Somone Really Needs To Explain To Europe What “Austerity” Means

Jon

Remember Europe’s “austerity”, or rather as we dubbed it, fauxterity?
Of course, how could you forget: after all everything that is wrong with Europe is blamed not on government corruption and the complete lack of reform, enabled so gloriously by Goldman’s custodian of Europe’s money printer who would do “whatever it takes” to mask Europe’s sad reality that without reform the continent is doomed, but on the intolerable, insufferable imposition of hated, loathed austerity on Europe’s insolvent nations. After all, how on earth are they all supposed to get out of their debt-induced depressions if they have to, gasp, cut their debt!
So yeah, we get the propaganda. What we don’t get is whether everyone in Europe is completely incapable of reading simple numbers, is atrocious at math, or simply doesn’t understand the definition of austerity.
According to the just released government debt data for Q2 2014 where we find that, in a very peculiar definition of what austerity supposedly means in Europe, total debt to GDP for the Euro Area rose once again, from 91.9%, to a new all time high of 92.7%, or in absolute terms from 9.15 trillion in government debt to 9.26 trillion.

This post was published at Zero Hedge on 10/23/2014.

Late Payments by Ibex Companies Hits 47 Billion, 169 Days (3 Times Legal Time Limit); Ibex vs. DOW

Jon

Lack of significant improvement in payments by IBEX companies to suppliers is yet another another sign there isn’t much of a recovery in Spain.
La Vanguardia reports Late Payments by Ibex Companies Hits 47 Billion, 169 days (nearly 3 times the legal time limit). Ibex is the name of the Spanish stock market exchange.
Via translation from La Vanguardia. <
Delinquency of the Ibex 35 exceeds 47 billion euros and the average payment is 169 days late, almost three times the limits set by law, according to the latest report of the Platform Multisectoral against delinquency (PMcM), made from the data published by the National Securities Market Commission (CNMV).

This post was published at Global Economic Analysis on October 23, 2014.

About That Referendum in Switzerland…

Jon

On November 30, Switzerland’s citizens will cast a very critical vote.
Through a referendum, they will vote for or against the Swiss National Bank increasing its gold bullion reserves to 20%, the central bank halting the selling of gold, and the storing of gold bullion in the country. (Source: Kitco News, September 30, 2014.)
If the results are in favor of the referendum, it will mean Switzerland’s central bank will be forced to buy a significant amount of gold bullion.
According to the most recent data from the World Gold Council, Switzerland has 1,040 tonnes of gold bullion in its reserves, equal to only 7.8% of its total reserves. (Source: ‘World Official Gold Holdings,’ World Gold Council web site, last accessed October 16, 2014.) To bring its gold bullion holdings to 20% of total reserves, the central bank of Switzerland will have to buy 1,600 more tonnes of gold, or about 60% of all global mine output this year. Will the gold market be able to handle this kind of demand shock? I highly doubt it.
And if the central bank of Switzerland stops selling gold, a significant amount of gold will come off the market.

This post was published at Gold-Eagle on October 22, 2014.

US Manufacturing PMI Tumbles, Biggest Miss In 14 Months

Jon

But the world has been printing such great PMIs? And the US is the new engine of global growth? So how did US Manufacturing PMI just print 56.2, 3 month lows, and its biggest miss since August 2013? Following China and Europe’s lead, US is latest PMI print with collapsing New Orders (57.1, down from 59.8, lowest since January), Output, and New Export Orders. This is the biggest 2-month drop in US PMI since May 2013.

This post was published at Zero Hedge on 10/23/2014.

Big Four Economic Indicators Show Possible Rollover

Jon

Official recession calls are the responsibility of the NBER Business Cycle Dating Committee, which is understandably vague about the specific indicators on which they base their decisions. This committee statement is about as close as they get to identifying their method.
There is, however, a general belief that there are four big indicators that the committee weighs heavily in their cycle identification process. They are:
Industrial Production Real Personal Income (excluding Transfer Payments) Nonfarm Employment Real Retail Sales The Latest Indicator Data With this morning’s release of the September Consumer Price Index, we can now calculate Real Retail Sales. I reported the nominal Advance Retail Sales last week, which showed September at -0.3% (-0.32% at two decimals) month-over-month, down from 0.6% in August. That was much worse that the mainstream forecasts. When we adjust for inflation, September sales came in even worse at a -0.41%. The chart below illustrates the series since 2009 with a linear regression to help us analyze the trend.

This post was published at FinancialSense on 10/22/2014.

Prepare for Global Gold Confiscation and Orwell’s 1984, Warns Rickards

Jon

Microchips embedded in the arms of citizens to track their activities, the total destruction of the middle classes and a cashless economy where an authoritarian state can freeze the accounts of dissenting citizens excluding them from all economic activity….. These are all part of the cheery scenario painted by the highly respected author and IMF-insider with connections to the Pentagon, Jim Rickards in his most recent article for Agora Financial.
“In the year 2024″ as the article is called, capitalism and markets will have been abolished in favour of a marxist dystopia managed by the “New World Order.” The savings and assets of the middle classes will have been annihilated. This unfolds through a series of panics and shocks to the markets and hyper-inflation. As the hyperinflation takes hold there is a mass exodus out of paper currency and into gold. The G-20 arrange for the mass confiscation of gold, to be stored in an enormous vault in the Swiss Alps, in order to force the public back onto newly created digital currency. To ensure that the public cannot protect themselves from the profligacy of governments gold is taken out of circulation forever.

He references Naomi Klein’s Shock Doctrine: The Rise of Disaster Capitalism when explaining “how power elites such as central bankers, finance ministers and the ultra-rich work behind the scenes” to achieve this Orwellian vision.

This post was published at Gold Core on 23 October 2014.

Juncker’s ‘Solution’

Jon

Will They Ever Learn? Europe’s economies are once again on the verge of a downturn, which in the euro area may as well mean ‘another crisis’. The establishment has lost the confidence of the voting public some time ago. The leader of France’s statist brain trust, Francois Hollande, enjoys the lowest approval rating of a French president ever, at 13%. If an election were held tomorrow, Marine Le Pen of the Front National would probably win it.
In that sense, Jean-Claude ‘we lie when occasion demands it’ Juncker, the new EU commission president isnot entirely wrong when he states that:
‘Citizens are losing faith,’ he said in remarks to an assembly to which many new Euroskeptic members were elected in May. ‘Extremists on the left and right are nipping at our heels. ‘We are last-chance Europe. Let’s seize this chance.’
So what does the grandiose plan to rescue Europe consist of? Simple: let’s throw money at the problem:
‘Designated European Commission President Jean-Claude Juncker called on Tuesday for a 300 billion euro ($409 billion) public-private investment programme to revive the European economy, create jobs for the young and stimulate growth over the next three years.
The money should be mobilised from existing budget resources, the European Investment Bank and the private sector, without changing the bloc’s strict rules on budget deficits and debt reduction, he told the European Parliament during a debate on his confirmation to head the EU’s executive.

This post was published at Acting-Man on October 23, 2014.

Speak, Switzerland!

Jon

In the United States, if we hold a referendum, so voters may speak directly and decisively on a question, it always is at the state level, and, lately, most often addresses the legality of gay marriage, the decriminalization of marijuana, getting tough on illegal immigrants, or some other grave matter.
You never will guess what the Swiss, by giving more than 100,000 signatures in support of a Swiss People’s Party referendum, will be deciding in a nationwide vote on November 30. They will vote on whether or not the Swiss National Bank (the equivalent of the U. S. Federal Reserve) should be prohibited from selling its precious metals, including gold; should be required to hold at least 20 percent of its foreign reserves in gold; and should hold its gold within the country.
Can you imagine a more gnomish matter? It seems that just 10 years ago, the Swiss National Bank (SNB) had the highest per capita gold holdings in the world. And the Swiss liked it that way. But, taking advantage of a time when the world economy was calm and prosperity comfortable, Switzerland in a national referendum in 1999 authorized the bank to sell 50 percent of its gold reserves. Through 2008, the bank sold hundreds of tons of gold – always too cheaply, because the price of gold kept climbing.

This post was published at FinancialSense on 10/21/2014.

BRICS Rising

Jon

While we’re on the topic of Russia, my brothers, I thought it would be an excellent time to go through some of the newest, crucial headlines from that land, with an eagle eye. These headlines are striking affirmations, that further validate that what we’ve been saying here at the Truth HQ, is 100% on the money! There can be no doubt that an alliance, called the BRICS, is positioning itself to be the new anti-globalist, anti-Western central banking force in the world.
In fact, there are well-respected voices within the Kremlin, who’ve now called upon the leaders of the East to step up the game-plan of the BRICS, and turn it from a mere trade and economic union, to an overtly, D. C.-blocking, anti-dollar alliance.
Rest assured that with each passing day, every new brain-dead sanction that D. C. and Brussels hurl at Russia, is actually just another fresh log on the fire, incinerating their own power.
The West is descending into tyranny and poverty, while the East is making strides toward financial and economic liberality, and at ‘double time’. It’s self evident that these preparations are being enacted, in order to live as best they can, in a post-dollar world.
If roughly half the world’s population is making those preparations, then doesn’t that behoove each of our brothers here to do the very same? In fact, to all you preppers out there, each time you read the words ‘East’ and ‘preparation’, your spidey senses should be tingling. You should instantly tell yourself:
If Moscow is doing it…
If Beijing is doing it…

This post was published at The Wealth Watchman on OCTOBER 22, 2014.

Silver investment to remain strong

Jon

Investment demand for silver will likely remain strong in coming years due to lackluster economic growth, industrial usage and the need to preserve capital in developing nations, analysts with the CPM Group said.
‘Investors may accumulate as much as 1 billion additional ounces of silver in various investment instruments over the next decade,’ the CPM analysts said in a report commissioned for the Washington, DC-based Silver Institute.
‘This is on top of the more than 860 million oz of silver purchased as an investment since 2006,’ the report said.
CPM analysts expect net investment demand to slip this year to about 90 million oz after totaling nearly 105 million oz last year.
‘Investor net buying is projected to continue in the foreseeable future, but the volumes that investors will collectively want to buy and hold can only be guessed,’ CPM analysts said in the report.

This post was published at TruthinGold on October 23, 2014.

Initial Jobless Claims Rise Most In 3 Months, 4-Week Average Lowest Since 2000

Jon

Having reached multi-year lows last week, this week’s 17k rise to 283k (albeit noise), missing expectations for the first time in 6 weeks, is the biggest weekly rise in initial jobless claims since early August. Of course that’s irrelevant as all the time there is no hiring, there is no firing and the 4-week average (less noisy) dropped to its lowest since May 2000 – though we are sure Fed heads will not be reassured by this data as they focus attention on inflationary expectations (having ‘fixed’ employment). Continuing Claims dropped to cycle lows – the lowest since Dec 2000.
First miss in 6 weeks and biggest weekly rise in almost 3 months… but trend is in tact

This post was published at Zero Hedge on 10/23/2014.

Yes vote in an early lead in the Swiss referendum to boost gold to 20% of total currency reserves

Jon

The Swiss financial establishment must be in a state of shock after an early poll put 45 per cent in favor of raising gold to 20 per cent of national currency reserves and just 39 per cent against. After ArabianMoney broke this story we had several posts suggesting that it was most unlikely to be passed (click here).
Switzerland has run its gold reserves down since 2000 and presently holds a little over 1,000 tonnes of gold. To raise gold from the current 7.7 per cent of total currency reserves to 20 per cent would mean buying some 1,700 tonnes.
Gold price hike
Even if phased over several years this volume of official gold buying would send prices to the moon. It would also set a precedent for other central banks to follow. Switzerland would then have the third highest gold holdings in the world, and all that for a relatively small country.

This post was published at Arabian Money on 23 October 2014.

George Soros Slams Putin, Warns Of “Existential Threat” From Russia, Demands $20 Billion From IMF In “Russia War Effort”

Jon

If even George Soros is getting concerned and writing Op-Eds, then Putin must be truly winning.

Here are the highlights from what the Open Society founder has to say about the “existential” Russian threat in a just released Op-Ed:
Europe is facing a challenge from Russia to its very existence. Neither the European leaders nor their citizens are fully aware of this challenge or know how best to deal with it. I attribute this mainly to the fact that the European Union in general and the eurozone in particular lost their way after the financial crisis of 2008.
Getting warmer:
[Europe] fails to recognize that the Russian attack on Ukraine is indirectly an attack on the European Union and its principles of governance. It ought to be evident that it is inappropriate for a country, or association of countries, at war to pursue a policy of fiscal austerity as the European Union continues to do.

This post was published at Zero Hedge on 10/23/2014.

The High Price of Free Money: Now US Bankers Fear Financial, Social, or Political ‘Instability’

Jon

Something is changing about the perception of the Fed’s free-money policies. While we’ve lambasted them for their nefarious effects on the real economy and the inequality they produce, Wall Street, the prime beneficiary, has been bombastically gung-ho about them. And the mainstream media have praised the Fed’s ‘bold action,’ as it’s called, at every twist and turn.
But now even Wall Street is getting cold feet. The official warning shot came from Fed Chair Janet Yellen, who admitted suddenly that ‘the extent of and continuing increase in inequality in the United States greatly concern me.’
Then bankers chimed in. FICO, which produces the infamous credit score, found in its latest survey of North American bank risk managers that 62% of them thought ‘the wealth gap poses a growing risk to the financial system.’
With the economy so dependent on consumer spending, ‘it makes sense that the concentration of wealth would raise flags among bank risk managers,’ explained Andrew Jennings, FICO chief analytics officer. ‘This concern was echoed on a global scale by Credit Suisse in a recent report that found many indicators of wealth inequality are reaching levels that could result in social or political instability.’
This is a twist: Bankers, beneficiaries of the Fed’s policies that created much of the wealth gap, are fretting that that wealth gap poses a ‘risk to the financial system,’ that it might take the banks through a another death spiral. Turns out, in our consumer-based economy, most consumers no longer have the means to adequately support that economy; and the few who have benefited from the wealth redistribution scheme, are too few to adequately support the economy.

This post was published at Wolf Street by Wolf Richter ‘ October 23, 2014.

Hoisington Investment Management – Quarterly Review and Outlook, Third Quarter 2014

Jon

I featured the thinking of Dr. Lacy Hunt on the velocity of money and its relationship to developed-world overindebtedness and the potential for deflation in this week’s Thoughts from the Frontline, and I thought you’d like to peruse Lacy’s entire recent piece on the subject.
Lacy takes the US, Europe, and Japan one by one, examining the velocity of money (V) in each economy and bolstering the principle, first proposed by Irving Fisher in 1933, that V is critically influenced by the productivity of debt. Then, turning to the equation of exchange (M*V=Nominal GDP, where M is money supply), he demonstrates that we shouldn’t be the least bit surprised by sluggish global growth and had better be on the lookout for global deflation.
Hoisington Investment Management Company (www. Hoisingtonmgt.com) is a registered investment advisor specializing in fixed-income portfolios for large institutional clients. Located in Austin, Texas, the firm has over $5 billion under management and is the sub-adviser of the Wasatch-Hoisington US Treasury Fund (WHOSX).

This post was published at Mauldin Economics on OCTOBER 22, 2014.

This Dhanteras, gold coins are in, jewellery is out

Jon

Instead of the usual rush for jewellery, this Dhanteras sees a reversal of buyer's preferences, with more people opting for the traditional gold coin. We talk to some shopkeepers and buyers to understand this shift in choices
For many families in the city, a visit to their family jeweller today is as important as lighting lamps on Diwali. Jewellers too look forward to the festival of Dhanteras all year long, in the hope of making up for slow sales and the lean months. Unlike last year, this Dhanteras, the gold rate is lower compared to the last few months, which has given many store owners hope for a busy shopping day today.
But in an interesting twist, the low gold rate hasn't motivated people to increase their Dhanteras budget and buy jewellery instead of the traditional gold coins. Shoppers told DT why they would prefer to wait for the remaining festive days to pass before making any major ornamental purchases and why they will stick to the traditional coin purchases instead. Crowded shops, busy salespeople and `formality shoppers' make Dhanteras a bad day for investing in jewellery because like they say, buying an ornament is an experience that can be done once the hustle and bustle of Diwali is over.

This post was published at India Times

Goldcorp chief says Asian buying will support price of gold

Jon

Demand from China and other parts of Asia will support the price of gold, the chief executive of one of its largest miners said, as the precious metal traded near its strongest level in six weeks.
Chuck Jeannes of Goldcorp said he saw "as much clarity in the market as there has ever been," with a "floor" created by strong demand whenever gold reached or fell below about $1,200 per ounce.
"The anecdotal evidence is that gold goes down and physical demand goes up," Mr. Jeannes said in an interview with the Financial Times. "A huge number of physical buyers in the world see gold as a bargain below $1,200."

This post was published at Financial Times

Nelson Bunker Hunt, 88, Oil Tycoon With a Texas-Size Presence, Dies

Jon

Nelson Bunker Hunt, the down-home Texas oil tycoon who owned a thousand race horses, drove an old Cadillac and once tried to corner the world’s silver market only to lose most of his fortune when the price collapsed, died on Tuesday in Dallas. He was 88.
His death, at an assisted living center, followed a long period of treatment for cancer and dementia, The Dallas Morning News reported.
“A billion dollars ain’t what it used to be,” he said in 1980 after silver stakes he had amassed with two brothers, Herbert and Lamar, fell to $10.80 from $50.35 an ounce. In barely two months, their holdings and contracts for purchases — corralling a third to half the world’s deliverable silver — had plunged from a $7 billion value in January to a $1.7 billion loss in March.
With the Hunts unable to cover enormous margin calls, the debacle endangered financial markets and brokerage houses, forcing federal regulators and the nation’s banks to step in with a $1 billion line of credit, a bailout that saved the system from a stampede and the Hunts from a meltdown.

This post was published at NY Times

Big nations snub Beijing bank launch after U.S. lobbying

Jon

China will officially launch a new $50 billion Asia Infrastructure Investment Bank on Friday as it steps up its challenge to global financial institutions like the World Bank that it feels are dominated by America and its allies.
But only 20 mostly small economies, many of them effectively client states of China, will become founding members of the bank at Friday's ceremony in Beijing after Washington lobbied furiously to stop other countries from signing up.
When it first unveiled its plan to establish the bank last year, Beijing extended a broad invitation and several European states, as well as Australia, Indonesia, and South Korea initially showed interest.
But thanks to pressure from the US — conveyed by US diplomats in Beijing, Washington, and other capitals — none of these countries will join the bank at this stage, although some are hoping to be involved later.

This post was published at GATA

Futures Bounce On Stronger Europe Headline PMIs Despite Markit’s Warning Of “Darker Picture” In “Anaemic” Internals

Jon

Perhaps the most interesting question from late yesterday is just how did the Chinese PMI rebound from 50.4 to 50.2, when the bulk of its most important forward-looking components, New Orders, Output, New Export Orders…

… posted a material deterioration? When asked, not even Markit could provide an explanation that seemed remotely reasonable so we can only assume the headline was goalseeked purely for the kneejerk reaction benefit of various algos that only focus on the headline and nothing else. Luckily, we didn’t have much time to ponder this quandary as a few hours later we got the latest batch of Eurozone PMI numbers.
The reason the PMI “soft-data” surveys are relevant, if mostly again for the benefit of kneejerk reacting algos, is because as Deutsche Bank said, “These real time numbers are clearly going to be important at the moment with many fearing an inflexion point in the global data.” So what better way to instill some confidence in a triple-dipping Europe, if only on actual “hard” data, than by providing cherry-picked, seasonally adjusted survey responses.

This post was published at Zero Hedge on 10/23/2014.