World’s Biggest Aluminum Producer Faces Default, Warns Of “Dramatic Social Unrest” Without A Beijing Bailout

While China Hongqiao Group may be best known for being the world’s largest aluminum producer, it has in recent months featured just as prominently among short-seller reports who have accused the company of being a fraud. As the WSJ’s Scott Patterson writes, questions about China Hongqiao’s finances first emerged in November, when an anonymous short seller wrote on a website called Hongqiao Exposed that the company’s profits are ‘too good to be true.’ China Hongqiao in the March 31 statement called the report ‘untrue and unfounded.’
A subsequent 46-page report on Feb. 28 by Emerson Analytics, a trading firm focused on Chinese stock-market fraud, disclosed more allegations of fraud involving the Chinese commodity giant.

This post was published at Zero Hedge on Apr 16, 2017.

So Who Are the Debt Slaves in this Rich Nation?

The American economy has split in two: how averages of wealth & debt paper over the risks.
We constantly hear the factoids about ‘American households’ that paint a picture of immense wealth – and therefore a lack of risk for consumer lenders during the next downturn. We hear: ‘This – the thing that happened in 2008 and 2009 – won’t happen again.’
For example, total net worth (assets minus debt) of US households and non-profit organization (they’re lumped together) rose to an astronomical $92.8 trillion at the end of 2016, according to the Federal Reserve. This is up by nearly 70% in early 2009 when the Fed started its QE and zero-interest-rate programs.
Inflating household wealth was one of the big priorities of the Fed during the Financial Crisis. It would crank up the economy. In an editorial in 2010, Fed Chair Ben Bernanke himself called this the ‘wealth effect.’ So with this colossal wealth of US households, what could go wrong during the next downturn?

This post was published at Wolf Street by Wolf Richter ‘ Apr 16, 2017.

The Boston Marathon Bombing After Four Years

Since their peak ‘shortedness’ in mid-January, US Treasury bond bears have covered 500,000 10-year-equivalent contracts, reducing the net speculative short to its lowest since before Thanksgiving 2016.
At the same time, however, Eurodollar shorts (bets on Fed rate hikes) have soared to a new record high (over $3.2 trillion notional).
However, both the absolute level of Treasury yields and the short-term eurodollar curve (bets on The Fed’s path in the next 18 months) are losing their faith in Trumpflation and Janet Yellen.

This post was published at Zero Hedge on Apr 16, 2017.

How to Get Rich Investing in Bitcoin and Emerging Cryptocurrencies

While I remain bullish on precious metals and believe that prices are headed much higher, it has been my cryptocurrency investments that have generated the most excitement (and profits) lately.
Precious metals and cryptocurrencies are complementary assets that share many philosophical/political similarities, so I think investors should consider owning both. Let’s put the ‘gold vs. bitcoin’ arguments to rest. I have gold, silver bitcoin and a few of the more promising cryptocurrencies in my portfolio and the returns have been outstanding.
What type of profit potential exists in Bitcoin and other cryptocurrencies?
Here is a visual representation of what Bitcoin could buy you over the past few years and what it might be able to buy you in the year 2020. The Lamborghini was not placed there for shock value or a joke. The price of Bitcoin was around $5 in 2012 and is $1,200 today. It has gone up 240X in four years, so if it were to go up another 240X over the next four years, you certainly could purchase a Lamborghini Huracan or just about any other car on the market with your initial $1,000 investment.

This post was published at GoldStockBull on April 14th, 2017.

Trump Replaces John Kerry as Flip-Flop Gold Medalist

Trump’s voters are watching the Washington Establishment capture Donald Trump.
His reversals are now heralded by the mainstream media. The Washington Post has continued to attack him 24×7, yet it admits he is taking centrist positions. The BBC has also noted it.
He campaigned against ObamaCare. He failed to promote repeal. The accent was on “replace.” Paul Ryan’s compromise was a disaster. The Freedom Caucus in the House of Representatives blocked it. Trump declared war on them. But he has no clout in their districts. Most of them pulled better than he did last November.
The Export-Import Bank has subsidized big businesses for decades. Candidate Trump said he was against it. Now he says he supports it.
Then there was China, the currency manipulator. China was forcing down its currency. How, he never said as a candidate. Well, that’s water under the bridge. China, it turns out, is no longer a currency manipulator. No, no, no. The problem now is that the dollar is too strong.
How about the Federal Reserve. As a candidate, he criticized the FED’s low-interest rate policy. It hurt savers. Not now. The FED’s policy is A-OK.
The latest defection is on NATO. NATO was obsolete. Not now. NATO is A-OK now.
What about tax cuts for the middle class? He has yet to introduce a bill.
What about the wall between the USA and Mexico? He has yet to introduce a bill.

This post was published at Gary North on April 14, 2017.

EU Rapporteur For Turkey Warns Turkish Talks Will Be Suspended If Erdogan Gets “Unchecked Powers”

Just hours after the predictable passage of today’s Turkish referendum, the EU has promptly slammed the outcome, warning it threatens to slide the country’s collapse into “authoritarianism” and that Turkey’s accession talks with the EU will be suspended if the constitutional package is implement as per today’s outcome.
In a post on the website of Kati Piri, the European Parliament’s Turkey rapporteur warned that if the referendum package is implemented unchanged, “this will have to lead to the formal suspension of the EU accession talks. Continuing to talk about Turkey’s integration into Europe under the current circumstances has become a farce.”
In her role as EU rapporteur for Turkey, Piri is responsible for drafting and presenting reports on Turkey’s progress to the EU parliament; rapporteurs are elected by other members of the European Parliament. Needless to say, her view of today’s referendum is hardly enthusiastic:

This post was published at Zero Hedge on Apr 16, 2017.

Brad Birkenfeld: Lucifer’s Banker

The following video was published by ChrisMartensondotcom on Apr 16, 2017
Just how bad is the ongoing fraud in the banking system? Get ready for a mind-bowing expose by a former insider at UBS.
Brad Birkenfield, author of Lucifer’s Banker: The Untold Story of How I Destroyed Swiss Bank Secrecy, recounts the efforts he uncovered by his employer to help its clients cheat the US government out of tens of $billions in taxes.
But despite his working with the government closely to expose the gigantic conspiracy between US-based tax cheats and the giant Swiss bank, UBS, the so-called Justice Department went after Mr. Birkenfeld for abetting tax evasion by one of his clients. After spending thirty months in Federal prison, he was released and three weeks later, received a whistle-blower check for $104 million, the largest such check ever from the IRS Whistle-blower Office.

Watch Live: Erdogan Declares Victory In Turkey’s Constitutional Referendum

If you can't win a vote after purging all your enemies & undermining the free press, you don't deserve to run an authoritarian regime.
— ian bremmer (@ianbremmer) April 16, 2017

Live feed from Turkey via TRT World:
With over 97% of ballots counted, Turkey’s president Erdogan and soon, quasi dictator, declared victory in the Turkish referendum and called the leaders of three political parties supporting changes to the constitution to congratulate them on the victory, Anadolu news agency reported, and added rather comically that “many world leaders send congratulatory messages to President Erdogan.” One wonders who exactly…

This post was published at Zero Hedge on Apr 16, 2017.

Immigrants Flood Into Japan At A Record Pace

Japan’s demographic “time-bomb” has been widely documented in recent years: as we discussed most recently in February, as troubling as Japan’s deflationary economic quagmire is, the biggest threat facing Japan has little to do with its balance sheet and everything to do with its demographics, for the simple reason that not only is Japan’s population the oldest it has ever been, as well as the oldest on average in the entire world, but is now also officially shrinking.
Earlier this year, data released by the Ministry of Internal Affairs and Communications showed that in the latest 5 year census, Japan’s population declined last year for the first time in nearly a century. The Internal Affairs and Communications Ministry said the latest census shows that Japan’s population as of Oct. 1, 2015, was 127,110,047 – a decline of 947,305, or 0.7 percent, since the last census conducted in 2010. The number of Japanese dropped to 127.1 million in a national census for 2015, down 0.7 percent compared with five years earlier, and was the first recorded decline since the 5-year census started in 1920. As the Shimbun adds, in the 2015 census, men accounted for 61,829,237 of the population, and women 65,280,810.

This post was published at Zero Hedge on Apr 16, 2017.

Market Report: Fear taking over

…”Relations between N Korea and China have deteriorated in recent years, and the only leader the Korean dictator will listen to is Putin. But America has burned bridges over Syria, so there seems no alternative to the Korean situation escalating out of control.” Last week’s market report concluded that with the Syrian situation deteriorating the outlook for the price of gold had rarely been better. Gold and silver have certainly risen, as our introductory chart indicates. Gold in European morning trade was up $34 from last Friday’s close at $1287, and silver up from $18.00 at $18.57. This is a short week given tomorrow’s Good Friday holiday, and with geopolitics taking centre-stage, traders are likely on balance to close short positions today, retaining their longs. More on geopolitics below.

This post was published at GoldMoney on APRIL 13, 2017.

Erdogan Declares Victory In Turkey’s Constitutional Referendum

With over 97% of ballots counted, Turkey’s president Erdogan and soon, quasi dictator, declared victory in the Turkish referendum and called the leaders of three political parties supporting changes to the constitution to congratulate them on the victory, Anadolu news agency reported, and added rather comically that “many world leaders send congratulatory messages to President Erdogan.” One wonders who exactly…
#Breaking | Many world leaders send congratulatory messages to President Erdogan: Presidential sources
— ANADOLU AGENCY (ENG) (@anadoluagency) April 16, 2017

This post was published at Zero Hedge on Apr 16, 2017.

Is Barcelona’s Crazy Tourist Boom Too Much of a Good Thing?

It brings buckets of money, but what are the consequences? Barcelona, Europe’s most visited non-capital city (at least officially speaking), is now so saturated with tourists that even the tourists are complaining. In a recent study by the City Council, 40% of the tourists surveyed thought that prices in the city were too high, while 59% believed that the streets and tourist hotspots were too crowded.
They’ve got a point. In 2015 the city, with a total permanent population of 1.7 million, drew 8.9 million visitors, 6.5% more than the year before and a five-fold increase from 1990. And that’s just those who stayed in hotels. Airbnb hosts provided accommodation for a further 900,000 visitors. By 2016 that number had climbed to 1.25 million. Many Airbnb offerings are considered illegal, according to the City Council.

This post was published at Wolf Street on Apr 16, 2017.

Death Spiral for the LBMA Gold and Silver auctions?

In a bizarre series of events that have had limited coverage but which are sure to have far-reaching consequences for benchmark pricing in the precious metals markets, the LBMA Gold Price and LBMA Silver Price auctions both experienced embarrassing trading glitches over consecutive trading days on Monday 10 April and Tuesday 11 April. At the outset, its worth remembering that both of these London-based benchmarks are Regulated Benchmarks, regulated by the UK’s Financial Conduct Authority (FCA).
In both cases, the trading glitches had real impact on the benchmark prices being derived in the respective auctions, with the auction prices deviating noticeably from the respective spot prices during the auctions. It’s also worth remembering that the LBMA Gold Price and LBMA Silver Price reference prices that are ‘discovered’ each day in the daily auctions are used to value everything from gold-backed and silver-backed Exchange Traded Funds (ETFs) to precious metals interest rate swaps, and are also used widely as reference prices by thousands of precious metals market participants, such as wholesalers, refineries, and bullion retailers, to value their own bi-lateral transactions.
Although the gold and silver auctions are separately administered, they both suffer from limited direct participation due to the LBMA only authorising a handful of banks to directly take part. Only 7 banks are allowed to participate directly in the Silver auction while the gold auction is only currently open to 14 entities, all of which are banks. Limited participation can in theory cause a lack of trading liquidity. Added to the mix, a central clearing option was introduced to the LBMA Gold Price auction on Monday 10 April, a day before Tuesday’s gold auction screw-up. The introduction of this central clearing process change saw four of the direct participants suspended from the auction since they had not made the necessary system changes in time to process central clearing. This in itself could have caused a drop in liquidity within Tuesday’s gold auction as it reduced the number of possible participants.

This post was published at Bullion Star on 14 Apr 2017.

15/4/17: Unconventional monetary policies: a warning

Just as the Fed (and now with some grumbling on the horizon, possibly soon, ECB) tightens the rates, the legacy of the monetary adventurism that swept across both advanced and developing economies since 2007-2008 remains a towering rock, hard to climb, impossible to shift.
Back in July last year, Claudio Borio, of the BIS, with a co-author Anna Zabai authored a paper titled ‘Unconventional monetary policies: a re-appraisal’ that attempts to gauge at least one slope of the monetarist mountain.
In it, the authors ‘explore the effectiveness and balance of benefits and costs of so-called ‘unconventional’ monetary policy measures extensively implemented in the wake of the financial crisis: balance sheet policies (commonly termed ‘quantitative easing’), forward guidance and negative policy rates’.

This post was published at True Economics on Saturday, April 15, 2017.