Rickards: The Next Crisis Is Coming, and a New World Government May Come With It

Global authorities are already planning for the next major crisis and, depending on its severity, are likely to respond with bail-ins, confiscations of wealth, and a new global currency backed by the IMF, says Jim Rickards in his new book, The Road to Ruin: The Global Elite’s Secret Plan for the Next Financial Crisis.
In a recent 40-minute interview with Financial Sense Newshour, Rickards explained many of the key ideas presented in The Road to Ruin including his thoughts on when the next crisis may hit.
The IMF Will Step In
The next crisis will be the third since 1998, Rickards noted. In 1998, Wall Street bailed out a hedge fund. In 2008, central banks were forced to bail out Wall Street.
‘In 2018, if not sooner, who’s going to bail out the central banks?’ he said.
Enter the International Monetary Fund.
The IMF is only levered 3-to-1, he said, while the Federal Reserve is levered 103-to-1. The IMF can print money, known as Special Drawing Rights, and that’s what Rickards expects will happen in the next major downturn.

This post was published at FinancialSense on 11/17/2016.

The Pain of Regime Change

It’s almost as if I can see the future.
In the September 22 issue of The 10th Man, I went through the math of how people would get screwed in a bond bear market.
I went through all the math, wrote about what duration was, gave some concrete examples of what would happen if rates backed up 100 basis points – and sure enough, since the election, rates have backed up about 40 basis points. This has meant heavy losses in bonds and bond funds.
Like our friend TLT here:

This post was published at Mauldin Economics on NOVEMBER 17, 2016.

A Tale Of Two Americas: Trump Vs. Clinton

It is no surprise that Democrats derive most their support from the large metropolitan areas of the United States while Republicans appeal more to people living in the rural areas. That said, the following two maps, created by the New York Times, provides a stunning look at the divide.
According to the NYT’s, while Hillary won the popular vote on November 8th, Trump was supported by residents occupying 85% of the land area of the country.

This post was published at Zero Hedge on Nov 17, 2016.

USDJPY Hits 110, 30Y TSY At 3.00% Again – Trader Warns “Don’t Fight The Trump Tidal Wave”

Two brief days of hiatus from the bond bloodbath are over as following Yellen’s testimony, 30Y yields have raced higher once again, breaking above 3.00%. Interestingly, EM bonds are having a big week even as DM bonds suffer…
As Bloomberg’s Mark Cudmore warns “don’t fight the Trump tidal wave”…
Trying to fight these market moves is like trying to stand your ground against a tsunami. Your line in the sand is arbitrary, you’ve nothing reliable to cling to, and even if you survive, the market will move on around you.
It’s so much easier to be carried along with the flow, and that’s what most investors will do, whether they want to or not. That way, even after the market recedes back to sustainable levels, you’ve hopefully been carried to some profitable higher ground.

This post was published at Zero Hedge on Nov 17, 2016.

Horseman Capital: “A Sharp Spike In Yields Preceded Every Market Crisis In The Last 20 Years”

Earlier this week, when looking at the alarming tightening in financial conditions, we asked if “the market was wrong” and was getting far ahead of itself in extrapolating bening growth as a result of Trump’s proposed policies instead of the risk of a “stagflation bond crash”, something which has emerged as the biggest market whisper risk according to the latest Bank of America survey of fund managers.
Overnight, a similar concern was voiced by Horseman’s Russel Clark who observed that 30 Year Treasury Yields have had a rapid rise since the election of Donald Trump, and then makes the following troubling observation: sharp yield spikes have preceded every major crisis in the past 20 years.
“the problem with sharply higher US bond yield is that this tightens financial conditions. We have often seen rises in yield coincide with financial market crises. A rise in yields preceded the 1987 market crash. A rise in yield in 1994 preceded the Tequila crisis, when the Mexican peso devalued by half. After both events, yields quickly fell to new lows. Yields rose in 1996/7 before the Asian Financial Crisis, and yields again rose in 1999 before the dot com crash. After both events, yields fell to new lows. More recently, bond yields rose in 2006 before the Global Financial Crisis, and again in 2010/1 before the Euro-crisis. There was also a rise in yields before the crash in oil prices in 2014. In all cases yields fells to new low.”

This post was published at Zero Hedge on Nov 17, 2016.

Are The Saudis About To Reveal The Best Kept Secret In Oil?

One of the oil world’s longest and best kept secrets may finally be revealed. Saudi Arabia is preparing to unveil how much oil it holds, a closely guarded state secret that has been kept quiet for decades.
The decision to bring such important data to light comes as Saudi Aramco is preparing to partially privatize its assets, an IPO that could bring in some $100 billion. The IPO will be a monumental event, one that the Wall Street Journal says could offer Wall Street some of the largest fees in history.
Saudi Arabia often trades off with Russia – and more recently, with the U. S. – as the world’s largest oil producer. But while it produces at similar levels as Russia and the U. S., it is long been a vastly more influential player in the oil world. That is because of two reasons – the size of its reserves, and the ability to use latent spare capacity to quickly adjust supply, affording it an outsized influence on crude oil prices.

This post was published at Zero Hedge on Nov 17, 2016.

NOV 17/GLOBAL BOND YIELDS CONTINUE TO SKYROCKET/USA DOLLAR ALSO IN THE STRATOSPHERE AS ALL OTHER CURRENCIES IN THE TOILET/SHANGHAI GOLD SPREAD TO NY: $10.30/OFFSHORE CHINESE YUAN PLUMMETS TO 6.90…

Gold closed at $1216.50 DOWN $6.90
silver closed at $16.76: DOWN $0.15
Access market prices:
Gold: 1217.00
Silver: 16.70
THE DAILY GOLD FIX REPORT FROM SHANGHAI AND LONDON
.
The Shanghai fix is at 10:15 pm est and 2:15 am est
The fix for London is at 5:30 am est (first fix) and 10 am est (second fix)
Thus Shanghai’s second fix corresponds to 195 minutes before London’s first fix.
And now the fix recordings:
Shanghai morning fix Nov 17 (10:15 pm est last night): $ 1238.54
NY ACCESS PRICE: $1228.10 (AT THE EXACT SAME TIME)/premium$10.44
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
Shanghai afternoon fix: 2: 15 am est (second fix/early morning):$ 1237.30
NY ACCESS PRICE: 1226.00 (AT THE EXACT SAME TIME/2:15 am)
HUGE SPREAD 2ND FIX TODAY!! 10.30 dollars
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
London Fix: Nov 17: 5:30 am est: $1232.00 (NY: same time: $1230.50 5:30AM)???
London Second fix Nov 17: 10 am est: $1226.75 (NY same time: $1225.50, 10 AM)???
It seems that Shanghai pricing is higher than the other two , (NY and London). The spread has been occurring on a regular basis and thus I expect to see arbitrage happening as investors buy the lower priced NY gold and sell to China at the higher price. This should drain the comex.
Also why would mining companies hand in their gold to the comex and receive constantly lower prices. They would be open to lawsuits if they knowingly continue to supply the comex despite the fact that they could be receiving higher prices in Shanghai.
end
For comex gold:
NOTICES FILINGS FOR NOVEMBER CONTRACT MONTH: 1 NOTICE(S) FOR 100 OZ TONNES
For silver:
NOTICES FOR NOVEMBER CONTRACT MONTH FOR SILVER: 0 NOTICE(s) OR nil OZ
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Let us have a look at the data for today

This post was published at Harvey Organ Blog on November 17, 2016.

Gold Daily and Silver Weekly Charts – A Metals Tap Off Yellen and Mexico

Gold and silver took a hit around noon EST as Mexico’s Central Bank raised its interest rate by 50 bp, and Fed Chair Yellen said she sees a rate increase in our own future.
Nothing about either of those two events was unexpected. The Mexican CB wants to fight the peso weakness for their own reasons, and the Fed has been keen on raising rates for their own policy purposes for quite some time.
Part of their excuse for doing so will be the Trump tax cuts for the wealthy and corporations, and the fiscal stimulus package on infrastructure that he has promised.
All of this will be justified by ‘dynamic modeling’ which will assume that tax cuts and fiscal stimulus will pay for themselves with increased GDP.
Where have we heard this before?
Well, I am keeping an open mind. But I have a very bad feeling about all of this.
Of course, when you are picking between two evils, what else might you expect?
The speculation of who will staff what Cabinet positions under The Donald continues to be in a bull market, with the emphasis on ‘bull.’ So far just about any Republican with an even number of arms and legs seems to be in the running. I think he is just playing nice with the denizens of the swamp for now.

This post was published at Jesses Crossroads Cafe on 17 NOVEMBER 2016.

France Won’t Be Following the UK Out of the EU

Since the Brexit vote in the UK there has been a lot of speculation concerning the next countries to leave the European Union. France is being repeatedly named in those lists. There are several reasons why France is not likely to leave the EU any time soon.
While British politicians are fairly unpopular in Brussels, French MEPs make up the core of the political groups and their messages, especially those who have pushed political integration and centralization. Joining the EU bureaucracy is considered to be a capstone to a successful political career, and a chance to be considered a ‘real’ statesmen. The French political class is quite committed to the EU project.
Moreover, there is substantial evidence that the French population overall has a relatively high opinion of the EU and its institutions. Polling conducted after the Brexit vote in the United Kingdom backs this up: in a Paris-Match/iTELE poll in June of this year, only 35% of the surveyed people supported the idea of France leaving the European Union. A similar TNS poll only found 33% supporting the same. This trend is also confirmed by the current lead and importance of 2017 presidential candidate Alain Jupp, a former prime minister, running on the platform of being ‘a European’ while favoring political integration in the EU. The pro-EU Jupp is the current leader of the field in his primary with 42% (with only 28% going to his chief rival, former president Nicolas Sarkozy), and therefore the most likely to become the next president.
The French May Be More Easily Bullied than the British
The Brexit reactions from EU officials only prove what the general trend of the European Union is: join our club or we will bully you. After creating a single market and restricting trade policies of its members, the EU then forces those who do not give in to accept all the edicts of the European commission – or else. If some sectors of the French population begin to push for separation, the EU will again get the fear machine rolling to prevent other countries from leaving.

This post was published at Ludwig von Mises Institute on Nov 17, 2016.

If I Were Trump’s Advisor, Here’s What I’d Tell Him

Characteristically, stocks and bonds rendered diametrically different verdicts on Donald Trump’s victory in last Tuesday’s presidential election. While the Dow Jones Industrial Average enjoyed its biggest rally in five years, jumping 5.4%, or 969.38 points, to close at a record high of 18,847.66, yields on 10- and 30-year Treasuries jumped 32 and 34 basis points to 2.15% and 2.94%, respectively. The S&P 500 jumped 3.8% on the week to 2,165.45, and the Nasdaq Composite Index rose 3.79% to 5,237.11. While global equities added $1.3 trillion in value, however, global bonds shed $1.0 trillion according to Bloomberg estimates. President-elect Trumpis expected to bring higher GDP and corporate profits, which are good for stocks, but also higher inflation and interest rates, which are bad for bonds. Bonds were already toxic, offering negative real (inflation-adjusted) returns, before the election; now investors are going to see exactly how much damage feckless central bank policies inflicted as the $1 trillion of losses of the last week are just a small down payment on what is coming.
Mr. Trump is inheriting a complicated and very volatile situation.
And if I were advising him, here’s what I’d suggest.

This post was published at Wall Street Examiner on November 17, 2016.

Hispanic Consumer Confidence Surges Post-Trump

Well, that was not supposed to happen…
Based on what the mainstrea media (the real news, not the fake news), and the Democratic politicians, the world should have ended by now with minority groups across America cowering in fear as Hitler’s alter-ego took power.
But it didn’t… and in fact Hispanic Consumer comfort surged post-election, and while white confidence rose very modestly, consumer confidence among black Americans fell only marginally…

This post was published at Zero Hedge on Nov 17, 2016.

Foreign Central Banks Are Dumping US Treasuries At An Alarming Rate – Episode 1130a

The following video was published by X22Report on Nov 17, 2016
Initial jobless claims are at all time lows even though more and more people are being laid off. Wells Fargo account opening are way down. Housing starts surge at mortgage apps decline. The housing bubble is getting ready to pop. Australia drops the TTIP and move to Chin’a free trade deal. Trump must shutdown the Federal Rerserve to end the control of a foriegn corporation. Foreign central banks are dumping Treasuries at an alarming rate.

Trump-onomics Distilled

Trump’s signature policy proposals – fiscal stimulus, a more restrictive immigration policy and trade protectionism – are bullish for the US dollar and bearish for bonds.
The Tax Policy Center estimates that Trump’s tax plan alone would increase the federal debt by $6.2 trillion over the next ten years (excluding additional interest). We doubt that Congress will approve anything close to that. Nevertheless, even if he gets one quarter of the revenue and expenditure measures that he is seeking, this would be enough to boost aggregate demand growth by 0.5-1.0% per year over the next two years.

This post was published at FinancialSense on 11/17/2016.

US Pension Crisis: This is How Families Get Squeezed to Bail Out Pension Funds in Chicago

Coming to a municipality near you.
Chicago is another trailblazer. But it’s not alone. Other cities are lining up behind it. Bankruptcy may still be the route to go. But until then, homeowners, renters, drivers, users of phones, etc. – in other words regular families who’re just sitting ducks – are going to get squeezed dry, in order to slow the momentum of the public-employee pension crisis eating up the city’s and the school district’s finances.
‘Because of a new accounting rule, Chicago now has to report its pension debt on its balance sheet,’ explains Truth in Accounting. ‘As a result, the city’s reported pension debt grew from $8.6 billion in 2014 to $33.8 billion in 2015.’
The funding hole for pensions amounts to $18.6 billion, according to current estimates, despite six years of booming asset prices. What is this going to look like when asset prices sag?
The City Council approved Mayor Rahm Emanuel’s $8.2 billion budget yesterday. Crisis or no crisis, it’s up 4.8% from last year. There wasn’t anything to debate because the tax and fee hikes had been done outside the budget process.
But this is what Chicago has to deal with. On November 9, S&P Global Ratings cut Chicago Public Schools (CPS) to deep junk (triple-C), citing the district’s ‘continued weak liquidity in its most recent cash flow forecast and reliance on cash flow borrowing, combined with the increased expenditures in the district’s new labor contract that exacerbate the district’s structural imbalance challenges.’

This post was published at Wolf Street by Wolf Richter ‘ November 17, 2016.

Newt Gingrich Confirms “I Will Not Be In Donald Trump’s Cabinet”

Having been a loyal defender of Trump through the campaign – slamming the media’s bias and Megyn Kelly’s sex-addiction at one point – former House Speaker Newt Gingrich has confirmed today in an interview with McClatchy, that ‘I will not be in the Cabinet…I intend to be focused on strategic planning.’
McClatchy had contacted him for comment on whether his long ties to the Washington establishment might pose a problem with a Trump team that boasts of its outsider status and its promise to ‘drain the swamp’ of Washington. He did not say whether the decision not to be in the new government was his or Trump’s. The Trump transition team did not respond to requests for comment.

This post was published at Zero Hedge on Nov 17, 2016.