en Frontrunning: May 22 <ul> <li>U.S. vows to continue patrols after China warns spy plane (<a href="">Reuters</a>)</li> <li>Bank of Japan Chief Cheers On Tokyo’s Surging Stocks (<a href="">WSJ</a>)</li> <li>Merkel Stamps Out Optimism on Greece After Tsipras Talks (<a href="">BBG</a>)</li> <li>Greece sees reforms deal with lenders in next 10 days (<a href="">Reuters</a>)</li> <li>Why Greece’s Syriza party is not sticking to the script on an IMF deal (<a href="">Channel4</a>)</li> <li>Why Does Putin Care Who Runs a Tiny Balkan Nation? Gas Pipelines (<a href="">BBG</a>)</li> <li>U.S. Stock-Index Futures Are Little Changed Before Yellen Speech (<a href="">BBG</a>)</li> <li>German Business Confidence Declines as Risks Cloud Outlook (<a href="">BBG</a>)</li> <li>Brazil’s Economic Downturn, Corruption Scandals Shake Leader (<a href="">WSJ</a>)</li> <li>Clinton Foundation reveals up to $26 million in additional payments (<a href="">WaPo</a>)</li> <li>Uber in Talks for $1 Billion Credit Facility With Banks (<a href="">WSJ</a>)</li> <li>Yellen Haunted by Taper Tantrum as Fed Rate Rise Draws Closer (<a href="">BBG</a>)</li> <li>Greece Submerges as Crisis Fallout Worse Than Emerging Markets (<a href="">BBG</a>)</li> <li>U.S. bird flu causing egg squeeze, emergency measures (<a href="">Reuters</a>)</li> <li>Baltimore grand jury indicts police in death of Freddie Gray (<a href="">Reuters</a>)</li> </ul> <p><strong>Overnight Media Digest</strong></p> <p><em><span style="text-decoration: underline;">FT</span></em></p> <p>Six global banks including Barclays and Royal Bank of Scotland have been fined a combined sum of more than $5.6 billion to settle charges of rigging foreign exchange markets between Dec 2007 and Jan 2013.</p> <p>U.S. Department of Financial Services' (DFS) top banking regulator Benjamin Lawsky has quit government services to start his own law and consulting firm. Lawsky will leave DFS in late June, according to people familiar with his plans.</p> <p>Stockholm-based music streaming service Spotify has revamped its platform and inked partnerships with content providers to offer video and podcasts, Chief Executive Daniel Ek said. The revamp comes weeks before Apple Inc readies to launch its own streaming service to compete with Spotify and others.</p> <p>Jeff Immelt, chief executive of GE, while speaking at a conference in Florida, said that the company was willing to sell intellectual property around a product to allay fears of the European Commission that an acquisition deal between GE and Alstom would harm competition in the gas and turbine market</p> <p>&nbsp;</p> <p><em><span style="text-decoration: underline;">NYT</span></em></p> <p>* Benjamin Lawsky, known as the Sheriff of Wall Street, is said to be stepping down as New York's top financial regulator in June to start his own legal and consulting firm.(<a href="" title=""></a>)</p> <p>* CareFirst, a Blue Cross Blue Shield plan, on Wednesday became the third major health insurer in the United States to disclose this year that hackers had breached its computer systems and potentially compromised some customer information. The attack could affect as many as 1.1 million of its customers.</p> <p>(<a href="" title=""></a>)</p> <p>* With its $9.1 billion acquisition of Suddenlink Communications on Wednesday, European company Altice established a small foothold in the United States cable market. But the deal may have set the stage for Altice to go after an even larger and more tantalizing target: Time Warner Cable Inc . (<a href="" title=""></a>)</p> <p>* Spotify, which has come to dominate the world of subscription streaming music, announced a series of changes to its mobile app on Wednesday, moving into new realms of media distribution just ahead of the expected arrival of a competing service from Apple Inc. (<a href="" title=""></a>)</p> <p>* A London judge on Wednesday denied an appeal by Navinder Singh Sarao, the futures trader accused of playing a major role in causing the "flash crash" of 2010, to reduce his bail after the United States government froze his assets worldwide. (<a href="" title=""></a>)</p> <p>&nbsp;</p> <p><em><span style="text-decoration: underline;">Canada</span></em></p> <p>THE GLOBE AND MAIL</p> <p>** Shopify Inc has raised C$131 million ($107.30 million) in its initial public offering, pricing the shares above an increased range as investors clamored for stock in the provider of software for small businesses. (<a href="" title=""></a>)</p> <p>** With the busy summer travel season set to take flight, Air Canada is about to begin clamping down on carry-on baggage to ensure it meets regulations. Starting next Monday at Toronto's Pearson International Airport, airline staff will be stationed at both check-in and security checkpoints to ensure carry-on bags meet size and weight requirements. (<a href="" title=""></a>)</p> <p>** The prospect of a liquefied natural gas industry in British Columbia would be a game-changer for aboriginal communities, Premier Christy Clark said on Wednesday. But she sidestepped the question of what happens if some of those communities continue to say no to the developments. (<a href="" title=""></a>)</p> <p>NATIONAL POST</p> <p>** An east-end Montreal college is gaining a reputation as a breeding ground for jihadis after four of its students were arrested at the airport Friday, allegedly on the verge of taking off to join an overseas terror group. (<a href="" title=""></a>)</p> <p>** British Columbia is promising significant "cost-certainty" assurances to the Petronas-led consortium proposing a natural gas export project on the West Coast, even as rising opposition from First Nations threatens to sour the plan. (<a href="" title=""></a>) </p> <p>&nbsp;</p> <p><em><span style="text-decoration: underline;">Hong Kong<br /></span></em></p> <p>SOUTH CHINA MORNING POST</p> <p>-- Supply chain manager Li &amp; Fung on Thursday urged shareholders at its annual general meeting to be patient even as it forecast difficulties to persist amid bleak prospects for global consumer demand this year. (<a href="" title=""></a>)</p> <p>-- The London Metal Exchange is in detailed talks with mainland authorities to create direct trading links with domestic commodity exchanges that would emulate the Shanghai-Hong Kong Stock Connect, the company's Chief Executive Garry Jones said. (<a href="" title=""></a>)</p> <p>THE STANDARD<br />-- Hong Kong's inflation sank to a low in more than 30 months in April, with prices held in check by cheaper imports due to a stronger local currency, a trend tipped to continue, data from the Census &amp; Statistics Department showed. (<a href="" title=""></a>)</p> <p>HONG KONG ECONOMIC JOURNAL<br />-- The union of Cathay Pacific Airways threatened to strike in August if the Hong Kong-based carrier ignores its demands in a protest over pay and benefits</p> <p></p> <p><em><span style="text-decoration: underline;">Britain</span></em></p> <p>The Times</p> <p>BARCLAYS FINED RECORD $2.4 BLN OVER FOREX FIX</p> <p>Six of the world's largest investment banks, including Barclays Plc and Royal Bank of Scotland, have been fined about $5.7 billion by U.S. regulators in the second and final major settlement with the industry over the foreign exchange markets manipulation scandal. (<a href="" title=""></a>)</p> <p>JUDGE REJECTS BAIL PLEA FROM LONDON'S 'FLASH CRASH' TRADER</p> <p>The British trader blamed for helping to wipe hundreds of billions of dollars off the value of U.S. shares five years ago is facing a fifth week behind bars after a judge rejected his appeal against a 5 million pounds ($7.77 million) bail condition. (<a href="" title=""></a>)</p> <p>The Guardian</p> <p>SCORES OF ALLEGED PHONE-HACKING VICTIMS PREPARE TO SUE MIRROR PUBLISHER</p> <p>Trinity Mirror Plc is facing a soaring legal bill after dozens of alleged phone-hacking victims, including senior Labour party figures, scores of TV stars and David Beckham's father, prepare to sue the Daily Mirror publisher. A number of journalists at the Daily Mirror, Sunday Mirror and the People were accused at the trial of carrying out "industrial-scale phone hacking" between mid-1999 and 2009. (<a href="" title=""></a>)</p> <p>DAVID CAMERON WARNED HE COULD LOSE MINISTERS OVER EU REFERENDUM CAMPAIGN</p> <p>David Cameron is being warned that a number of ministers will resign unless he allows cabinet members to follow their conscience and campaign for a no vote in the EU referendum. (<a href="" title=""></a>)</p> <p>The Telegraph</p> <p>GEORGE OSBORNE TO PRIVATISE 23 BLN STG OF TAXPAYER ASSETS</p> <p>George Osborne has pledged to privatise 23 billion pounds ($35.72 billion) of government assets by the end of the next year in an attempt to bolster public finances and increase productivity. (<a href="" title=""></a>)</p> <p>AIRBUS CHIEF SAYS FUTURE INVESTMENT AT RISK IF UK LEAVES EUROPE</p> <p>The head of Airbus in the UK, Paul Kahn, has said the aerospace and defence giant would reconsider future investment in the United Kingdom were it to leave the European Union. (<a href="" title=""></a>)</p> <p>Sky News</p> <p>HG TO BUY EFFECTS FIRM THE FOUNDRY FOR $310.60 mln</p> <p>The Foundry, which offers post-production and other services to film and television studios, is being bought by Hg Capital, a London-based private equity firm. (<a href="" title=""></a>)</p> <p>BOOKER TO BUY LONDIS AND BUDGENS CHAINS</p> <p>Food wholesaler Booker is to buy the Londis and Budgens chains in England, Scotland and Wales in a deal that will strengthen its status as an independent grocery retailer. (<a href="" title=""></a>)</p> <p>The Independent</p> <p>VODAFONE HEAD JOINS DEUTSCHE BANK IN WARNING OVER EU EXIT</p> <p>The battle over Britain's membership of the European Union intensified as two of the country's largest employers warned that an exit would be damaging to the economy. (<a href="" title=""></a>)</p> <p>WAGES PAID TO ILLEGAL IMMIGRANTS WILL BE CONFISCATED BY THE POLICE, SAYS DAVID CAMERON</p> <p>The wages paid to illegal migrants working in the shadow economy will be confiscated by police as part of a fresh drive by David Cameron to push down immigration. (<a href="" title=""></a>)</p> Apple Bank of Japan Barclays China Corruption Deutsche Bank European Union Florida Greece Hong Kong Japan Jeff Immelt Natural Gas Private Equity Reuters Royal Bank of Scotland SPY Time Warner United Kingdom Fri, 22 May 2015 11:36:37 +0000 Tyler Durden 506826 at Tick Tock, The Greek Time Bomb Is About To Go Off <p><a href=""><img src="" alt="Greece Troika" width="524" height="348" style="display: block; margin-left: auto; margin-right: auto;" class="size-full wp-image-8617 aligncenter" /></a></p> <p>We were warning in several previous articles (<a href="" target="_blank">here</a> &amp; <a href="" target="_blank">here</a>) the Greeks didn’t have much time left to enter into a new funding agreement with its lenders as the country was facing several billions of euros in mandatory repayments over the next few weeks.</p> <p>Meanwhile, the International Monetary Fund has estimated Greece has until June 5<sup>th</sup> before it runs out of any money, so the leaders of Greece, the EU and the Eurozone have two more weeks to make the final tranche of 7.2B EUR of emergency funding available, or the consequences might be disastrous.</p> <p><a href=""><img src="" alt="Tsipras Merkel" width="512" height="300" style="display: block; margin-left: auto; margin-right: auto;" class="size-full wp-image-11460 aligncenter" /></a></p> <p>The negotiations to make the 7B+ EUR available have been ongoing for several weeks, if not months, and the parties involved in the negotiations haven’t even come close to reaching a deal. Athens was already running on fumes and directed its public institutions to send their cash back to the central government to meet some shorter term payment obligations. On top of that, the government is mulling over instating a transaction tax on cash withdrawals and wire transfers, and several sources indicate this will happen in the short term.</p> <p>The thing is, it might be too late. </p> <p>Late last night, a meeting between France, Germany and Greece came to an <a href="" target="_blank">abrupt end</a> after the parties once again failed to come to some sort of agreement on the terms to make the additional emergency financing accessible for Greece. The main issue right now are the pensions and a sales tax in the country as the Eurozone representatives are forcing Greece to find new ways to cut expenses and increase its income. We aren’t sure the Greeks are unreasonable as its sales tax rate is already at a very high level of 23% after increasing it from 19% in 2010 (see next image).</p> <p><a href=""><img src="" alt="Greece sales tax" width="599" height="274" style="display: block; margin-left: auto; margin-right: auto;" class="size-full wp-image-11461 aligncenter" /></a></p> <p>Source:</p> <p>But whoever is playing hardball during the negotiations, the clock just does not stop ticking and the fact that no follow-up meeting has been scheduled yet is really worrisome. A break-up of the Eurozone no longer is a remote possibility and this scenario should not be taken lightly. The bond market seems to be agreeing as even though the Greek 10 year bond yield is just over 11%, the <a href="" target="_blank">market consensus</a> is expecting the yield to increase to in excess of 14% by the end of this year. </p> <p><em>An additional emergency meeting will now undoubtedly be needed as the next regular meeting is only scheduled for June 18<sup>th</sup>, two weeks after Athens is expected to run out of funds.<br /> </em></p> <p><strong><a href="" target="_blank">&gt;&gt;&gt; Check Out Our Latest Gold Report!</a></strong> </p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><strong>Secular Investor</strong> offers a fresh look at investing. We analyze long lasting cycles, coupled with a collection of strategic investments and concrete tips for different types of assets. The methods and strategies are transformed into the <a href=""><strong>Gold &amp; Silver Report</strong></a> and the <a href=""><strong>Commodity Report</strong></a>.</p></blockquote> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>Follow us on Facebook <strong><a href="">@SecularInvestor</a> [NEW] </strong>and Twitter <a href=""><strong>@SecularInvest</strong></a></p></blockquote> <div class="field field-type-filefield field-field-image-blog"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_blog" width="512" height="300" alt="" src="" /> </div> </div> </div> 10 Year Bond Bond Eurozone France Germany Greece International Monetary Fund Transaction Tax Twitter Twitter Fri, 22 May 2015 11:10:04 +0000 Secular Investor 506825 at Suicide Bomber Detonates In Saudi Mosque, ISIS Suspected <p>Just yesterday, <a href="">we said</a> we would not be at all surprised to see plans for a US incursion into blood-soaked Syria start unfolding within a month.&nbsp;</p> <p>You see, ISIS now controls “more than half of Syria” and has just captured Palmyra, home to ancient ruins and treasures of antiquity which are now at risk of being indiscriminately destroyed by barbarous black flag-flying butchers who have incidentally met with quite a bit of success in their Iraq adventures of late as well.&nbsp;</p> <p>Or at least that’s the official story.</p> <p>And it’s a story that plays well when you need an excuse to ‘intervene’ in order to salvage what’s left of an Iraq Washington destroyed before moving on to Syria (because <em>‘well, while we’re here...’</em>), a nation that, to use the politically correct parlance, is <em>‘ripe for regime change.’</em> Here’s what we said on Thursday:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><em>And like that the stage is again set for the following scenario: unwilling to lose any more territory, and face, the Nobel peace-prize winning US president will sit down with his security council in the next few days and decide that, as much as he hates to do it, he will dispatch [X],000 US troops to support the Iraq government in their losing fight with the resurgent ISIS. Troops which will promptly enter Syria and then make sure Assad is quietly eliminated.</em></p> <p>&nbsp;</p> <p><em>As Reuters also reports in an exclusive piece, Turkey's state intelligence agency helped deliver arms to parts of Syria under Islamist rebel control during late 2013 and early 2014, according to a prosecutor and court testimony from gendarmerie officers seen by Reuters.</em></p> <p>&nbsp;</p> <p><em>As Reuters observes, the witness testimony contradicts Turkey's denials that it sent arms to Syrian rebels and, by extension, contributed to the rise of Islamic State, now a major concern for the NATO member.</em></p> <p><em>In other words, a NATO member and a nation very close to the US, has been instrument in the rise of ISIS. Worse, unlike running speculation that ISIS was created by the CIA and funded by the Saudis, there is now documented evidence that ISIS is indeed a "western" creation.</em></p> <p>&nbsp;</p> <p><em>Which in turn explains the news from two weeks ago that "Turkey, Saudis Form Alliance To Topple Syria's Assad As US Starts Training Syrian Rebels."</em></p> <p>&nbsp;</p> <p><strong><em>And just to make sure Obama's upcoming offensive against Assad, pardon ISIS' al-Baghdadi is successful, Reuters finally reports that contrary to previous reports, not 1000, but 2000 anti-tank weapons are being sent to Iraq. Wait, ISIS has tanks? Well no, that would be Syria, but when fabricating a narrative suicide bombers are as durable as tanks.&nbsp;</em></strong></p> <p>&nbsp;</p> <p><em>It's an even better counter when staging an offensive operation, aka an invasion, against the Syrian army and not just from one side but two sides: the east, via Iraq, and north, via Turkey, with <strong>the occasional bombing run by Saudi Arabia</strong> (with Jordan just waiting to enter from the South and "liberate" Damascus).</em></p> </blockquote> <p>Got all of that? That’s good, because now, an ISIS suicide bomber (so not a tank) has reportedly detonated himself in a Saudi mosque.&nbsp;</p> <ul> <li><span style="font-size: 1em; line-height: 1.3em;">SUICIDE BOMBER STRIKES SHIITE MOSQUE IN SAUDI, REUTERS REPORTS</span></li> </ul> <div>A bit more color:</div> <div> <blockquote> <div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <div><em>A suicide bomber blew himself up at a Shi'ite mosque in eastern Saudi Arabia during Friday prayers, residents said, killing and wounding several people.</em></div> <div><em>One witness described a huge explosion at the Imam Ali mosque in the village of al-Qadeeh. He estimated there were at least 30 casualties in the attack, where more than 150 people were praying. (Reuters)</em></div> </blockquote> </div> <div>Eyewitness accounts estimate the death toll at 30. Here's the scene:</div> <blockquote class="twitter-tweet" lang="en"><p dir="ltr" lang="en">A suicide bomber detonated himself in a Shiite mosque in Qatif, eastern Saudi Arabia <a href=""></a></p> <p>— Ali Hashem ??? ???? (@alihashem_tv) <a href="">May 22, 2015</a></p></blockquote> <script src="//"></script><blockquote class="twitter-tweet" lang="en"><p dir="ltr" lang="en">PT: Reports the bombing occurred in <a href="">#Qatif</a>'s al-Qudaih; initial numbers at 5 killed, 20 wounded (via <a href="">@QatifDirect</a>) <a href=""></a></p> </blockquote> <blockquote class="twitter-tweet" lang="en"><p>— Miriam Goldman (@Miriam411) <a href="">May 22, 2015</a></p></blockquote> <p>And the official word from the Saudis:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><em>The spokesman for the Ministry of the Interior: an explosion in a mosque in the town of alqudaih Al-Qatif province.</em></p> <p>&nbsp;</p> </blockquote> <p><em><br /></em></p> <script src="//"></script><blockquote class="twitter-tweet" lang="en"><p dir="rtl" lang="ar">??????? ?????? ?????? ???????? : ???? ?????? ?? ??? ??????? ????? ?????? ??????? ?????? .<br /> <a href="">#???</a></p> <p>— ??? (@spagov) <a href="">May 22, 2015</a></p></blockquote> <script src="//"></script><blockquote class="twitter-tweet" lang="en"><p dir="ltr" lang="en">Till the moment 6 people are reported killed in the suicide bombing in Qatif eastern <a href="">#Saudi</a> <a href=""></a></p> <p>— Ali Hashem ??? ???? (@alihashem_tv) <a href="">May 22, 2015</a></p></blockquote> <script src="//"></script><p> Whodunnit? Why ISIS of course:</p> <blockquote class="twitter-tweet" lang="en"><p dir="ltr" lang="en">This might be the first sectarian suicide attack in eastern <a href="">#Saudi</a> Arabia since the start of the <a href="">#IS</a> wave</p> <p>— Ali Hashem ??? ???? (@alihashem_tv) <a href="">May 22, 2015</a></p></blockquote> <script src="//"></script><p>* &nbsp;* &nbsp;*</p> <p>There you have it. We're no weathermen, but based on recent history in Yemen we wonder if a "Decisive Storm" might be on the horizon in Syria.</p> <p>We'll leave you with out prediction from yesterday, but with a slight modifiction.</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><em>So gun to our head, this is what happens next: a couple of the good ole' "chemical attack" false flag YouTube clips (<strong>or Saudi mosque bombings</strong>) once again emerge just around the time Obama announces it is time to send a tactical, contained group of troops in Syria to retake the "cultural heritage" that is Palmyra, at which point the war against ISIS morphs into what it has been from day one: the western attempt to crush and topple the Assad government, and to hand over control of Syria to Turkey and Iraq, just so the US, Saudi Arabia and Qatar can control what happens behind the scenes, by which we mean finally allow that long overdue Qatari gas pipeline to traverse the nation and sideline Russian gas deliveries to Europe.&nbsp;</em></p> </blockquote> <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="362" height="224" alt="" src="" /> </div> </div> </div> Iraq Reuters Saudi Arabia Testimony Turkey Twitter Twitter Fri, 22 May 2015 11:03:25 +0000 Tyler Durden 506824 at Chinese Stock Bubble Frenzy Returns; US Futures Flat Ahead Of Today's Pre-Holiday Zero Volume Melt Up <p>The highlight of the overnight newsflow may have been the BOJ's preannounced statement that it is <a href="">keeping its QE unchanged </a>(which comes as no surprise after a few weeks ago the BOJ adimirted it would be unable to keep inflation "stable" at the 2% in the required timeframe), but the highlight of overnight markets was certainly China, where the Banzai Buyers have reemerged, leading to another whopping +2.8% session for the Shanghai Composite which has now risen to a fresh 7 years high. </p> <p><a href=""><img src="" width="600" height="265" /></a></p> <p><img src="" width="507" height="338" /></p> <p><img src="" width="506" height="284" /></p> <p>The catalyst? In addition to the PBOC's desire to reflate the biggest equity bubble ever, was follow through from the US zero volume levitation to its 4th record high close in 6 sessions. As a result expect US stocks to rise next to record<em><strong>er</strong></em> highs because China surged because the US surged, and so on. That, and of course the slow motion economic collapse which is the best news a stock buyer can have: after all it means that more easing - if only for stocks - is all but assured.</p> <p>A broader look at Asian equities in general shows Hang Seng (+1.7%) and Shanghai Comp (+2.8%) leading the way, with the latter touching another consecutive fresh 7yr high, as easing expectations continued to underpin sentiment. This also follows excess funds from yesterday’s conclusion of this week’s 20 IPO offerings, being channelled back to underperforming stocks. </p> <p>European stocks (Eurostoxx50: -0.40%) started the session on a relatively tentative footing and trade lower amid light newsflow. Of relevance for Liberty Global, the FTSE 100 modestly outperforms due to Vodafone (+4.8%) who were lifted by comments from Goldman Sachs saying they were more likely to be sellers of assets rather than buyers. To the downside, luxury names have been weighed on by Richemont’s (-1.78%) pre-market update which revealed an unexpected 8% decline in April sales. Today’s only large cap earnings from the US is Deere &amp; Co. who are scheduled to report at 1200BST/0700EDT. </p> <p>USTs (+5 ticks) have moved higher in tandem with Bunds (+44 ticks) during the European morning, which have ebbed higher to retrace some of the downside seen yesterday and making a technical break above yesterday’s high at 153.99. Of note, analysts at BNP Paribas have stated they expect European bonds to trade in a tight range today and in the coming week.</p> <p>In commodities, the metals complex has benefited from weakness in the USD while after market yesterday CME lowered COMEX 100 gold futures initial margins for specs by 6.3% to USD 4,125/contract from USD 4,400/contract and lowered COMEX 5000 silver futures initial margins for specs by 9.1% to USD 7,700/contract from USD 8,470/contract. WTI and Brent both reside in negative territory amid light newsflow. However WTI remains on track to finish higher for the 10th consecutive week, the longest streak since trading began in 1983.</p> <p>USD (-0.5%) weakened throughout the European morning, with the greenback initially impacted by JPY strength in the wake of the BoJ policy decision to see USD/JPY pull away from the 121.00 handle. USD was further weakened on the back of better than expected German IFO Business Climate (108.5 vs. Exp. 108.3, Prev. 108.6), which bolstered EUR/USD (+78 pips) as market participants await comments regarding Greece from the Eurogroup meeting. Not surprisingly, the "good" German data (unlike the PMI or the ZEW earlier this week), has pushed not only the EUR higher, but the DAX lower which correlates inversely to the strength of the European currency with about 0.9 R-squared.</p> <p>German Chancellor Merkel and French President Hollande have told Greek PM Tsipras that they would personally contribute toward the direction of a viable, long-term solution for Greece and accelerate the procedure, according to a senior Greek government official. Nonetheless, talks between Greece and its creditors failed to reach an agreement overnight, with a Greek government spokesman suggesting a deal could be finalised within the next 10 days and aims to meet all of its debt obligations in June.</p> <p>Looking ahead, the pre-holiday US session sees US and Canadian CPI, with Greek news from the Eurogroup meeting in Riga once again on the radar but perhaps the most important event will come from Yellen, speaking at 1pm Eastern in Rhode Island just as the bond pit closes earlier ahead of Memorial Day.&nbsp; A<strong>nd since volumes today will be even more abysmal than usual, the zero volume levitation algos should have no problem pushing the S&amp;P up at least another 10 points on a few thousands ES contracts.</strong></p> <p>&nbsp;</p> <p><strong>Bulletin Headline Summary from Bloomberg and RanSquawk</strong></p> <ul> <li>USD (-0.5%) weakened during the Asian session following JPY strength in the wake of the BoJ policy decision to see USD/JPY pull away from the 121.00 handle</li> <li>USD was further weakened in European hours on the back of better than expected German IFO Business Climate which bolstered EUR/USD (+78 pips)</li> <li>Looking ahead, the US session sees US and Canadian CPI, with participants looking out for any Greek news filtering out from the Eurogroup meeting in Riga and comments from Fed’s Yellen, BoE’s Carney and Shafik.</li> <li>Treasuries gain, paring weekly decline before CPI report, Yellen speech as bunds lead rally in EGBs; trading likely to be muted before long holiday weekend with futures closing at 1pm, cash market at 2pm.</li> <li>German Chancellor Merkel said that greater efforts are needed to unlock bailout funds for Greece after late-night negotiations with Greek PM Tsipras failed to yield any sign of a breakthrough</li> <li>Greece’s economy is faring even worse than a string of developing countries which suffered traumas in the last two decades, which leaves Commerzbank AG declaring the country is in little position to pare its debt and that default or a restructuring may loom</li> <li>Draghi said euro-area countries must speed up structural reforms not only to raise economic growth and bring down unemployment, but also to allow ECB policy makers to ensure price stability </li> <li>Germany’s Ifo institute business climate index dropped to 108.5 from 108.6 in April, falling for the first time in seven months; median estimate in Bloomberg survey was for a decline to 108.3</li> <li>China’s territorial maneuvers in the contested South China Sea are bringing its Communist neighbor Vietnam and the U.S. closer together, according to the new ambassador to Vietnam, Ted Osius</li> <li>The Bank of Japan refrained from increasing stimulus and signaled a more optimistic view on the economy, as Governor Haruhiko Kuroda bets on stronger growth fueling stalling inflation</li> <li>Sovereign bond yields fall. Asian stocks gain, European stocks decline, U.S. equity-index futures gain. Crude oil and copper lower; gold higher</li> </ul> <p><strong>US Event Calendar</strong></p> <ul> <li>8:30am: CPI m/m, April, est. 0.1% (prior 0.2%) <ul> <li>CPI ex Food and Energy m/m, April, est. 0.2% (prior 0.2%)</li> <li>CPI y/y, April, est. -0.2% (prior -0.1%)</li> <li>CPI ex Food and Energy y/y, April, est. 1.7% (prior 1.8%)</li> <li>CPI Index NSA, April est. 236.580 (prior 236.119)</li> <li>CPI Core Index SA, April, est. 241.130 (prior 240.793)</li> </ul> </li> <li>8:30am: Real Avg Weekly Earnings y/y, April (prior 2.1%)</li> <li>1:00 pm Yellen speaks on U.S. economic outlook in Providence, RI</li> </ul> <p><strong>DB's Jim Reid Concludes the overnight recap</strong></p> <p>It’s a weekend of closed door, secret European meetings ahead with lots of behind the scenes maneuverings and no-one with any idea which way it'll go until the end. Yes, the annual Eurovision song contest is 60 years old tomorrow night and much of the continent will be glued to the action. Last year a man dressed as a lady but with a full beard won the contest so who knows what to expect and if anyone can explain to me why Australia are in tomorrow's event then I'd be grateful. Apparently Sweden is favourite and who knows we may revisit the glory days of ABBA. We should note for the record that Greece's entry is called "One last breath". Oh and the UK entry is awful in my opinion. Lots of 'nul points' await. </p> <p>In this nul interest rate world, today's US CPI will further add to the lift-off debate as will a Yellen speech at 6pm London time. In terms of CPI the current Bloomberg consensus is for a fall in the headline (+0.1% mom from +0.2%) which in turn is expected to lower the annualized rate down to -0.2%. Meanwhile the core is expected to be unchanged for the month at +0.2% mom, but the annualized rate is expected to round down to +1.7% yoy. With a few large markets closed for a public holiday on Monday, it’s possible that we could see some exaggerated price action if the number is away from consensus. So one to look forward to this afternoon and it’s worth remembering that the reading follows last week’s weaker than expected PPI print for the same month. </p> <p>Ahead of this bourses in Asia are generally firmer across the board with the Nikkei (+0.24%) and ASX (+0.11%) a touch higher, while there are large gains for the Hang Seng (+1.48%) and Shanghai Comp (+1.93%) with the latter back at 7-year highs. Credit markets are around a basis point tighter. Meanwhile, the Bank of Japan has announced that it has made no change to its QE programe as largely expected. The BoJ will continue to increase the monetary base at a pace of ¥80tn per year with the accompanying statement saying that the economy ‘has continued to recover modestly’. The BoJ also noted that the effect of the decline in energy prices means CPI is ‘likely to be about zero per cent for the time being’. </p> <p>There was a lot of data to get through yesterday. It was kick started with some modestly weaker flash PMI’s in Europe and then followed up with a generally softer set of indicators in the US which once again illustrated a Q2 yet to fire on all cylinders. This helped send Treasury yields lower as we saw 5y (-4.0bps), 10y (-5.8bps) and 30y (-5.9bps) yields fall to 1.512%, 2.191% and 2.989% respectively. Risk assets closed firmer meanwhile as the S&amp;P 500 closed +0.23% to make a new record high, supported also by a move higher for WTI (+2.95%) and Brent (+2.32%), while in credit CDX IG closed nearly a basis point tighter. The Dollar was a tad more muted as the DXY eventually finished 0.10% lower, bringing to an end three consecutive days of gains.</p> <p>In terms of details on the data, aside from a better than expected Conference Board leading indicator print for April (+0.7% mom vs. +0.3% expected) and an 'ok' initial jobless claims print which climbed 10k to 274k for the week but kept the four-week moving average at a 5-year low (266k), it was a day of disappointment in the US on the whole. The flash manufacturing PMI for May fell 0.3pts and below consensus to 53.8 (vs. 54.5 expected), marking three consecutive months of declines with new orders in particular hitting a 16-month low. The weakness in existing home sales for April also garnered attention after falling -3.3% (vs. +0.8% expected) in the month. As well as the weakness in the flash PMI, the May Kansas City Fed manufacturing activity index fell to the lowest level since April 2009 after the -13 print fell six points from the previous month. The components of the index made for no better reading as the volume of new orders (-19), number of employees (-17) and average workweek (-14) all fell into deep negative territory. Elsewhere, there was a 0.8pt fall for the Philadelphia Fed Business outlook to 6.7 (vs. 8.0 expected) while the Chicago Fed national activity index (-0.15 vs. 0.00) rose slightly but still came in below consensus. </p> <p>Data flow in Europe was dominated by yesterday’s May flash PMI readings. On the whole the readings were slightly disappointing and although still suggestive of a modest recovery, it perhaps signaled some dissipating upward momentum – in line with the thoughts of DB’s Marco Stringa who highlighted a material risk that the upward trend in consensus forecasts for 2015 will not continue with the DB SIREN-Surprise index turning negative in mid-April and yesterday hitting its lowest value since November. On the data, the Euro-area composite weakened by 0.5pts to 53.4 which was below expectations of no change. The weakness wasn’t helped by a softening in the services print (53.3 vs. 53.9 expected) which fell 0.8pts and offset a modest 0.3pt rise in the manufacturing print (52.3 vs. 51.8 expected). Regionally, there was more disappointment in Germany as the composite (52.8 vs. 53.8 expected) declined 1.3pts while in France the composite rose 0.4pts in line with expectations to 51.0. Marco notes that although disappointing, the readings still point to a +0.4% qoq GDP growth rate for Q2. </p> <p>Elsewhere, European consumer confidence for May was downgraded to -5.5 from -4.6 previously. There was a bright spot for data in the UK however as April retail sales both ex fuel (+1.2% mom vs. +0.2% expected) and including fuel (+1.2% mom vs. +0.4% expected) came in higher than expected. The ECB minutes meanwhile offered few surprises, noting that ‘members agreed that emphasis needed to be placed on a steady course of monetary policy with a focus on the firm implementation of the Governing Council’s recent monetary-policy decisions’. There was however some mention of the uncertainties with regards to structural reforms, with the minutes noting that ‘members expressed that the risk of insufficient reform progress was particularly pronounced with regard to structural policies, which were hampered by resistance to change’ and that ‘in the absence of structural reforms, there were serious risks that potential growth would remain low and investment demand would not pick up as strongly as expected’. </p> <p>Just wrapping up yesterday’s price action, European equity markets finished slightly higher in most regions, rising into the close as US markets moved higher. The Stoxx 600 (+0.36%), DAX (+0.14%) and CAC (+0.26%) in particular led gains. It was more mixed in bond markets meanwhile as 10y Bunds finished 0.8bps higher at 0.637% while similar maturity yields in the periphery finished 1-4bps lower.</p> <p>Talks between Greek PM Tsipras, French PM Hollande and German Chancellor Merkel at the European summit in Riga yesterday appeared to offer few clues that any material progress has been made. Headlines on the wires have suggested that the meeting appears to have been nothing more than a sign of political support so far with a joint statement released after saying that talks took place in a ‘friendly and constructive atmosphere’ and were based on ‘the successful fulfillment of the current program’. The statement went on to say that ‘it was agreed that the talks between the Greek government and the institutions will be continued’ while open issues discussed included pensions and tax reforms. Talks will continue at the summit today. </p> <p>Looking at today’s calendar now, it’s a busy data docket this morning in the European session as we kick off with the final Q1 GDP print for Germany quickly followed by business and manufacturing confidence readings out of France. We’ll be back in Germany shortly after this when we get the May IFO business survey before we get Italian retail sales and UK public sector net borrowing data. In the US focus will be on the aforementioned CPI print while we’ll also get average weekly earnings data. The European summit continues in Riga for a second day while as mentioned at the top, the Fed’s Yellen is also due to speak later on the US economic outlook which will be worth watching.</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="600" height="400" alt="" src="" /> </div> </div> </div> Australia Bank of Japan Bond China Conference Board Consumer Confidence Copper CPI Creditors Crude Crude Oil default Equity Markets France Germany Goldman Sachs goldman sachs Greece headlines Initial Jobless Claims Japan Jim Reid Monetary Base Monetary Policy Nikkei Price Action recovery Unemployment Fri, 22 May 2015 10:51:55 +0000 Tyler Durden 506823 at David Cameron's New Thought Police <p><a href=""><em>Submitted by Pater Tenebrarum via</em></a>,</p> <h3><u>You May No Longer Think Wrong Thoughts, Citizen</u></h3> <p>Shortly after the election victory that probably surprised no-one more than himself, David Cameron launched into explaining to the hoi-polloi what further transmogrification of the State is in store now that he&rsquo;s got a free hand. He inter alia elated the audience with the following zinger:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&ldquo;For too long, we have been a passively tolerant society, saying to our citizens: as long as you obey the law, we will leave you alone. It&rsquo;s often meant we have stood neutral between different values. And that&rsquo;s helped foster a narrative of extremism and grievance. This government will conclusively turn the page on this failed approach.&rdquo;</p> </blockquote> <p>In other words, dear citizen, mafia uncle State will no longer leave you alone if you merely &ldquo;obey the law&rdquo;. Your &ldquo;narratives of grievance&rdquo; henceforth won&rsquo;t be tolerated anymore!</p> <p>&nbsp;</p> <p style="text-align: center;"><img alt="sun shine" class="aligncenter wp-image-37555 size-full" height="424" src="" width="620" /></p> <p style="text-align: center;">As one reader remarked, all that&rsquo;s missing now is Frau Bluecher making her entrance &hellip;</p> <p style="text-align: center;">Cartoon by Steve Bell</p> <p>As the Guardian reports, this means that now that the Lib Dems will no longer be able to veto Cameron&rsquo;s more outlandish ideas, he intends to keep us all safe by fighting terrorism by means of an Orwellian thought police.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&ldquo;A counter-terrorism bill including plans for extremism disruption orders designed to restrict those trying to radicalize young people is to be included in the Queen&rsquo;s speech, David Cameron will tell the national security council on Wednesday.</p> <p>&nbsp;</p> <p>The orders, the product of an extremism task force set up by the prime minister, were proposed during the last parliament in March, but were largely vetoed by the Liberal Democrats on the grounds of free speech. They were subsequently revived in the Conservative manifesto.</p> <p>&nbsp;</p> <p>The measures would give the police powers to apply to the high court for an order to limit the &ldquo;harmful activities&rdquo; of an extremist individual. The definition of harmful is to include a risk of public disorder, a risk of harassment, alarm or distress or creating a &ldquo;threat to the functioning of democracy&rdquo;.</p> <p>&nbsp;</p> <p>The aim is to catch not just those who spread or incite hatred on the grounds of gender, race or religion but also those who undertake harmful activities for the &ldquo;purpose of overthrowing democracy&rdquo;.</p> <p>&nbsp;</p> <p>They would include a ban on broadcasting and a requirement to submit to the police in advance any proposed publication on the web and social media or in print. The bill will also contain plans for banning orders for extremist organizations which seek to undermine democracy or use hate speech in public places, but it will fall short of banning on the grounds of provoking hatred.&rdquo;</p> </blockquote> <p>It is actually hard to see what this bill could possibly &ldquo;fall short of&rdquo;. Given that any ideas that might be considered to &ldquo;threaten the functioning of democracy&rdquo; will require a special police permit to be uttered, we have to wonder if e.g. Hans-Hermann Hoppe&rsquo;s book Democracy, the God that Failed will be banned in the UK. The definition of &ldquo;harmful&rdquo; provided above is quite striking. In order to be deemed too harmful to be tolerated by the thought police one only needs to create a &ldquo;risk of causing alarm or distress&rdquo;.</p> <p>In light of this, we want to take this opportunity to apply for a broadcasting ban on David Cameron. The man is definitely causing us great alarm and distress now that he&rsquo;s been handed the pants of power.</p> <p>&nbsp;</p> <p style="text-align: center;"><img alt="pants of power" class="aligncenter wp-image-37554" height="235" src="" width="700" /></p> <p style="text-align: center;">David Cameron, wearer of the pants of power</p> <p style="text-align: center;">Cartoon by Steve Bell</p> <p>Of course we can fully rely on the UK police force to be able to clearly differentiate &ldquo;good and tolerable hate&rdquo; from the &ldquo;bad and distressing&rdquo; kind when the time comes to make that determination. It&rsquo;s really easy. Just consider how easy it has e.g. been to differentiate the good guys from the bad guys on the battlefields of Syria and Iraq.</p> <p>&nbsp;</p> <p style="text-align: center;"><img alt="good guys" class="aligncenter wp-image-37552" height="373" src="" width="600" /></p> <p style="text-align: center;">Clear as day!</p> <p style="text-align: center;">Cartoon by Brian Gable</p> <h3><u>Can We Still Call him a Fascist Twat in a Onesie?</u></h3> <p>As Glenn Greenwald remarks at the Intercept, UK home secretary Theresa May has been doing her best to explain why certain purveyors of thought crimes must henceforth be persecuted by the State in order to ensure our continued safety. You see, it&rsquo;s all about being &ldquo;One Nation&rdquo;. Well, that&rsquo;s OK then, right? Sieg Heil!</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&ldquo;In essence, advocating any ideas or working for any political outcomes regarded by British politicians as &ldquo;extremist&rdquo; will not only be a crime, but can be physically banned in advance.</p> <p>&nbsp;</p> <p>[&hellip;]</p> <p>&nbsp;</p> <p>It&rsquo;s not enough for British subjects merely to &ldquo;obey the law&rdquo;; they must refrain from believing in or expressing ideas which Her Majesty&rsquo;s Government dislikes.</p> <p>&nbsp;</p> <p>If all that sounds menacing, tyrannical and even fascist to you &mdash; and really, how could it not? &ldquo;extremism disruption orders&rdquo; &mdash; you should really watch this video of Tory Home Secretary Theresa May trying to justify the bill in an interview on BBC this morning. When pressed on what &ldquo;extremism&rdquo; means &mdash; specifically, when something crosses the line from legitimate disagreement into criminal &ldquo;extremism&rdquo; &mdash; she evades the question completely, repeatedly invoking creepy slogans about the need to stop those who seek to &ldquo;undermine Our British Values&rdquo; and, instead, ensure &ldquo;we are together as one society, One Nation&rdquo; (I personally believe this was all more lyrical in its original German). Click here to watch the video and see the face of Western authoritarianism, advocating powers in the name of Freedom that are its very antithesis.&rdquo;</p> </blockquote> <p>(emphasis added)</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p style="text-align: center;"><iframe frameborder="0" height="498" src="" width="398"><br /> <p style="text-align: center;">Theresa May explains what exactly her government means by &amp;ldquo;extremist&amp;rdquo; speech that should be made illegal. She doesn&amp;rsquo;t seem to realize how creepy it all sounds.</p> <p></p></iframe></p> </blockquote> <p>It seems that many Western political leaders no longer know what freedom of speech actually means. Freedom of speech includes the possibility that people might utter opinions that cover the full range from &ldquo;totally idiotic&rdquo; to &ldquo;potentially undermining someone else&rsquo;s values&rdquo; and more. Yes, it is a slightly risky concept, since some people may indeed be convinced by the rhetoric of very bad people. We&rsquo;re quite sure it happens every day.</p> <p>If we not only agree with Steve Bell that David Cameron is a &ldquo;colossal twat in a onesie&rdquo;, but augment that by calling him a &ldquo;colossal fascist twat in a onesie&rdquo;, are we engaging in hate speech? What about advocating anarchy, i.e., the possibility of doing away with ruling elites and the State altogether? Would that be regarded as criminally &ldquo;undermining democracy&rdquo;? Clearly, those who advocate a stateless society have to be considered &ldquo;anti-democratic&rdquo;, since there wouldn&rsquo;t be a government or elections in such a society. How do we know anarchists won&rsquo;t be prosecuted under the cover of this proposed legislation? Theresa May certainly hasn&rsquo;t provided much reassurance on such fine points.</p> <p style="text-align: center;"><img alt="a for anarchy" class="aligncenter wp-image-37557" height="416" src="" width="450" /></p> <p style="text-align: center;">Will this symbol fall under the UK government&rsquo;s definition of &ldquo;harmful&rdquo;? If an anarchy were to be established, both David Cameron and Theresa May would have to get real jobs, so our tentative guess at this point would be that the answer must be &ldquo;yes&rdquo;.</p> <p>&nbsp;</p> <p>Many people might be tempted to think that since the superficially obvious goal is to curb the speech of Islamist fundamentalist hate preachers &ndash; of whom there is apparently no shortage in the UK &ndash; it is all fine and dandy. However, as soon as governments restrict free speech by means of new laws, it is an apodictic certainty that they will abuse this newly acquired power. It is in fact already happening. Glenn Greenwald provides a number of examples and includes links for fact-checking purposes:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&ldquo;Threats to free speech can come from lots of places. But right now, the greatest threat by far in the West to ideals of free expression is coming not from radical Muslims, but from the very Western governments claiming to fight them. The increasingly unhinged, Cheney-sounding governments of the U.K., Australia, France, New Zealand and Canada &mdash; joining the U.S. &mdash; have a seemingly insatiable desire to curb freedoms in the name of protecting them: prosecuting people for Facebook postings critical of Western militarism or selling &ldquo;radical&rdquo; cable channels , imprisoning people for &ldquo;radical&rdquo; tweets, banning websites containing ideas they dislike, seeking (and obtaining ) new powers of surveillance and detention for those people (usually though not exclusively Muslim citizens) who hold and espouse views deemed by these governments to be &ldquo;radical.&rdquo;</p> <p>&nbsp;</p> <p>Anticipating Prime Minister Cameron&rsquo;s new &ldquo;anti-extremist&rdquo; bill (to be unveiled in the &ldquo;Queen&rsquo;s Speech&rdquo;), University of Bath Professor Bill Durodié said that &ldquo;the window for free speech has now been firmly shut just a few months after so many political leaders walked in supposed solidarity for murdered cartoonists in France.&rdquo; Actually, there has long been a broad, sustained assault in the West on core political liberties &mdash; specifically due process, free speech and free assembly &mdash; perpetrated not by &ldquo;radical Muslims,&rdquo; but by those who endlessly claim to fight them.</p> </blockquote> <p>(emphasis added)</p> <p>What happened to &ldquo;je suis Charlie&rdquo;? As we recall, the rally in Paris in the wake of the attack was attended by all sorts of politicians from countries with a less than exemplary record of tolerating free speech, which should perhaps have been a tip-off that defending free speech wasn&rsquo;t really what it was all about.</p> <p>Meanwhile, David Cameron has no problem with the UK selling arms to assorted Arab theocratic and authoritarian rulers, as well as calling for arming &ldquo;moderately mad mullahs&rdquo; that might be induced to do the West&rsquo;s bidding in various benighted Muslim lands. Much of this is likely to eventually boomerang in the form of &ldquo;blow-back&rdquo;, at which point we will be told that even more liberties will need to be curbed if we are to remain &ldquo;safe&rdquo;.</p> <p>&nbsp;</p> <p style="text-align: center;"><img alt="Steve Bell 06.11.2012" class="aligncenter wp-image-37553" height="446" src="" width="600" /></p> <p style="text-align: center;">David Cameron and the Arab arms trade &ndash; arming moderately mad mullahs is apparently not regarded as a problem.</p> <p style="text-align: center;">Cartoon by Steve Bell</p> <h3><span style="text-decoration: underline;">Conclusion</span></h3> <p>We certainly don&rsquo;t like what one might term &ldquo;extremist hate preachers&rdquo; and the ideas they are propagating. We are just as repulsed by people glorifying fascism, communism or Islamist fundamentalism as almost all civilized people presumably are. We too find it extremely unfortunate that a number of impressionable young people have been taken in by the slick propaganda published by outfits like the Islamic State. However, <span style="text-decoration: underline;"><strong>once government becomes the arbiter of what speech is and isn&rsquo;t legitimate, the door is inevitably thrown wide open to the suppression of all political dissent.</strong></span></p> <p>It must be repeated here that even though terrorism certainly needs to be fought, the dangers emanating from terrorists are in reality exceedingly small. The average Western citizen is many thousands of times more likely to die from simply falling off a piece of furniture (e.g. a chair with an innately evil disposition) than to be killed by a terrorist. <strong>The act of taking a bath is almost a million times more risky than all the terrorism in the world, since accidentally drowning in the bathtub is statistically speaking a fairly common way of shuffling off the mortal coil.</strong> Life as such is inherently risky, given the fact that it invariably ends with death. And yet, no-one has proposed that it would be sensible to introduce State surveillance of all bath-tubs or furniture as of yet.</p> <p><strong>We therefore have absolutely nothing to gain in terms of enhanced security by restricting essential civil liberties.</strong> This is simply a government propaganda-induced illusion. We do however have a lot to lose. Once people feel they have to watch what they can say or write, an essential pillar of civilization and progress is severely undermined.</p> <p><strong>In order to make a small contribution to forestalling this sad trend for a little while longer, we will take the opportunity to repeat that David Cameron is a colossal fascist twat in a onesie.</strong></p> <p>&nbsp;</p> <p style="text-align: center;"><img alt="11.01.13: Steve Bell on David Cameron's big speech on the European Union" class="aligncenter wp-image-37556" height="442" src="" width="600" /></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="593" height="436" alt="" src="" /> </div> </div> </div> Australia France Iraq national security New Zealand Proposed Legislation Reality Fri, 22 May 2015 07:00:44 +0000 Tyler Durden 506819 at OBAMAS MaSSiVe FiGHT WiTH WaLL STReeT... <p style="text-align: center;"><iframe src="" width="651" height="1024" frameborder="0"></iframe>.</p> <p style="text-align: center;">&nbsp;</p> <h2 class="editable meta-field photo-desc " style="font-size: 14px; margin-top: 0px; margin-bottom: 0px; font-weight: 400; line-height: 18px; padding-bottom: 0px; min-height: 18px; clear: both; color: #212124; font-family: 'Proxima Nova', 'helvetica neue', helvetica, arial, sans-serif;"> <p style="margin: 0px; text-align: center;">Our banks have admitted to crimes</p> <p style="margin: 0px; text-align: center;">And sentenced to pay a few dimes</p> <p style="margin: 0px; text-align: center;">While profits they see</p> <p style="margin: 0px; text-align: center;">Front-running QE</p> <p style="margin: 0px; text-align: center;">We're living in interesting times</p> <p style="margin: 0px; text-align: center;">The Limerick King</p> </h2> Fri, 22 May 2015 06:05:07 +0000 williambanzai7 506822 at ECB's Willful Ignorance: Leaking Central Bank Says Austerity "Compliments" QE <p>Earlier this week, the ECB’s Benoit Coeure pulled <a href="">a Janet Yellen</a> and <a href="">told a non-public audience</a> of hedge funds that because markets are usually less liquid in the July-August “lull”, the central bank would be “slightly” front-loading PSPP purchases in May and June. This bit of very material, very non-public information promptly triggered a quick move lower in the EURUSD before things calmed down. Some ten hours later, the ECB was kind enough to share that information with the public which of course precipitated a 150 pip EURUSD plunge prompting us to ask just how many other mysterious market moves can be explained by "Chatham House rule" meetings heald by The ECB each day/week/month?</p> <p>The ECB’s move to front-load asset purchases effectively means that QE will be expanded in months when net supply is positive and <a href="">tapered when negative</a>, which underscores a feature of PSPP that sets it apart from QE in the US and Japan: Mario Draghi is buying at a time when European governments have been cornered into an austerity fixation by the troika, meaning in many cases, monthly asset purchase targets will be difficult to hit owing lackluster supply.&nbsp;</p> <p>This of course highlights something rather absurd about the ECB’s asset purchase program specifically, and about Brussels’ stance on fiscal discipline more generally. <strong>Namely, there’s something quite contradictory about telling governments to tighten their belts while promising to buy any and every piece of paper their treasury departments care to issue.</strong> In fact, it’s probably fair to say that a €1.1 trillion QE program simply cannot peacefully coexist with a strict, currency bloc-wide austerity policy.</p> <p>This glaring contraction was on full display at the ECB’s April 14-15 policy meeting, minutes show. </p> <p>Here’s more via <a href="">the ECB</a>:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><em><strong>Since the Governing Council’s previous monetary policy meeting on 4-5 March 2015, the implementation of the ECB’s expanded asset purchase programme (APP) had had a significant impact on euro area financial markets, contributing to further declines in government bond yields, </strong>while higher levels of excess liquidity had put downward pressure on euro money market rates. The euro had continued to depreciate against the US dollar, reaching a low of USD 1.05 per euro.</em></p> <p>&nbsp;</p> <p><em>Since the start of purchases under the public sector purchase programme (PSPP) on 9 March, sovereign bond yields had declined further, reaching new historical lows in almost all euro area jurisdictions, the impact being strongest at the longer end of the yield curve. However, over the course of the month, yields in some jurisdictions had partly reversed the earlier declines that had immediately followed the start of the programme. Yield curves had remained lower and flatter than on 4 March, i.e. just before the announcement of the details on PSPP implementation. <strong>The downward shift was even more apparent when comparing prevailing yield curves with those observed immediately before the announcement of the APP on 22 January.</strong></em></p> </blockquote> <p>In other words, the ECB’s announcement in January has made it easier for EMU governments to borrow (the opposite of fiscal discipline), recent bond market turmoil notwithstanding. But the ECB is willfully ignorant (at least we hope it’s willful, although with central bankers, it’s hard to say what they might or might not understand) of the fact that its policies run counter to notions of fiscal restraint:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><em><strong>At the same time, a strong signal needed to be sent to euro area governments urging them to press ahead with structural reforms and to take measures to improve the business environment. Only with such complementary action could the full benefits of the monetary policy measures be reaped.</strong> Swift and effective implementation of appropriate reforms in the euro area would not only lead to higher sustainable growth in the medium to long term but also raise expectations of permanently higher incomes and encourage households to expand consumption and firms to increase investment already in the near term. In addition, fiscal policies should support the economic recovery while remaining in compliance with the Stability and Growth Pact.</em></p> </blockquote> <p>It doesn’t get much more ridiculous than that. Coeure has just called fiscal reform “complementary” to a €1.1 trillion government bond buying program. But these two things aren’t complimentary at all, a fact which is on full display in Germany where the government does not need to borrow money, meaning that unless Bunds can be purchased in the secondary market, QE simply can’t be implemented in full under the capital key.&nbsp;</p> <p>With these types on conflicting messages coming out of EMU officials, is it any wonder that "ascendant" socilaists are challenging austerity?</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="248" height="146" alt="" src="" /> </div> </div> </div> Bond Germany Janet Yellen Japan Monetary Policy recovery SWIFT Yield Curve Fri, 22 May 2015 06:00:00 +0000 Tyler Durden 506820 at George Soros Warns "No Exaggeration" That China-US On "Threshold Of World War 3" <p>While admitting that reaching agreement between the two countries will be difficult to achieve, George Soros - <em><a href="">speaking at The World Bank's Bretton Woods conference this week</a></em> - warned that <strong><em>unless the U.S. makes 'major concessions' and allows China's currency to join the IMF's basket of currencies, "there is a real danger China will align itself with Russia politically and militarily, and then the threat of world war becomes real."</em></strong></p> <p><strong>Much in global geopolitics depends on the health and trajectory of the Chinese economy,</strong> was the undertone of George Soros' comments as he spoke this week, <a href="">but as MarketWatch reports,</a></p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>Billionaire investor <strong>George Soros said flatly that he’s concerned about the possibility of another world war.</strong></p> <p>&nbsp;</p> <p>...</p> <p>&nbsp;</p> <p><strong>If China’s efforts to transition to a domestic-demand led economy from an export engine falter, <span style="text-decoration: underline;">there is a “likelihood” that China’s rulers would foster an external conflict to keep the country together and hold on to power</span>.</strong></p> <p>&nbsp;</p> <p>...</p> <p>&nbsp;</p> <p><strong>To avoid this scenario, Soros called on the U.S. to make a “major concession” and allow China’s currency to join the International Monetary Fund’s basket of currencies.</strong> This would make the yuan a potential rival to the dollar as a global reserve currency.</p> <p>&nbsp;</p> <p>In return, China would have to make similar major concessions to reform its economy, such as accepting the rule of law, Soros said.</p> <p>&nbsp;</p> <p>Allowing China’s yuan to be a market currency would create “a binding connection” between the two systems.</p> <p>&nbsp;</p> <p>An agreement along these lines will be difficult to achieve, Soros said, but the alternative is so unpleasant.</p> <p>&nbsp;</p> <p><span style="text-decoration: underline;"><strong>“Without it, there is a real danger that China will align itself with Russia politically and militarily, and then the threat of third world war becomes real, so it is worth trying.”</strong></span></p> </blockquote> <p>And while on the topic, Soros also spoke recently, <a href="">as ValueWalk notes,</a> on <strong>the situation in Europe...</strong></p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><strong>“The European Union was a very inspiring idea to people like me,” </strong>he commented, reflecting back to when EU economies were more balanced. “It was the embodiment of the idea of an open society, like minded countries getting together and sacrificing part of their sovereignty for the common good.&nbsp; It was meant to be a voluntary association of equals.”</p> <p>&nbsp;</p> <p>Soros continued to say:<strong> “Because of the Euro crisis, [the E.U.] has been transformed into something radically different.”</strong> He also emphasized that over time two different classes of countries have evolved: creditors and debtors. “The debtors had difficulty meeting their obligations and this put the creditors in charge. They (the creditors) set the rules and made it very difficult for the debtors to exit their inferior status. A voluntary association of equals turned into an involuntary association of un-equals.”</p> <p>&nbsp;</p> <p>While avoiding making predictions, on Greece Soros noted: <strong>“Greece is a poisonous situation. All sides have made a lot of mistakes, and there is a lot of hostility, a lot of negative sentiments…Both sides are willing to hurt the other side even if it hurts them.”</strong></p> </blockquote> <p>*&nbsp; *&nbsp; *</p> <p>The billionaire investor concluded by pointing out that military spending is currently on the rise in both Russia and China, warning ominously...</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><span style="text-decoration: underline;"><strong>"If there is conflict between China and a military ally of the United States, like Japan, then it is not an exaggeration to say that we are on the threshold of a third world war."</strong></span></p> </blockquote> <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="451" height="380" alt="" src="" /> </div> </div> </div> China Creditors European Union George Soros Greece Japan Reserve Currency Yuan Fri, 22 May 2015 05:00:40 +0000 Tyler Durden 506821 at Where America's Airplanes Go To Die <p>Davis–Monthan Air Force Base is located in Tucson, Arizona. It occupies an area of over 10 square kilometers, equal to roughly 1,870 football fields. The base is the location of the Air Force Materiel Command's 309th Aerospace Maintenance and Regeneration Group, or AMARG in short. It is also known as the "<em>boneyard."&nbsp; </em></p> <p>With the area's low humidity in the 10%-20% range, meager rainfall of 11" annually, hard alkaline soil, and high altitude of 2,550 feet, it has the "just right" conditions to avoid corrosion and not to need paving when moving massive objects. It has emerged as the perfect venue for one thing: the largest aircraft boneyard in the world, with a typical inventory of more than 4,400 aircraft.</p> <p>Allowing the aircraft to be naturally preserved for cannibalization or possible reuse, Davis-Monthan is the logical choice for a major storage facility. The geology of the desert allows aircraft to be moved around without having to pave the storage areas.</p> <p>AMARG's role in the storage of military aircraft began after World War II, and continues today.</p> <p><em>Interactive map of AMARG as seen in the most recent Google maps satellite overflight:</em></p> <p><iframe src="!1m18!1m12!1m3!1d3756.1642687442354!2d-110.83092832250287!3d32.152268483847564!2m3!1f0!2f0!3f0!3m2!1i1024!2i768!4f13.1!3m3!1m2!1s0x86d6653db2375c9b%3A0xdf50c8f87748ce38!2sDavis-Monthan+Air+Force+Base!5e1!3m2!1sen!2sus!4v1432245360427" width="640" height="640" frameborder="0"></iframe></p> <p><em>Aerial Map of Davis-Monthan Air Force Base, AMARG and the Pima Air &amp; Space Museum</em></p> <p><a href=""><img src="" width="641" height="379" /></a></p> <p>&nbsp;</p> <p><em>Follows the brief&nbsp; story of the world's largest military airplane boneyard.</em></p> <p>AMARG was established in 1946 as the 4105th Army Air Force Unit to house B-29 and C-47 aircraft. By May of 1946, more than 600 B-29 Superfortresses and 200 C-47 Skytrains had been moved to Davis-Monthan. Some were preserved and returned to action in the Korean War, others were scrapped.</p> <p>In 1948, after the Air Force's creation as a separate service, the unit was renamed the 3040th Aircraft Storage Depot.</p> <p>In February of 1956, the first Convair B-36 Peacemaker aircraft arrived at Davis-Monthan AFB for scrapping. All of the fleet of 384 Peacemakers would ultimately be dismantled except for four remaining B-36 survivors saved for air museums.</p> <p>In 1965, the depot was renamed the Military Aircraft Storage and Disposition Center (MASDC), and tasked with processing aircraft for all the US armed forces (not just the Air Force). The U.S. Navy had operated its own boneyard at Naval Air Station Litchfield Park at Goodyear, Arizona for Navy, Marine and Coast Guard aircraft. In February 1965, some 500 aircraft were moved from Litchfield Park to Davis-Monthan AFB. NAS Litchfield Park was finally closed in 1968.</p> <p>The last Air Force B-47 jet bomber was retired at the end of 1969, and the entire fleet was dismantled at Davis-Monthan except for about 30 Stratojets which were saved for display in air museums.</p> <p>In the 1980s, the center began processing ICBMs for dismantling or reuse in satellite launches, and was renamed the Aerospace Maintenance and Regeneration Center (AMARC) to reflect the expanded focus on all aerospace assets.</p> <p>In the 1990s, in accordance with the START I treaty, the center was tasked with eliminating 365 B-52 bombers. The progress of this task was to be verified by Russia via satellite and first-person inspection at the facility. Initially, the B-52s were chopped into pieces with a 13,000-pound guillotine winched by a steel cable, supported by a crane. Later on, the tool of choice became K-12 rescue saws. This more precise technique afforded AMARG with salvageable spare parts.</p> <p>In May 2007, command of AMARG was transferred to the 309th Maintenance Wing, and the center was renamed the 309th Aerospace Maintenance and Regeneration Group.</p> <p>* * *</p> <p>Today, Davis-Monthan is the location of the 309th Aerospace Maintenance and Regeneration Group (AMARG), the sole aircraft boneyard and parts reclamation facility for all excess military and government aircraft. Aircraft from the Air Force, Navy, Marine Corps, Coast Guard, NASA and other government agencies are processed at AMARG, which employs 550 people, almost all civilians.</p> <p><strong>It is the largest airplane boneyard in the world.</strong></p> <p>Another role of AMARG is to support the program that converts old fighter jets, such as the F-4 Phantom II and F-16, into aerial target drones. It also serves as an auxiliary facility of the National Museum of the United States Air Force, and stores tooling for out-of-production military aircraft.</p> <p>AMARG's typical inventory comprises more than 4,400 aircraft, which makes it the largest aircraft storage and preservation facility in the world.</p> <p>AMARG is a controlled-access site, and is off-limits to anyone not employed there without the proper clearance. The only access for non-cleared individuals is via a bus tour which is conducted by the nearby Pima Air &amp; Space Museum.</p> <p>* * *</p> <p><em>Below is an extensive photo library of the residents of this final resting place for thousands of America's warplanes.</em></p> <p><em><a href=""><img src="" width="640" height="427" /></a></em></p> <p><em>Aerial view of aircraft in storage at Davis-Monthan Air Force Base AMARG boneyard</em></p> <p><em><a href=""><img src="" width="640" height="370" /></a></em></p> <p><em>Aerial view of Davis-Monthan Air Force Base and AMARG airplane boneyard in Tucson, Arizona with rows of C-141 Starlifters, B-1B Lancers and F-111 Aardvarks in storage</em></p> <p><em><a href=""><img src="" width="640" height="516" /></a></em></p> <p><em>Aerial view of aircraft in storage at Davis-Monthan Air Force Base AMARG boneyard</em></p> <p><em><a href=""><img src="" width="640" height="503" /></a></em></p> <p><em>Aerial view of aircraft in storage at Davis-Monthan Air Force Base AMARG boneyard</em></p> <p><em><a href=""><img src="" width="640" height="427" /></a></em></p> <p><em>Aerial view of aircraft in storage at Davis-Monthan Air Force Base AMARG boneyard</em></p> <p><em><a href=""><img src="" width="640" height="515" /></a></em></p> <p><em>Aerial view of aircraft in storage at Davis-Monthan Air Force Base AMARG boneyard</em></p> <p><em><img src="" width="640" height="457" /></em></p> <p><em>Aerial view of aircraft in storage at Davis-Monthan Air Force Base AMARG boneyard</em></p> <p><em><img src="" width="640" height="358" /></em></p> <p><em>C-141 and B-52 aircraft at Davis-Monthan Air Force Base AMARG boneyard</em></p> <p><em><img src="" width="640" height="334" /></em></p> <p><em>Aerial view of C-130 aircraft at Davis-Monthan Air Force Base AMARG boneyard</em></p> <p><em><a href=""><img src="" width="642" height="361" /></a></em></p> <p><em>Another aerial view of C-130 aircraft at Davis-Monthan Air Force Base AMARG boneyard</em></p> <p><em><img src="" width="640" height="419" /></em></p> <p><em>Aerial view of aircraft in storage at Davis-Monthan Air Force Base AMARG circa 2011</em></p> <p><em><img src="" width="640" height="417" /></em></p> <p><em>Aerial view of work areas at Davis-Monthan Air Force Base AMARG</em></p> <p><em><img src="" width="640" height="427" /></em></p> <p><em>C-5A Galaxy transports in storage at Davis-Monthan Air Force Base AMARG</em></p> <p><em><img src="" width="640" height="427" /></em></p> <p><em>C-5A Galaxy reclamation at Davis-Monthan Air Force Base AMARG</em></p> <p><em><img src="" width="640" height="420" /></em></p> <p><em>A-10 Thunderbolts parked at Davis-Monthan Air Force Base AMARG</em></p> <p><em><img src="" width="640" height="480" /></em></p> <p><em>B-1B Lancer bomber in storage at the Air Force Materiel Command's</em></p> <p><em><img src="" width="640" height="480" /></em></p> <p><em>Boeing C-135 S/N 91518 parked on Celebrity Row at AMARG</em></p> <p><em><img src="" width="640" height="480" /></em></p> <p><em>United Air Lines Boeing 727-100, S/N N7004U, built in 1963, on display at Davis-Monthan AMARG's "Celebrity Row"</em></p> <p><em><img src="" width="640" height="480" /></em></p> <p><em>U.S. Air Force C-22A Transport, S/N 84-0193 ... variant of the Boeing 727 ... parked on Celebrity Row at AMARG</em></p> <p><em><img src="" width="640" height="480" /></em></p> <p><em>F-14 on display on Celebrity Row at Davis-Monthan AFB's AMARG facility</em></p> <p><em><img src="" width="640" height="480" /></em></p> <p><em>F-4 Phantom II fighters in desert storage at Tucson, Arizona, AMARG</em></p> <p><em><img src="" width="640" height="319" /></em></p> <p><em>Helicopters in desert storage at Davis-Monthan Air Force Base in Arizona</em></p> <p><em><img src="" width="640" height="234" /></em></p> <p><em>F-111 Aardvarks in storage at AMARG</em></p> <p><em><img src="" width="640" height="480" /></em></p> <p><em>KC-135 aircraft at Davis-Monthan Air Force Base AMARG in October, 2012</em></p> <p><em><img src="" width="640" height="480" /></em></p> <p><em>Fairchild Republic A-10 Thunderbolt II on display on Celebrity Row at AMARG at Davis-Monthan AFB</em></p> <p>* * *</p> <p>That largely covers US warplanes, but what about commercial jets? As the <a href="">Bossroyal blog shows</a>, many if not most disused, aging or obsolete airliners, end up in the Californian desert, 150 kilometres outside Los Angeles, at the Mojave Air and Space Port.</p> <p><iframe src="!1m18!1m12!1m3!1d2309.084017535814!2d-118.14504423748605!3d35.06398922989006!2m3!1f0!2f0!3f0!3m2!1i1024!2i768!4f13.1!3m3!1m2!1s0x80c2251a22da85e3%3A0xc35a70196bae2679!2sMojave+Air+%26+Space+Port!5e1!3m2!1sen!2sus!4v1432248451967" width="640" height="640" frameborder="0"></iframe></p> <p>In addition to being the “world’s premier civilian aerospace test center”, the Mojave Port is also one of America’s most well-known ‘aircraft boneyards’, and just like in Arizona, the dry Nevada conditions are ideal for minimising corrosion on jets looking for new owner-operators, or just looking for a quiet place in which to rust in peace.</p> <p><a href=""><img src="" width="640" height="429" /></a></p> <p>Hundreds, if not thousands, of junked or stored airliners form a surreal view amid the harsh landscape in Mojave, and all the major commercial airliner manufacturers – Boeing, Airbus, McDonnell Douglas and Lockheed Martin – are well represented.</p> <p>For plane buffs, Mojave and facilities like it dotted across the US provide both a history of commercial aviation as well as a damning judgement on modern day consumerism.&nbsp; In the aftermath of the September 11, 2001 terrorists attacks, for example, the demand for air travel hit massive turbulence, and many major airlines were forced to mothball some of their fleet due to lack of demand. Many of them ended up at Mojave, and many remain there today, waiting to spread their wings once more.</p> <p><img src="" width="640" height="431" /></p> <p>In addition to the boneyards shown above, there are many other active and inactive places where thousands of airplanes and fighter jets have been stored across the continental US. The annotated map below is a handy reference to tracking down most of them.</p> <p><iframe src="" width="640" height="480"></iframe></p> <p><em>Source: <a href="">Airplaneboneyards</a>, <a href="">Bossroyal</a></em><a href=""></a></p> Boeing Google Fri, 22 May 2015 03:13:55 +0000 Tyler Durden 506814 at Guest Post: This October The World Will Change - "China Is Preparing For Something Big" <p><a href=""><em>Submitted by Mac Slavo via</em></a>,</p> <p><em>&ldquo;China&hellip; across the board&hellip; is preparing for something big in currency markets.&rdquo;</em></p> <p><iframe frameborder="0" height="315" src="" width="560"></iframe></p> <p style="text-align: left;"><em>(Video Via <a href="" target="_blank">Future Money Trends</a>)</em></p> <p><strong>This October may see the beginning of the end for the U.S. dollar as the world&rsquo;s reserve currency. </strong>Twice every decade the International Monetary Fund meets to discuss their Special Drawing Rights (SDR) currency basket. Currently comprised of the dollar, Japanese Yen, British Pound and Euro, if China has their way a few months from now, we may well see the Chinese Yuan take its place among the world&rsquo;s most trusted currencies.</p> <p>U.S. Treasury Secretary Jack Lew says, &ldquo;China isn&rsquo;t ready for currency reserve status,&rdquo; and would certainly like to see the Chinese&nbsp;blocked from entry, preserving the dollar&rsquo;s status as the world&rsquo;s go-to currency and primary mechanism of exchange for global international trade.</p> <p>But while Lew and his predecessors have presided over the largest growth in national debt in world history, the Chinese have been strategically positioning, much like the United States did in the early 1900&rsquo;s,&nbsp;to not just become the world&rsquo;s largest economy, but to be&nbsp;the super power of the 21st century.</p> <p>Forget for a moment what&rsquo;s being touted&nbsp;by analysts, forecasters, politicians, and financial officials who say China is not ready. Focus instead on <a href="" target="_blank">the actions being undertaken by China</a> and you&rsquo;ll understand why Chinese President Hu Jintao says that the dollar is a product of the past.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Excerpted From <a href="" target="_blank">Future Money Trends</a>:</p> <p>&nbsp;</p> <p>Already we are seeing China and Russia hoard gold with Chinese demand skyrocketing in the past give year&hellip; China is both, the world&rsquo;s largest gold producer and biggest importer&hellip; so not only are they accumulating gold by the truck load, but not one ounce produced is leaving their shore.</p> <p>&nbsp;</p> <p><strong>China&hellip; across the board&hellip; is preparing for something big in currency markets.</strong></p> <p>&nbsp;</p> <p><strong>&hellip;</strong></p> <p>&nbsp;</p> <p><strong>The world has an unease about the dollar system&hellip; President Hu of China said &lsquo;the dollar is a product of the past.&rsquo;</strong></p> </blockquote> <p>There was a time when the U.S. dollar was backed by gold. This backing helped to solidify it as a currency that could be trusted on the open market. Today, however, for all intents and purposes, the dollar is backed by absolutely nothing.</p> <p>It is this weakness that the Chinese aim to exploit and that&rsquo;s why they have been actively stockpiling thousands of tons of gold in recent years. But this is&nbsp;only part of the story.</p> <p>In addition to their physical gold holdings, the Chinese have been using <a href="" target="_blank">a secret gold accumulation strategy</a> that no one is talking about :</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>The headlines for gold these past few years have only focused on physical gold accumulation by China, Russia and Eastern central banks. But <strong>what they have missed is a 7,000 year-old strategy that China is doubling down on.</strong></p> <p>&nbsp;</p> <p>According to data compiled by Bloomberg, in 2013 asset purchases by Hong Kong and [Chinese] mainland miners increased to a record $2.2 billion.</p> <p>&nbsp;</p> <p><strong>China is buying gold mines at a record&hellip; something completely missed by both, the mainstream investor and even the gold analysts who tend to only focus on the bullion sales, which haven&rsquo;t been disclosed officially since 2009.</strong></p> <p>&nbsp;</p> <p>Although, according to Bloomberg, based on trade data the physical bullion stockpile has likely tripled since then.</p> <p>&nbsp;</p> <p>China, who is aggressively buying gold, would spark an event if it disclosed how much gold it has stockpiled.</p> <p>&nbsp;</p> <p>But imagine the true disclosure when you add up all their deposits&hellip; not just in China, but offshore. $2.2 billion is equivalent to 46 metric tons of physical gold&hellip; but when buying gold deposits in the ground this could be upwards of 5,000 metric tons.</p> <p>&nbsp;</p> <p>And that is just one year of record mine buying from China.</p> </blockquote> <p>It&rsquo;s been rumored that China may disclose those gold holdings ahead of the IMF&rsquo;s decision this October in an effort to prove to the world that their currency is not only worthy of admission into the SDR basket, but that it is more trustworthy than the U.S. dollar itself.</p> <p>The winds of change are blowing and the Chinese will soon be taking the helm of the global economy. They know a major event is coming and they have been preparing for it by acquiring the one asset that has survived the test of time as a mechanism of exchange.</p> <p>For those desperately trying to figure out where they should be putting their money before the next major market event takes shape, consider following their strategy.</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="635" height="380" alt="" src="" /> </div> </div> </div> British Pound Central Banks China Global Economy Guest Post headlines Hong Kong International Monetary Fund National Debt Reserve Currency Yen Yuan Fri, 22 May 2015 03:10:38 +0000 Tyler Durden 506812 at