Author: admin

By the SRSrocco Report,

If the market has finally experienced a peak in world silver production, this warns of higher prices in the future.  In addition, the global silver market suffered another large net supply deficit in 2016.  These factors point to a big upcoming trend change in the future silver market.

The Silver Institute just published its 2016 Silver Interim Report.  This report is published by Thomson Reuters GFMS.  According to their forecast for 2016, global silver production will decline to 887 million oz (Moz), down from 893 Moz in 2015:

While forecasted global silver production for 2016 is down only slightly versus last year, GFMS also stated this in their report:

    1) We estimate that mine supply peaked in 2015 and will trend lower in the foreseeable future.
    2) Declining total supply is expected to be a key driver of annual deficits in the silver market going forward.

I will get to the annual silver deficits in a minute, but let’s look at their world silver mine supply by region:

What is interesting here, is that GFMS forecasts the number one silver producer, Mexico, to be down in 2016 by more than 6 Moz.  Last year, I forecasted that global silver production would likely be lower in 2015.  I was going by data by the “World Metals Statistics.”  However, Mexico’s INEGI (government agency) considerably revised their figures higher for 2015.  While I have seen revisions take place, the revisions by Mexico’s INEGI for 2015 were quite substantial.

Regardless, GFMS does a pretty good job with the silver mine supply data.  The important take-away here is that the trend of global silver production will likely be lower going forward.

The Majority Of Global Silver Production Declines Will Come From By-Product Base Mining

The majority of silver production comes from the by-product of base metal mining.  According to GFMS 2016 Silver Interim Report, lead & zinc accounted for 34.4% of silver supply, while copper yielded 22.1%.  Thus, the mining of these three base metals supplied 56.5% of global silver production in 2016.  Primary silver production accounted for 30.4% and gold mining supplied 12.5%:

As I have mentioned in prior articles, the decline in global oil production will impact base metal mining to a larger degree than primary silver production.  It takes a great deal of liquid fuels to produce the world’s base metals.

For example, the Chilean Copper Commission stated in a 2014 report, that the country consumed 535 million gallons of liquid fuel to produce 5.7 million tons of copper.  Thus Chile’s copper industry consumed 94 gallons of liquid fuel for each tonne of copper produced.

On the other hand, Pan American Silver burned 20.5 million gallons of liquid fuel to produce their 26.5 million oz of silver in 2015.  Which means, each ounce of silver production took 0.80 gallons of liquid fuel.  If we use Pan American Silver as a guide, then the 269 Moz of primary silver production in 2016 consumed 215 million gallons of liquid fuel.  However, I would imagine the global primary silver production average is much less, more like 0.50 gallon per ounce of silver.  So, we are talking about 135-150 million gallons of liquid fuel to produce all the primary silver in the world.

Now, the world produced a total of 18.4 million tons of copper in 2014.  Taking Chile’s average of 94 gallons per tonne of copper produced and providing a conservative estimate of say 75 gallons per tonne for entire globe, then the world consumed roughly 1.4 billion gallons of liquid fuels to produce its copper in 2014.  This is about ten times the amount of fuel it took to produce all the primary silver production.  Of course this is a simple estimate, but there you have it.

Once the world enters into the next financial collapse, U.S. and world oil production will plummet.  This will impact base metal mining a great deal more than primary silver production.  Which means, overall silver production will decline more rapidly due to more than half coming from zinc, lead and copper.

Global Annual Silver Deficits Continue For 13 Consecutive Years

Due to the huge increase in Global Silver ETF demand as well as a large Exchange Inventory build, the silver market will suffer a forecasted 185 Moz annual deficit in 2016.  If we look at the annual silver deficits since 2004, it equals a stunning 1.5 billion ounces:

GFMS calculates their “net balance” by subtracting physical demand from supply, then deducted or added changes in Silver ETF and Exchange inventories.  According to their data (as of Sept 2016), Silver ETF’s and Exchanges added 133.3 Moz of silver to their inventories.  Furthermore, total physical demand exceeded total supply by 52.2 Moz to arrive at the total 185.5 Moz (rounded to 185 Moz) net deficit.

These annual deficits have been supplemented by silver surpluses of the 1980’s and 1990’s.  However, annual deficits are forecasted to continue as mine supply continues to decline along with subdued scrap supply.

Why Do These Supply & Demand Factors Matter For the Future Price Of Silver?

Recently I have stated that new information on the Thermodynamic Oil Collapse, based on the Hills Group and Louis Arnoux’s work, suggests that supply and demand are not the real factor that determines price, rather it’s the cost of production.

However, gold and silver are different from most other metals, commodities and energy.  While silver is consumed more than gold, it still functions as “MONEY” or a “STORE OF VALUE.”  Thus, it should be valued differently than copper, wheat or oil.

I don’t look at global mine supply or the annual silver deficits as factors that will impact the market price of silver by certain degrees, rather I look at them as a TELLTALE sign that the overall trend is changing, and has been for nearly a decade.  It is the longer term fundamental trend change that interests me, not the year by year supply and demand factors on price.

Currently, the silver price is based on its cost of production (90-95%) plus some supply and demand factors.  While many believe the BIG BANKS can push the price of silver anywhere they see fit, this is pure nonsense.  If the Big banks pushed the price of silver 25-50% below its average primary silver cost of production, traders would come in by the droves.   While traders may be uninterested in long-term fundamentals, they aren’t stupid as it pertains to short-term market forces.

That being said, silver’s ultimate value is not based on its cost, it will be based on its STORE OF VALUE properties when the MOTHER OF ALL DEFLATIONS finally arrives.  I am talking about deflation of most paper assets (stocks & bonds) and real estate.

Because there is so little real physical silver out in the market, 3-4 billion oz, any significant amount of capital moving into it will push its value to seriously high levels.  This may seem a play on hype, especially for those who are a bit disillusioned by the price smash since the Trump President election.

Unfortunately, for those who continue BELLY-ACHING about low silver prices, there isn’t much I can say to change your opinion.  I have come to realize that a significant percentage of silver investors who continue to understand the long-term fundamentals, will never complain about lower prices.  They just suck it up and know that insane Central Bank policies won’t last forever.

Unfortunately, the precious metals community also has its group of individuals who will complain when the going gets rough.  This should be expected as this is the typical nature of a FICKLE public.  All slaps on the back when things are good and the first to bad mouth when things turn south.

I get a kick out of the BELLY-ACHERS who seem to forget that the Central Banks have embarked on the most insane monetary policy in history.  They have pushed debt and money supply to an exponential trend.  I find it simply amazing how a disgruntled silver investor points out how wrong the precious metals analysts were on the silver price since 2012, while totally dismissing massive Central Bank monetary invention.

Regardless, peak silver production on top of the continued annual deficits point to a trend that will reach an INFLECTION POINT in the future.  So, here is the BEEF.  If you think exponentially increasing debt and monetary liquidity will continue for the next 5-10 years, then maybe you should stay in Dollars, U.S. Treasuries, Stocks and Real Estate.  However, if you aren’t suffering from brain damage as many in the markets are today, you may want to consider staying put in the 2,000+ year monetary history and store of value of silver.

Lastly, if you haven’t checked out our new PRECIOUS METALS INVESTING section or our new LOWEST COST PRECIOUS METALS STORAGE page, I highly recommend you do.

Check back for new articles and updates at the SRSrocco Report.

via http://ift.tt/2fT6mSK SRSrocco

Submitted by Mac Slavo via SHTFPlan.com,

Is this how the economic crisis will play out in America? A cash strapped population, forced to the brink and stripped of their dignity?

Unfortunately, it is already underway in Venezuela.

Of course there is a higher standard of living in the United States overall, but tens of millions of people are already on the edge of poverty and tens of millions more can be brought to their knees in a matter of hours.

Some 46 million Americans are already on food stamps, and reliance on digital systems, EBT debit cards and electronic transactions could make Americans more vulnerable than they appear on the surface.

If the system shut down tomorrow, what would you do? How would you feed your family? Unless you are a prepper, the answer could make you uneasy.

Long lines have been the norm in Venezuela for over a year now; shortages and rations just another part of their upended lives. But now, the sheer free fall of their currency’s value has made live even more precarious – forcing many to visit as many as six ATMs just for enough to buy very basic, cheap goods.

via Bloomberg:

“I’ve had to go to six different ATMs just to get 6,000 bolivars,” said [Domingris] Montano… She needed to buy groceries. A package of rice would cost 3,500 bolivars, more than half the daily withdrawal limit, and the automated teller machine might be empty by the time her turn came. Maybe she could hit a few more before dark?

 

Lines are nothing new in Venezuela, where the economy is shattered, inflation is soaring and the currency fell a staggering 67 percent against the U.S. dollar on the black market last month alone — making 6,000 bolivars worth just $1.30.

 

[…] It takes almost six minutes for it to spit out, 3,500 bolivars at a shot, and the victor walks away with a 3-inch stack worth $5.32.

 

“Sometimes I go to five ATMs without getting anything at all,” he said, because the devices are busted or bare.

 

[…]

 

“The last time I cashed a check [with a live bank teller], it was for 44,000 bolivars and they gave it to me in bills of 5 and 10,” said Elyn Hernandez, a 27-year-old assistant chef. That many bolivars in notes of 10 would fill a Duffel bag. An ATM delivers in larger denominations.

Most of the people is poor, and cash has long been the only fluid transaction for most vendors, and the wide segment of the population that don’t have bank accounts.

This has proven to be an especially difficult logistical problem – as banks have responded to an accelerating crisis by placing harsh limits on the amount of money that can be withdrawn from ATMs – with the maximum equating a huge fistful of bolivars but only a few U.S. dollars of purchasing power.

That is why President Maduro has ordered a revaluing of the currency, and will issue higher denomination bills sometime early next year. But that will do little to alleviate the problems that everyday people are facing in the meantime.

They have been desperate already, but now things are reaching a point of outright hyperinflation and spiraling collapse.

So for anyone still unsure what real-time hyperinflation looks like, here is the updated visual answer.

Pray for these people, and prepare so that it might not happen to you or yours.

via http://ift.tt/2fWObGS Tyler Durden

At least nine people were confirmed dead and 25 others are unaccounted for after a fire broke out during a rave at a “huge” warehouse in Oakland, California, local media reported on Saturday, according to city fire officials, cited by KTVU.

The fire was first reported Friday night at 11:30 p.m., on 31st Avenue and International Boulevard. The building houses a group of artists and their studios, according to police. The building in the Fruitvale district housed units where people lived and worked, and it had no sprinkler system, Fire Chief Teresa Deloach-Reed told the East Bay Times newspaper.

#breaking: Greater alarm fire burning inside commercial building in #Oakland, California. Firefighters have taken a defensive mode. http://pic.twitter.com/GcssQ6dTvs

— Tim Jue (@timjue) December 3, 2016

31st- http://pic.twitter.com/8TX6jk0iYq

— Oakland Firefighters (@OaklandFireLive) December 3, 2016

The blaze broke out on 31st Ave in Oakland during a party advertised as a ‘Rave Cave’ as part of musician Golden Donna’s ‘100% Silk’ West Coast tour.  A Facebook event page showed 176 people planned to attend the party, which featured a performance by the electronic music act Golden Donna. The page, which listed 355 others as interested in going, carried posts from people who were either missing or accounted for.

31st- http://pic.twitter.com/8TX6jk0iYq

— Oakland Firefighters (@OaklandFireLive) December 3, 2016

Fire Chief Teresa Deloche-Reed said that at least another 13 people are still unaccounted for after the deadly blaze started around 11:30pm in the 1300 block of 31st Avenue during an event advertised as ‘Rave Cave’ featuring musician Golden Donna’s 100% Silk West Coast tour. Officials said they were informed that between 30 and 70 patrons were at the event when the fire broke out, the East Bay Times reports.

#breaking: More video of commercial structure fire in Oakland, California. 3 alarms and counting. Mutual aid from City of Alameda arriving. http://pic.twitter.com/Gqw6EUjPjH

— Tim Jue (@timjue) December 3, 2016

‘We still have to do a more thorough search of the building and we don’t know the potential number of other victims,’ Deloche-Reed said.

Fire officials were still trying to determine how the fire started, the fire chief, who described the building as “huge”, said. She added the roof had collapsed, complicating efforts to recover bodies.

“There is a large majority of that building that has not been searched,” Deloach-Reed said during a press briefing.

“We are hoping that the number nine is what there is and that there are no more,” the fire chief said, referring to the number of known fatalities. “But we have not done a complete search of the building.”

An aggressive attack on the fire was underway when conditions suddenly changed and firefighters had to go back outside. 

31st Ave: Fire through the roof, Command requests all units out of the building, going defensive. @KTVU @kron4news @CBSSF @abc7newsbayarea

— Oakland Firefighters (@OaklandFireLive) December 3, 2016

As of 4:20am PT, the fire was not officially under control, as smoke was still coming from an upper floor in the building, the Times reported.

31st Ave- crews will remain on scene for several more hours. 2 ladder pipes and hand lines still deployed extinguishing hot spots. #oakland

— Oakland Firefighters (@OaklandFireLive) December 3, 2016

Sabrina May Dolan told DailyMail.com that her sister, Chelsea Faith, was performing at the party under her stage name Cherushii when the fire started on the second floor of the building.

As RT notes, dozens of people posted on the event’s Facebook page to say that they had safely escaped the fire, while others are inquiring about friends and relatives yet unaccounted for.

One, Eveline Darroch, wrote: “I am here with the fire inspector going through the list of missing names of missing/safe. At this point there are several threads. I am requesting that you only post in this thread their name and missing or safe next to it. Thank you.”

A Twitter account that posts about Oakland firefighters reported that the fire has gone through the roof and all units have been told to withdraw from the building. There has been no official update from the Oakland Fire Department, however.

via http://ift.tt/2fWEmIW Tyler Durden

2016 is shaping up as the year when countless conspiracy theories will be confirmed to be non-conspiracy fact: from central bank rigging of capital markets, to political rigging of elections, to media rigging of public sentiment, and now, commercial bank rigging of silver. In short, tinfoil hat-wearing nutjobs living in their parents basement have been right all along.

In early October, we reported that “In A Major Victory For Gold And Silver Traders, Manipulation Lawsuit Against Gold-Fixing Banks Ordered To Proceed,” however one bank was exempt: Deutsche Bank. The reason why was known since April, when we first reported that Deutsche Bank had agreed to settle the class action lawsuit filed in July 2014 accusing a consortium of banks of plotting to manipulate gold and silver. Among the charges that Deutsche Bank effectively refused to contest were the following:

• employment of a manipulative device claims
• bid-rigging, and unjust enrichment.
• price fixing and unlawful restraint
• price manipulation claims
• aiding and abetting and principal-agent claims.

An affidavit filed in October shed more light on the settlement process:

The negotiations with Deutsche Bank over the material terms of the Settlement took place over several months starting in December 2015 and continuing until the Deutsche Bank Settlement Agreement was executed on September 6, 2016.

 

Following initial phone calls with Deutsche Bank’s counsel in December 2015, Lowey and Grant & Eisenhofer engaged in lengthy negotiations with Deutsche Bank’s counsel over the material terms of the settlement, including the amount of the settlement consideration, the scope of the cooperation to be provided by the Deutsche Bank Defendants, the scope of the releases, and the circumstances under which the parties would have the right to terminate the settlement.

 

During the course of the negotiations, Class Counsel presented what we perceived to be the strengths and weaknesses of the claims and defenses, as well as Deutsche Bank’s litigation exposure.

In February 2016, we reached an agreement with Deutsche Bank on the amount of the settlement, subject to the negotiation of other material terms of the deal. For example, given that this is the first settlement in the case, it was our view that the cooperation provisions of the deal were extremely important to our ability to maximize the overall recovery for the class against the Non-Settling Defendants. The negotiations as to the scope of the cooperation provisions continued for several months.

 

On April 13, 2016, counsel for Deutsche Bank and Class Counsel signed a Binding Settlement Term Sheet (“Term Sheet”). The Term Sheet set forth the terms on which the parties agreed, subject to the negotiation of a full Settlement Agreement, to settle Plaintiffs’ claims against Deutsche Bank. At the time the Term Sheet was executed, Class Counsel was well-informed about the legal risks, factual uncertainties, potential damages, and other aspects of the strengths and weaknesses of the claims and defenses asserted.

 

By letter dated April 13, 2016, the Parties reported to the Court via ECF that the Term Sheet had been executed, and advised the Court that the Term Sheet would be superseded by a formal settlement agreement. ECF No. 116.

 

The parties negotiated the Deutsche Bank Settlement Agreement over the course of the next several months. The negotiations over the terms of the Deutsche Bank Settlement Agreement included  various material terms over which the parties had substantial disagreement, requiring significant give and take on both sides. To that end, drafts of the Deutsche Bank Settlement Agreement went back and forth between the parties, and numerous contested issues were raised, negotiated and resolved, including without limitation, continuing negotiations over the scope of Deutsche Bank’s cooperation (see ¶ 4(A)-(G)), the scope of the releases (see ¶ 12 (A)-(C)), and the circumstances under which the parties could terminate the Settlement (see ¶ 21).

 

Thus, the Deutsche Bank Settlement Agreement, which was executed (along with the Supplemental Agreement) on September 6, 2016, was the culmination of arm’s-length settlement negotiations that had extended over many months.

 

The Deutsche Bank Settlement was not the product of collusion. Before any financial numbers were discussed in the settlement negotiations and before any demand or counter-offer was ever made, we were well informed about the legal risks, factual uncertainties, potential damages, and other aspects of the strengths and weaknesses of the claims against Deutsche Bank.

 

The Deutsche Bank Settlement involves a structure and terms that are common in class action settlements in this District. The consideration that Deutsche Bank has agreed to pay is within the range of that which may be found to be fair, reasonable, and adequate at final approval.

There was just one thing missing: the settlement amount. Then, on October 17, the first part of the answer was revealed when according to court filings, Deutsche Bank had agreed to pay $38 million to settle the silver manipulation litigation. The settlement, which was disclosed in papers filed in Manhattan federal court, concludes one of many recent lawsuits in which investors have accused banks of conspiring to rig the precious metal markets. However, until Deutsche Bank’s payment of $38 million to settle silver manipulation allegations, there was never any formal closure.

On Friday, two months after the silver settlement, Deutsche Bank agreed to pay another $60 million to settle the other side of the antitrust litigation: that of rigging the gold market.

As Reuters first reported, the preliminary settlement was filed on Friday with the U.S. District Court in Manhattan, and requires a judge’s approval. As part of the settelement, Deutsche Bank has denied any wrongdoing, and with the two settlements, and some $98 million out of pocket, it is clear of any future liability regarding precious metals manipulation.

The case is one of many in the Manhattan court in which investors accused banks of conspiring to rig rates and prices in financial and commodities markets.

As we reported previously, in an Oct. 3 decision, U.S. District Judge Valerie Caproni in Manhattan said investors could pursue much of their lawsuit against the other four banks named in the anti-trust lawsuit which include Barclays, Bank of Nova Scotia, HSBC and Societe Generale.

In October, Vincent Briganti, a lawyer for the investors, said the silver settlement deal provides “substantial monetary compensation plus cooperation from Deutsche Bank in the continued prosecution of this important case against the non-settling defendants.” He has yet to comment on the gold settlement.

So who gets to benefit from the settlement? This is what the lawyer said on the silver settlement disclosed in early October:

We have reason to believe that there are at least hundreds of geographically dispersed persons and entities that fall within the Settlement Class definition. The Settlement Class includes traders of COMEX Silver Futures contracts, anyone who traded in physical silver based on the Silver Fix, and traders in various silver derivatives.

The same will likely be applicable to gold traders following Friday’s monetary settlement.

The other beneficiary, of course, is the class of investors, people and “conspiracy theorists” who claimed all along that gold and silver were subject to rigging in various forms throughout the years. Well, you were right. However, we wouldn’t hold much hope for getting any substantial monetary rewards. By the time the settlement is done, there will likely be at best a few hundred dollars left per claimant.

The good news is that this formal closure will open the door for other, similar lawsuits – for both silver and gold manipulation – now that the seal has been broken.

via http://ift.tt/2h5gZ4X Tyler Durden

Following  yesterday’s unexpected phone call between Taiwan president Tsai Ing-wen and President-elect Trump, which broke with decades of foreign policy norms resulting from Washington’s official “One China” stance….

NEW PHOTO: Taiwan releases photo of President Tsai Ing-wen, center, speaking with Trump during controversial call https://t.co/Gt2CAiKH7K http://pic.twitter.com/RoLIjWlYML

— ABC News (@ABC) December 3, 2016

… and which spooked numerous foreign policy pundits, concerned that China would see the call as a hostile act by the Trump team and lead to a material deterioration in US-China relations, which also prompted Trump to take to twitter on Friday night to explain that he did not initiate the call but was merely responding to good wishes from the president of Taiwan…

The President of Taiwan CALLED ME today to wish me congratulations on winning the Presidency. Thank you!

— Donald J. Trump (@realDonaldTrump) December 3, 2016

….and further poked the hypocrisy of the US establishment by saying “Interesting how the U.S. sells Taiwan billions of dollars of military equipment but I should not accept a congratulatory call” in a follow up tweet…

Interesting how the U.S. sells Taiwan billions of dollars of military equipment but I should not accept a congratulatory call.

— Donald J. Trump (@realDonaldTrump) December 3, 2016

… China responded on Saturday morning in two ways.

First, as Xinhua writes in its English edition, it “lodged solemn representations with the United States, urging the latter to honor its commitment to the one-China policy, Foreign Ministry spokesperson Geng Shuang said on Saturday.”

“It must be stated that, there is only one China and Taiwan is an inalienable part of China’s territory, and the government of the People’s Republic of China is the sole legitimate government that represents China. Those are all facts recognized by the international community,” Geng said. The one-China principle is the political foundation for the China-U.S. relations, Geng said.

The White House on Friday reaffirmed backing for its long-standing support of the one-China policy and the three China-U.S. joint communiques. “We remain firmly committed to our one-China policy based on the three joint communiques,” White House National Security Council spokesperson Ned Price told local media. “Our fundamental interest is in peaceful and stable cross-strait relations.”

Geng also urged “relevant parties in the US to honor the commitment to the one-China policy as well as the three Sino-U.S. joint communiques, and to handle Taiwan-related issues with caution and care to avoid unnecessarily interfering with the overall situation of Sino-US relations.” That was interpreted as a direct warning to Trump to be careful while observing international diplomatic protocol, especially when China is involved.

According to AFP, it was not immediately clear whether Trump’s telephone call with Tsai Ing-wen marked a deliberate pivot away from Washington’s official “One China” stance, but it fuelled fears he is improvising on international affairs. China added that the one-China principle is a cornerstone for healthy development of Sino-U.S. relations, and China does not want this political foundation to be interfered with or damaged, Wang added.

That said, to avoid being seen as too critical on the president-elect, Xinhua also reported that overnight, Foreign Minister Wang Yi called Tsai’s call with Trump “a little trick”, or loosely translated in English as “gimmick”, by Taiwan which would not change the one-China consensus in international community. He added that the “One-China” policy is the foundation for the healthy development of China’s relationship with the U.S.

Further de-escalating tensions, Wang also said on the sidelines of a foreign policy seminar on Saturday that “I don’t think it will change the one-China policy of the U.S. government either.”

* * *

Prior to Beijing’s response, in China, analysts painted the call as something originating from Taiwan, claiming it was a deliberate Taiwanese attempt to upend America’s China policy. Jin Canrong, from China’s Renmin University, told AFP Tsai had been “very cunning” in her call to Trump.

“Tsai Ing-wen would like to draw the United States against the mainland,” he said.

During his presidential campaign, Trump repeatedly accused China of manipulating its currency to harm US manufacturing and threatened to impose tariffs on some of its exports. “One can see at once that Trump is very reckless, not familiar at all with the whole context,” Jin said.

Chinese citizens were quick to react to the call on social networking platforms, noting Trump’s reference to Tsai as “president” whereas on the mainland she is only referred to as Taiwan’s “leader”.

“The US dares to recognise Taiwan independence,” one user said on Weibo, China’s version of Twitter.

 

Another posted: “He calls Tsai as +president+ on Twitter!!! Is Trump thinking of using Taiwan as a bargaining chip in his negotiations with China?”

 

However Zhang Wensheng, of Xiamen University, was more circumspect, dismissing Trump’s use of the term “president” as “personal greetings” that “do not reflect a political position whatsoever”.

While the motive behind Trump’s conversation with the Taiwan president remains unclear – and perhaps there was no motive to begin with – Friday’s incident is a reminder that under the President-elect, everything is about to change and what was formally considered “mere protocol” is now officially out of the door, for better or worse.

via http://ift.tt/2gl1kub Tyler Durden

Authored by William Blum, originally posted at Strategic-Culture.org,

On November 16, at a State Department press briefing, department spokesperson John Kirby was having one of his frequent adversarial dialogues with Gayane Chichakyan, a reporter for RT (Russia Today); this time concerning U.S. charges of Russia bombing hospitals in Syria and blocking the U.N. from delivering aid to the trapped population.

When Chichakyan asked for some detail about these charges, Kirby replied: “Why don’t you ask your defense ministry?”

GC: Do you – can you give any specific information on when Russia or the Syrian Government blocked the UN from delivering aid? Just any specific information.

 

KIRBY: There hasn’t been any aid delivered in the last month.

 

GC: And you believe it was blocked exclusively by Russia and the Syrian Government?

 

KIRBY: There’s no question in our mind that the obstruction is coming from the regime and from Russia. No question at all.…

 

MATTHEW LEE (Associated Press): Let me –- hold on, just let me say: Please be careful about saying “your defense minister” and things like that. I mean, she’s a journalist just like the rest of us are, so it’s -– she’s asking pointed questions, but they’re not –

 

KIRBY: From a state-owned -– from a state-owned –

 

LEE: But they’re not –

 

KIRBY: From a state-owned outlet, Matt.

 

LEE: But they’re not –

 

KIRBY: From a state-owned outlet that’s not independent.

 

LEE: The questions that she’s asking are not out of line.

 

KIRBY: I didn’t say the questions were out of line…

 

KIRBY: I’m sorry, but I’m not going to put Russia Today on the same level with the rest of you who are representing independent media outlets.

One has to wonder if State Department spokesperson Kirby knows that in 2011 Secretary of State Hillary Clinton, speaking about RT, declared: “The Russians have opened an English-language network. I’ve seen it in a few countries, and it is quite instructive.”

I also wonder how Mr. Kirby deals with reporters from the BBC, a STATE-OWNED television and radio entity in the U.K., broadcasting in the U.S. and all around the world.

Or the state-owned Australian Broadcasting Corporation, described by Wikipedia as follows: “The corporation provides television, radio, online and mobile services throughout metropolitan and regional Australia, as well as overseas… and is well regarded for quality and reliability as well as for offering educational and cultural programming that the commercial sector would be unlikely to supply on its own.”

There’s also Radio Free Europe, Radio Free Asia, Radio Liberty (Central/Eastern Europe), and Radio Marti (Cuba); all (U.S.) state-owned, none “independent”, but all deemed worthy enough by the United States to feed to the world.

And let’s not forget what Americans have at home: PBS (Public Broadcasting Service) and NPR (National Public Radio), which would have a near-impossible time surviving without large federal government grants. How independent does this leave them? Has either broadcaster ever unequivocally opposed a modern American war? There’s good reason NPR has long been known as National Pentagon Radio. But it’s part of American media’s ideology to pretend that it doesn’t have any ideology.

As to the non-state American media … There are about 1,400 daily newspapers in the United States. Can you name a single paper, or a single TV network, that was unequivocally opposed to the American wars carried out against Libya, Iraq, Afghanistan, Yugoslavia, Panama, Grenada, and Vietnam while they were happening, or shortly thereafter? Or even opposed to any two of these seven wars? How about one?

In 1968, six years into the Vietnam War, the Boston Globe (Feb. 18, 1968) surveyed the editorial positions of 39 leading U.S. papers concerning the war and found that “none advocated a pull-out.” Has the phrase “invasion of Vietnam” ever appeared in the U.S. mainstream media?

In 2003, leading cable station MSNBC took the much-admired Phil Donahue off the air because of his opposition to the calls for war in Iraq. Mr. Kirby would undoubtedly call MSNBC “independent.”

If the American mainstream media were officially state-controlled, would they look or sound significantly different when it comes to U.S. foreign policy?

New Cold War Propaganda

On Nov. 25, the Washington Post ran an article entitled: “Research ties ‘fake news’ to Russia.” It’s all about how sources in Russia are flooding American media and the Internet with phony stories designed as “part of a broadly effective strategy of sowing distrust in U.S. democracy and its leaders.”

“The sophistication of the Russian tactics,” the article says, “may complicate efforts by Facebook and Google to crack down on ‘fake news’.”

The Post states that the Russian tactics included “penetrating the computers of election officials in several states and releasing troves of hacked emails that embarrassed Clinton in the final months of her campaign.” (Heretofore this had been credited to Wikileaks.)

The story is simply bursting with anti-Russian references:

• –An online magazine header – “Trolling for Trump: How Russia Is Trying to Destroy Our Democracy.”
• –“the startling reach and effectiveness of Russian propaganda campaigns.”
• –“more than 200 websites as routine peddlers of Russian propaganda during the election season.”
• –“stories planted or promoted by the disinformation campaign were viewed more than 213 million times.”
• –“The Russian campaign during this election season … worked by harnessing the online world’s fascination with ‘buzzy’ content that is surprising and emotionally potent, and tracks with popular conspiracy theories about how secret forces dictate world events.”
• –“Russian-backed phony news to outcompete traditional news organizations for audience”
• –“They use our technologies and values against us to sow doubt. It’s starting to undermine our democratic system.”
• –“Russian propaganda operations also worked to promote the ‘Brexit’ departure of Britain from the European Union.”
• –“Some of these stories originated with RT and Sputnik, state-funded Russian information services that mimic the style and tone of independent news organizations yet sometimes include false and misleading stories in their reports.”
• –“a variety of other false stories — fake reports of a coup launched at Incirlik Air Base in Turkey and stories about how the United States was going to conduct a military attack and blame it on Russia”

A former U.S. ambassador to Russia, Michael McFaul, is quoted saying he was “struck by the overt support that Sputnik expressed for Trump during the campaign, even using the #CrookedHillary hashtag pushed by the candidate.” McFaul said Russian propaganda typically is aimed at weakening opponents and critics.

“They don’t try to win the argument. It’s to make everything seem relative. It’s kind of an appeal to cynicism.” [Cynicism? Heavens! What will those Moscow fascists/communists think of next?]

The Post did, however, include the following: “RT disputed the findings of the researchers in an e-mail on Friday, saying it played no role in producing or amplifying any fake news stories related to the U.S. election.” RT was quoted: “It is the height of irony that an article about ‘fake news’ is built on false, unsubstantiated claims. RT adamantly rejects any and all claims and insinuations that the network has originated even a single ‘fake story’ related to the US election.”

It must be noted that the Washington Post article fails to provide a single example showing how the actual facts of a specific news event were rewritten or distorted by a Russian agency to produce a news event with a contrary political message.

What then lies behind such blatant anti-Russian propaganda? In the new Cold War such a question requires no answer. The new Cold War by definition exists to discredit Russia simply because it stands in the way of American world domination. In the new Cold War, the political spectrum in the mainstream media runs the gamut from A to B.

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For months we’ve been warning that real estate markets in NYC and San Francisco, among others, are getting ready to rollover as the market is about to be flooded with new supply of luxury apartments (see here and here).  Real estate in both markets are just starting to show signs of cracking as the apartments sales cycle is getting stretched out and pricing growth has stalled. 

Now, per an article from the Wall Street Journal, wealthy Chinese real estate investors are admitting that the jig is up in large cities like New York and are running for the hills.  With a substantial amount of capacity expected to come online over the next several quarters and a growth cycle that is entering its 8th year, one Chinese real estate investor admits “you get a sense now that it’s peaking.”

Swelling supply of high-end New York condominiums could result in losses for some Chinese developers, analysts said. A push to partner with U.S. developers on other projects, meanwhile, has brought unexpected legal spats and other delays.

 

“I see a danger in the real-estate market in the U.S.,” said John Liang, Xinyuan Real Estate’s managing director of U.S. operations. “With its seven- to eight-year cycle, you get a sense now that it’s peaking.” He added that he sees value in middle-tier residential properties in Manhattan and Queens.

 

“Right now the prices are really high,” said Zhang Xin, chief executive of Soho China, whose family invested in a stake in Manhattan’s General Motors Building in 2013. “I would be very cautious if I were to make a large investment in New York’s real estate today.”

 

Of course, Manhattan isn’t the only Burrough experiencing a supply glut.  Forest City Realty was just forced to take a $300mm impairment charge on a joint venture with a Shanghai-based development company after “unprecedented rental supply in downtown Brooklyn” forced the copanies to delay development.

CL Investment, which has three other high-end residential projects in Manhattan, plans to keep the office space as part of efforts to diversify, according to a person with knowledge of the matter.

 

In Brooklyn, N.Y., a deal between Shanghai-based, state-owned conglomerate Greenland Holding Group and Forest City Realty Trust on a 22-acre, 15-building mixed-use project in various stages of construction is facing stiff headwinds.

 

Forest City earlier this month said it took a $307.6 million impairment charge for the project, called Pacific Park Brooklyn, and said it plans “to delay future vertical development.”

 

“We revised the schedule due to a number of factors, including almost unprecedented concentrations of new rental supply in downtown Brooklyn, which will take time for the market to absorb,” said Forest City CEO David LaRue.

Just to add insult to injury, the softening real estate market is coming just as China is once again looking to tighten rules on capital investments outside of China. 

The headwinds come at a time when Beijing once again is planning to tighten its rules on Chinese investment capital leaving the country.

 

The Chinese State Council is expected to soon announce new reviews of foreign acquisitions of $10 billion or more and property investments by state-owned firms of more than $1 billion, according to people with direct knowledge of the matter and documents reviewed by The Wall Street Journal.

 

Total Chinese direct investment in U.S. real-estate and hospitality assets is nearly $12.6 billion, accounting for nearly a fifth of total Chinese investment in the U.S. since 1990, according to a recent report from the Rhodium Group and the National Committee on U.S.-China Relations. Most of the activity has taken place since 2010 and is concentrated in areas such as New York, Los Angeles and San Francisco.

Of course, no matter what kind of capital controls are put in place, just like the Vancouver and Sydney real estate markets, we suspect that when Chinese money needs to be laundered, people will find a way.  The only question is now that yet another bubble has run its course, where subsequent bubbles will emerge.

* * *

For those who missed it, below is what we recently wrote after 3Q16 apartment closings plunged 18.6% in NYC.

New York City apartment owners should take note of the latest 3Q16 “Elliman Report” on Manhattan real estate sales because the market looks to be in free fall.  In fact, the number of apartment closings plunged 18.6% YoY while apartments sat on the market an average of 8.2% longer.  Inventory also spiked with re-sale inventory up 8.2% YoY and new development inventory up a massive 27.2%.   

“The number of re-sales has fallen year over year in each of the last four quarters at an increasing rate.  Listing inventory reflected significant differences in the rate of growth between re-sale and new development.  Re-sale inventory expanded 8.2% to 5,290 while new development inventory surged 27.2% to 973 respectively from the same period a year ago.“

Median sales prices did increase YoY by 7.6% but collapsed QoQ despite a massive surge in pricing on the luxury end of the market.

 

The re-sale market looks even more bleak, on a standalone basis, as the overall numbers above are skewed by sales of super-luxury new development units.  The number of re-sale closings collapsed over 20% YoY while days on the market increased 7.5%

 

All segments of the market exhibited volume weakness with co-op sales down 17.1% YoY on a 14.1% increase in listing days and a modest 1.4% increase in median sales price.

 

Condo sales declined 20.1% YoY on a 2.4% increase in listing days and a 6.7% increase in median sales price.  Meanwhile, condo inventory rose over 15%.

 

And, of course, the luxury market seemed to hold up the best in 3Q with volumes still weak at -18.6% but median pricing up 23.9% and listing inventory down YoY.

 

In conclusion, the lesson seems to be that the marginal New York City buyer has been priced out of the market (volume down 20%) while sellers have not yet accepted that the bubble has burst deciding instead to maintain listing prices while letting their apartments sit on the market longer amid growing inventory levels.  Meanwhile, the luxury market is the only segment that seems to be holding up which only serves to prove that Chinese billionaires still have cash they would like to hide in the U.S.

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