Japan

Sprott Money's picture

The Jefferson Airplane sang about truth and lies nearly 50 years ago.

“When the truth is found to be lies

And all the joy within you dies…”

Restating their insight to make it relevant to our global delusions about real money – gold and silver – and the much less real money we call dollars, euros, pounds, yen and so forth:

When the truths we want to believe are clearly lies,

Then CONFIDENCE in our currency dies…


The Top 0.1% Loves A Guaranteed Minimum Income: With One Caveat

The last thing the top 1/10th of 1% wants is a desperate, politically charged underclass with no money to buy the goods and services that generate the income of the top 1/10th of 1%. The best way to keep the underclasses passive and powerless while insuring they have enough money to continue consuming is to arrange for the central bank to issue them money in the form of a popularly acclaimed guaranteed minimum income. Helicopter money here we come.

 

Frontrunning: February 10

  • Greek defense minister says Greece has Plan B if EU rigid on deal (Reuters)
  • Germany rejects Greek claim for World War Two reparations (Reuters)
  • Greece to Seek $11.3 Billion in Financing to Avoid Funding Crunch (BBG)
  • Lazard Sees $113 Billion Greek Debt Cut as ‘Reasonable’ (BBG)
  • U.S. Navy Considers Setting Up Ship Base in Australia (BBG)
  • Dalio’s Bridgewater Fund Said to Rise 8.3% in January (BBG)
  • As U.S. Exits, China Takes On Afghanistan Role (WSJ)
  • EU money funds cut exposure to bank debt (FT)
  • China Inflation Drops to Five-Year Low in January (WSJ)
  • Oil-Price Rebound Predicted (WSJ)

Dan Loeb Is Scared Of "The Haunted House Market"

2015 has been marked by increasing volatility, prompting Third Point's Dan Loeb to characterize this as a “haunted house market” where a new scary event lurks around each corner. Out of this year’s 25 trading days, 22 have had intra-day moves in the market of more than 1%..."Avoiding dramatic downside in individual names and sizeable losses during inevitable sell-offs will be key to succeeding in this market and navigating successfully through the haunted hallways of 2015."

Chinese Producer Prices Tumble For 34th Month In A Row, Worst 'Deflation' Since Oct 2009

For the 34th month in a row, Chinese Producer Prices (PPI) fell YoY (dropping 4.3%, missing expectations of a 3.8% deflation). This is the biggest YoY drop in prices since October 2009 led by a 9.9% plunge in fuel costs. Chinese Consumer Prices are also showing continued deceleration with a 0.8% rise YoY (missing expectations of a 1.0% rise YoY) - the weakest CPI low-flation since November 2009. Great news for the average Chinese person is that food prices rose at the slowest pace in years (and even better the cost of alcohol & tobacco fell YoY again).

Should I Trust The Government?

Only the people of Japan and Spain trust their government less than the people of the U.S. trust our government. The confluence of government and business has created a corporate fascist surveillance state. Trust in government, politicians, bankers, and the media is plummeting.

Why Citi Thinks Oil Is Going To $20

The recent rally in crude prices looks more like a head-fake than a sustainable turning point, suggests Citi's Ed Morse, noting that short-term market factors are more bearish, pointing to more price pressure for the next couple of months and beyond. While the shape of the oil price recovery is unlikely to be 'L'-shaped in their view (more likely 'U', 'V', or 'W'-shaped recovery), Citi warns the oil market should bottom sometime between the end of Q1 and beginning of Q2 at a significantly lower price level in the $40 range (perhaps as low as the $20 range for a while) - after which markets should start to balance, first with an end to inventory builds and later on with a period of sustained inventory draws.

Europe, US Risk Off After Greece Rejects European Ultimatum, Ukraine Peace Talks Falter

In the absence of any notable developments overnight, the market remains focused on the rapidly moving situation in Greece, which as detailed over the weekend, responded to Europe's Friday ultimatum very vocally and belligerently, crushing any speculation that Syriza would back down or compromise, and with just days left until the emergency Eurogroup meeting in three days, whispers that a Grexit is imminent grow louder. The only outstanding item is what happens to the EUR and to risk assets: do they rise when the Eurozone kicks out its weakest member, or will they tumble as UBS suggested this morning when it said that "the escalation of tensions between the Greek government and its creditors is so far being shrugged off by investors, an attitude which is overly simplistic and ignores the risk of market dislocations" while Morgan Stanley adds that a Grexit would likely lead to the EURUSD sliding near its all time lows of about 0.90.

Albert Edwards' On The Next Shoe To Drop: The Realization That Core Inflation In The US And Europe Are The Same

"The next shoe to drop will be the realisation that the US recovery is stalling and outright deflation is as big a threat there as it is in the eurozone. Indeed my former esteemed colleagues Marchel Alexandrovich and David Owen pointed out to me that if US core CPI is measured in a similar way to the eurozone (i.e. ex shelter), then US core CPI inflation is already pari passu with the eurozone ? despite the former having enjoyed a much stronger economy!"

Chinese Imports Crash & Worst January Export Plunge Since 2009 Sends Trade Surplus To Record High

Chinese imports collapsed 19.9% YoY in January, missing expectations of a modest 3.2% drop by the most since Lehman. This is the biggest YoY drop since May 2009 and worst January since the peak of the financial crisis. Exports tumbled 3.3% YoY (missing expectations of 5.9% surge) for the worst January since 2009. Combined this led to a $60.03 billion trade surplus in January - the largest ever. But apart from these massive imbalances, everything is awesome in the global economy (oh apart from The Baltic Dry at record lows, Iron Ore near record lows, oil prices crashed, and the other engine of the world economy - USA USA USA - imploding).

Global Economy Will Shrink By $2.3 Trillion In 2015

The world is going to be about $2.37 trillion smaller in 2015 than most expected at the start of the year as a consequence of the USD strengthening. This is not insignificant, as it represents 3.2% of last year’s estimated global GDP. For perspective, that would be as if an economy of the size between Brazil’s and the UK’s would have just disappeared.