Social Security Taxes Set To Soar For Top Earners In 2017

Many Americans looking forward to Trump’s promise of tax cuts from his administration are going to get a rude awakening when they get their first paychecks of 2017. While Trump has vowed to cut marginal income tax rates for individuals and corporations, the social security tax levied on the nation’s top earners is set to soar in 2017 for top earners.
For the 2015 and 2016 tax years, only the first $118,500 of earnings was subject to the 6.2% social security payroll tax. That said, that “taxable minimum” is set to soar to $127,200 for the 2017 tax year, a 7.3% increase that will cost America’s top earners an additional $539 this year.
As Bloomberg points out, the steep increase in 2017 is the result of the federal government making up for lost time as the “taxable minimum” is not allowed to increase in tax years during which benefit recipients don’t get a cost-of-living increase.

This post was published at Zero Hedge on Jan 9, 2017.

Trump Is Set To Label China A “Currency Manipulator”: What Happens Then?

While China has been banging the nationalist drums in its government-owned tabloids, warning daily of the adverse consequences to the US from either a trade war, or from Trump’s violating the “One China” policy, a more tangible concern for deteriorating relations between China and the US is that Trump could, and most likely will, brand China a currency manipulator shortly after taking over the the Oval Office. Even Bank of America, which two months ago issued a report arguing that it is too early to base concerns of US trade barriers against China on campaign rhetoric, notes “that recent tweeter feeds from Mr. Trump suggests he disapproves the yuan depreciation, implying a higher probability of naming China as a currency manipulator country after his inauguration in January 2017.”
BofA believes that such an action could take place as soon as the spring of 2017, or around the time the the US Treasury Department meet in April to determine which country on the monitoring list will be named.
First, some background: under rules adopted by the Obama Treasury, China is not a currency manipulator. It fails to meet 2 out of the 3 conditions named below, even though it is on the watch list together with 5 other economies (Japan, Germany, South Korea, Taiwan and Switzerland). The criteria include:

This post was published at Zero Hedge on Jan 9, 2017.

Who Owns the World’s Largest Gold Hoards? – Not the Central Banks!

It’s a common misconception that the world’s major central banks and monetary authorities own large quantities of gold bars. Most of them do not. Instead, this gold is owned by the sovereign states that have entrusted it to the respective nation’s central bank, and the central banks are merely acting as guardians of the gold. Tracing the ownership question a step further, what are sovereign states? A sovereign state is an entity with legal personality that is represented by one government. And with each government representing the people of that sovereign state, in essence, the large gold hordes managed by the central banks are in fact pools of gold owned by the state for the benefit of its citizens.
Owned by the State
When ownership of gold reserves resides with the associated sovereign state, the central bank or monetary authority is officially appointed to act on behalf of the state in holding and managing that state’s gold reserves.
For example, the Deutsche Bundesbank has stated that:
‘The Deutsche Bundesbank holds and manages the national foreign reserves of the Federal Republic of Germany’
Likewise, as per its Statutes, the Banque de France highlights that it:
‘shall hold and manage the State’s gold and currency reserves and shall enter them on the asset side of its balance sheet pursuant to the terms and conditions of an agreement it enters into with the State.’

This post was published at Bullion Star on 9 Jan 2017.

Russian Consul In Athens Found Dead

According to reports in the Greek press, on Monday the head of the Russian Consular service in Athens was found dead in his apartment in downtown Athens. However, unlike the recent assassination of the Russian ambassador in Ankara, according to preliminary reports the death is not the result of a criminal act.
The 55-year-old Andrei Melanin was found dead on Monday afternoon in his apartment on Herod Atticus Road. Local authorities and a coroner were quickly dispatched to the site.

This post was published at Zero Hedge on Jan 9, 2017.

Consumer Credit Soars, Driven By Near Record Credit Card-Fueled Spending

After several months of tepid growth in the revolving consumer credit, i.e., credit card, space, the latest monthly report from the Fed revealed that Americans went on a credit card-funded shopping spree in November, when total revolving credit exploded higher by a massive $11 billion, the highest November increase on record, and the second highest of the post crash period.
The credit card spending spike may explain why November, i.e., early holiday sales, were strong only to tumble in the second half of the holiday spending season as various retailers have already complained.
The spike in revolving credit was more than matched by non-revolving credit, which as usual bounced by a solid $13.5 billion, bringing the total monthly increase in consumer credit to $24.5 billion, far above the revised October print of $16.2 billion and also well above the consensus estimate of $18.4 billion.

This post was published at Zero Hedge on Jan 9, 2017.

JAN 9/GOLD AND SILVER RISE/ DESPITE THE RISE IN GOLD: 8.87 TONNES OF GOLD WITHDRAWN FROM GLD/ NO SILVER LEAVES SLV/CHINA CRACKDOWN ON BITCOIN/CHINESE FOREIGN EXCHANGES RESERVES FALL BELOW $3.0 TR…

Gold at (1:30 am est) $1183.50 UP $11.60
silver at $16.63: UP 17 cents
Access market prices:
Gold: $1181.20
Silver: $16.58
THE DAILY GOLD FIX REPORT FROM SHANGHAI AND LONDON
The Shanghai fix is at 10:15 pm est last night and 2:15 am est early this morning
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:
MONDAY gold fix Shanghai
Shanghai morning fix Jan 9/17 (10:15 pm est last night): $ 1193.79
NY ACCESS PRICE: $1174.95 (AT THE EXACT SAME TIME)/premium $18.75
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
Shanghai afternoon fix: 2: 15 am est (second fix/early morning):$ 1192.97
NY ACCESS PRICE: $1174.25 (AT THE EXACT SAME TIME/2:15 am)
HUGE SPREAD 2ND FIX TODAY!!: $18.72
China rejects NY pricing of gold as a fraud/arbitrage will now commence fully
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
London Fix: Jan 9/2017: 5:30 am est: $.1176.100 (NY: same time: $1176.10 5:30AM)
London Second fix Jan 9.2017: 10 am est: $1178.50 (NY same time: $1178.50 (10 AM)

This post was published at Harvey Organ Blog on January 9, 2017.

Georgetown Professor Calls For Whites To Have An I.R.A. – “Individual Reparations Account”

Georgetown Professor Michael Eric Dyson is proposing the idea that white people should have an ‘Individual Reparations Account’ to make donations to black institutions and individuals.
The idea is part of his forthcoming book, ‘Tears We Cannot Stop: A Sermon to White America.’
Dyson made the argument during an interview with Ana Marie Cox in the January 8 edition of the New York Times Magazine.
From the interview:
At the end of your sermon, you do a ‘benediction’ section, in which you talk about making reparations on the local and individual level: donating to groups like the United Negro College Fund or a scholarship program, but also, to cite your example from the book, paying ‘the black person who cuts your grass double what you might ordinarily pay.’ That gave me pause!
Good! I used to say in church, ‘If the sermon ain’t making you a little bit uncomfortable, it ain’t effective.’ Look, if it doesn’t cost you anything, you’re not really engaging in change; you’re engaging in convenience. You’re engaged in the overflow. I’m asking you to do stuff you wouldn’t ordinarily do. I’m asking you to think more seriously and strategically about why you possess what you possess.

This post was published at Zero Hedge on Jan 9, 2017.

Three Possible Scenarios for China

In an article in Wednesday’s Financial Times, Gabriel Wildau, Yuan Yang, and Tom Mitchell set out a range of economic outcomes for China. They propose three scenarios that they think – and I agree – are the most plausible ones. Their approach is useful, in my opinion, because by setting out the various possible paths China can follow we can compare them and logically work out the conditions that are required for each. This allows us to identify the conditions we should be looking for to help us decide the direction we think the economy is following.
The article starts with an important warning about the relationship between debt and growth that is still too poorly understood. The authors note that at the beginning of 2016, concerns about the Chinese economy had risen so dramatically that there was a growing chorus calling for financial and economic collapse. I have long argued that the Chinese economy is in far worse shape than most of us realize, and its debt burden far heavier, but I’ve always thought that a financial crisis was pretty unlikely (although I think the probability of crisis might rise sharply over the next two to three years). Most analysts seem to find it hard to reconcile these two views, but excessive debt does not have to lead to a financial crisis. In fact, it usually doesn’t. A financial crisis is simply one of the two ways – usually more efficient of the two – in which excess debt is resolved, the other being a long, drawn-out grinding away of debt, with growth slowly dropping to very low levels.
The collapse many expected in 2016 never came, but as the article points out that didn’t mean all was good:
Few think that China’s fundamental economic challenges have been addressed. The relatively strong growth performance came at the cost of adding further leverage to the economy and falling back on smokestack industries to drive growth. Many economists believe that by pursuing overly ambitious short-term growth targets while delaying necessary but painful reforms, policymakers are only storing up trouble.

This post was published at FinancialSense on 01/09/2017.

Pope Francis Now International Monetary Guru?

As the new year dawns, it seems the current occupant of St. Peter’s Chair will take on a new function which is outside the purview of the office that the Divine Founder of his institution had clearly mandated. Besides being a self proclaimed expert on global warming and a vociferous advocate of societal-wrecking mass immigration, it looks as if ‘Pope’ Francis has entered the realm of global economics specifically, international monetary policy.
In an 18-page document issued through the Vatican’s Office of Justice and Peace, Bergoglio has called for, among other repressive and wealth-destructive measures, the establishment of a ‘supranational [monetary] authority’ to oversee international monetary affairs:

This post was published at Zero Hedge on Jan 9, 2017.

Fiat CEO Warns May Shut All Mexico Production If Trump Tariff Too High

Agree with his proposed policies or not, it’s difficult to argue that Trump is delivering on his promises to the autoworkers of the Midwest who single-handedly voted him into the White House. Before even taking office, the mere threat of import tariffs has caused Ford to cancel the construction of a $1.6 billion new facility in Mexico, and has automotive CEO’s from Toyota to Chrysler walking on eggshells as they carefully try to flaunt all of the capital investments they’re making in U. S.-based facilities.
While likely secretly hoping for the status quo, Fiat Chrysler’s U. S. CEO, Sergio Marchionne, admitted earlier today that if Trump’s import tariffs are “sufficiently large” he would be forced to shutter all of his manufacturing capacity in Mexico as it would be rendered “uneconomical.” Per the FT:
Fiat Chrysler may close its Mexican car plants if Donald Trump imposes sufficiently stringent tariffs on vehicles coming into the US, chief executive Sergio Marchionne said on Monday.
‘It’s possible that if economic tariffs are imposed…and are sufficiently large, it will make production of anything in mexico uneconomical and we would have to withdraw,’ he said in Detroit on Monday. ‘It’s quite possible.’

This post was published at Zero Hedge on Jan 9, 2017.

How Did We Get 2016 So Wrong?

Go through the late 2015/early 2016 articles published on this and similar sites and you’ll find a consensus that 2016 was going to be a really bad year. Corporate profits were falling, business inventories had spiked, and deflation was deepening in Japan and Europe. See More Ominous Charts For 2016 for a longer list of indicators that seemed, a year ago, to portend imminent recession if not full-blown financial crisis.
As David Stockman put it in a late-2015 prediction piece,
The Keynesian Recovery Meme Is About To Get Mugged, Part 1
Just consider the most recent data on wholesale sales and inventory. This sector of the domestic economy embodies the leading edge of business activity, meaning that trends in wholesale level sales and inventory stocking are advance indicators of the general macroeconomic outlook.
Needless to say, the soaring inventory-sales ratio is not a sign that ‘escape velocity’ is just around the corner. Contrariwise, whenever the ratio has busted through 1.30X in the past, what came next was a recession.

This post was published at DollarCollapse on JANUARY 9, 2017.

The FED’s Own Indicator Is Signalling A Recession – Episode 1173a

The following video was published by X22Report on Jan 9, 2017
Italy’s unemployment rises once again as youth unemployment surges. Obama created 9 million part time jobs as 14 million people aren’t counted. Consumer credit spending soared this holiday season because most don’t have the funds to spend. The debt surge has created this fake recovery, it looks great in the beginning but later on everything collapses. GM does assemble cars in Mexico and sell them here in the US, it turns out Trump was telling the truth and GM lied. Fed labor market condition indicates we are now in a recession

4 Ways Gold Accounts Beat Cryptocurrencies

In his latest podcast, Peter Schiff illustrates the important differences between cryptocurrencies like Bitcoin and a gold transaction account like Goldmoney when it comes to convenience and preserving wealth. Essentially, it comes down to the technological risks and the price volatility of the underlying currencies. Here’s a breakdown of Peter’s major points:
Convenience
One advantage cryptocurrencies have over physical precious metals is the ease of transaction, but it comes at a cost. Bitcoin is a completely digital currency, so you can spend or transfer it just like cash. However, with a Goldmoney account, gold owners can now enjoy the same convenience, whether they’re depositing, sending or receiving transfers through an app or paying with a Goldmoney MasterCard.
‘It’s not about Goldmoney being the substituted for Bitcoin,’ Peter explains. ‘It’s gold itself. Gold is what you want to own, not Bitcoin. Goldmoney makes gold as convenient to use as Bitcoin. In fact, I think more convenient to use when it comes to commerce because you can deposit some of your gold in your Goldmoney account and now it takes all of those liquid characteristics that so many people like about Bitcoin.’

This post was published at Schiffgold on JANUARY 9, 2017.

Why Morgan Stanley Threw Up All Over Those “Great” Rising Earnings

Following last Friday’s disappointing payrolls report, the punditry was understandably focused on the silver lining: the 0.4% monthly jump in average hourly earnings, which translated into a 2.9% annual increase in hourly earnings – the hottest since the financial crisis. The strong increase in earnings was quickly interpreted by the sellside as the latest indication rising inflation has arrived, and that more rate hikes are imminent.
Alas, that was only part of the story.
As we showed shortly thereafter, the reality is that the wage growth had mostly benefited supervisory and management level workers – who comprise only 18% of the labor force – and whose average hourly earnings soared by a record 4.7% Y/Y. Meanwhile, the earnings of the vast majority of US employees, those production and non-supervisory workers who make up 82% of the workforce, remained stuck in the doldrums, rising by a far less exciting 2.5%, or the same growth rate observed for the better part of the past 3 years.

This post was published at Zero Hedge on Jan 9, 2017.

Gold and Silver Market Morning: Jan 9 2017 – Shanghai dominating London and New York prices!

Gold Today – New York closed at $1,173.40 on the 6th January after closing at $1,181.20 on the 5th January. London opened againat $1,178.20 today.
Overall the dollar is stronger against global currencies today. Before London’s opening:
– The $: was stronger at $1.0532 1 from $1.0596: 1 Friday.
– The Dollar index was stronger at 102.36 from 101.61 Friday.
– The Yen was weaker at 117.40: $1 from Friday’s 116.08 against the dollar.
– The Yuan was weaker at 6.9329: $1, from 6.9211: $1, Friday.
– The Pound Sterling was weaker at $1.2185: 1 from Friday’s $1.2386: 1.
Yuan Gold Fix
As you can above Friday’s prices were $11.25 higher than the close of New York and only $5 higher than London. The People’s Bank of China’s efforts to hold the Yuan up appear to be failing as it fall.
LBMA price setting: The LBMA gold price setting was at $1,176.10this morning against yesterday’s $1,178.00.

This post was published at GoldSeek on 9 January 2017.

Toyota To Invest $10 Billion In America As Jack Ma Meets Trump To Discuss Creation Of 1 Million US Jobs

While there are many questions about the sincerity, not to mention underlying viability of his company (which many skeptical investors have accused of being an accounting shell whose operations raise many questions), moments ago Alibaba’s Jack Ma appeared at the Trump Tower for a meeting with Donald Trump, where according to CNBC, he will discuss plans to create 1 million new U. S. jobs over the next five years. The Monday meeting will focus on the Chinese e-commerce company’s U. S. expansion plans, according to spokespeople for both Alibaba and Trump.
It is unclear why Beijig would be ok with Ma creating 1 million jobs in the US and not China, but let’s ignore that for now.
While the meeting comes amid tensions between China and the Trump administration as a result of the proposed steep tariffs on trade with China, Trump has shown more tolerance at the micro level in his discussions with prominent Asian businessmen and investors, like SoftBank’s Masayoshi Son, who recently assured Trump he would create 50,000 jobs in the US.

This post was published at Zero Hedge on Jan 9, 2017.

Here’s How Goldman Sachs Became the Overlord of the Trump Administration

During his political campaign, Donald Trump repeatedly railed against Wall Street with a specific focus on Goldman Sachs. In the final days of his campaign, Trump released an advertisement (see video below) that featured his opponent, Hillary Clinton, shaking hands with Goldman Sachs CEO Lloyd Blankfein. As the image flickers on the screen, Trump does a voice over, stating: ”It’s a global power structure that is responsible for the economic decisions that have robbed our working class, stripped our country of its wealth, and put that money into the pockets of a handful of large corporations and political entities.’ As the ad ends, Trump bares his soul: ‘I’m doing this for the people and for the movement and we will take back this country for you and we will make America great again.’
How did a candidate who repeatedly demonized Goldman Sachs as the poster child for a corrupt establishment that owned Washington end up with Goldman Sachs’ progeny filling every post that even tangentially has the odor of money or global finance? One answer is family ties; another may be something darker.
Trump’s non-stop nominations and appointments of Goldman Sachs alumni have left his supporters stunned. Trump nominated Steven Mnuchin, a 17-year veteran of Goldman Sachs to be his Treasury Secretary. Stephen Bannon, another former Goldman Sachs banker, was named by Trump as his Chief Strategist in the White House. The sitting President of Goldman Sachs, Gary Cohn, has been named by Trump as Director of the National Economic Council, which, according to its website, coordinates ‘policy-making for domestic and international economic issues.’ Last week, in a move that stunned even Wall Street, Trump nominated a Goldman Sachs outside lawyer, Jay Clayton of Sullivan & Cromwell, to serve as Wall Street’s top cop as Chairman of the Securities and Exchange Commission. Adding to the slap in the face to Trump’s working class supporters, Clayton’s wife currently works as a Vice President at Goldman Sachs.

This post was published at Wall Street On Parade on January 9, 2017.

Charts for Stocks and Metals – Three Kingse

Interesting divergence in stocks today as the tech sector led the way to new highs there, but the SP 500 was lower on the day, and the Dow Industrials, industrial in name only these days, once again not only failed to close above that 20,000 level, but actually gave up some additional ground.
This is bubble action. Whether it is late stage or not remains to be seen, but I keep thinking that the Wall Street wiseguys are just executing the same gameplan they would have followed regardless of who won the election, with perhaps some variation on the sectors they pushed.
So, in other words, can we expect them to ‘buy the election, and sell the inauguration?’
That would be an appropriately cynical outcome for very cynical times.
Gold and silver managed to inch higher after the December drubbing they took into deeply oversold territory.
I suspect that was an ‘end of year’ thing.
The Comex warehouses and deliveries were the usual snooze. The real metals action is taking place in points East.
Yesterday marked the end of the Christmas season with the feast of the Magi, or the Three Kings.

This post was published at Jesses Crossroads Cafe on 09 JANUARY 2017.

Here’s a unique sign of inflation

I remember the first time I ever saw a $100 bill.
It was back in the early 80s, I must have only been 5 or 6 years old.
My parents took my sister and I to a fancy restaurant, and I distinctly remember a man dressed in a dark business suit a few tables over paying his bill with a crisp $100 note.
He pulled it out of his wallet, slid it onto the table, and walked away.
I was dumbfounded. It was more money than I had ever seen in my young life.
None of my friends had ever seen a $100 bill, and I was the big news at school the next day, regaling the whole class with stories of my proximity to such vast wealth.
Of course, back then, a $100 bill truly was a rare sighting because prices were so much lower.
A can of Campbell’s soup was 25 cents. Today it costs 4x as much.
A movie ticket ran about $3.50, according to the National Association of Theater Owners. Today it’s almost to $9.
Gasoline was 86 cents per gallon. Now it’s $2.20, and that’s after a major price collapse.
$100 could practically pay the rent in a lot of places back in the 80s.
That’s obviously no longer the case. Even a mundane trip to the grocery store can easily blow through $100 without feeling unusual.

This post was published at Sovereign Man on January 9, 2017.