Late last week, we reported that in its latest push to limit and/or halt capital outflows, China unveiled new capital controls meant to stem further capital flight disguised as outbound M&A by clamping down with tighter controls on Chinese companies seeking to invest overseas, intensifying efforts to slow a surge in capital fleeing offshore amid tepid growth and an uncertain economic outlook. Beijing was said to focus on “extra-large” foreign acquisitions valued at $10 billion or more per deal, property investments by state-owned firms above $1 billion and investments of $1 billion or more by any Chinese company in an overseas entity unrelated to the investor’s core business. The new controls would apply to deals yet to receive approval from China’s top economic planning agency.

It did not end there.

One month after we noted a Bloomberg report that China was preparing to impose curbs on Bitcoin – which has in the recent past become a widely accepted mechanism to bypass capital controls – including policies restricting domestic bitcoin exchanges from moving the cryptocurrency to platforms outside the nation and imposing quotas on the amount of bitcoins that can be sent abroad, overnight we learned that China was taking a page out of the Indian demonetization playbook, and was curbing gold imports in another attempt to clamp down on capital leaving the country.

As the FT reported, some banks with licences have recently had difficulty obtaining approval to import gold, they said — a move tied to China’s attempts to stop a weakening renminbi by tightening outflows of dollars, the banks added.

To summarize, in just the past month, China has unveiled at least three distinct sets of “controls” aimed at curbing capital flight out of China, at a time when as Goldman calculated recently, the true extent of capital outflows if far greater than what is reported by the central bank.

 

Then, overnight, the PBOC added a fourth unique form of “capital control” when China’s central bank announced it would limit the amount of renminbi that Chinese companies and individuals can remit outside the country, “imposing a cap for the first time in more than two decades”, according to the SCMP, to stem the yuan’s outflow as the currency plumbs daily lows.

As the Hong Kong publication reports, companies domiciled in China will be limited to net currency outflows equivalent to 30 per cent of the owners’ equity, according to Order No. 306 issued Monday by the People’s Bank of China. Commercial banks should “utilise an integrated prudential management for cross-border payment in both foreign currency and yuan,” according to the central bank’s statement.

Among the other rules established by the PBOC in setting yuan-denominated loans to overseas entities, are the following, courtesy of Bloomberg and Reuters:

• Onshore corporates can only make yuan loans within quota; banks should stop handling business if cos use up quota
• Lender also has to have been registered for at least a year; borrower has to be a related entity
• Lender can’t make personal loan to overseas borrower, and also can’t use debt financing for purpose of an overseas loan to a foreign entity
• Party making a yuan loan to an overseas entity must first register the loan with SAFE; must keep loan within a certain limit which wasn’t specified
• Lenders should have shareholding relationships with borrowers
• Banks need to strictly examine whether use of yuan funds offshore is genuine and appropriate
• Interest rates for loans need to be above 0%
• Tenor should be 6 mos to 5 yrs; loans with maturities of 5 yrs or above need to be registered at local PBOC branches
• If lenders can’t justify why borrowers don’t repay debt on time, banks need to stop handling new business and report it to local PBOC branches

This is a stunning reversal in government policy, which had previously encouraged the renminbi’s worldwide usage, part of a long-term strategy to internationalise the currency, culminating with the renminbi’s admission into the IMF’s SDR basket. Needless to say, the latest announcement will hardly impress the IMF which has been pushing for less government control of the currency.

As SCMP notes, among the other measures, not listed above to halt capital flight, the central bank has instituted a range of measures to plug gaps where the currency could be remitted amid its 7 per cent slump this year against the US dollar, from banning Chinese citizens from buying insurance policies offshore, to requiring credit card companies to seek currency licenses.

* * *

Two days ago, Horseman Global’s Russell Clark asked “Is China running out of money.” With every incremental “capital control” the answer is becoming increasingly obvious.

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After soaring over 15% in the post-Trump period, Caterpillar shares are halted this morning ahead of a presentation at Credit Suisse Annual Industrial Conference. The presentation shows cost cuts, layoffs, and admits that 2017 consensus estimates are "too optimistic."

Other highlights:

• CATERPILLAR ON TRACK FOR OVER $2B COST REDUCTION FOR 2016
• CAT: COST CUTS INCL COMBINED/REDUCED FUNCTIONS, FEWER PEOPLE
• CAT: FIRST CALL 2017 CONSENSUS ESTIMATE $3.25 TOO OPTIMISTIC
• CAT: FIRST CALL '17 CONSENSUS EST. $38B SALES TOO OPTIMISTIC

CAT Halted…

 

Re-opened…Buy the dip…

 

Full Presentation…

Caterpillar Presentation at Credit Suisse Investor Conference 2016 by zerohedge on Scribd

 

Link to Credit Suisse Webcast.

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It is said that history has a sense of irony. The latest US election is not an exception.

Consider the following…

1.     Donald Trump campaigned aggressively on trade… particularly his opposing of the fact that the US gets taken advantage of by foreign nations via bad trade deals.

2.     Trump wins the Presidency on November 8, 2016.

3.     US trade gets royally screwed in the currency markets.

This is not conspiracy theory. Since Trump won the Presidency, Japan has absolutely SHREDDED the Yen relative to the $USD. In a mere three weeks, the Yen/ $USD pair has collapsed an astounding 12%.

That doesn’t sound like a huge deal, so look at the longer-term chart.

That is a massive currency crash. The Bank of Japan has accomplished in three weeks what previously took six months and a $100 BILLION+ expansion of a massive QE program.

The real problem with this is that it is forcing the $USD sharply higher, triggering a potential crisis the debt markets as the $10 TRILLION US Dollar carry trade ignites.

If you’re unfamiliar with the concept of a carry trade, it occurs when you borrow in one currency, usually at a very low interest rate, and then invest the money in another security, whether it be a bond, stock or what have you, that is denominated in another currency.

Globally over $10 TRILION of $USD is doing this right now. $10 Trillion: an amount greater than the economies of Japan and German combined.

Every tick higher in the $USD… means more of this trade blowing up. Already, it’s leading credit stress in Asia.

Another Crisis is brewing… the time to prepare is now.

If you've yet to take action to prepare for this, we offer a FREE investment report called the Prepare and Profit From the Next Financial Crisis that outlines simple, easy to follow strategies you can use to not only protect your portfolio from it, but actually produce profits.

We made 1,000 copies available for FREE the general public.

As we write this, there are less than 50 left.

To pick up yours, swing by….

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Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

 

 

 

 

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Submitted by Martin Armstrong via ArmstrongEconomics.com,

Gallup first began asking if Americans trusted the mainstream media in 1972. America’s trust and confidence in mainstream media stood at its highest level back in 1976 at 72%. Of course, that was due to the investigative journalism regarding Vietnam, and naturally Woodward and Berstein, with the Watergate scandal.

Following that period, the media began to attack the right with Reagan. By the late 1990s, the Americans’ trust in the media fell steadily into the low to mid 50% level.

Following 2005, the trust in mainstream media dropped into the mid 40% range. It has consistently been below a majority level ever since the 2007 economic decline. However, after the 2016 election and the extreme bias for Hillary, where virtually 99% of mainstream media deliberately tried to manipulate the people to vote for Hillary, the trust factor has collapsed to 32%. When they polled just conservative Republicans, it was 14%. So the 32% level is the average American.

 

Our models on the confidence in American mainstream media using the Gallup Poll data projects a sharp decline into 2019/2020, which is the bottom of the current 8.6-year Economic Confidence Model. This will be 43 years from high. Note that 2007 was 31 years from that peak. It was 2007 and the collapse in the economy that has marked the collapse in public confidence in government and the media.

We should expect that the media will viciously attack Donald Trump in a futile effort to cling to some level of importance and to desperately try to demonstrate that they were not wrong with 99% of the media endorsing Hillary. But the media willingly conspired to make Hillary president. They will now try to vindicate themselves by trashing Trump at every possible chance. They will now fuel the civil divide and help lay the foundation for the collapse of the United States itself by turning left against right. Even the New York Post wrote that what they were witnessing was the end of journalism. They will do everything to try to change Congress in 2018. It appears that will be their last stand. The younger generation does not buy newspapers and magazines. Their end is near.

Trump summoned the mainstream TV media to Trump Tower for a meeting. Whether he can persuade them to stop the supporting of civil unrest remains to be seen. Lester Holt, Charlie Rose, George Stephanopoulos and Wolf Blitzer all headed to this private meeting. All have demonstrated outrageous bias and have disgraced the very purpose of a free press as they all tried to influence the people rather than report the news. Even Saturday Night Live made fun of how biased mainstream media has been…

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Is Janet Yellen trying to crash stocks to screw Trump?

Ever since the $USD began its bull market run in mid-2014, the Fed, lead by Janet Yellen, has intervened whenever the $USD cleared 98.

The reason for this was the following…

Over 47% of US corporate sales come from abroad. With the $USD spiking, pushing all other major currencies generally lower, US corporate profits began to implode. As we write this today, profits have fallen to 2012 levels.

Note when this whole profit massacre began.

Because of this, the Fed has “talked down” the $USD anytime it began to push higher.

Until today…

Since it was announced that Trump won the Presidency, the Fed has allowed the $USD to ramp straight up. It is currently over 101…and the Fed hasn’t said a word.

So we ask again… is Janet Yellen trying to crash stocks to screw Trump?

We all know the Yellen Fed is one of the most political in history with Fed officials openly donating money to the Clinton campaign.

Now Trump has won… the $USD soars to 101… and suddenly the Fed is silent? Not one Fed official has appeared to talk about putting off a rate hike or some other statement that might push the $USD lower…

This could literally crash stocks through any number of means:

1)   China implements a massive one-off devaluation of the Yuan.

2)   The $10 Trillion US Dollar carry trade blows up.

3)   The $199 Bond Bubble implodes as debt deflation ripples through the financial system.

4)   The $555 Trillion derivatives market based on interest rates ignites courtesy of a bon sell-off.

Another Crisis is brewing… the time to prepare is now.

If you've yet to take action to prepare for this, we offer a FREE investment report called the Prepare and Profit From the Next Financial Crisis that outlines simple, easy to follow strategies you can use to not only protect your portfolio from it, but actually produce profits.

We made 1,000 copies available for FREE the general public.

As we write this, there are less than 70 left.

To pick up yours, swing by….

http://ift.tt/2ePZt1g

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

 

 

 

 

 

 

 

 

 

 

 

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Hold your real assets outside of the banking system in one of many private international facilities  –>    http://ift.tt/2cyFwvQ;

 

 

 

 

Cashless World: 1 out of 3 People Never Use Cash

Posted with permission and written by Rory Hall (CLICK HERE FOR ORIGINAL)

 

 

We recently learned how serious these criminals are about stealing the sovereignty of every person on planet earth. Actually, most people are willingly handing over their sovereignty to the banks/government and have no idea what they are actually doing.

 

When India banned, made illegal, the 500 and 1000 rupee banknotes, this move effected every 1 out of 7 people on planet earth. That means that every 7th person, anywhere and everywhere, you come in contact with may have been effected by this cash ban.

 

Our individual sovereignty is tied directly to our ability to move freely about. When every step we make is tracked by the bank/government, our sovereignty is gone forever. Freely trading commerce is one of the cornerstones of human sovereignty. Without the ability to conduct business with whom we wish, when we wish, we are nothing more than cattle to the overlords of the land.

 

An expat living in Thailand sent me an email last week, at the height of India blowing apart because the idiotic decision by Prime Minister Modi to eliminate the two most used bank notes in India. The email was to inform me that Thailand would be implementing a new policy in the early part of 2017 to completely eliminate coins from circulation. South Korea has already taken measures to eliminate coins from circulation.

 

Here is a google translation from the Korean website wikitree.co.kr (once you arrive you will need to translate from Korean language)

 

From next year, you can get the change of cash that you bought and paid at a convenience store on your transportation card.

In the mid to long term, not only transportation cards but also remittance to credit cards and accounts will be promoted, and the industry will be expanded to retail sector such as marts and pharmacies.

The Bank of Korea announced on the 21st [November] that it will provide a service to charge prepaid transportation cards at convenient stores from the first half of next year (2017) as the first stage of the demonstration project to realize “a society without coins”.

What’s happening in Thailand? Well, the government doesn’t even bother with trying to cover up the “scheme” to move people onto the tax farm – currency enslavement awaits for all that enter the great Bangkok Baht giveaway!!!

 

According to Bangkok.Coconuts.co (published in July 2016):

 

“Want to win a million baht? Go for e-payment,” says Thailand’s junta, offering a lucky draw as an incentive to use the new online payment scheme “PromptPay.” The government wants to encourage citizens to use the service for business, in an effort to bring some of the massive informal Thai economy onto the books and boost tax revenues.

As Southeast Asian economies struggle and tax income misses budget targets, Thailand’s finance minister is hopeful that a nationwide e-payment scheme can add tax revenue of THB100 billion a year to the coffers.

Finance Minister Apisak Tantivorawong has estimated the move will save banks and businesses a combined THB75 billion a year, though other policymakers expect it could take some time for businesses to change their habits. Cash and checks now make up 80 percent of transactions.

A coup in May 2014 ended months of political unrest, but the generals have struggled to revive Southeast Asia’s second-largest economy as exports and consumption remain weak.

What about the most populace country on the planet: China? Well, they are, currently, in fourth place in use of digitized currency behind the U.S., Europe and Brazil. While none of these countries have eliminated cash from circulation, the banks/government make is sound “trendy”, convenient and oh so cool to never use cash. Why force a policy change when you can convince the people to hand over their freewill?

 

Although China still has some way to go before it catches up with countries such as the US and Sweden, the speed at which China has made the shift from cash towards cashless has surprised many. Non-cash payments have been growing by around 40 per cent a year and last year China moved into 4th place in the world for non-cash payments after the US, Europe and Brazil.

There are many reasons for China’s rapid transition away from cash. One is urbanisation, as non-cash payments are becoming both easy and popular. This is especially the case in top-tier cities such as Shanghai, Shenzhen and Beijing where it is both trendy and convenient to pay without using cash.

There is a huge variety of choices when it comes to making cashless payments and China UnionPay has definitely helped to encourage this, particularly in the case of debit cards, which outnumber credit cards in China by 10 to one. China has more than 4 billion cards on issue – almost enough for each adult to have about three each.

Mobile payments have also taken off in China – it has the largest proportion of people in the world using their mobile phones to make payments, online and physically. Source

The purpose of going cashless is not for our “convenience”, it is specifically for the purpose of “saving the banks” and tax collections. Governments and banks could care-less about what is convenient for us. They are only concerned with how much of our wealth they can extract from every person who has any currency.

 

The population of South Korea is 50.22 million people or said another way about 1/6th the size of the United States. India, on the other hand, is populated by 1.33 BILLION people while there are 7.4 BILLION populating the world. With Thailand making moves to remove cash/coins from the people we need to add their population to the mix as well. With more than 68.22 Million people this brings the number of people that are being forced by their government to use digital currency to a whopping 1.45 BILLION people. If you add 40% of China’s population of 1.35 BILLION that equates to approximately 540 million people the number of people currently living within a cashless society breaches 2 Billion people or said another way 1 out of every 3.5 people we come into contact with everyday. Every 4th person you greet has nothing to do with cash. This does not take in
account the top 3 nations using digitized currency for their transactions. If the U.S., Europe and Brazil were calculated we would be well below 1 out of 3 people never using cash for any transaction.

 

Some people that are reading this are telling themselves “so what?” those are distant far off lands that have nothing to do with the U.S. and this will never happen here. Well, not so fast.

 

Larry Summers, who is like an embedded tick at the Treasury Department of the United States, has called for the elimination of the $100 bill. With the elimination of the largest denominated bank note from circulation this would effectively kill the use of cash. Why? Because it would eliminate most of the total cash value from circulation in one-fell-swoop.

 

With $1.2 trillion in cash in circulation, as of July 2013 (now three year old information), not just in the United States but around the world, removing the $100 bill would deal a serious blow to the cash balance in circulation. Maybe not the amount of pieces of paper, but the cash value removed would be huge. Imagine going to a casino and hitting a blackjack table for $2,000 and the cashier hands you bundles of $50 bills (40) or worse, bundles of $20 bills (100)! $2,000 payout at a casino is not that a big deal. Having to handle the sheer volume of bank notes could potentially be a problem for the person receiving the windfall of paper.

 

If you have any misguided notion that a cashless society is not coming, just keep telling yourself that every time you use a debit card, credit card or your phone for your next purchase. With the elimination of cash we effectively hand over our individual human sovereignty to the banks and the government.

 

 

 

Please email with any questions about this article or precious metals HERE

 

 

 

 

 

Cashless World: 1 out of 3 People Never Use Cash

Posted with permission and written by Rory Hall (CLICK HERE FOR ORIGINAL)

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In his annual address to the nation, Russian President Vladimir Putin struck an unusually conciliatory tone on Thursday, saying Moscow wanted to get on with the incoming U.S. administration and was looking to make friends not enemies: “We are ready to cooperate with the new U.S. administration. We have a shared responsibility to ensure international security.”

“We don’t want confrontation with anyone. We don’t need it. We are not seeking and have never sought enemies. We need friends,” Putin told Russia’s political elite gathered in the Kremlin’s grand hall.

This year’s speech is a marked contrast to prior addresses, in which Putin lashed out at the West and the United States in particular. He did however note that any U.S.-Russia co-operation would have to be mutually beneficial and even-handed. Shortly after Trump’s victory, Putin said the President-elect may help restore tattered U.S.-Russia relations, and analysts said he was unlikely to want to dial up anti-Western rhetoric before Trump’s inauguration in January.

Putin also said he was hoping to find common ground with Washington on fighting global terrorism, a reference to Syria where Moscow is backing President Bashar al-Assad, while the outgoing U.S. administration has supported anti-Assad rebels. Russia hopes Trump will give Russia a freer hand there and cooperate militarily to fight Islamic State.

“We hope to unite our forces with the United States in the fight against the real threat, not the fictional one – international terrorism,” he said. The president also emphasized the need “to strengthen non-proliferation regimes,” noting that “attempts to upset the strategic balance are extremely dangerous and could lead to a global catastrophe.”

The tide has now turned in the Syrian conflict in favor of Putin’s ally, President Bashar al-Assad, whose grip on the Middle East country is increasing as Trump seems set to cut back support for rebel groups and focus U.S. efforts on fighting Islamic State.

The Russian leader also expressed hope of a better relationship with European countries. “Unlike some of our foreign colleagues, who see Russia as an opponent, we aren’t looking for enemies and never have done, we need friends,” Putin said, however he added that “we will not allow any infringement on the interests of the Russian Federation and we will manage our own destiny without tips and unsolicited advice.”

This too contrasted sharply with last year’s speech, when Putin lashed out at Turkish President Recep Tayyip Erodogan after his air force shot down a Russian warplane near the border with Syria.  Since then Russian relations with Turkey have seen a vast improvement.

Putin reached out to the entire world when he said that he stands for “the safety and the possibility of development, not for just the chosen few, but for all countries and peoples, for respect for international law and the diversity of the world.”

The president also said that Russia’s policy towards its Asian partners, China and Japan, is not opportunistic or a response to the deterioration in US-relations, but based on Russia’s plans for long-term development. “Once again, I stress that Russia’s active [Asia] policy is not dictated by some opportunistic considerations of today, not even by the cooling in relations with the United States or the European Union, but by long-term national interests and trends of global development,” the president said.

The Russian leader devoted much of his more than hour-long speech to the economy as he prepares to seek re-election in early 2018, blaming domestic factors for holding up growth, including a lack of investment, inadequate competition and shortcomings in the business climate, very much as has been the recent case in the US. There’ll be an “insignificant” decline in Russia’s economy this year after a contraction of 3.7 percent in 2015, Putin said. Inflation should end the year at a record low of less than 6 percent, then slow to the central bank’s 4 percent target in 2017, he said. The country’s difficulties over the last two years have only made it stronger, he said.

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The relentless dollar rally continues to slam the Turkish lira, which has been printing fresh all time lows on a daily basis, and today has been no exception, tumbling over 1.8%, and pushing the USDTRY to an all time high above 3.50.

Source: BBG

The collapse is driven by numerous factors: the rally in oil, the strength in the U.S. dollar, the surge in global bond yields, ongoing political uncertainty, signs of weakening economic growth from macro indicators are all weighing on the currency as well as Turkish stocks, which were down over 2%, making them underperformers among peers, according to Gulsen Ayaz, director of institutional sales at Istanbul-based Deniz Invest. Historically, Turkey has been sensitive to rising oil prices, with its high current account deficit having recently benefited from the slump in commodity prices which now is reversing.

According to Morgan Stanley there is little to look forward to for Lira bulls: the bank expects the Lira to hit 3.60 per dollar in about 6 months, and 3.70 by the end of 2017.

“This forecast is at the bearish end of the range of forecasts currently published by Bloomberg, though we expect the consensus to shift towards our forecasts soon… “Risk remains that these forecasts are hit earlier than expected.” Indeed, at this rate 3.60 may be hit by the end of the week.

Morgan Stanley also writes that the government’s moves to encourage replacement of FX contracts with liras “address the symptoms of the underlying problems affecting the currency, rather than addressing the causes of currency weakness.”

If the drop is not halted, the lira may fall as much as 2%, which marks the worst single daily drop for the Lira since the failed coup in July.

However, it is unclear just how Turkey can arrest the drop: last week the Turkish central bank hiked rates for the first time in over two years, defying pressure from Erdogan who has been pressuring it to lower rates, to prop up the currency. However, as the chart above shows, it has yet to have any impact.

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