Germany

"The modern financial animal is wont to assume that he or she lives in an age of science. The truth is we live in an age of pseudoscience. Far from dealing in science, central bankers, and, to a degree, investment bankers and security analysts, employ magical thinking... For an individual to fix Libor is a crime. For a central bank to suppress European bond yields is an act of financial statesmanship..."

China will be a net buyer, and a net importer of physical gold for years to come. In and of itself that won’t necessarily cause a sharp rally in gold prices anytime soon, but gold acquisition from the Chinese state and her citizens, as well as emerging market central banks the world over will continue to provide support for the physical gold market. Those that have sold gold in the past few days (and there have been plenty in the ETF and futures markets) as a result of the “disappointing” number out of China may have just caused the capitulation event that typically marks the bottom of any bear market.

After yesterday's latest drop in stocks driven by "old economy" companies such as CAT, which sent the Dow Jones back to red for the year and the S&P fractionally unchanged, today has been a glaring example of the "new" vs "old" economy contrast, with futures propped up thanks to strong tech company earnings after the close, chief among which Amazon, which gained $40 billion in after hours trading and has now surpassed Walmart as the largest US retailer. As a result Brent crude is little changed near 2-wk low after disappointing Chinese manufacturing data fueled demand concerns, adding to bearish sentiment in an oversupplied mkt. WTI up ~26c, trimming losses after yday falling to lowest since March 31 to close in bear mkt. Both Brent and WTI are set for 4th consecutive week of declines; this is the longest losing streak for Brent since Jan., for WTI since March.

Schäuble seems to have foresaw the crisis back in 1994, distinguishing between core members and non-core members. Therefore, his thinking is quite different from that of France. Behind the curtain, the federalization of Europe is the ultimate goal, although politicians always denied that in front of the curtain. The curtain is starting to be drawn, but the equal federalization of Europe was never part of the German mindset.

How hard do you work compared to the rest of the world?

Clearly, Russia puts great strategic importance on its gold reserves. Both President Putin and Prime Minister Medvedev have been photographed on  numerous occasions holding gold bars and coins as a display of economic stability and strength. Since early 2007 Russia has sold gold only twice, in 2012, in small amounts.

• Stocks sour as Apple results leave bitter aftertaste (Reuters)
• Awkward Alliance Running Germany Exposed by Greek Crisis (BBG)
• Apple Faces Old Question of What’s Next After Record Profit (BBG)
• Lawmakers, White House Explore Tax Revamp for U.S. Firms Overseas (WSJ)
• Digital Misfits Link JPMorgan Hack to Pump-and-Dump Fraud (BBG)
• More Debt Traders at Risk as European Banks Report Results (BBG)
• Iran rejects sanctions extension beyond 10 years (Reuters)

In what may be the biggest story of the year, if confirmed, Greek newspaper To Vima reports that Greek Prime Minister Alexis Tsipras has asked Russian President Vladimir Putin for 10 billion dollars in order to print drachmas. But the real shocker: on the night of the referendum, word came from Russia that Putin did not want to support Greece’s return to the drachma. After that, Tsipras had no choice left but to “surrender” to German Chancellor.

What if Syriza were not just a particularly fluffy breed of miniature Europoodle but actual honest-to-goodness revolutionaries, ready to do whatever it takes? How would they act differently? And what would be the result? Given that the price is so high, perhaps it would be better after all if we just sat quietly, allowed the rich get richer as the poor get poorer, watched listlessly as the environment got completely destroyed by capitalist industrialists in blind pursuit of profit, and eventually curled up, kissed our sweet asses good-bye and died? Good luck selling that idea to young radicalized hotheads who have nothing to lose - except maybe you, if you happen to stand in their way as they change the world!

The one line item everyone looks for in every Greek forecast is what its debt will be now that reality is finally allowed to creep in. We have dutifully highlighted it on the chart below: it is now expected to hit 238% by 2018. But it was another number that caught our attention: Citi's estimate for Greek HICP (inflation) in 2017. 22.5%  In other words, Citi predicts that by 2017 Greece will have hyperinflation even if it remains in the Eurozone.

My own most likely Grexit scenario is a different one yet again. Donald Tusk, the president of the European Council, hinted at this in his interview with the Financial Times last week when he said that he felt "something revolutionary" in the air. He is on to something. The most probable scenario for me is Grexit through insurrection.

Capital controls imposed by the Greek government are taking a heavy toll on Greek businesses, according to a new report from Endeavour Greece. With over two-thirds of respondents reporting a "significant drop in revenues," and 1 in 9 firms forced to suspend production due to shortages of raw materials (unable to buy due to capital controls), the problems created by The Greek government's action seem asymmetric as almost a quarter (23%) of firms are now "planning to transfer their headquarters abroad for security, cashflow, and stability reasons."

"We seriously need to hit the Cntrl-Alt-Delete button on government. This is total insanity and we are losing absolutely everything that made society function. Once they eliminate CASH, they will have total control over who can buy or sell anything."

Many analysts believe the officially reported 1,660 tonnes to be an understatement given the enormous volumes of gold that have been passing through Hong Kong - and through Shanghai in more recent years - and the large amounts that have been produced and bought domestically.

It is important to remember that as we have long pointed out two other entities, besides the PBOC, have also been buying gold - the State Administration of Foreign Exchange (SAFE) and the China Investment Corporation (CIC).

"While the hardcore of Podemos voters will read the outcome as an even stronger need to change the economic and political order in Europe, the more undecided voters will probably look twice at the Greek economy — held in stasis by bank holidays and capital controls — before risking voting for Podemos," Bloomberg says.