The Yuan Ascends to World Reserve Status: ‘Dollar System Being Done Away With’

Today’s news is a historic milestone. The dollar’s days are numbered, and the new global economic order is shifting into place.
As many insiders have expected, China has now officially gained status among the world reserve currencies, taking place alongside the dollar, the euro, the pound and the yen.
The IMF decided to grant this upgrade as a result of financial and monetary benchmarks that Chinese leaders worked towards during the past several years. Its implications run deep.
Via Reuters:
The International Monetary Fund on Monday, as expected, admitted China’s yuan into its benchmark currency basket in a victory for Beijing’s campaign for recognition as a global economic power.
The IMF executive board’s decision to add the yuan, also known as the renminbi, to the Special Drawing Rights (SDR) basket alongside the dollar, euro, pound sterling and yen, is an important milestone in China’s integration into the global financial system and a nod to the progress it has made with reforms.
IMF chief Christine Lagarde, who along with in-house experts has previously backed the move, made it clear she did not expect Beijing to stop there.
‘The yuan’s inclusion is a largely symbolic move, with few immediate implications for financial markets. But it is the first time an additional currency has been added to the SDR basket and the biggest change in its composition in 35 years.
Below is IMF chief Christine Legarde’s statement on the new benchmark of global currency, and what will inevitably be a resettling for the people affected by it – not least the American people who could see a significant decline in their living standard after an era of economic supremacy that the United States has enjoyed since the end of WWII:

This post was published at shtfplan on November 30th, 2015.

Hillary’s Tax Plan Is Full of Expensive (and Impossible) Promises

The Hillary Clinton tax plan is being slowly released in increments, like a serialized novel designed to capture and hold the public’s attention.
In June, the Democratic presidential front-runner proposed an expensive ‘targeted tax benefit’ – a universal preschool for American households with children four years of age and older. Then in July, Clinton pushed a profit-sharing plan that would provide a new, two-year tax credit for employers. And most recently on Nov. 22, she announced a credit worth up to $1,200 to help families bearing the cost of care for their elderly members at home.
OK, Hillary, you’ve got our attention. Now tell us how you intend for pay for these promises…
Especially since your campaign relies heavily upon one grand principle: none of the 97% of U. S. households that earn $250,000 or less per year will be asked to contribute higher taxes for these proposals.
‘How is that possible?’ you ask.
Here’s the answer, folks: It’s not.
‘There is simply no way that the federal government can meet its current fiscal commitments, plus the increased demands of an aging population, and provide the new forms of middle-class relief and business tax relief Ms. Clinton promises, while tapping only the top 3% of earners,’ reported The Washington Post on Nov. 28.
The proof that Hillary Clinton’s tax plan will ultimately fail lies in its lack of counter-solutions to America’s looming budget deficit crisis.
She wants to spend more without consequence. And promise more without delivering. Which means that the former first lady is really just doing one thing: she’s pandering.
Here’s a look at why Clinton won’t be able to follow through on her latest tax promises…

This post was published at Wall Street Examiner by Money Morning Staff Reports ‘ November 30, 2015.

Comex Conundrum

For a fair and honest market, the latest developments might be significant and noteworthy, perhaps even troublesome. But remember, we’re not talking about a fair and honest market, we’re talking about The Comex, instead.
As the “delivery month” of December begins on the Comex…and before we begin another exercise detailing what a sham, charade and illusion this all is…please take a few moments to review the links below. This is hardly the first time we’ve tried to draw attention to all of this and it likely won’t be the last:
Again, the only reason that the Comex price for gold (and silver) has any relevance whatsoever is the alleged physical delivery that takes place at the price “discovered” through the trading of paper derivatives. Without physical delivery, the only “price” that is being discovered is the price of the paper derivative contract, itself. Thus, physical delivery is what gives relevance to the paper derivative price.
So, what happens when the Comex “delivery” process is exposed as a fraud, an illusion and a charade? Does this mean that the Comex paper derivative price can no longer be the basis for physical pricing worldwide? YES IT DOES! That, my friend, is the reason we so diligently chronicle this stuff month after month. And, boy oh boy, it sure looks like December 2015 is going to be a doozy.

This post was published at TF Metals Report on November 30, 2015.

AsiaPac Unleashes Baffle ‘Em With Bullshit Data Bonanza

From South Korean exports (beat) to Aussie PMI (multi-year highs) and from China Manufacturing PMI (2012 lows) to Japan CapEx (multi-year highs), AsiaPac was awash with the exact kind of baffle ’em with bullshit data that provides just enough “see everything is awesome after all” to balance the “umm, but what about…” less glass half full perspective. For your viewing pleasure – 5 WTF charts for AsiaPac economies.
WTF1 – Aussie PMI surprises to the upside to 2 year highs as Aussie Consumer confidence collapses…

This post was published at Zero Hedge on 11/30/2015.

More Measures of U.S. Manufacturing Weakness

RealityChek has looked at U. S. domestic manufacturing’s health through the lenses of employment, wages, output, trade balances, and productivity. All have revealed a pretty dismal picture these days. But since manufacturing renaissance claims still persist, here are two other indicators that strongly suggest that the sector is hardly in a golden age – the numbers of manufacturing establishments and firms in America.
Among those who closely follow the sector, it’s widely recognized thatthere’s been major shrinkage in the number of manufacturing establishments in America since the early 1990s. But that number has always been a little fuzzy, because ‘establishment’ can mean ‘individual facility.’ Since manufacturing’s efficiency has kept growing for most of this period, fewer establishments could partly, or mainly, mean that companies are simply closing factories or other assets that are no longer needed to maintain or even increase output levels.
Luckily, surfing around U. S. government data sites today, I’ve found two statistical series that allow more definitive conclusions to be drawn. The first comes from the Labor Department, and consists of figures on establishment births and deaths by industry that are part of the Business Employment Dynamics data I used recently to shed new light on manufacturing employment. As suggested by the name, establishment ‘deaths’ don’t come back to life whereas ‘closing’ decisions can be temporary for a variety of reasons – including seasonal fluctuations in demand and work flow. Deaths can still stem from greater efficiency, too, but logically more of them reflect declining fortunes in the sector.

This post was published at Wall Street Examiner by Alan Tonelson – November 30, 2015.

China Manufacturing Slumps To 3-Year Lows And Soars To 5-Month Highs

Following the earlier onslaught of weak (and strong) economic data, China has revealed its official and Caixin-based PMI surveys for Manufacturing and Services. Sure enough, while China’s official manufacturing data missed (to Aug 2012 lows), Ciaxin’s survey beat, jumping to June 2015 highs. even as China’s official Services PMI beat expectations, bouncing off 15-month lows. The question now is – given The IMF’s inclusion of the Yuan in the SDR basket – will The PBOC devalue (as offshore Yuan implies) to juice a collapsing manufacturing sector… or is China’s manufacturing now improving if one looks at the “other” PMI?
Lots of confusion, even if just as we suggested before the Caixin PMI print:

This post was published at Zero Hedge on 11/30/2015.

US Stock Market – An Accident Waiting to Happen

Monetary Inflation Becomes Less Supportive of Asset Prices
We have recently discussed the sorry state of the junk bond market, as well as the noteworthy decline in the annual growth rate of US money supply aggregates. The latter has finally manifested itself not only in terms of narrow monetary aggregates like M1 (see chart) and AMS (‘Austrian money supply’, a.k.a. TMS-1, the narrow true money supply), but also in the broader true money supply aggregate TMS-2.
As a reminder, here is the most recent chart of the year-on-year growth rate of TMS-2 :

This post was published at Acting-Man on December 1, 2015.

Fashion Company SQBG Tries To Crush Shorts, Force Squeeze After Chairman Urges Investors To Pull Borrow

Last Thursday, in a move which we had expected would happen, KaloBios new CEO Martin Shkreli gave shorts in KBIO a “thanksgiving present” when he announced he would stop lending out his 70% block of KBIO shares, thus making shorting virtually impossible and forcing a short squeeze, one which sent the stock up over 100% the next day.
It appears the idea of withdrawing one’s borrow has spread to other troubled companies, and moments ago in a very surprising statement, the Chairman of small-cap fashion company, Sequential Brands Group (SQBG), William Sweedler issued the following statement today “with respect to the recent volatility in the Company’s stock price”, by which we assume meant the 10% intraday slide in the company’s price.

This post was published at Zero Hedge on 11/30/2015.

Monetary Metals – Light Thanksgiving Week Supply Demand Report

Illiquid Trading Conditions
In this holiday-shortened week (Thanksgiving), the price of gold dropped $20 and silver 10 cents. Friday, when the price dropped the most, could not have had much liquidity as most Americans were not at work, but shopping or partying. Whatever they may have been buying, it sure wasn’t gold.
We might be inclined to take the basis data this week with a grain of salt.
Here is the graph of the metals’ prices.

This post was published at Acting-Man on December 1, 2015.

Another Hedge Fund Bites The Dust: Trafigura Shuts Down Its Flagship Metals Fund

Two months ago, with everyone focusing on Glencore, we urged readers to “Forget Glencore: This Is The Real “Systemic Risk” Among The Commodity Traders” in which we profiled the “other” major independent commodity trader, Trafigura, specifically looking at the quite daunting $21.9 billion in disclosed debt which suggests a debt/EBITDA of a staggering 10x.
Since then the newsflow out of Trafigura has been troubling (perhaps justifying why its bonds continue to yield somewhere north of 8%) and culminating last week with the announcement that Duncan Letchford, chief executive officer of Trafigura’s hedge fund Galena Asset Management, is leaving the company. As Bloomberg, who first reported the high profile departure last week, wrote, “Letchford, who has served as a member of Trafigura’s management board since August 2012, is leaving to pursue other interests” adding that Letchford took over the role of Galena CEO in March 2014 from Jeremy Weir, who became CEO of Trafigura after co-founder Claude Dauphin was diagnosed with cancer.”
Letchford was the third senior executive to leave Trafigura in six months. His exit follows the resignation of Chief Financial Officer Pierre Lorinet, who left in September, and Simon Collins, the former head of metals who departed in May.

This post was published at Zero Hedge on 11/30/2015.

Fed To Do Repo Test – WTH Are They Thinking?

At its January 2015 meeting, the Federal Open Market Committee (FOMC) approved the Authorization for Domestic Open Market Operations that authorized the Selected Bank (the Federal Reserve Bank of New York) to undertake certain open market transactions for the purpose of testing operational readiness.
In connection with this authorization, the Federal Reserve Bank of New York’s Open Market Trading Desk (the Desk) intends to conduct a small-value repo operation on Wednesday, December 2. The transaction will have an overnight tenor, will be conducted with the primary dealer community, and will run from approximately 9:40 – 9:50 a.m. ET. The operation will be multi-tranche (Treasury, agency, and agency MBS) and settle the same day. Each dealer will be limited to one $10 million proposition in each tranche of this operation.

This post was published at Wall Street Examiner by NY Fed | Press Releases | Markets & Policy Implementation ‘ November 30, 2015.

Hyperinflation Watch: Kazakhstan Unveils New 20,000 Tenge Banknote

While hyperinflating Argentina has begun discussing a rise in the denominations of its banknotes, andSouth Africa has admitted defeat in the currency wars, it appears Kazakhstan’s collapsing currency and crashing reserves has prompted action. Since allowing the Tenge to “free float” in August it has imploded (from 188 to 308 per USD) and so today The Kazakh Central Bank unveiled the new 20,000 Tenge banknote – double the highest denomination previously.
As The FT reports, The Kazakh central bank unveiled the new 20,000 tenge note on Monday evening, saying it would become legal tender on Tuesday December 1 – which since 2012 has been celebrated as the “Day of the First President of Kazakhstan” writes Jack Farchy in Moscow.

This post was published at Zero Hedge on 11/30/2015.


Gold: $1065.89 up $9.60 (comex closing time)
Silver $14.05 up 4 cents
In the access market 5:15 pm
Gold $1058.50
Silver: $14.08
At the gold comex today, we had an extremely surprisingly low delivery day, registering 2 notices for 20 ounces. Silver saw 2746 notices for 13,730,000 oz.
Several months ago the comex had 303 tonnes of total gold. Today, the total inventory rests at 198.37 tonnes for a loss of 105 tonnes over that period.
In silver, the open interest fell by 1673 contracts as silver was down 16 cents in Friday’s trading. Generally we are witnessing a massive OI contraction once we approach first day notice. The total silver OI now rests at 164,564 contracts In ounces, the OI is still represented by .822 billion oz or 117% of annual global silver production (ex Russia ex China).
In silver we had 2746 notices served upon for 13,730,000 oz.
In gold, the total comex gold OI rose by 3685 contracts as the OI rose to 396,795 contracts. Gold was down by $13.80 with respect to Friday’s trading.
We had no change in gold inventory at the GLD/ thus the inventory rests tonight at 654.80 tonnes. The appetite for gold coming from China is depleting not only gold from the LBMA and GLD but also the comex is bleeding gold. Our 670 tonnes of rock bottom inventory in GLD gold has been broken. It looks to me that China has taken the last amounts of physical gold from the GLD. I guess the only place left for China to receive physical gold, after they deplete the GLD will be the FRBNY and the comex. In silver, we had no change in silver inventory, / Inventory rests at 318.209 million oz.
First, here is an outline of what will be discussed tonight:
1. Today, we had the open interest in silver fall by 1673 contracts down to 164,564 as silver was down in price to the tune of 16 cents with respect to Friday’s trading. The total OI for gold rose by 3685 contracts to 396,795 contracts as gold was down by $13.80 with respect toFriday’s trading.

This post was published at Harvey Organ Blog on November 30, 2015.

IMF Approves The Reserve Status Of The Chinese Yuan In 2016 – Episode 830a

The following video was published by X22Report on Nov 30, 2015
Morgan Stanley is planning to layoff 25% from its fix income department. Black Friday sales are a bust, same goes for Thanksgiving. Ford pushing more workers out of US and setting up factories over seas. Dallas fed signals a recession. NAR admits that real estate is slowing and prices are starting to fall. The Chinese home purchases are slowing as more and more Chinese pull out of the housing market. IMF gives the green light for the yuan to become a reserve currency in 2016. Russia included more yuan in its reserve basket of currency.

The Federal Reserve: Damned if It Does, Damned if It Doesn’t

To hike or not to hike? That is the question.
Indeed, that has been the question for what seems like an eternity. But the question of whether or not the Federal Reserve is going to raise interest rates in December misses the point. The truth is, the Federal Reserve is damned if it does and damned if it doesn’t.
The ‘rate hike hype’ began nearly three years ago. We’ve experienced almost 36 months of wishy washy, back and forth, pseudo-scientific attempts to decipher increasingly vague and non-conclusive Fed minutes as to when, how much, and what kind of rate hike we can expect.
You don’t have to be a professional economist to recognize the Fed policy as a stall tactic. Peter Schiff has called them out on this point time and again, showing that if they really wanted to raise rates, they would have done so by now.
Even some mainstream financial media outlets are starting to poke fun at what’s come to resemble a bad soap opera suspense drama.

This post was published at Schiffgold on NOVEMBER 30, 2015.

To JPM, This Is The Alarming Chart Suggesting The Next Recession “Is Just Around The Corner”

By now it is clear to even the most tenured economists that the half of the US economy, the one that deals with manufacturing and industrial production, is sliding into, if not already, in recession with today’s contractionary Chicago PMI and subzero Dallas Fed data confirming this deterioration.
But while the NBER is notoriously behind the curve when it comes to determining the onset of recessions, the market may have already spoken, and nowhere louder than in the collapse of corporate cash flow generation. This collapse in EBITDA is also what we cautioned three weeks ago is the biggest risk facing the economy.
This drop in cash flow is also one of the key catalysts listed by JPM in its report (noted earlier) which said it is time to lower allocation to US equity exposures as “the long period of indiscriminately buying any dip might be coming to an end.”
Specifically, JPM looks at the corporate financing gap, the difference between organic cash flow and the outflow on dividends and buybacks, and is very concerned with what it sees.

This post was published at Zero Hedge on 11/30/2015.