Bundesbank’s Weidmann rejects German stimulus call

Jon

Bundesbank President Jens Weidmann Friday rejected calls for a German stimulus plan, saying only structural reforms and more competitiveness would kick-start eurozone economies.
"Calls for a public fiscal stimulus plan in Germany to boost the eurozone economy are amiss," said Mr. Weidmann in a speech for an economic summit hosted by the German newspaper Süddeutsche Zeitung.
"Investment rates that are above the growth potential of a developed economy aren't likely to boost prosperity–this applies to both public and private investments."
Mr. Weidmann stressed that it is also wrong to believe central bank monetary policy would be able to solve the bloc's economic problems.

This post was published at Market Watch

Doug Noland: The King of Dollar Pegs

Jon

On the back of OPEC’s failure to cut production, crude this week sank $10.36, or 13.5%, to the lowest price since May 2010. The Goldman Sachs’ Commodities Index (GSCI) dropped 8.2%, to the lowest since September 2010. It’s worth noting that copper dropped 6% this week to the lowest level since July 2010.
On the currency front, this week saw Russia’s ruble slammed for 7.3% to a record low. Brazil’s real dropped 1.9%, the Colombian peso 3.2%, and the Chilean peso 2.3%. The Mexican peso fell 1.9% to the lowest level since the tumultuous summer of 2012. The South African rand declined 1.1%. And despite losing a little ground to the euro this week, the U.S. dollar index traded to the highest level since June 2010.
At the troubled “Periphery of the Periphery,” Russian 10-year yields jumped 43 bps to 10.53%. Ukraine 10-year yields surged 297 bps to a record 19.49% (Bloomberg: “worst week on record”). Venezuela CDS jumped 188 bps to 2,292. Greek 10-year yields surged 42 bps to 8.35%—and the melt-up in global “developed” bond markets is nothing short of incredible.

This post was published at Prudent Bear

Ruble Freefall: And the Ugliest Currencies Are?

Jon

The 35% plunge of the price of oil since June and the sanction spiral imposed on Russia are wreaking havoc on the ruble. Oil and gas revenues are crucial to the finances of the Russian government and to the oil-and-gas dominated economy. So the ruble continues its free-fall that started in June. It hit a new low of 50.21 rubles to the dollar. Down 33.55% year to date, and down 32% since June.
After the collapse of the Soviet Union, the ruble got wiped out completely. When I went to Russia for the first time in 1996, it traded for 5,000 rubles to the dollar and was falling so fast that all prices were denoted in dollars and payable in rubles at the exchange rate of the day, which every Russian knew. By 1998, during the ‘ruble crisis,’ Russia defaulted on its debt and devalued to ruble to where it lost practically all its value from just a few years earlier. A process no Russian will ever forget.
The distrust in the ruble as a store of value has been so ingrained that chitters in the world incite Russians to dump their rubles for dollars and euros. Their distrust goes far beyond the distrust many Americans have in the dollar!
This chart shows the ruble’s dual collapse against the dollar since 2003:

This post was published at Wolf Street by Wolf Richter ‘ November 29, 2014.

Do We Own Our Stuff, or Does Our Stuff Own Us?

Jon

Being freed from being owned is a form of liberation with many manifestations.
The frenzied acquisition of more stuff is supposed to be an unalloyed good: good for “growth,” good for the consumer who presumably benefits from more stuff and good for governments collecting taxes on the purchase of all the stuff.
But the frenzy to acquire more stuff raises a question: do we own our stuff, or does our stuff own us? I think the answer is clear: our stuff owns us, not the other way around.
Everything we own demands its pound of flesh in one way or another: space must be found for it amid the clutter of stuff we already own, it must be programmed, recharged, maintained, dusted, moved, etc.
The only way to lighten the burden of ownership is to get rid of stuff rather than buy more stuff. The only way to stop being owned is to is get rid of the stuff that owns us.
I propose a new holiday event, Gold Sunday: this is the day everyone hauls all the stuff they “own” that is a burden to a central location and dumps it in a free-for-all. Whatever is left after the freeters have picked through the pile is carted to the recycling yard and whatever’s left after that culling is taken to the dump.
Frankly, I wouldn’t accept a new big-screen TV, vehicle, tablet computer, etc. etc. etc. at any price because I am tired of stuff owning me. I don’t want any more entertainment or computational devices, musical instruments, vehicles, clothing, kitchen appliances, or anything else for that matter, except what can be consumed with some modest enjoyment and no ill effects.
We live in a small flat and I have no room for more stuff, and I have no time for more devices or entertainment. I have too much of everything but money and time.
I don’t want to pay more auto insurance, maintenance costs, etc., nor do I want more devices to fiddle with. I am enslaved to the few I already own.

This post was published at Charles Hugh Smith on SATURDAY, NOVEMBER 29, 2014.

Switzerland Leads In Gold Sales Among Central Banks Since 1993

Jon

Although they are still among the top ten in total gold holdings, Switzerland has been one of the largest sellers of gold among official entities since 1993.
It is no surprise then that the people of Switzerland have taken to a referendum to provide their opinions on this to the Swiss National Bank.
With regard to the second chart, personally I do not believe that the World Gold Council estimates are correct for China at all, and probably Russia.

This post was published at Jesses Crossroads Cafe on 29 NOVEMBER 2014.

Presenting The 70 Year Old Hydraulic Computer Used By Central Planners To “Visualize Economy”

Jon

Meet MONIAC – Monetary National Income Analogue Computer – the 7-foot-tall, 70-year-old ‘Rube Goldberg’ hydraulic contraption that was the machine that analyzed data, simulated the economy, andmade predictions about the future for the central planners of yore…

As Wired.com reports,
There was a time when computers ran on water. No, really. They did. Check out the video above, a recent demonstration of a machine called the MONIAC, originally built in 1949. The MONIAC – short for Monetary National Income Analogue Computer – was a machine that analyzed economic data using, yes, hydraulics. Basically, it pumped water through pipes and tanks in an effort to simulate an economy and make predictions about its future.


This post was published at Zero Hedge on 11/29/2014.

Dow Jones Observartions

Jon

Oct 15th – Nov6h
17 trading sessions 1705 point gain on Dow 4 down trading sessions with all closing off the lows and near the highs but on one day Nov 7th – Nov 28th
15 trading sessions 274 point gain 4 down sessions with all but one closing at/near the highs While it’s impossible to know if the markets are going to ever correct again (slight sarcasm), one can’t deny that the strength of the recent move is deteriorating. Staunch bulls could argue that we’re simply digesting the gains, and that is something one should consider here, but it’s really hard to believe that some sort of correction is coming based on the strength of the move and the refusal for any sort of selling to stick.

This post was published at ZenTrader on November 29, 2014.

Italy’s Unemployment Rate Unexpectedly Hits Record High 13.2%

Jon

The string of unexpectedly bad news in the eurozone continues unabated as Italian Unemployment Rate Rises to Record, Above Forecasts.
The unemployment rate rose to 13.2 percent from a revised 12.9 percent the previous month, the Rome-based national statistics office Istat said in a preliminary report today. That’s the highest since the quarterly series began in 1977. The median estimate of seven economists surveyed by Bloomberg called for an unemployment rate of 12.6 percent in October.
The youth unemployment rate for those aged 15 to 24 rose to 43.3 percent last month from 42.7 percent in September, today’s report showed.

This post was published at Global Economic Analysis on November 29, 2014.

Weekend Reading & Soul Searching

Jon

Below are four posts for your reading pleasure. Enjoy. –Jerome
————————————————————————————————————————-
MOPE
Submitted by JY896 on June 21, 2012 – 11:45pm.
Don’t buy. Sell. Get out of PMs. We are all fools for listening to charlatans who are misguided/deluded at best, and probably trying to rip us off. The fiat system will survive, as it always has throughout history. Paper money in hand is a great rainy-day option, but we really all should be rushing to the ironclad safety of bank deposit and that old ultimate safe investment – Treasury bonds. There is no manipulation of the metals, let alone the global financial markets. Even if there were such a thing, those behind it are surely too powerful to stand against — hang your head, stay on your knees and pray for mercy. The global economy will work its way through this rough patch, like it always has. There are no constraints of resources, capital, capable workforce or anything else standing in the way — prosperity will soon be here again. We simply have not given central banks and our outstanding civil servants in government leadership — not to mention the stalwart pillars of finance and industry — enough time. We’ve been faithless, nay, downright antagonistic toward our benefactors and rightful guardians.
Why didn’t you say so before? When it might have helped? Where, oh where were you here:

This post was published at TF Metals Report on November 29, 2014.

That Hot US-EU Trade Deal? Destroys 600,000 EU Jobs – Study

Jon

Cutting wages – bad as that is – does not necessarily translate into the creation of new jobs, debt-crisis countries in the EU periphery have shown. But then, who would win in the TTIP?
By Don Quijones, freelance writer, translator in Barcelona, Spain, and editor at WOLF STREET. Mexico is his country-in-law. Raging Bull-Shit is his modest attempt to scrub away the lathers of soft soap peddled by political and business leaders and their loyal mainstream media.
In a 1994 interview with Charlie Rose, the British billionaire financier James Goldsmith delivered a stark, eerily prescient warning of the state the world would be in today if it succumbed to the freer borders and more centralized, corporate-owned governance envisaged by trade regimes such as NAFTA and GATT (the predecessor to the World Trade Organization).
Goldsmith was spot on about just about everything, from the threats posed by derivatives – then in their infancy – to the risks of industrializing agriculture throughout the developing world [You can watch the full interview here]. Yet his warnings went unheeded, as laments the U. S. economist and former Assistant Treasury Secretary Paul Craig Roberts:
Sir James called it correct, as did Roger Milliken. They predicted that the working and middle classes in the US and Europe would be ruined by the greed of Wall Street and corporations, who would boost corporate earnings by replacing their domestic work forces with foreign labor, which could be paid a fraction of labor’s productivity as a result of the foreign country’s low living standard and large excess supply of labor.

This post was published at Wolf Street on November 29, 2014.

Federal Reserve Confirms Biggest Foreign Gold Withdrawal In Over Ten Years

Jon

A week ago, when we reported that in a stunning move, the “Dutch Central Bank Secretly Withdrew 122 Tons Of Gold From The New York Fed“, and when looking at the NY Fed’s monthly reports of gold deposits by foreign entities, we observed that “we can see that while the 5 tons outflow in 2013 was most likely Germany, the recent surge in gold repatriation from Liberty 33 was the Netherlands. That said, only 77.5 tons of NY deposits gold has been officially repatriated through September, which means the October update, when it comes out, will be a doozy.” Yesterday, the long anticipated October update of “earmarked gold” held on deposit at the NY Fed was released, and sure enough it did not disappoint. Declining in dollar value from $8.305 billion to $8.248 billion, this was the equivalent of 42 tonnes of gold being withdrawn, in the process reducing net gold located in the vault of JPMorgan the NY Fed to 6,076 tonnes. The 42 tonnes withdrawal was also the biggest single monthly redemption from the NY Fed since 2001.

This post was published at Zero Hedge on 11/29/2014.

Ted Butler Quote of the Day 11-29-14

Jon

It does remain to be seen if JPMorgan and/or the other eight largest COMEX shorts will add new short positions aggressively on the next silver price rally, but if that occurs at least we should be able to see it in future reports. Highlighting the importance of JPMorgan’s involvement in any future silver short selling, without JPM joining in, I doubt the big eight would succeed in capping prices as they have on every past occasion. And considering the swirl of negative news surrounding big banks influencing commodity prices, it’s hard for me to imagine JPMorgan not beating it out of Dodge City and quitting their manipulative control of silver to the downside. If JPMorgan (or the big eight) do cap silver prices ahead, I promise not to be anywhere near as polite as I’ve been to these crooks until now.

Aside from the radical transformation of JPMorgan from being the world’s largest silver short to possibly the largest long in history, the recent double cross of the raptors (the smaller commercials who were net long) is remarkable in its own right. The forced sale of more than 12,000 net contracts by around 8 to 10 raptors over the past few weeks has probably knocked those traders out of silver permanently considering the estimated size of their losses (over $200 million). There is no doubt these 12,000 contracts would have been sold on the next silver rally and now that is impossible. Mathematically, this greatly increases the burden on the 8 big shorts if they intend to cap the next silver rally. These 8 big shorts, with or without the collusive cooperation of JPMorgan, will have to sell many more contracts short than they would have had the raptors not been double crossed.

I admit that my reasoning could turn out to be wrong, but I believe the increased short selling burden of the Big 8 will persuade them not to even try, or alternatively, if they do try, they may fail in their manipulative intent.

A small excerpt from Ted Butler’s subscription letter on 11-26-14.

  More precious metals news & information available at
Ed Steer’s Gold & Silver Daily.

Gold And Silver – For Elites, All The World’s A Stage, Including China And Russia

Jon

While the Shakespearean reference, from As You Like It, compares the world to the seven ages of man, it can also be applied to the way in which the Rothschild formula for gaining control of a nation’s money supply ultimately leads to that nation’s total subjugation to the elites. It is the elite rent seeking who control the world, and that will not change in the lifetime of anyone reading this, perhaps even for several successive generations to follow.
‘Rent seeking’ is defined as those who spend wealth on influencing a nation’s government in order to increase one’s wealth without creating new wealth. Think of it more as a transfer of resources from any faction in favor of gaining control of those resources to those who have the power to influence. It is an inherently unfair redistribution mostly accomplished by manipulating disadvantageous competition, abetted by those who are in a position to bring about such change. Rent seeking through lobbying efforts is an easy example. The fascist corporate model in the US today, like Monsanto and its mandated use of GMOs is another, almost always at the expense of everyone else.
Think of the Rothschild system of moneychangers gaining control over a nation’s money supply and its government as the highest rent seeking template. China and Russia are about ready to enter that web. Last week, we posited that both countries are likely to be the next world leaders over which the Rothschild system will eventually prevail, [ see Is The Golden Rule Broken? starting around the 11th paragraph.] What prompted that tangent thought was when Putin stated a few months back that he thought it important that the IMF be respected.
Just a few weeks ago, Putin met with Christine Legarde, managing director of the IMF, while the two were in Bejing. Shortly after, while in Brisbane for the G20 Summit, Chinese president Xi Backs Higher IMF Standards. While surprising that the two seemingly anti-NWO stalwarts would be cozying up to the ‘enemy’ is actually not so surprising.

This post was published at Edge Trader Plus on November 29, 2014.

Quick take on oil’s collapse, gold’s drop and worries about an oil-driven credit collapse

Jon

We all know that the major central banks around the world are on the same page when it comes to inflation: They want it higher. One member of the European Central Bank’s executive board, Yves Mensch, went so far as to suggest that Europe’s central bank might buy gold in an effort to ratchet up the inflation rate.
Today OPEC decided to take no action to stem the glut of oil depressing the price in global markets. The oil price is the chief driver of price inflation, thus with OPEC showing little interest in propping up the price, deflation starts to dominate market thinking. Thus the drop in various currencies – a miserable day for the British pound (the BoE is trying desperately to create inflation in the UK) – and the drop in gold.
CNBC ran a headline asking Could the oil collapse cause the next credit crisis? ‘It’s not just the Saudis who could get much poorer from the oil price free fall,’ says CNBC. ‘Everyone could suffer if the collapse triggers a wave of defaults through the high-yield debt market, and in turn, hits stocks. The first to fall: the banks that were last hit by the housing crisis. Why could that happen? Well, energy companies make up anywhere from 15 to 20 percent of all U. S. junk debt, according to various sources.’

This post was published at GoldSeek on 28 November 2014.

What happens when 100 million Americans are not in the labor force? More pressure is being added on the one-third of working Americans supporting two-thirds of the population.

Jon

It is hard to believe but we have over 92 million Americans not in the labor force. I’ve paid close attention as to how the media presents this group and they usually attribute it to older Americans retiring. The problem with this narrative is that it gives the impression that many have the means to retire and also, that many of these are older people. That is not true. Many older Americans are dropping out and fully relying on Social Security so they do not fall into a life of financial destitute. Many others including younger workers are oscillating in and out of the low wage economy. This entire shadow group which is getting close to one-third of our nation is largely discounted in the media. The unemployment rate looks fantastic because every month, we have more Americans simply being erased off the financial ledger. At this current rate, we will have 100 million Americans not in the labor force by 2020.
The race to 100 million
Whenever I tell people that one-third of working Americans are supporting two-thirds of the country they find the figure hard to believe and full of hyperbole. Unfortunately this is the reality of the current situation. We can break down the figures and get a better perspective. Math is math after all.
Here is the population broken down:

This post was published at MyBudget360 on NOV 28 2014.

The Environment: Depleting Resources – Crash Course Chapter 23

Jon

When we wander over to the third E in this story – the Environment – we note two things: both the increasing demand of exponentially more resources being extracted from the ground and exponentially more waste being put back into various ecosystems.
Because we are trying to assess here whether we can justify ever-increasing amounts of money and debt, for now let’s just concern ourselves with the resources we take from the natural world to support our global economy.
Oil is not the only essential resource that is fast becoming more expensive to produce, harder to find, or both. In fact, we see an alarming number of examples depletion of critical resources that almost exactly mirror the oil story.
First we went after the easy and or high quality stuff, then the progressively trickier, deeper and or more dilute stuff.
The bottom line is this: we, as a species, all over the globe, have already mined the richest ores, found the easiest energy sources, and farmed the richest soils that our Environment has to offer.

This post was published at PeakProsperity on November 28, 2014.

Black Friday: A Pavlovian Mental Disorder – Now Medicated by ‘Cyber Monday’

Jon

Yes, it’s ‘that time of year’ and that means we get another annual dose of America’s twin obsessions – those who partake in Black Friday madness, and those who enjoy watching it.
I used to think it was all just part of the human herd mentality – just another twisted expression of crowd dynamics, but there is a lot more to it than that.
For better or for worse, Black Friday is officially part of Americana, but it’s roots go much deeper than many will care to admit, and it’s still a work in progress whose evolution began with the Founding Fathers and is now tossing and turning inside the giant digital half-pipe known asthe internet.

Symbolically speaking, Black Friday got off on a poor foot to begin with, plagued with negative undertones, and hence, it’s been long-destined for a place in the waste heap of American culture. The term ‘Black Friday’ was originally coined by both the Philadelphia and Chicago police departments to describe the mayhem that was unleashed by the first Friday afterThanksgiving Day, as waves of shoppers hit the pedestrian ways and roads, causing traffic accidents and occasional violence. It’s interesting how the cultural herd managed to make the term work though, given that previous ‘black days’ were reserved for catastrophic stock market crashes, on Black Thursday (1929) and Black Monday (1987).
During the 1980’s, mega shopping mall culture became the dominant consumer experience, and melted in with the Gordon Gekko inspired, ‘me, me’ culture, where society was told to abandon anything that was old, stop saving money, extend your reaching distance, get into debt, and euphorically embrace the here and now. Today’s ‘big box’ stores are really eighties mall culture on steroids – more intense, with everything from A-Z condensed under one umbrella.
It stands to reason – that when you squeeze that many people into concentrated areas, and then add in the incendiary element of artificial scarcity, you can expect a certain amount of violent incidents. This is taken to a whole other level when individual outbursts give way to crazed crowds rushing the entrance of a big box, overwhelming security guards and staff, like a riot scene…

This post was published at 21st Century Wire on NOVEMBER 29, 2014.