the coal and steel sectors as it tries to cut down on overcapacity</strong> - we&#39;re eager to find out how much will be set aside for workers that are being displaced by these robots.</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="864" height="452" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20160524_robot3.JPG?1464132353" /> </div> </div> </div> http://www.zerohedge.com/news/2016-05-24/china-executing-plan-foxconn-replaces-60000-workers-robots#comments Apple China Germany Japan Yuan Wed, 25 May 2016 07:00:00 +0000 Tyler Durden 561743 at http://www.zerohedge.com The Global Monetary System Has Devalued 47% Over The Last 10 Years http://www.zerohedge.com/news/2016-05-24/global-monetary-system-has-devalued-47-over-last-10-years <p><a href="http://www.macro-allocation.com/"><em>Authored by Paul Brodsky via Macro-Allocation.com,</em></a></p> <p><strong>We have argued the inevitability of Fed-administered hyperinflation, prompted by a global slowdown and its negative impact on the ability to service and repay systemic debt. </strong>One of the most politically expedient avenues policy makers could take would be to inflate the debt away in real terms through coordinated currency devaluations against gold, the only monetize-able asset on most central bank balance sheets. <strong><em>To do so they would create new base money with which to purchase gold at pre-arranged fixed exchange prices, which would raise the general price levels in their currencies and across the world to levels that diminish the relative burden of debt repayment (while not sacrificing debt covenants).</em></strong></p> <p><span style="text-decoration: underline;"><strong>The odds of this occurring seem to have risen, judging by the gold prices. </strong></span>Table 1 looks at gold performance over one, five and ten years in terms of the fifteen currencies representing the fifteen largest economies (about 77% of global GDP). The bold figures at the bottom show gold&rsquo;s performance weighted for GDP.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/05/24/220160524_gold1.png"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/05/24/220160524_gold1_0.png" style="width: 600px; height: 417px;" /></a></p> <p><strong>Gold is mostly quoted in US dollars, but it is also implicitly valued at each point in time in all currencies (as is everything that may be bought or sold across the world), simply by applying cross exchange rates to its USD price</strong>. Table 1 shows the experience of gold holders around the world has been quite different. A Russian would have had the currency he receives his wages in devalued to gold by almost 370% over the last ten years. Or, he could have generated a 370% gain by converting his ruble savings into gold. <strong>Anyone else in the world would also show a 370% gain by having owned gold and having been short the ruble.</strong></p> <p><strong>Meanwhile, gold in dollar terms, as it is quoted for capital market participants given London and US exchange dominance over fungible gold trading, is up far less &ndash; about 94%</strong>. (This performance also represents gold performance for currencies pegged to the dollar, like the Saudi Arabian riyal.) Gold in Chinese yuan terms and Swiss franc terms are only about 57% higher over the last ten years.</p> <p>The wide gap in gold&rsquo;s performance is due to sharp differences in ongoing currency exchange rates. <strong>Gold is a currency hedge - the stable fulcrum around which fiat currencies fluctuate</strong>. Gold is not consumed and has no internal rate of return. Changing market quotes for gold &ndash; whether for spot gold, gold futures or gold bullion &ndash; merely represent currency exchange rates. <em><strong>The performance of gold in Table 1 is not the performance of gold at all, but rather the performance of the currencies in which it is quoted.</strong></em></p> <p>The last line of Table 1 shows gold price changes adjusted for the relative importance of currencies, as determined by GDP. <u><em><strong>It implies that the global monetary system has been devalued against gold by 46.88% over the last ten years (1/1.8824), which was in line with the MSCI ACWI World equity index over this time.) One who produced a good or service anywhere in the world over the last ten years would have been wise to save the fruit of his labor in gold terms.</strong></em></u></p> <h2><u>Central Banks</u></h2> <p><strong>If we were a central banker overseeing the fiat global monetary regime we would want to treat gold as a market-based indicator of inflation, not as a potential competitor to the currencies we established and promote. </strong>We would build econometric models in which we would define the relationships linking credit growth to demand growth, demand growth to production growth, and production growth to inflation and employment. We would establish economic mandates, like stable prices and full employment, and then we would model conditional scenarios and reaction functions in which to proceed.</p> <p>We would be very transparent in our communications policies, sharing assumptions and data from our models and our economic projections based on them. It would appear to all the world that we would be applying thoughtful, best efforts science to the vagaries of irrational human animal spirits &ndash; the irrationality of mass consumption and investment or the irrationality of short term decision making over what would be more sustainable.<strong> We would blanket our science in pedantic academic rhetoric and debate nuance with others interested in the same discipline.</strong></p> <p>We would not question the moral nature of our pursuits because science is amoral. Nor would we question whether our models and actions might be unduly harmful because our position is clearly defined and its roadmap conditional and usually marked with precedent.<strong> We would not question our reason for being because we would be the very foundation upon which economies sit. </strong>We would not separate economics from finance because, well, because it would not reconcile with everything else we do.</p> <p><strong>When asked about gold, we would testify before our congresses and parliaments that we hold it on our balance sheets merely as tradition</strong>, and that its relevance in our scientifically managed domestic economies and coordinated, financial-centric global economies is de minimus. Gold would be an afterthought to us, and most serious economists, politicians, policy makers and market observers.</p> <p><u><em><strong>Those clinging to the relevancy of the barbarous relic would be generally perceived as sour pessimists, economic losers unwilling to change with the times, malcontents clinging to regressive social mores, Chicken Littles seeking to undermine centrist politics and policy in the face of contrary economic indicators, druids unwilling or incapable of using leveraged financial assets to save, provincial patriots unwilling to strive to live in a peaceful and prosperous international community.</strong></em></u></p> <p><strong>Ironically, it is this last point that holds the key to gold&rsquo;s relevancy in modern times.</strong> The fact that <u><strong>gold remains on the balance sheets of central banks and is being aggressively bought by them suggests it is gaining, not losing, relevancy as a monetary asset</strong></u>. The fact that it can be used as the fulcrum against which to devalue currencies gives it purpose. The fact that allocations to gold and gold-related assets remains less than 3% of investment portfolios makes it a superior risk-adjusted portfolio allocation.</p> <p>&nbsp;</p> <h2><u>Expectations</u></h2> <p>Graph 1, shows the relationship of US real yields and the USD gold price.<strong> Real (inflation adjusted) yields and gold have been tightly correlated. </strong>Non-income producing gold ebbs and flows inversely with yields available on financial assets. This is understandable, but ask yourself this: <em><strong>what happens now that global sovereign interest rates must go negative to give the impression that credit is becoming easier?</strong></em></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/05/24/220160524_gold.png"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/05/24/220160524_gold_0.png" style="width: 600px; height: 469px;" /></a></p> <p><strong>The sound reasoning behind the tight correlation should break down if/when no amount of central bank stimulus, other than QE, produces inflation, and that inflation is limited to asset inflation. Then, the system would break and global monetary authorities would have to re-work it.</strong></p> <p><u><em><strong>Our view is that there will not be a switch to a fully-reserved banking system or even a reversion to a fixed exchange rate; however, there will be a significant increase in global currency devaluations against gold, and that it will be coordinated by monetary authorities.</strong></em></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="291" height="148" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/220160524_gold2.png?1464144133" /> </div> </div> </div> http://www.zerohedge.com/news/2016-05-24/global-monetary-system-has-devalued-47-over-last-10-years#comments Central Banks Covenants fixed Hyperinflation Swiss Franc Yuan Wed, 25 May 2016 06:00:00 +0000 Tyler Durden 561758 at http://www.zerohedge.com Trump Escalates Clinton Attack, Calls Vince Foster Suicide "Very Fishy" http://www.zerohedge.com/news/2016-05-24/trump-escalates-clinton-attack-calls-vince-foster-suicide-very-fishy <p>Just hours after <a href="http://www.zerohedge.com/news/2016-05-23/trump-goes-hillarys-jugular-releases-video-featuring-bill-clinton-rape-accusers">Donald Trump released a clip </a>in which the presumptive Republican presidential candidate hinted at Bill Clinton's sexual transgressions which featured audio of two women - Kathleen Willey and Juanita Broaddrick - who have made rape accusations against Bill Clinton, Trump escalated his attack on Hillary and Bill Clinton in an interview with WaPo in which Trump called the circumstances of Vincent Foster’s death "<strong>very fishy</strong>."</p> <p>"He had intimate knowledge of what was going on," Trump said of Foster’s relationship with the Clintons. "He knew everything that was going on and then all of a sudden he committed suicide." </p> <p>As a reminder, Vince Foster, a longtime friend of the Clintons, was deputy White House counsel in the first few months of Clinton’s presidency.&nbsp; He was found dead from a gunshot wound to the mouth in July 1993. The three official investigations into Foster’s death concluded he committed suicide as he suffered from depression, however unproven theories have constantly swirled that the Clintons were involved in Foster’s death. </p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2016/05/13/vince%20foster.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2016/05/13/vince%20foster_0.jpg" width="500" height="281" /></a></p> <p>&nbsp;</p> <p>The <a href="https://www.washingtonpost.com/politics/trump-escalates-attack-on-bill-clinton/2016/05/23/ed109acc-2100-11e6-8690-f14ca9de2972_story.html">Washington Post was not pleased</a>, saying that "Trump is reviving some of the ugliest political chapters of the 1990s with escalating personal attacks on Bill Clinton’s character, part of a concerted effort to smother Hillary Clinton’s campaign message with the weight of decades of controversy."</p> <p>The WaPo does correctly note that in many ways the race already appears to be "<em>teed up as a referendum on the two candidates’ pasts - both of whom carry enough baggage to fill many books - rather than their visions for the country’s future.</em>"</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>"Clinton has increasingly directed fire at Trump’s long history of derogatory statements about women, his bankruptcies and other controversies to argue he is unfit for office." </p> <p>&nbsp;</p> <p>Trump, meanwhile, has sought to brand the former secretary of state as “Crooked Hillary,” pointing to such issues as the Whitewater real estate controversy in the 1990s and foreign donations to her family’s philanthropic organization over the past decade. Trump also regularly accuses the Clintons of hypocrisy on women’s issues and argues that Hillary Clinton has been an “enabler” of her husband’s actions and attempting to discredit the women in question.</p> </blockquote> <p>That is how the topic of Vince Foster emerged: according to the WaPo<strong>, "Trump said another topic of potential concern is the suicide of former White House aide Vincent Foster, which remains the focus of intense and far-fetched conspiracy theories on the Internet.</strong>"</p> <p>Conspiracy theory or not, the issue of Foster's death may just hit a live nerve in the Clinton campaign, something that is the ultimate goal of Trump.&nbsp; </p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>One issue on Trump’s radar is the 1993 death of Foster, which has been ruled a suicide by law enforcement officials and a subsequent federal investigation. But some voices on the far right have long argued that the Clintons may have been involved in a conspiracy that led to Foster’s death. </p> <p>&nbsp;</p> <p><strong>He called theories of possible foul play “very serious” and the circumstances of Foster’s death “very fishy.”</strong></p> <p>&nbsp;</p> <p>"He had intimate knowledge of what was going on,” Trump said, speaking of Foster’s relationship with the Clintons at the time. "He knew everything that was going on, and then all of a sudden he committed suicide." </p> <p>&nbsp;</p> <p>He added, "I don’t bring [Foster’s death] up because I don’t know enough to really discuss it. I will say there are people who continue to bring it up because they think it was absolutely a murder. I don’t do that because I don’t think it’s fair."</p> </blockquote> <p>He has now, and we can only expect the topic of Clinton's alleged rape as well as the Clintons' involvement in Vince Foster' death to become an increasingly prevalent, if circuitous, theme of future Trump attack campaigns, even if as he says he "doesn't bring it up", because the purpose is simple: to throw Hillary and her campaign off balance. </p> <p>Finally, since as the WaPo puts it, the presidential race is a "<em>referendum on the candidates' past</em>", the one candidate who comes up with the most shocking - and thus most memorable, remarkable and entertaining - skeletons in the closet will likely win. For now Trump appears to be holding the advantage, especially since nothing Hillary has come up with has managed to penetrate <em>Teflon Trump's</em> thick skin so far.</p> <script src="//platform.twitter.com/widgets.js"></script> <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="645" height="363" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/trump%20bill.jpg?1464115915" /> </div> </div> </div> http://www.zerohedge.com/news/2016-05-24/trump-escalates-clinton-attack-calls-vince-foster-suicide-very-fishy#comments Donald Trump Real estate White House Wed, 25 May 2016 03:12:52 +0000 Tyler Durden 561717 at http://www.zerohedge.com Paul Craig Roberts: "Americans Are A Conquered People" http://www.zerohedge.com/news/2016-05-24/paul-craig-roberts-americans-are-conquered-people <p><a href="http://www.paulcraigroberts.org/2016/05/23/americans-a-conquered-people-the-new-serfs-paul-craig-roberts/"><em>Authored by Paul Craig Roberts,</em></a></p> <p>As readers know, I have seen some optimism in voters support for Trump and Sanders as neither are members of the corrupt Republican and Democratic political establishments. <strong>Members of both political establishments enrich themselves by betraying the American people and serving only the interest of the One Percent. </strong>The American people are being driven into the ground purely for the sake of more mega-billions for a handful of super-rich people.</p> <p>Neither political party is capable of doing anything whatsoever about it, and neither will.</p> <p><strong>The optimism that I see is that the public&rsquo;s support of outsiders is an indication that the insouciant public is waking up.</strong> But Americans will have to do more than wake up, as they cannot rescue themselves via the voting booth. <strong>In my opinion, the American people will remain serfs until they wake up to Revolution. </strong></p> <p><span style="text-decoration: underline;"><strong>Today Americans exist as a conquered people.</strong></span> <em>They have lost the Bill of Rights, the amendments to the Constitution that protect their liberty. Anyone, other than the One Percent and their political and legal servants, can be picked up without charges and detained indefinitely as during the Dark Ages, when government was unaccountable and no one had any rights. Only those with power were safe. In America today anyone not politically protected can be declared &ldquo;associated with terrorism&rdquo; and taken out by a Hellfire missile from a drone on the basis of a list of human targets drawn up by the president&rsquo;s advisers. Due process, guaranteed by the US Constitution, no longer exists in the United States of America. Neither does the constitutional prohibition against the government spying on citizens without just cause and a court warrant. The First Amendment itself, whose importance was emphasized by our Founding Fathers by making it the First Amendment, is no longer protected by the corrupt Supreme Court. The Nine who comprise the Supreme Court, like the rest of the bought-and-paid-for-government, serve only the One Percent. Truth-tellers have become &ldquo;an enemy of the state.&rdquo; Whistleblowers are imprisoned despite their legal protection in US law.</em></p> <p><strong>The United States government has unaccountable power.</strong> Its power is not accountable to US statutory law, to international law, to the Congress, to the judiciary, to the American people, or to moral conscience. In the 21st century the war criminal US government has murdered, maimed, and dislocated millions of people based on lies and propaganda. Washington has destroyed seven countries in whole or part in order to enrich the American elite and comply with the neoconservative drive for US world hegemony.</p> <p><strong>Americans live in a propaganda-fabricated world in which a brutal police state is cloaked in nice words like &ldquo;freedom and democracy.&rdquo;</strong> &ldquo;Freedom and democracy&rdquo; is what Washington&rsquo;s war machine brings with sanctions, bombs, no-fly zones, troops, and drones to countries that dare to cling to their independence from Washington&rsquo;s hegemony.</p> <p><strong>Only two countries armed with strong military capability and nuclear weapons&mdash;Russia and China&mdash;stand between Washington and Washington&rsquo;s goal of hegemony over the entire world.</strong></p> <p>If Russia or China falter, the evil ensconced in Washington will rule the world. America will be the Anti-Christ. The predictions of the Christian Evangelicals preaching &ldquo;end times&rdquo; will take on new meaning.</p> <p>Russia is vulnerable to becoming a vassal state of Washington. Despite a legion of betrayals by Washington, the Russian government has just proposed a joint US/Russia cooperation against terrorists.</p> <p>One wonders if the Russian government will ever learn from experience. Has Washington cooperated with the agreement concerning Ukraine? Of course not. Has Washington cooperated in the investigation of MH-17? Of course not. Has Washington ceased its propaganda about a Russian invasion of Crimera and Ukraine? Of course not. Has Washington kept any agreement previous US governments made with Russia? Of course not.</p> <p>So why does the Russian government think Washington would keep any agreement about a joint effort against terrorism?</p> <p>The Russian government and the Russian people are so unaware of the danger that they face from Washington that they let foreigners control 20 percent of their media! <em><strong>Is Russia unaware that Washington has Russia slated for vassalage or destruction?</strong></em></p> <p>China is even more absurd. According to the Chinese government itself, China has 7,000 foreign-financed NGOs operating in China! Foreign financed NGOs are what Washington used to destabilize Ukraine and overthrow the elected government.</p> <p><strong>What does the Chinese government think these NGOs are doing other than destabilizing China?</strong></p> <p>Both Russia and China are infected with Western worship that creates a vulnerability that Washington can exploit. Delusions can result in inadequate response to threat.</p> <p><strong>All of Europe, both western, eastern and southern, the British Pacific such as Australia and New Zealand, Japan and other parts of Asia are vassal states of Washington&rsquo;s Empire.</strong> None of these allegedly &ldquo;sovereign&rdquo; countries have an independent voice or an independent foreign or economic policy. All of Latin America is subject to Washington&rsquo;s control. No reformist government in Latin America has ever survived Washington&rsquo;s disapproval of putting the interests of the domestic populations ahead of American corporate and financial profits. Already this year Washington has overthrown the female presidents of Argentina and Brazil. Washington is currently in the process of overthrowing the government in Venezuela, with Ecuador and Bolivia waiting in the wings. In 2009 Killary Clinton and Obama overthrew the government of Honduras, an old Washington habit.</p> <p><u><strong>As Washington pays the UN&rsquo;s bills, the UN is compliant.</strong></u> No hand is ever raised against Washington. So why does anyone on the face of the earth think that an American election can change anything or mean anything?</p> <p><strong>We know that Killary is a liar, a crook, an agent for the One Percent, and a warmonger. Let&rsquo;s now look at Trump.</strong></p> <p><strong>Are there grounds for optimism about Trump?</strong> In the West &ldquo;news reporting&rdquo; is propaganda, so it is difficult to know. Moreover, we do know that, at least initially, the response of the Republican Establishment to Trump is to demonize him, so we do not know the veracity of the news reports about Trump.</p> <p>Without belaboring the issue, two news reports struck me. One is the <a href="https://www.washingtonpost.com/opinions/sheldon-adelson-i-endorse-donald-trump-for-president/2016/05/12/ea89d7f0-17a0-11e6-aa55-670cabef46e0_story.html">Washington Post report that the Zionist multi-billionaire US casino owner Sheldon Adelson has endorsed Donald Trump for President</a>.</p> <p>Other reports say that Adelson has mentioned as much as $100 million as his political campaign contribution to Trump.</p> <p>Anyone who gives a political campaign $100 million dollars expect something in exchange, and the recipient is obligated to provide whatever is desired. So are we witnessing the purchase of Donald Trump? The initial Republican response to Trump, encouraged by the crazed neoconservatives, was to abandon the Republican candidate and to vote for Killary.</p> <p><strong>Is Adelson&rsquo;s endorsement a signal that Trump can be bought and brought into the establishment?</strong></p> <p>Additional evidence that Trump has sold out his naive supporters is <a href="https://ourfuture.org/20160519/populist-trump-wants-to-deregulate-wall-street">his latest statement that Wall Street should be deregulated.</a>&nbsp;<a href="https://ourfuture.org/20160519/populist-trump-wants-to-deregulate-wall-street" target="_blank"> </a></p> <p><em>It is extraordinary that Trump&rsquo;s advisers have not told him that Wall Street was deregulated back in the 20th century during the Clinton regime. The repeal of Glass-Steagall deregulated Wall Street. One source of the 2008 financial crisis is the deregulated derivative market. When Brooksley Born attempted to fulfill the responsibility of the Commodity Futures Trading Commission and regulate over-the-counter derivatives, she was blocked by the Federal Reserve, the US Treasury, the SEC, and the US Congress.</em></p> <p><strong>Nothing has been done to correct the massive mistake of financial deregulation.</strong> The Dodd-Frank legislation did not correct the massive financial concentration that produced banks too big to fail, and the legislation did not stop Wall Street&rsquo;s reckless casino gambling with the US economy. Yet Trump says he will dismantle even the weak Dodd-Frank restrictions.</p> <p><strong>The American print and TV media are so corrupt that these reports could be false stories, the purpose of which is to demoralize Trump&rsquo;s supporters. On the other hand, should we be surprised if a billionaire aligns with the One Percent?</strong></p> <p>Elections are an unlikely means of restoring government that is accountable to the people rather than to the One Percent. <strong>Even if Trump is legitimate, he does not have the experience in foreign and economic affairs to know who to appoint to his government in order to implement change.</strong> Moreover, even if he knew, unless Trump candidates also replace the Senate, Trump could not get his choices confirmed by a Senate accountable only to the One Percent.</p> <p><u><strong>Americans are a conquered people.</strong></u> We see this in the appeal from <a href="http://act.rootsaction.org/p/dia/action3/common/public/?action_KEY=12247">RootsAction</a> to the rest of the world to come to the aid of the American people.<strong> Unable to stop the lawlessness of their own &ldquo;democratic&rdquo; government, Americans plea for help from abroad.&nbsp;</strong><a href="http://act.rootsaction.org/p/dia/action3/common/public/?action_KEY=12247" target="_blank"> </a></p> <p>The plea from RootsAction indicates that committed activists now acknowledge that<strong> change in America cannot be produced by elections or be achieved internally through peaceful means.</strong></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="243" height="159" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/220160524_serf.png?1464135420" /> </div> </div> </div> http://www.zerohedge.com/news/2016-05-24/paul-craig-roberts-americans-are-conquered-people#comments Australia Brazil China Commodity Futures Trading Commission Donald Trump Fail Federal Reserve First Amendment Gambling Japan New Zealand None Sheldon Adelson Too Big To Fail Ukraine Wed, 25 May 2016 02:30:00 +0000 Tyler Durden 561748 at http://www.zerohedge.com Currency War Resumes - China Devalues Yuan To 5-Year Lows http://www.zerohedge.com/news/2016-05-24/currency-war-resumes-china-devalues-yuan-5-year-lows <p>After a brief hiatus from the ongoing currency wars, China fired another salvo at The Fed tonight by<strong> devaluing the Yuan fix to 6.5693 - its weakest against the USD since March 2011</strong>. After eight days higher in a row for The USD Index, it seems PBOC has turned its currency liberalization plan off, stabilizing the broad Renminbi basket (which has been steadily devalued) and turning its attention to devaluing against the USD. Having unleashed turmoil in August (pre-Sept FOMC) and January (post Dec rate-hike), it appears the <strong>rising rate-hike probabilities jawboned by The Fed are decidedly disagreeable to &quot;authoritative persons&quot; in China</strong>.</p> <p>&nbsp;</p> <p>The Yuan Fix was driven down to March 2011 lows...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/05/24/220160524_yuan1.png"><img height="301" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/05/24/220160524_yuan1_0.png" width="600" /></a></p> <p>Front-running?</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>&ldquo;It could be because the authorities want to alleviate some of the depreciation pressure before the Fed interest rate decision in June,&quot; </strong>said Christy Tan, head of markets strategy at National Australia Bank Ltd. in Hong Kong. <strong>&quot;If there are signs of panic dollar buying, the PBOC will step in.&quot;</strong></p> </blockquote> <p>As it seems maintaining some &#39;stability&#39; against the USD has lost its appeal as the USD surges once again...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/05/24/220160524_yuan2.png"><img height="312" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/05/24/220160524_yuan2_0.png" width="600" /></a></p> <p>&nbsp;</p> <p>What the chart above shows is that the <strong>Chinese currency (red) has been devaluing in an orderly and quiet manner for much of the year while maintaining the appearance of stability against the USD (blue)</strong>. That appears to have changed now and the last time turmoil started to ripple through the CNHUSD markets - it didn&#39;t stop until Tom Cook lied to Jim Cramer and The PPT rescued the world.</p> <p>The irony of the apparent stability in the broad-based Renminbi basket (while devaluing against the USD) is that it comes after a desperate China has reportedly given up on its liberalization goals. <a href="http://www.wsj.com/articles/china-preferring-stability-to-free-markets-loses-resolve-to-revamp-currency-1464022378?mod=e2tw">As The Wall Street Journal notes,</a></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Behind closed doors in March, some of China&rsquo;s most prominent economists and <strong>bankers bluntly asked the People&rsquo;s Bank of China to stop fighting the financial markets and let the value of the nation&rsquo;s currency fall.</strong></p> <p>&nbsp;</p> <p><strong>They got nowhere. &ldquo;The primary task is to maintain stability,&rdquo;</strong> said one central-bank official, according to previously undisclosed minutes of the meeting reviewed by The Wall Street Journal.</p> <p>&nbsp;</p> <p>The meeting left<strong> little doubt China&rsquo;s top leaders have lost interest in a major policy shift announced in a surprise move just nine months ago.</strong> In August 2015, the PBOC said it would make the yuan&rsquo;s value more market-based, an important step in liberalizing the world&rsquo;s second-largest economy.</p> </blockquote> <p><span style="text-decoration: underline;"><strong>In reality, though, the yuan&rsquo;s daily exchange rate is now back under tight government control,</strong></span> according to meeting minutes that detail private deliberations and interviews with Chinese officials and advisers who spoke with The Wall Street Journal about the country&rsquo;s currency policy.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><span style="text-decoration: underline;"><strong>On Jan. 4, the central bank behind closed doors ditched the market-based mechanism, according to people close to the PBOC.</strong></span> The central bank hasn&rsquo;t announced the reversal, but officials have essentially returned to the old way of adjusting the yuan&rsquo;s daily value higher or lower based on whatever suits Beijing best.</p> </blockquote> <p><strong>The flip-flop is a sign of policy makers&rsquo; deepening wariness about how much money is fleeing China, a problem driven by its slowing economy.</strong> For now, at least, officials believe the benefits of freeing the yuan are outnumbered by the number of threats... though we note that <strong>a 3% depreciation of the yuan could add $25.6 billion to Chinese companies&rsquo; annual interest payments on dollar debts</strong>, according to estimates by analysts at BNP Paribas.</p> <p>So the question is - <em><strong>will the Yuan turmoil ripple through markets enough to spook The Fed once more and dissolve what little credibility they have left or will Janet and her henchmen stand up to the foreign forces, hike rates to spit their own face, and deal with the aftermath </strong></em>through some more Citadel-driven VIXtermination? With VIX futures near record shorts and S&amp;P futures at their longest in almost 2 years - there&#39;s not much easy leveraged money to squeeze there - like there was in August.</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="965" height="501" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/220160524_yuan2.png?1464142723" /> </div> </div> </div> http://www.zerohedge.com/news/2016-05-24/currency-war-resumes-china-devalues-yuan-5-year-lows#comments Australia China Hong Kong Jim Cramer Reality Renminbi Wall Street Journal Yuan Wed, 25 May 2016 02:25:44 +0000 Tyler Durden 561757 at http://www.zerohedge.com