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Is Chinese Growth About to Falter?

  • The IMF revised Chinese growth forecasts higher in July – were they premature?
  • Retail sales, industrial output and fixed investment have slowed
  • The Real Estate sector is still buoyant but home price increases are moderating
  • Narrow money supply growth has slowed, other parts of the economy will follow

China has long been the marginal driver of demand for a wide array of commodities. In an attempt to understand the recent rise in the price of industrial metals, the strength of Chinese demand is a key factor. The picture is mixed.

The chart and commentary below is taken from Sean Corrigan’s August newsletter – Cantillon Consulting – China: Is the tide turning?:-

China_Money_Supply_-_Cantillon_August_2017

Source: Cantillon Consulting

As Corrigan goes on to say:-

As the deceleration has progressed, the PMI has shown its expected downward response. In due course, company revenues – and ultimately profits – will follow if this is long maintained.

Greater recourse to receivables financing (funded partly by recourse to shadow finance) can delay full recognition of this awhile, but it cannot fail to impair either the magnitude or the quality of earnings as it works through the economy.

At the heart of the credit equation lies the Real Estate market:-

China_Real-Estate_and_M1_-_Cantillon_-_August_2017

Source: Cantillon Consulting

During 2016 property prices in China increased by 19%, new homes by 12.4%, the fastest since 2011, but the market has cooled of late due to government intervention to subdue its speculative excess. New-home prices, excluding government-subsidized housing, gained from the previous month in 56 of 70 cities in July, compared with 60 in June. New Home Sales for August were the weakest in three years at +3.8%, however, investment in Real Estate development increased 7.8% last month – this is hardly a collapse. House prices are still forecast to rise by 6.8% in 2017 with growth driven by continued increases in second and third tier cities:-

…click on the above link to read the rest of the article…

Algeria Officially Launches Helicopter Money Amid Sliding Oil Revenue, Budget Crisis

Algeria Officially Launches Helicopter Money Amid Sliding Oil Revenue, Budget Crisis

One year ago, the imminent arrival of helicopter money among endless discussions of pervasive lowflation was all the rage within high-finance policy circles. Then, everything changed as if on a dime, and in recent months the dominant topic has been global coordinated tightening – and in some cases even revisions to central bank mandates and the lowering of inflation targets – perhaps as a result of central banks’ realization that monetizing debt by central banks leads to bad outcomes, not to mention global asset bubbles.

But not everywhere.

On Sunday, Algeria’s prime minister unveiled a plan to plug the country’s budget deficit as the the OPEC member state looks to offset lower oil revenue by directly borrowing from the central bank, while avoiding international debt markets. In other words, direct monetization of debt, which bypasses commercial banks as a monetary intermediate, and is better known as “helicopter money.”

According to Bloomberg, the five-year plan presented by Prime Minister Ahmed Ouyahia aims to balance the budget by 2022, and reverse a deficit that ballooned with the plunge in global crude prices, which also cut foreign reserves by nearly half.

If we turn to external debt, as the IMF suggests, we will need to borrow $20 billion a year to repay the deficit and within four years we will be unable to repay the debt,” Ouyahia said. “This is what made the government look at non-traditional financing.”

With domestic debt currently around 20 percent of gross domestic product, Algeria has room to take on additional borrowing, the IMF has said. Earlier this month, the cabinet authorized the central bank to lend money to the Treasury to narrow the deficit. Businesses and importers would stand to benefit from a cash injection from the regulator, but analysts say the plan has risks.

…click on the above link to read the rest of the article…

The New World Order Will Begin With Germany And China

The New World Order Will Begin With Germany And China

In numerous articles over the years I have outlined in acute detail the agenda for a future one-world economic and governmental system led primarily by banking elites and globalists; an agenda they sometimes refer to as the “New World Order.” The term has gained such public exposure and notoriety recently that the globalists have fallen back to using different terminology. Some of them, like the International Monetary Fund’s Christine Lagarde, refer to it as the “global economic reset.” Others call it the “new multilateralism.” Still others refer to it as the “end of the unipolar order,” referring to the slow death of the U.S. economy as the central pillar of the global economy.

Whatever label they decide to use, all of them signal a full spectrum destabilization of the “old world” financial and geopolitical system and the ascendance of a tightly controlled one world edifice dominated openly by globalist hubs like the IMF and the BIS.

Too many people, even in the liberty movement, tend to examine only the veneer of this agenda. Some have deluded themselves into thinking the U.S. and the dollar are actually the core of the NWO and are therefore indispensable to the globalists. As I have shown time and time again, the Federal Reserve is now on a fast track to complete its sabotage of the U.S. economy; they would not be instigating instability and crisis to deflate the massive fiscal bubbles they have created unless America was at least partially expendable.

Some believe the NWO is a purely “western” construct and that eastern nations are defending themselves against an encroaching globalist empire. I have also shown that this is nonsense, and that eastern nations work closely with the same exact globalists they are supposedly at war with. This includes Russia’s Vladimir Putin, a figure often ignorantly praised by select liberty activists.

…click on the above link to read the rest of the article…

IMF Rings The Alarm On Canada’s Economy 

IMF Rings The Alarm On Canada’s Economy 

Shortly after yesterday’s rate hike by the Bank of Canada, its first since 2010, we warned that as rates in Canada begin to rise, the local economy which has seen a striking decline in hourly earnings in the past year, which remains greatly reliant on a vibrant construction sector, and where households are the most levered on record, if there is anything that can burst the local housing bubble, it is tighter monetary conditions. And a bubble it is, as the chart below clearly demonstrates… one just waiting for the pin, which as we suggested yesterday in “”Canada Is In Serious Trouble” Again, And This Time It’s For Real“, may have finally been provided thanks to the Bank of Canada itself.

Now, one day after our warning, the IMF has doubled down and on Thursday issued its latest consultation report, in which it said that while Canada’s economy has regained some momentum, it warned that business investment remains weak, non-energy exports have underperformed, housing imbalances have increased and uncertainty surrounding trade negotiations with the United States could hurt the recovery.

The report – which concerningly was written even before the BOC hiked rates by 0.25% – also said the Bank of Canada’s current monetary policy stance is appropriate, and it cautioned against tightening.

“While the output gap has started to close, monetary policy should stay accommodative until signs of durable growth and higher inflation emerge,” the IMF said, adding that rate hikes should be “approached cautiously”.

Directors noted that Canada’s financial sector is well capitalized and has strong profitability, but that there are rising vulnerabilities in the housing sector…  Directors agreed that monetary policy should stay accommodative and be gradually tightened as signs of durable growth and
inflation pressures emerge.

…click on the above link to read the rest of the article…

Venezuela’s Oil Production On The Brink Of Collapse

Venezuela’s Oil Production On The Brink Of Collapse

Venezuela

Desperation is spreading in Venezuela as violent protests continue to paralyze the country, further damaging the country’s shattered economy. Venezuela’s already-decrepit oil industry is deteriorating by the day, and an outright implosion is no longer out of the question.

The inflation rate, according to the IMF, will balloon to 720 percent this year. Food shortages have been common for quite some time, but are deepening and wearing down the population. Three out of four people surveyed by the WSJ reported involuntary weight loss last year. Hospitals have completely broken down.

Venezuela has been crippled by protests since late March, with more than three dozen people having been killed over the past two months, and there is no sign of improvement. This meltdown is taking a toll on Venezuela’s oil production, the last thing keeping the country from becoming a failed state. Venezuela’s oil production has been declining for more than a decade, mainly because oil revenues are used to finance the government, leaving little for state-owned PDVSA to reinvest in its operations.

But things are getting worse. The cash shortage is accelerating the decline. As of April, oil production stood at 1.956 million barrels per day (mb/d), down 10 percent from last year, and down more than 17 percent from 2015 levels – and output continues to trend downward. James Williams, energy economist at WTRG Economics, told Marketwatch in March that he expects Venezuela to lose another 200,000 to 300,000 bpd this year, another 10 to 15 percent decline from 1Q2017 levels.

The problem is downstream as well, as the shortage of refined products worsens. Three out of Venezuela’s four oil refineries are operating significantly below capacity because of the inability to find spare parts for maintenance, according to Reuters.

…click on the above link to read the rest of the article…

Surplus or Stimulus

Surplus or Stimulus

René Magritte Le Cri du Coeur 1960

Austerity is over, proclaimed the IMF this week. And no doubt attributed that to the ‘successful’ period of ‘five years of belt tightening’ a.k.a. ‘gradual fiscal consolidation’ it has, along with its econo-religious ilk, imposed on many of the world’s people. Only, it’s not true of course. Austerity is not over. You can ask many of those same people about that. It’s certainly not true in Greece.

IMF Says Austerity Is Over

Austerity is over as governments across the rich world increased spending last year and plan to keep their wallets open for the foreseeable future. After five years of belt tightening, the IMF says the era of spending cuts that followed the financial crisis is now at an end. “Advanced economies eased their fiscal stance by one-fifth of 1pc of GDP in 2016, breaking a five-year trend of gradual fiscal consolidation,” said the IMF in its fiscal monitor.

In Greece, the government did not increase spending in 2016. Nor is the country’s era of spending cuts at an end. So did the IMF ‘forget’ about Greece? Or does it not count it as part of the rich world? Greece is a member of the EU, and the EU is absolutely part of the rich world, so that can’t be it. Something Freudian, wishful thinking perhaps?

However this may be, it’s obvious the IMF are not done with Greece yet. And neither are the rest of the Troika. They are still demanding measures that are dead certain to plunge the Greeks much further into their abyss in the future. As my friend Steve Keen put it to me recently: “Dreadful. It will become Europe’s Somalia.”

…click on the above link to read the rest of the article…

The Real Dangers Behind The Syrian Crisis Are Economic

The Real Dangers Behind The Syrian Crisis Are Economic

Back in 2010/2011 when I was still writing under the pen-name Giordano Bruno, I warned extensively about the dangers of any destabilization in the nation of Syria, long before the real troubles began. In an article titled Migration Of The Black Swans, I pointed out that due to Syria’s unique set of alliances and economic relationships the country was a “keystone” for disruption in the Middle East and that a “revolution” (or civil war) was imminent. Syria, I warned, represented the first domino in a chain of dominoes that could lead to widespread regional warfare and draw in major powers like the U.S. and Russia.

That said, my position has always been that the next “world war” would not be a nuclear war, but primarily an economic war. Meaning, I believed and still believe it is far more useful for establishment elites to use the East as a foil to bring down certain parts of the West with economic weapons, such as the dumping of the U.S. dollar. The chaos this would cause in global markets and the panic that would ensue among the general public would provide perfect cover for the introduction of what the globalists call the “great financial reset.” The term “reset” is essentially code for the total centralization of all fiscal and monetary management of the world’s economies under one institution, most likely the IMF. This would culminate in the destruction of the dollar’s world reserve status, its replacement being the IMF’s Special Drawing Rights basket currency system.

Eventually, the SDR basket system would act as a stepping stone towards a single global currency system, and its final form and function would probably be entirely digital. This would give the globalists TOTAL push-button control over even the smallest aspects of normal trade. The amount of power they would gain from a single centralized digital currency system would be endless.

…click on the above link to read the rest of the article…

IMF De-Cashing: Soft-Selling Financial Enslavement – Rory Hall

IMF De-Cashing: Soft-Selling Financial Enslavement - Rory Hall

The IMF (International Monetary Fund) or as I like to call them – International Mafia Federation – is showing its true colors and proving beyond question this organization is nothing more than street-corner-thugs in high priced suits.

With the release of this latest working paper on how to enslave nations, steal the remaining sovereignty of the people and the nations they have drawn up plans to force a cashless society upon all the people within IMF member nations.

The International Monetary Fund (IMF) in Washington has published a Working Paper on “de-cashing”. It gives advice to governments who want to abolish cash against the will of their citizenry. Move slowly, start with harmless seeming measures, is part of that advice.

In “The Macroeconomics of De-Cashing”, IMF-Analyst Alexei Kireyev recommends in his conclusions:
Although some countries most likely will de-cash in a few years, going completely cashless should be phased in steps. The de-cashing process could build on the initial and largely uncontested steps, such as the phasing out of large denomination bills, the placement of ceilings on cash transactions, and the reporting of cash moves across the borders. Further steps could include creating economic incentives to reduce the use of cash in transactions, simplifying the opening and use of transferrable deposits, and further computerizing the financial system.

The private sector led de-cashing seems preferable to the public sector led decashing. The former seems almost entirely benign (e.g., more use of mobile phones to pay for coffee), but still needs policy adaptation. The latter seems more questionable, and people may have valid objections to it.

…click on the above link to read the rest of the article…

 

NEW UNCOVERED INFORMATION: Why Central Banks Were Forced To Rig The Gold Market

NEW UNCOVERED INFORMATION: Why Central Banks Were Forced To Rig The Gold Market

According to newly uncovered information in the gold market, it provides additional evidence of why the Fed, Central Banks and the IMF were forced to RIG the gold market.  Not only was the dropping of the Gold-Dollar peg going to release a great deal of pressure on the manipulated gold price, but forecasts of a massive increase in gold demand was going to totally overwhelm supply.

Thus, this new information provides clear evidence that the gold market was being assaulted on “two fronts.”  Not only was the gold market suffering from a decades of price suppression schemes via the Fed and Central Banks, but also that surging gold demand in the jewelry and industrial sectors was going to lead to severe shortages in the gold market.

Which means, the gold market was experiencing a great deal more stress than complications stemming from the debasement of the U.S. Dollar due to massive money printing.  Actually, looking at this new information, I had no idea of the amount of Fed, Central Bank and IMF gold market intervention until I put all the pieces together.

Now, when I say “new information”, it pertains to new information and data that I dug up from older official documents.  While most of the folks in the precious metals community realize that the Fed and Central Banks have sold gold into the market to depress the price, this new evidence puts the gold market it in an entirely DIFFERENT LIGHT. 

Furthermore, additional data points to a “Gold Supply & Demand” situation that would have gone completely out of control, if the Fed, Central Banks and IMF did not step in.

…click on the above link to read the rest of the article…

Strange That The Same Point In Time For The Economic Crisis Keeps Coming Up

Strange That The Same Point In Time For The Economic Crisis Keeps Coming Up

This video was produced by X22 Report

Netherlands is making a move to leave the EU. Theresa May is worried that a Scottish Referendum vote will happen at the same time as the Article 50 vote. Former IMF chief sentenced to jail in Spain. The EU says no bail-ins at this time because it would hurt the creditors. Maine drops 9,000 from Food Stamp roll says people need to look for jobs. Pending home sales tumble. Durable goods decline. David Stockman says it will begin on March 15 and the economy will really go down hill in the summer and the fall will be a disaster.

Tsipras Warns IMF, Schauble To “Stop Playing With Fire” Over Greek Debt

Tsipras Warns IMF, Schauble To “Stop Playing With Fire” Over Greek Debt

One day after Greek 2Y bond yields tumbled following press reports that for the first time in the latest Greek mini-crisis, the IMF and Eurozone creditors finally agreed on a “common stance” regarding what the Greek fiscal surplus and debt profile would look like, despite talks between Greece and its creditors ending in Brussels with no breakthrough, Greek PM Alexis Tsipras on Saturday warned the IMF and German Finance Minister Wolfgang Schaeuble to “stop playing with fire” in handling his country’s debt.

Nonetheless, striking a positive tone, Tsipras opened a meeting of his Syriza party by saying he was confident a solution would be found, and urged a change of course from the IMF. “We expect as soon as possible that the IMF revise its forecast so that discussions can continue at the technical level”, AFP reported, suggesting that contrary to initial reports, the bid-ask between the Troika and Greece still remains irreconcilable .

Tsipras also attacked Greek nemesis Wolfgang Schauble – who earlier in the week ruled out a Greek debt cut, saying “for that Greece would have to exit the currency area”- and called for German Chancellor Angela Merkel to “encourage her finance minister to end his permanent aggressiveness” towards Greece.

As documented before, ongoing feuding with the IMF has raised fears of a new debt crisis. Greece, whose economic collapse is now worse than the US Great Depression – remains embroiled in a row with its eurozone paymasters and the IMF over debt relief and budget targets that has rattled markets and revived talk of its place in the euro. 

A silver lining emerged on Friday, when Eurogroup chief Jeroen Dijsselbloem said progress had been made in the Brussels talks with Greek Finance Minister Euclid Tsakalotos and other EU and IMF officials. But he provided few details.

…click on the above link to read the rest of the article…

Why energy prices are ultimately headed lower; what the IMF missed

Why energy prices are ultimately headed lower; what the IMF missed

  • Too much growth in debt, with China particularly mentioned as a problem
  • World economic growth seems to have slowed on a long-term basis
  • Central bank intervention required to produce artificially low interest rates, to produce even this low growth
  • Global international trade is no longer growing rapidly
  • Economic stagnation could lead to protectionist calls

These issues are very much related to issues that I have been writing about:

  • It takes energy to make goods and services.
  • It takes an increasing amount of energy consumption to create a growing amount of goods and services–in other words, growing GDP.
  • This energy must be inexpensive, if it is to operate in the historical way: the economy produces good productivity growth; this productivity growth translates to wage growth; and debt levels can stay within reasonable bounds as growth occurs.
  • We can’t keep producing cheap energy because what “runs out” is cheap-to-extract energy. We extract this cheap-to-extract energy first, forcing us to move on to expensive-to-extract energy.
  • Eventually, we run into the problem of energy prices falling below the cost of production because of affordability issues. The wages of non-elite workers don’t keep up with the rising cost of extraction.
  • Governments can try to cover up the problem with more debt at ever-lower interest rates, but eventually this doesn’t work either.
  • Instead of producing higher commodity prices, the system tends to produce asset bubbles.
  • Eventually, the system must collapse due to growing inefficiencies of the system. The result is likely to look much like a “Minsky Moment,” with a collapse in asset prices.

…click on the above link to read the rest of the article…

The IMF and All The Other Losers


Andre Kertesz Bumper cars at amusement park in Neuilly-sur-Seine, near Paris 1930
I read a lot, been doing it for years, about finance and affiliated topics (a wide horizon of them), which means I’ve inevitably seen a wholesale lot of nonsense fly by. But for some reason, and I think I know why, Q3 2016 has been gunning for a top -or bottom- seat in that regard, and Q4 is looking to do it one better/worse.

Apart from the fast increasingly brainless political ‘discussions’ that don’t deserve the name, in the US and UK and beyond, there are the transnational organizations, NATO, IMF, EU and all those things, all suffocating in their own hubris, things I’ve dealt with before in for instance Globalization Is Dead, But The Idea Is Not and Why There is Trump. But none of it still seems to have trickled through anywhere that I can see.

The end of growth exposes the stupidity and ignorance of all but (and even that’s a maybe) a precious few (of our) ‘leaders’. There is no other way this could have run, because an era of growth simply selects for different people to float to the top of the pond than a period of contraction does. Can we agree on that?

‘Growth leaders’ only have to seduce voters into believing that they can keep growth going, and create more of it (though in reality they have no control over it at all). Anyone can do that. So ‘anyone’ who’s sufficiently hooked on power games will apply.

‘Contraction leaders’ have a much harder time; they must convince voters that they can minimize the ‘suffering of the herd’. Which is invariably a herd that no-one wants to belong to. A tough sell.

…click on the above link to read the rest of the article…

Someone Is Lying

Someone Is Lying

Observant readers may recall the name Vitas Vasiliauskas from our May story in which we quoted the ECB governing council member as defining not only himself, but his central banking peers, as “magic people.” As the portly Lithuanian banker said in a Bloomberg interview then, “markets say the ECB is done, their box is empty, but we are magic people. Each time we take something and give to the markets — a rabbit out of the hat.” What was more disturbing is that he was dead serious when he said it, which is important, because it is finally obvious that central bankers are neither gods, nor magicians, nor even doing “god’s work on earth”, but plain and simple psychopaths.

They could also be pathological liars, as the WSJ revealed today when it published an interview with Vasiliauskas, in which among other things, covered the topic of Deutsche Bank. To wit:

Struggling German lender Deutsche Bank won’t drive the eurozone economy into the ground, a member of the European Central Bank’s governing council said Thursday, adding a fresh dose of calm into a case that has raised concerns about the continent’s ability to confront the struggles of Germany’s largest lender.

“I don’t think that problems related with one of the banks somehow can influence overall financial stability,” said Vitas Vasiliauskas, the head of Lithuania’s central bank, in an interview with The Wall Street Journal. The small Baltic state has used the euro since last year and therefore has a voice on the 25-member governing council that sets monetary policy in the currency bloc. The ECB also serves as supervisor of the eurozone’s largest banks. “I don’t think that we face something systemic,” he said on the sidelines of the annual meetings of the International Monetary Fund.

And just in case the punchline is somehow missed, here it is timestamped for posterity.

…click on the above link to read the rest of the article…

Doomed to Failure

We’ve been waiting for the U.S. economy to reach escape velocity for the last six years.  What we mean is we’ve been waiting for the economy to finally become self-stimulating and no longer require monetary or fiscal stimulus to keep it from stalling out.  Unfortunately, this may not be possible the way things are going.

fischersAs Milton Jones once revealed: “A month before he died, my grandfather covered his back in lard. After that, he went downhill quickly” (his other grandfather drowned in a bowl of cheerios). A similar fate may await the larded up US economy.

In short, the U.S. economy may never reach “escape velocity” unless it is first allowed to crash.  It has been too larded up and larded over with debt for any real sustainable growth to take root.  More evidence, to this effect, was revealed this week.

For example, the International Monetary Fund (IMF) anticipates the U.S. economy will expand by just 1.6 percent this year.  That’s about one percent less than last year’s estimated growth.  In other words, the rate of economic growth in the United States isn’t increasing; rather, it’s decreasing.

According to the IMF, “the slower-than-expected activity comes out of the ongoing oil industry slump, depressed business investment and a persistent surplus in business inventories.”  Could this be the twilight of the weakest economic recovery in the post-World War II era?  Only time will tell, for sure.

But anyone with an ear to the ground and a nose to the grindstone knows the answer to that question.  Business ain’t booming.  Moreover, it has become near impossible for corporations to grow their earnings.

…click on the above link to read the rest of the article…

Olduvai II: Exodus
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Olduvai
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Olduvai II: Exodus
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Olduvai III: Cataclysm
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