This week 45 years ago, August 15th 1971 to be exact, President Nixon suddenly declared the end of the Gold Standard. He ushered in the modern monetary system based on fiat paper and digital currency that works so poorly for us today and led to the global financial crisis.

The dramatic announcement by ‘Tricky Dicky’ is a must watch and you can see it here:

“Your dollar will be worth just as much tomorrow as it is today… ”  

This was one of the most important events in modern financial, economic and monetary history and is a seminal moment in the creation of the global debt crisis which has confronted the U.S., Europe and the world in recent years and continues to this day.

Nixon ushered in an era of floating fiat currencies not backed by gold or silver but rather deriving value through government “fiat,” diktat or order of the government.

While Nixon justified the “technical” and “temporary” move as necessary to combat malign “international money speculators” who were “waging an all out war on the American dollar.”  The real reason for the move was that the U.S. , then as today, was living way beyond its means with the Vietnam war and rapidly escalating military spending leading to large budget deficits and inflation.

Imperial overstretch had begun…

Governments internationally including the French and their President Charles de Gaulle were concerned about the debasement of the dollar and began to exchange their dollar reserves for gold bullion bars.

Nixon tried to reassure the American public about the “bugaboo of devaluation” and the value of their currency by declaring incorrectly and comically to us today:

“Your dollar will be worth just as much tomorrow as it is today… “

Subsequent to Nixon’s decision 45 years ago, the U.S. dollar fell very sharply. Gold surged in the coming 9 years and rose from $35/oz to $850/oz by January 1980. Since 1971, gold has fallen from 1/35th of an ounce of gold to 1/1350th of an ounce of gold today.

This is not the fault of “speculators”, rather it is the fault of irresponsible governments and central bankers debasing the U.S. dollar since 1913 and indeed since 1971. With the notable exception of Federal Reserve Chairman Paul Volcker.

Today, U.S. dollars and all paper and digital money is declared by governments to be legal tender, despite the fact that neither paper nor digital currency has any intrinsic value and is not backed by gold reserves.

Historically, currencies were based on precious metals such as gold or silver, but fiat money is based on faith and on the performance of politicians, bankers and central bankers.

Because today’s fiat money is not linked to physical reserves of gold and silver, it is becoming worth less with each passing month and risks becoming worthless should hyperinflation take hold as has been seen in many nations in recent years including Zimbabwe and as being seen in Venezuela today. Indeed, Nigeria appears to be in the early stages of an inflationary spiral.

If people lose faith in a nation’s paper currency, they exchange it rapidly for real things and hard assets. Their ‘money’ no longer holds value. People who own real assets are protected. Those who are dependent solely on income and wages see their income and their standard of living fall. We appear to be in the end phase of this cycle:

Source: VisualizingEconomics.com via ZeroHedge.com

Throughout history most fiat currencies have not survived more than a few decades and have succumbed to hyperinflation.

The fiat currency or paper and digital based international monetary system has survived 45 years but is in terminal decline with many astute commentators now questioning whether it will survive the coming global financial crisis.

Gold’s role as a store of value and important monetary asset is being increasingly appreciated. Although some less informed commentators still view gold as a “barbaric relic,” the biggest market participants are again using gold as an alternative monetary asset today.

These include the largest central banks in the world, the largest banks in the world, the largest insurance companies in the world, the largest hedge funds in the world, the largest pension funds in the world and indeed the wealthiest investors in the world.

Currency debasement has without fail ended in disaster throughout history and in recent years. As faith is lost in the debased currency, inflation surges and the economy collapses.

We have been warning of the real risk of an international monetary crisis and a currency reset which sees all fiat currencies devalued against gold. While hyperinflation remains a worst case scenario, stagflation and a virulent bout of inflation looks almost certain in the coming months in debt laden economies globally.

Gold and silver will protect against currency devaluations as is being seen in the UK since Brexit.

Gold and Silver Bullion – News and Commentary

Gold treads water on U.S. Fed rate views; awaits July minutes (Reuters)

Gold Holds Advance Even as Fed Officials Flag Possible Rate Rise (Reuters)

Gold’s Popularity Dims In Short Term as ETFs Shrink by Most This Year (Bloomberg)

Gold cuts gains after mixed U.S. economic data (Reuters)

Banks to keep piles of cash in high security vaults (FT)

Billionaire Crispin Odey “Is Betting Everything On Gold” (Zerohedge)

Odey Still Bearish, Explains Massive Long Gold Bull Position (ValueWalk.com)

DB discloses $2 billion mining share portfolio (Smaulgd)

Labour opposition wants to increase the national debt by £270 billion (Telegraph)

Gold: Fresh Upside Breakout Is Imminent (Goldseek)

Gold Prices (LBMA AM)

17Aug: USD 1,342.75, GBP 1,031.23 & EUR 1,191.96 per ounce
16Aug: USD 1,349.10, GBP 1,039.89 & EUR 1,197.33 per ounce
15Aug: USD 1,339.20, GBP 1,037.21 & EUR 1,198.85 per ounce
12Aug: USD 1,336.70, GBP 1,032.60 & EUR 1,199.02 per ounce
11Aug: USD 1,344.55, GBP 1,037.05 & EUR 1,206.06 per ounce
10Aug: USD 1,351.85, GBP 1,035.11 & EUR 1,209.23 per ounce
09Aug: USD 1,332.90, GBP 1,025.80 & EUR 1,201.74 per ounce

Silver Prices (LBMA)

17Aug: USD 19.57, GBP 15.04 & EUR 17.37 per ounce
16Aug: USD 20.04, GBP 15.43 & EUR 17.77 per ounce
15Aug: USD 19.90, GBP 15.40 & EUR 17.81 per ounce
12Aug: USD 19.87, GBP 15.33 & EUR 17.81 per ounce
11Aug: USD 20.21, GBP 15.56 & EUR 18.13 per ounce
10Aug: USD 20.34, GBP 15.55 & EUR 18.19 per ounce
09Aug: USD 19.70, GBP 15.18 & EUR 17.77 per ounce

Recent Market Updates

– Gold In UK Pounds Collapses 38% Versus Gold and 56% Versus Silver Year To Date
– Will Ireland Be First Country In World To See Bail-in Regime?
– Money “Madness” Negative Interest Rates Sees Gold Buying Surge
– Gold Investment Demand Reaches Record In First Half 2016 On “Perfect Storm”
– Peak Gold – Did Gold Production Peak in 2015?
– Financial Times: “Victory For Gold Bulls Is Only Just Beginning”
– Irish Banks Most Vulnerable In Stress Tests – Banking Contagion In EU Cometh
– Gold In Sterling 2.2% Higher After Bank Of England Cuts To 0.25% and Expands QE
– Silver Kangaroo Coins – Sales Surge To Over 10 Million
– Trump, Clinton, “Ugliest” Election Coming – Gold’s “Summer Doldrums” Prior To Resumption of Bull Market
– Marc Faber: Invest 25% Of Investment Portfolios In Gold Bullion
– “Could Not Invent A More Bullish Story For Gold Bullion”
– Gold In Bull Market – “Every Reason For It To Continue” – Frisby In Money

via http://ift.tt/2bAsb6N GoldCore

• Futures flat ahead of Fed minutes (Reuters)
• Trump shakes up campaign staff (Reuters)
• Univision Wins Bankruptcy Auction for Gawker Media for $135 Million (WSJ)
• Congress receives FBI material on Hillary Clinton emails (CBS)
• Traders Brace for More Turmoil in World’s Worst Stock Market (BBG)
• Withdrawals Plague Once-Mighty Hedge-Fund Firms Brevan Howard and Tudor (WSJ)
• New York man in court charged with murdering Muslim cleric, assistant (Reuters)
• NSA website recovers from outage amid intrigue (Politico)
• The Soft Pinch of Austerity in Saudi Arabia Could Backfire (BBG)
• Walmart’s Out-of-Control Crime Problem Is Driving Police Crazy (BBG)
• Iran official: No permanent Russia base for Syria strikes (AP)
• Deutsche Bank Must Weigh Scrapping Bonus for 2016, Sewing Says (BBG)
• U.S. Charges Gabonese Fixer Tied to Hedge Fund Och-Ziff With Bribery (WSJ)
• Modi Sends Warning Shot to China, Pakistan on Territory Spat (BBG)
• Israel to pay Turkey $20 million in compensation after six-year rift (Reuters)
• Fund managers to ditch UK holdings over Brexit (Times)
• North Korea deputy ambassador in UK defects to South (Reuters)
• Target cuts profit forecast as same-store sales decline (Reuters)

 

Overnight Media Digest

WSJ

– A growing exodus from hedge funds extended to two of the biggest names in the industry Tuesday, Tudor Investment and Brevan Howard, as disenchanted investors increasingly shun what was once the hottest place to put money. Hedge funds and actively managed mutual funds have been underperforming since financial markets began their rebound in early 2009. http://on.wsj.com/2bboNON

– Pennsylvania Attorney General Kathleen Kane announced her resignation Tuesday, a day after she was convicted of perjury and obstruction in a case stemming from her leak of grand jury materials. http://on.wsj.com/2aZxCIo

– Ford Motor plans to release a fully driverless car without a steering wheel or pedals in the next five years, the latest salvo in a technological arms race engulfing the global auto industry. http://on.wsj.com/2aYyKfo

– Univision Communications won a court-administered auction for Gawker Media Group, outbidding Ziff Davis for control of the digital media pioneer that was forced into bankruptcy by a costly legal battle with former professional wrestler Hulk Hogan. http://on.wsj.com/2baMnLJ

 

FT

– Univision is buying Gawker Media for $135 million and offer from Univision represents a 50 percent premium to the initial $90 million bid by Ziff Davis, its main competition in the auction.

– Ford says it would build a fully self-driving car by the year 2021. The car will have no steering wheel or pedals and will be used in the driverless taxi services.

– Barnes & Noble has fired its CEO, Ron Boire, after the bookseller said the board determined that Boire “was not a good fit for the organization”

– BT CEO Gavin Patterson wrote to rival broadband providers Sky, Vodafone and TalkTalk to say that their ‘Fix Britain’s Internet’ campaign is misleading consumers and “talking down” Britain.

 

NYT

– Gawker Media was sold to Univision at auction on Tuesday. Univision bid $135 million to beat out digital media publisher Ziff Davis. http://nyti.ms/2bxbEi9

– Ford Motor’s Chief Executive Mark Fields said the company planned to mass produce driverless cars and have them in commercial operation in a ride-hailing service by 2021. http://nyti.ms/2bxaOSD

– The Obama administration on Tuesday issued aggressive new emissions standards for heavy-duty trucks. The rules are expected to achieve better fuel efficiency and a bigger cut in pollution than the version that was first proposed last year. http://nyti.ms/2bxbVS2

– African officials say the arrest of a Gabonese man on bribery charges may help pull back the curtain on a long-running foreign corruption scandal. United States authorities on Tuesday arrested Samuel Mebiame, a consultant who worked for a joint venture involving Och-Ziff Capital Management Group. http://nyti.ms/2bxcbk9

 

Canada

THE GLOBE AND MAIL

** Ottawa is monitoring the surge of unregulated mortgages in Canada as non-bank lenders see their market share grow amidst frothy housing conditions in Toronto and Vancouver. (http://bit.ly/2bdmNEU)

** Energy infrastructure company Kinder Morgan’s pipeline expansion is caught amidst a “challenging” time of transition, according to a federal ministerial panel appointed to conduct additional work despite the pipeline getting approved by the National Energy Board. (http://bit.ly/2bdp5Uw)

** A month after rules to legalize UberX were to come into effect, Toronto said that it had issued a new sort of licence to the disruptive ride-for-hire service and will begin screening its drivers with criminal background checks. (http://bit.ly/2bdoFh1)

NATIONAL POST

** BHP Billiton Ltd, the world’s biggest mining company, may end up “mothballing” its Canadian potash project by the end of the decade after completing two shafts at a cost of about US$2.6 billion. After the shafts are completed by 2018 or 2019, the company will decide on whether to build the mine or not. (http://bit.ly/2bmKGLO)

** Ontario’s largest credit union Meridian is launching a nationally available online and mobile bank. The aim is to compete with the country’s Big Five banks by accepting deposits and giving loans. (http://bit.ly/2bmR05D)

** Virgin Mobile Canada has introduced two new home Internet service plans for eligible Ontario residents. Customers in the province have the option of signing up for a 300 GB plan for $50 per month or an unlimited plan for $65 per month. (http://bit.ly/2bmM299)

 

Britain

The Times

More than half of Europe’s largest fund managers plan to cut their holdings in UK companies amid fears about the impact of Britain leaving the European Union. http://bit.ly/2bcnUom

A 3.4 billion pounds ($4.43 billion) bid for William Hill Plc hung by a thread last night amid indications that Rank Group Plc and 888 Holdings Plc may be ready to throw in their cards. http://bit.ly/2bcp8jp

The Guardian

The financial pressure on older people and their families when trying to pay for social care is growing, with the average cost of a room in a care home now more than 30,000 pounds a year. The cost of a care home room has risen by 5.2 percent in the last year, more than 10 times the average increase in pensioners income, according to a report by Prestige Nursing and Care. http://bit.ly/2bcpree

Britain’s Intellectual Property Office has approved Specsavers’ application to trademark the terms “should’ve” and “shouldve” to protect its well-known catchphrase. The high street opticians made the application in July in a bid to safeguard its slogan “should’ve gone to Specsavers”. http://bit.ly/2bcpzKQ

The Telegraph

Prime Minister Theresa May has written to Chinese President Xi Jinping insisting she wants stronger trade and cooperation between Britain and China, amid a row over her decision to delay the Hinkley Point nuclear deal. http://bit.ly/2bcr6Aw

City firms that help businesses run tax avoidance schemes could face huge financial penalties under fresh Government proposals. Under new HMRC plans, firms that help clients exploit tax rules, including the use of offshore tax havens, could pay a fine of up to 100 percent of the money lost to the taxpayer. http://bit.ly/2bcqE5f

Sky News

Direct Line Insurance Group Plc, one of Britain’s biggest insurance companies, has abandoned plans to offload a chunk of its pension liabilities as deficits soar in the wake of this month’s Bank of England interest rate cut, Sky News has learnt. http://bit.ly/2bcrvTg

Three 24-hour strikes by Virgin Trains East Coast staff have been called off pending further talks, the company has said. Members of the Rail, Maritime and Transport union had been planning to walk out later this month in a row over jobs, working conditions and safety. http://bit.ly/2bcpSVX

The Independent

Banco Santander SA has warned that Britain’s vote to leave the European Union marked the end of an era of stability for the UK banking sector as banks face the prospect of record low interest rates and wider economic volatility. http://ind.pn/2bcqURV

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

In the latest surprise move meant to boost his sagging polling, overnight Donald Trump revealed the latest shake up to his presidential campaign, the second in two months, hiring a top executive from Breitbart News and promoting a senior adviser in an effort to right his faltering campaign.

According to the NYT, Stephen Bannon, the executive chairman of Breitbart News will become the Republican campaign’s chief executive, and Kellyanne Conway, a senior adviser and pollster for Mr. Trump and his running mate, Gov. Mike Pence of Indiana, will become the campaign manager. Paul Manafort, the campaign chairman, will retain his title. But the staffing change, hammered out on Sunday and set to be formally announced Wednesday morning, was seen by some as a demotion for Mr. Manafort. The Washington Post cited campaign aides as saying that while Trump respected Manafort, he felt “‘boxed in’ and ‘controlled’ by people “who barely knew him”.

The news, first reported by The Wall Street Journal, was confirmed early Wednesday by Ms. Conway in a brief interview, but she rejected the idea that the changes amounted to a shake-up and said that Mr. Manafort was not being diminished. Manafort was forced to deny any impropriety this week after the New York Times reported his name was on secret ledgers showing cash payments designated to him of more than $12 million from a Ukrainian political party with close ties to Russia. Manafort has denied impropriety. Manafort took on the role in March after Trump fired his predecessor Corey Lewandowski.

“It’s an expansion at a busy time in the final stretch of the campaign,” she said, adding that Mr. Manafort and his deputy, Rick Gates, would remain in their roles. “We met as the ‘core four’ today,” Ms. Conway added, referring to herself, Mr. Bannon, Mr. Manafort and Mr. Gates.

Why the change? People briefed on the move said that it “reflected Mr. Trump’s realization that his campaign was at a crisis point, as opinion polls show Trump falling behind Hillary Clinton in the race for the Nov. 8 election. It also indicates that Trump — who has chafed at making the types of changes his current aides have asked for, even though he had acknowledged they would need to occur — has decided to embrace his aggressive style for the duration of the race.”  Conway and Bannon, whose news organization has been favorable to Trump since he entered the primaries, are close with Robert and Rebekah Mercer, the father-and-daughter conservative donors who have become allies of the candidate and are funding a “super PAC” that is working against Hillary Clinton.

Conway has past presidential experience in primary races, but the role in a general election represents a new one for her. She is well liked by Mr. Trump’s daughter Ivanka and her husband, Jared Kushner, who had been serving as the de facto campaign manager. Bannon has no experience with political campaigns, but he represents the type of bare-knuckled fighter that the candidate had in Corey Lewandowski, his combative former campaign manager, who was fired on June 20.

Bannon has been a supporter of Mr. Trump’s pugilistic instincts, which the candidate has made clear in interviews he is uncertain about suppressing. He is also deeply mistrustful of the political establishment, and his website has often been critical of Speaker Paul D. Ryan and Senator Mitch McConnell, the majority leader.

Meanwhile, Trump is hinting he may be willing to accept some criticism to his campaigning style: on Monday, he delivered a speech on terrorism using a teleprompter rather than the off-the-cuff style he prefers. And on Tuesday, he offered yet another scripted address, this time on law and order. Republican VP candidate Pence, too, has privately worked to quell the growing concerns surrounding the Republican ticket. At the annual meeting of the Republican Governors Association in Colorado on Tuesday, Mr. Pence used his keynote speech to offer “encouragement” — a word he used several times — and reassurance to the crowd.

“We’re still winning hearts and minds every day despite an avalanche of negative media coverage,” Mr. Pence said during the closed-door session, according to audio provided to The Times. Time, Mr. Pence added, was on their side. “It’s preseason, for heaven’s sake,” he said. “The gun starts on Labor Day.”

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

European stocks are down led by tech, chemicals, alongside EM stocks which retreated from near a one-year high and oil fell for the first time in a week after hawkish comments from Federal Reserve officials revived bets on U.S. interest rate rises this year, and pushed the dollar higher from 7 week lows ahead of today’s Fed Minutes. S&P 500 futures were little changed following yesterday’s drop from record highs.

The Stoxx Europe 600 Index fell for a fourth day, while MSCI’s gauge of developing-nation shares also declined, having halted an eight-day winning streak on Tuesday.

Crude pulled back from a five-week high as the Bloomberg Dollar Spot Index rebounded from near a three-month low after two regional Fed chiefs indicated interest rates could be increased at least once this year. South Korea’s won tumbled by the most since Britain voted to leave the European Union and gold declined. After sliding as low as 99.50 yesterday, a rebound in the USDJPY to 101 overnight pushed the Nikkei higher by 0.9%, closing at 16,746.

The rebound in the dollar was catalyzed by comments from Fed President William Dudley and Dennis Lockhart who jolted markets yesterday by indicating a rate hike in 2016 remained possible despite uneven growth in the world’s largest economy. Their comments helped push the probability of a Fed move above 50 percent in the futures market for the first time since the June 23 Brexit vote. Before their comments, global equities had climbed to a one-year high and the dollar index sank to levels last seen in May amid conflicting signals over the U.S. labor market and growth.

“A pull-back is following through in European stocks today after the Fed raised the possibility of a September rate hike,” said William Hobbs of Barclays in London. “It seems like expectations had become too muted.”

Today it will be all abaout the Fed again: Group head of multi-asset portfolios at GAM, Larry Hatheway, said attention was firmly on the Fed minutes and particularly why the bank’s last meeting ended with a notably cautious statement. “It wasn’t really about Brexit. It is not even about the world economy which isn’t in great shape but is somewhat improved from the first quarter fears and its surely not about the cost of capital,” Hatheway said. “So one presumes the caution reflects a thought process about a much lower equilibrium real interest rate …or possibly the fact that inflation is just not accelerating, which was corroborated to a degree by CPI data yesterday.”

But before the Fed we will get another dovish blast as St. Louis Fed chief James Bullard – the Fed’s latest uberdove – is due to speak Wednesday at 1pm, one hour ahead of the Minutes release which are scheduled for release at 2 p.m. in Washington.

In Asia overnight, the MSCI’ Asia-Pacific index ex-Japan dipped 0.3% while Japan’s Nikkei closed 0.9 percent higher, paring some of Tuesday’s sharp losses thanks to a weaker yen as it dropped back below the 100 yen per dollar level. China’s CSI 300 index and the Shanghai Composite both erased earlier losses to end the day flat after authorities approved the launch of a long-awaited scheme to allow stock trading between Shenzhen and Hong Kong.

European yields nudged 2-4 basis point lower with Spanish bonds boosted ahead of a meeting later that could pave the way for a new government in Madrid after eight months of limbo. Interim prime minister Mariano Rajoy is to hold a meeting of his Conservative People’s Party (PP) to consider a reforms-for-support offer from centrist rivals Ciudadanos. “I still have doubts about political progress in Spain and negotiations could still go on for weeks,” said DZ Bank strategist Christian Lenk. “But markets do seem to like what’s coming out of Madrid.

It has been a quiet session in European equities where the Stoxx 600 slipped 0.3% for a fourth day without gains. The volume of Stoxx 600 shares traded was 27% lower than the 30-day average. S&P 500 Index futures were little changed, after U.S. equities fell on Tuesday.  ASML Holding NV dragged technology shares to the biggest decline on the equity benchmark, dropping 5 percent after Intel surprised the market when it said it won’t use the semiconductor-equipment maker’s lithography technology to make some of its chips. Carlsberg A/S slid 4.6% after the Danish brewer reported first-half profit that missed analysts’ estimates as the weakness of Russia’s ruble eroded earnings.

The MSCI Emerging Markets Index was down 0.9 percent, trimming this
quarter’s advance to less than 9 percent. In Hong Kong, small-cap shares
were the brightest
part of China’s stock markets after an exchange trading link between
the city and Shenzhen was unveiled. The Hang Seng Composite Small Cap
Index climbed 0.5 percent to four-month high.

Tyco International Plc and Johnson Controls Inc. have shareholder meetings lined up to vote on their proposed $16 billion merger, while Target Corp. and Cisco Systems Inc. are among U.S. companies reporting results.

Market Snapshot

• S&P 500 futures down less than 0.1% to 2176
• Stoxx 600 down 0.3% to 342
• FTSE 100 down 0.1% to 6887
• DAX down 0.8% to 10592
• German 10Yr yield down less than 1bp to -0.04%
• Italian 10Yr yield up 2bps to 1.13%
• Spanish 10Yr yield up 2bps to 1%
• S&P GSCI Index down 0.6% to 360.9
• MSCI Asia Pacific down less than 0.1% to 139
• Nikkei 225 up 0.9% to 16746
• Hang Seng down 0.5% to 22800
• Shanghai Composite down less than 0.1% to 3110
• S&P/ASX 200 up less than 0.1% to 5535
• US 10-yr yield up less than 1bp to 1.58%
• Dollar Index up 0.19% to 94.97
• WTI Crude futures down 0.9% to $46.14
• Brent Futures down 1% to $48.75
• Gold spot down 0.2% to $1,343
• Silver spot down 0.9% to $19.61

Top Global News

• Och-Ziff Bribery Settlement Said to Spare Firm as Unit Convicted: Hedge fund is in talks to resolve probe of dealings in Africa. Gabonese ‘fixer’ with links to firm arrested on Tuesday
• Cisco Plans to Cut Up to 14,000 Jobs Within Weeks, CRN Says: CEO Robbins is shifting to emphasize software as growth slows. Cuts could account for up to 20 percent of 73,000 employees
• JPMorgan Hires Sakagami as Chief Japan Equity Strategist: Fills position left vacant since Jesper Koll left last year. Top-ranked Japan equity strategist according to Nikkei Veritas
• Deutsche Bank Must Consider Scrapping Bonuses, Sewing Tells Bild: Lender scrapped 2015 management bonuses following annual loss. No dividend means bonuses should be up for debate, Sewing says
• BOJ Firepower Falls Short as Yen Climb to 100 Dares Japan to Act: Bank of Tokyo-Mitsubishi, Morgan Stanley see further gains
• Hong Kong Exchange Sees Second Link Cementing China Gateway Role: Shenzhen link expands Chinese investor access to Hong Kong
• Barnes & Noble Ousts Its CEO After Less Than a Year on the Job
• FOMC releases minutes from July 26-27 meeting; follow TOPLive for blog coverage at 2pm
• Hyundai Motor Says It’s Discussing Partnerships With Google
• Citadel to KCG Tell SEC New Treasuries Rules Don’t Go Far Enough
• Univision Said to Buy Gawker Media for $135m: Recode
• U.S. Senator Seeks Multiple Reviews for Major Chem Mergers: FuW
• Madison Square Garden Said to Take 12% Stake in Townsquare: WSJ

* * *

Looking at regional markets, Asia equity markets slightly shrugged off the weak lead from US markets where hawkish Fed comments weighed on risk-appetite, with Asia mixed and Japan leading as JPY pared some of its recent considerable gains. Energy names were among the outperformers in Nikkei 225 (+0.9%) on the continued advances in oil prices, with the materials sector also reflecting the strength seen across its global counterparts. Conversely, ASX 200 (flat) was initially weighed by some lacklustre earnings reports before paring loses to close flat. Chinese markets were mixed with the Shanghai Comp (flat) indecisive and Hang Seng (-0.4%) pared gains after initially being bolstered after China approved the Shenzhen¬HK stock connect which would provide wider investment options and allow foreign investors access to the world’s 7th largest stock exchange via Hong Kong. 10yr JGBs traded marginally lower amid increased demand for riskier assets in Japan, while today’s BoJ market operations were for a relatively reserved JPY 750b1n in government debt. PBoC set CNY mid-point at 6.6056 (Prey. 6.6305); strongest fix by the PBoC since June 24th. PBoC injected CNY 100bIn via 7-day reverse repos.

Top Asia News

• BOJ Firepower Falls Short as Yen Climb to 100 Dares Japan to Act: Bank of Tokyo-Mitsubishi, Morgan Stanley see further gains
• Hong Kong Exchange Sees Second Link Cementing China Gateway Role: Shenzhen link expands Chinese investor access to Hong Kong
• Hong Kong Small Caps Rise, Brokerages Fall on Shenzhen Link News: There’s profit-taking in main beneficiaries, CMB analyst says
• Aussie Rides Out RBA Cuts as World-Beating Yields Lure Funds: Options traders become least bearish on currency since 2014
• Cathay Shares Drop as Profit Slumps 82% on Fuel Hedge Losses: Co.’s yields under pressure as Chinese carriers expand
• Modi Sends Warning Shot to China, Pakistan on Territory Spat: Comments come after weeks of violence and tension in Kashmir

European equities extend on yesterday’s losses following hawkish comments from Fed’s Dudley and Lockhart while newsflow has been relatively light as participants await the FOMC minutes release. In terms of a sector breakdown, financial and IT names have been the notable drags, with chip maker ASML (-4.8%) one of the laggards following a negative broker move. However, equities saw a minor bounce after the UK Jobs report, in particular the Jobless Claims which showed little signs of Brexit jitters. Elsewhere, in credit markets, Portuguese bonds yet again decline amid the recent commentary from the DBRS stating that they may consider downgrading the countries rating, which could have serious implications as the ECB uses the DBRS to decides if countries are eligible for QE.

Top European News

• Carlsberg 1H Organic Rev. Beats Ests., Keeps 2016 Outlook
• Admiral Group Biggest SXXP Decliner As Solvency Ratio Drops
• ABN Amro Says 2Q Net Profit Impacted by Derivatives Provision
• Deutsche Bank Must Consider Scrapping Bonuses, Sewing Tells Bild: Lender scrapped 2015 management bonuses following annual loss. No dividend means bonuses should be up for debate, Sewing says
• U.K. Dividends at Risk as BOE Action Swells Pension Hole: Rate cut lowers yields, piling pressure on retirement plans. Some investors dump shares as dividend reductions loom
• Credit Suisse Joins War for Quants, Hiring Rothman to Build Team: He’ll assemble equity researchers to hone strategies, products. Banks and fund managers are snapping up quants to sift data

In FX, the Bloomberg Dollar Spot Index rose 0.4 percent, after sliding 1 percent over the past three days. “While Dudley was at least able to stem the bleeding for the dollar index, price action is not encouraging for the dollar near term,” said Sean Callow, a senior foreign-exchange strategist at Westpac Banking Corp. in Sydney. “Still, so long as a rate hike seems more likely than not as the Fed’s next move, we wouldn’t get super bearish on the dollar.” The yen was down 0.5 percent at 100.76 per dollar, after strengthening beyond 100 on Tuesday for only the second time this year. The currency is still up 19 percent for the year and Japanese Vice Finance Minister Masatsugu Asakawa said policy makers are prepared to intervene if exchange-rate moves are extreme. South Korea’s won slumped 1.5 percent, its steepest slide since June 24. The currency climbed to its strongest level in more than a year last week and its 14-day relative strength index ended the last session below 30, a sign to some investors that a retreat was likely. The MSCI Emerging Markets Currency Index lost 0.6 percent, headed for the biggest drop in seven weeks on a closing basis.

In commodities, oil halted its advance after the biggest four-day gain since April as weekly industry data showed U.S. gasoline stockpiles expanded, keeping supplies at the highest seasonal level in more than two decades. West Texas Intermediate crude slipped 0.9 percent to $46.15 a barrel, ending a 12 percent rally over the preceding four days after Saudi Arabia said it is prepared to act to stabilize markets. U.S. inventories of motor fuel increased by 2.18 million barrels last week while crude stockpiles dropped by 1 million barrels last week, the American Petroleum Institute was said to report Tuesday. Government data Wednesday is forecast to show a drop in gasoline supplies and an increase for crude. Gold’s two-day gain stalled on the Fed rates speculation. Bullion for immediate delivery slipped 0.3 percent to $1,342.63 an ounce. Silver lost 1 percent. U.S. natural gas futures rose 1.1 percent to $2.645 per million British thermal units, a fourth day of gains and the longest rally since the start of June. Temperatures may be above average in the East and Northwest, boosting demand for electricity for cooling.

It’s quiet on the US calendar today where the focus will be on the FOMC minutes tonight, while the DOE will release the official weekly inventory data at 10:30am ET.

* * *

Bulletin Headline Summary from RanSquawk and Bloomberg

• European equities enter the North American crossover lower amid yesterday’s hawkish Fed rhetoric with newsflow otherwise light
• GBP/USD was lent some support by the latest jobs report, although gains have now been pared with the data not providing too much insight into the post-Brexit fallout
• Looking ahead, highlights include FOMC Meeting Minutes, DoE crude oil inventories and comments from Fed’s Bullard
• Treasuries lower in overnight trading with global equities, oil and gold; FOMC minutes at 2pm ET may “reflect greater confidence in labor mkt and domestic economic growth than in June.”
• The U.K. labor market showed signs of continued resilience after the country’s referendum on EU membership, as jobless claims unexpectedly fell 8,600 in July after increasing 900 in June
• Norway’s $890 billion sovereign wealth fund, the world’s biggest, took the step of independently cutting the value of its massive U.K. real estate portfolio by 5% after Britain voted to leave the European Union
• Russia is delaying what would have been its biggest asset sale in a decade after renewed weakness in global oil markets and tensions among potential buyers upended plans to offer a stake in Bashneft PJSC
• ABN Amro jumped the most in almost six months after second- quarter profit beat estimates and Chief Executive Officer Gerrit Zalm announced plans to cut costs by about 200 million euros ($225 million)
• Chinese authorities said 450 suspects have been arrested this year in a crackdown on using offshore companies and “underground banks” to transfer money illegally
• Cisco Systems, the largest maker of networking equipment, will cut as many as 14,000 employees worldwide, or 20% of its workforce, CRN reported, citing people close to the company

US Event Calendar

• 7am: MBA Mortgage Applications, Aug. 12 (prior 7.1%)
• 10:30am: DOE Energy Inventories
• 1pm: Fed’s Bullard speaks in St. Louis
• 2pm: FOMC Minutes

DB’s Jim Reid concludes the overnight wrap

The FOMC minutes (from the July 26-27 meeting) will be a little more interesting than previously thought after the influential and usually relatively dovish NY Fed President Dudley’s unscheduled comments yesterday. He suggested that a September hike was “possible” and that “we’re edging closer towards the point in time where it will be appropriate to raise rates further.” He added that 10y Treasuries were “pretty low given the circumstances” and that the Fed funds futures market was underpricing rate hikes. We’ve heard this sort of thing a lot in recent years from FOMC members without much eventual action so we shouldn’t over interpret but it was inevitable that it would impact rates pricing yesterday.

Indeed while 10y Treasury yields only ended up climbing 1.7bps yesterday to close at 1.575% they were up some 6bps from the intraday lows just prior to Dudley’s comments. The same can be said for 2y yields which were at 0.681% prior to the comments and 0.746% by the end of the session (+2.0bps on the day and +6.4bps from the session low). September rate hike expectations edged up to 22% from 18% the day prior while December expectations rose from 45% to 51%. European government bond markets also followed the lead. 10y Bund yields ended up climbing 4.4bps to -0.031% which is the highest yield since August 4th, while the peripherals were up anywhere from 5bps to 15bps in yield. We’ve seen a similar move in Asia this morning where 10y JGB’s are +3.0bps and similar benchmark bonds in the Australian, NZ and China are 2-4bps higher.

Staying with bonds, yesterday we saw the latest long-dated reverse Gilt auction which was hotly anticipated after last week’s failure from the BoE to buy the desired amount. With a week of press and publicity it was expected that they would have more success this week and indeed they did. However the £3.12bn tendered vs. the £1.17bn desired (2.67 covered) was still less than for any of the other non long-end auctions so far (3.54 times being the lowest cover). We also have a 2055 Gilt auction today which may have encouraged more sellers than last week. 30 year gilts sold off 5.6bps yesterday but this was in line with international equivalents. Given the BoE will be buying these bonds every week this story will continue to be a big theme for many months and we’d expect the supply/demand dynamics at the long end to continue to be tough for the Bank.

Meanwhile, there was little evidence that the big post-referendum decline for Sterling has fed through to headline consumer prices yet as the July headline CPI reading came in as expected at -0.1% mom. The YoY rate did however nudge up one-tenth to +0.6% while the core reading was down one-tenth to +1.3%. That said the more interesting read-through was in producer prices where PPI input rose a significant and more than expected +3.3% in July (vs. +1.0% expected). That was most since 2011 while the YoY rate is now up to +4.3% from -0.5% and so ends 32 consecutive months of deflation in input costs.

Risk assets ended up spluttering yesterday following Dudley’s comments with US equity markets in particular retreating from Monday’s record high marks. The S&P 500 (-0.55%), Dow (-0.45%) and Nasdaq (-0.66%) all closed lower while in Europe the Stoxx 600 (-0.79%) also ended up weakening as automakers in particular came under pressure. The rally for emerging markets also finally came to a halt with the MSCI emerging markets index (-0.03%) just about closing in the red following eight consecutive daily gains which had seen it surge over 5%. Notably the weaker performance for equity markets also came despite another +1.84% rally for WTI where some pre-Dudley weakness for the USD (-0.88%) supported gains.

This morning in Asia it’s been another relatively mixed start. Currently in the red is the Shanghai Comp (-0.52%), Kospi (-0.66%) and ASX (-0.08%), however the Nikkei (+0.50%) and Hang Seng (+0.21%) are both up in early trading. The Shenzhen is also a touch higher after Beijing yesterday approved the long awaited Shenzhen and Hong Kong trading link. Meanwhile gains for Japanese equities this morning have come about following a slightly weaker morning for the Yen which has been a big focus in the last couple of days. After breaking below 100 yesterday, the Yen is -0.32% weaker this morning at 100.62. Japan’s Vice Financial Minister said earlier that he is watching with ‘a strong sense of concern’ about moves in the currency and would look to act if needed.

Moving on. Despite playing second fiddle to Dudley yesterday, the Atlanta Fed’s Lockhart also attracted a bit of attention when he said that ‘I’m not locked in to any policy position at this stage, but if my confidence in the economy proves to be justified, I think at least one increase of the policy rate could be appropriate later this year’.

The hawkish Fedspeak largely overshadowed what was a mixed batch of economic data in the US yesterday. Of most focus was the July CPI report where headline inflation printed at 0.0% mom as expected although the YoY rate rounded down to a slightly lower than expected +0.8% from +1.0% in June. The core (+0.1% mom vs. +0.2% expected) also rose less than the market had forecasted resulting in the YoY rate dipping one-tenth to +2.2%, driven primarily by an unusual plunge in airfares.

There was better news in the latest activity indicators however where industrial production rose a bumper +0.7% mom last month (vs. +0.3% expected). Capacity utilization was up half a percent to 75.9% (vs. 75.6% expected) while manufacturing production also rose a robust +0.5% mom (vs. +0.3% expected). Finally the latest housing starts data covering July revealed starts rose +2.1% mom in July (vs. -0.8% expected) leaving the annualised level of starts at the highest since February. Building permits (-0.1% mom vs. +0.6% expected) were a bit weaker than expected however. The only other data to note came in Germany where the August ZEW current situations index bounced back from its post-Brexit decline to rise nearly 8pts to 57.6 (vs. 50.2 expected). That actually left the index at the highest level since January while the expectations component rose over 7pts to +0.5.

Looking at the day ahead, this morning in the UK we’ll get the next slug of data with the latest employment numbers. We’ll get the claimant count and jobless claims change data for July (i.e. post referendum) along with the ILO unemployment rate and average weekly earnings data in the three months to June. It’s quiet in the US this afternoon where the focus will be on the FOMC minutes tonight. Away from the data we’ll also hear from the Fed’s Bullard again this evening at 6pm BST where he’s due to speak on the US economy and monetary policy

via http://ift.tt/2b3Lcfd Tyler Durden

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Hyperinflation Defined, Explained, and Proven: Part III

Written by Jeff Nielson (CLICK FOR ORIGINAL)

 

 

In the first part of this series, the term “hyperinflation” was defined. “Inflation” is an increase in the supply of money. The prefix “hyper” denotes that something is excessive. Thus by necessary, logical extrapolation, hyperinflation can only be an excessive or exponential increase in the supply of money (currency).

Most people will either not understand or not agree with this definition, because they have been consistently fed a pseudo-definition of this term, that “hyperinflation” represents an exponential increase in prices, i.e. extreme price inflation. In fact, this extreme price-spiral is not the actual hyperinflation, but rather the consequence of hyperinflation. The causal chain here is elementary.

First, the supply of money is increased at an exponential rate. This causes an ultra-extreme dilution of that currency, and it is this ultra-extreme dilution which causes the currency to lose value at an ever-increasing rate, and thus prices spiral higher. This conclusion is reinforced by the fact that there is no consensus on the pseudo-definition. Look for a definition of “hyperinflation” in terms of a price-spiral, and all one will find is either generalities, or, where specific numbers/formulas are used, these numbers and formulae are all different.

Readers were provided with a real-life example of a currency which has already been hyperinflated (past tense): the U.S. dollar, via the infamous Bernanke Helicopter Drop . Part II then took on the task of explaining how and why our current economic parameters guarantee a hyperinflation spiral for all of the debauched currencies of the Corrupt West ( not a deflationary crash).

Skeptics will remain unconvinced. “Where is the proof?” they ask. That is the task of this final instalment. We begin this process by again resorting to the basics of sound analysis: definition of terms. Any historical examination of the economic phenomenon of hyperinflation will show that there is always a temporal gap between the time when the money supply of a currency has been hyperinflated, and the time when the consequence of that hyperinflation occurs – the price inflation death-spiral.

This temporal gap between when a currency becomes fundamentally worthless (worthless in theory) and its exchange rate plunges to zero (worthless in fact) is a confidence gap . It is the amount of time it takes for the Chumps using this now-worthless fiat currency to realize that the currency is worthless.

Note that the terms “con” and “con-man” are derived from the original expression “confidence man”. A confidence man was someone who engaged in fraud, and the means to his success was gaining and maintaining the confidence of his victims. Hyperinflation is the ultimate economic con (and central bankers are the ultimate Con-Men). A regime conjures (un-backed) currency into existence at a near-infinite rate, and then tries to pretend that the currency still has value.

It is within such a confidence gap that we now dwell, the final honeymoon of this gigantic, systemic fraud. Our currencies are already fundamentally worthless, but the Chumps do not yet realize this. In this case, “chumps” includes a large herd of charlatans who have the audacity to label themselves “economists”.

These charlatans see no signs of hyperinflation. They believe the absurd lies from our puppet governments (parroted by the media drones) which they call “inflation statistics” . They believe this as the price of food and shelter, the two most-important components in our cost of living are already spiralling higher at the greatest rate in the modern history of our nations .

Further proof that we have already begun an irreversible hyperinflation spiral comes in showing why other asset classes are not (yet) exhibiting such price-spirals. We start with an examination of the fraudulent, worthless, Western currencies themselves.

Why has the exchange rate of these currencies not begun to spiral towards zero in an even more obvious/overt manner? Two words: currency manipulation . As regular readers are well aware, the Big Bank crime syndicate has already been criminally convicted of serially manipulating all of the world’s currencies, going back to at least 2008.

By fraudulently manipulating worthless Western currencies upward, and fraudulently manipulating the currencies of the Rest of the World downward, the effects of Western hyperinflation can be temporarily suppressed. But this is only the beginning of the (illegal) schemes by the banksters to conceal their hyperinflation.

The prices of commodities, the raw materials which are primary inputs in the production of goods have been ruthlessly suppressed, through systemic market-manipulation, which has been well-documented in previous commentaries . The other primary input of production is labour. Wages have been even more-ruthlessly suppressed, by the political puppets of our governments, at the orders of their Masters – the banking oligarchs.

In real dollars, Western wages have been in a downward spiral for 40+ years. This wage destruction has been perpetrated through a combination of two economic crimes-against-humanity. First, our puppet governments have allowed structural unemployment (i.e. permanent unemployment) to reach all-time extremes. Secondly, via the economic crime known as “globalization”, these puppet governments have knowingly and deliberately given away 10’s of millions of our jobs – primarily well-paid, skilled-labour jobs in manufacturing.

Via these twin economic crimes, an enormous glut of labour has been created across the West, with now well over 100 million people permanently unemployed . As an elementary premise of economics, an excess of supply causes the price for that good to fall – and the price continues to fall until that excess is eliminated. With the Traitor Governments of the West doing less-than-nothing to eliminate this radical, excess supply of labour, there is no end in sight to the downward spiral in wages.

With two of the primary inputs of manufacturing being suppressed, this leaves only one more primary input: energy. U.S. political puppet, Barack Obama, has already publicly boasted that the downward manipulation of oil prices is “a part of the U.S. strategy” of economic terrorism against Russia. With all of the primary inputs of manufacturing heavily suppressed/manipulated, this has temporarily depressed the prices of virtually all manufactured goods, to a dramatic degree.

Through the mega-crime of currency manipulation, the mega-crime of market manipulation, the mega-crime of wage manipulation, and the despicable crime-of-omission of our governments in allowing all of this to occur; the effects of hyperinflation have been temporarily hidden and delayed.

Despite the theoretical proof that hyperinflation has already taken place, despite the existence of massive, obvious economic parameters showing that hyperinflation is inevitable, despite a gargantuan sequence of crimes, corruption, and deceit to hide this hyperinflation; the Skeptics will still remain unconvinced. One cannot “see” if they insist on keeping their eyes closed.

Having now explained how this mega-crime is being (temporarily) hidden, we can refer back to the public confessions of our governments, first discussed in Part II.

Competitive devaluation is the official and permanent monetary policy of the Corrupt West…All of our governments are racing to see which can drive down the value of its currency the fastest, i.e. which can “create inflation” the fastest – since lowering the exchange rate and creating inflation are two sides of the same coin.

As was explained in another recent commentary , “competitive” devaluation is more than merely economic suicide. It is economic treason. Our Traitor Governments, by their own, public admission, are racing to inflate our currencies as fast as they can. What do we call it when the rate of inflation is maximized? We call it “hyperinflation”. Our governments are in an open race to see which can complete this hyperinflation spiral the fastest, and complete the destruction of our economies along with it.

The motive for this Crime of the Century has been frequently discussed previously. Our central banks, tentacles of the banking crime syndicate known as “the One Bank” steal via inflation. Inflate a currency a little bit, and you can steal a little wealth (in relative terms). Inflate a currency a lot, and you can steal a lot of wealth. Hyperinflate a currency, and you steal all the wealth stored in that paper.

This is the ultimate crime against humanity of the One Bank, now very near its fruition. Our Traitor Governments are its principal accomplices. “Competitive devaluation” is the euphemistic lie parroted by these political puppets, as yet another means to aid the banking crime syndicate in hiding the hyperinflation spiral – and thus extending the confidence gap. Our currencies are supposed to be plunging toward zero, the puppets tell us. It is how to “build an economy”.

No, it is not. One cannot “build” anything via serial suicide. This nonsense was debunked emphatically, in the commentary already previously referenced:

Competitive devaluation relentlessly drives down domestic wages (in real dollars), causing a perpetual, downward spiral in the domestic economy. With the real-dollar value of the currency continuously falling, the Workers get less and less “bang” for every buck. Less and less domestic goods and services can be consumed, and thus produced.

Understand the folly. With any/every nation it is domestic activity which comprises the vast majority of all GDP. Even with so-called “exporting nations” this is true. Competitive devaluation is an effort to artificially boost one facet of an economy (exports), through seriously and permanently sabotaging the heart of that economy: domestic activity. It would never and could never be possible for any nation to achieve lasting economic benefits through the serial devaluation of its currency. The numbers could never add up . [emphasis mine]

Competitive devaluation is a lie. It is a lie to cover up a crime, the bankers’ crime of hyperinflation. This term has now been defined. It has now been explained. And it has now been proven, in several ways, including via the open confessions of our own governments. Ignore this economic holocaust at your own peril.

 

 

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

 

 

Hyperinflation Defined, Explained, and Proven: Part III

Written by Jeff Nielson (CLICK FOR ORIGINAL)

 

 

via http://ift.tt/2aZc2cw Sprott Money

In Alberta, the Oil Sands King in the North, the economy continues to be crushed by crude prices.  With the oil fallout has come massive job losses, business closings, soaring office vacancy rates and increasing crime.  None of this should be terribly surprising for a region of the world that is somewhat dependent on oil sands production.  At current oil prices most oil sands projects can't even cover their cash operating costs which are estimated to be $50 per barrel much less the estimated $90 per barrel required to start a new project. 

As recently reported by the Huffington Post, Calgary is on pace to close 7,000 businesses in 2016 up from 6,337 in 2015 and 5,902 in 2014. Furthermore, a separate Huffington Post article highlights a recent report from CBRE which found that vacancy rates of commercial office space in Calgary rose to 22.2% in 2Q 2016, the highest level since 1983, and up massively vs. the 13% vacancy rate from one year prior.  The report also points out that 4mm sq. ft. of office space has come online in just the past 6 quarters alone. 

And just to make things even worse, 3 new commercial buildings are wrapping up construction within the next year and which should add a additional 2.4mm sq. ft of capacity.  Seems like timing was just a little late on those projects.   

The impact of the oil downturn is even more pronounced in Edmonton.  Per a report from CBC News, the economic situation has become so dire that they're seeing a spike in child prostitution as kids are "having to find their own resources to meet their basic needs."

Some children who haven't yet reached their teens are being recruited for sex work in Edmonton, as child prostitution becomes more prevalent because of the economic downturn, say frontline workers in social service agencies.

 

"There's people out there looking to make money," she says. "It's turning our kids into their little cash cows."

 

The exploitation of children has changed in recent years, he says, and now reflects "the echoes of an economic downturn."

 

"We're having a lot more kids having to find their own resources to meet their basic needs."

What's even more disgusting is that kids are being recruited into the sex trade only to then be traded around as property.

Recruiters, Cautley says, commonly tells kids: "I think you'd be really good at this. You should try this."

 

Soon the message changes, to: "You owe me. So you're going to go back and earn money to pay back everything I've bought you."

 

One challenge Cherrington points to is that interactions have become less visible.

 

"It's not the traditional walking the streets," he says. "The vast majority are on Backpages. It's a lot darker place on the Internet."

 

He says kids end up being taxied around between johns that way.

 

YESS worked with police last year to help a girl who was being kept in a tent in a ravine by a man who sold her as a prostitute, Cautley says.

Yet another crushing side effect of our engineered economic bubbles.  Inefficient (rigged) markets create unsustainable oil prices which have to be exploited before they crash again…leading to massive boom/bust cycles that leave a trail of human and economic destruction in their path when the bubble pops.

via http://ift.tt/2bzRCp6 Tyler Durden

Authored by Charles Gave, Chairman Gavekal Capital; originally posted via MauldinEconomics.com,

In A Study of History, the great Arnold Toynbee explained that the role of “elites” in any society is to handle challenges that allow the group to survive and move on to the next phase of their shared journey.

If bad solutions are offered up, then problems will intensify, and pressure will arise for a change in the elite. This can happen in various ways: through elections in a best case scenario; a change of regime as with France’s Fourth Republic which failed to properly handle decolonization; a collapse in the political structure such as befell the Austrian empire at the end of WWI; or, most dramatically, the overthrow of a civilization as in South America with the arrival of the Spaniards or in Egypt when the Muslims took over.

In Europe, the main problem for a century or more was the internecine rivalry between Germany and France, which led to three wars that became progressively more destructive. By the time Europe’s exhausted elites reached 1945, it was obvious that war was not going to solve anything and hence a new solution was tried in the shape of “political” Europe. The plan worked to such an extent that new challenges were spawned such as the handling of Germany's reunification, managing the effects of an aging population, and integrating lots of immigrants from a genuinely different civilization.

New problems, old solutions

These new challenges required new solutions, and yet the elites responded with solutions used to handle the previous challenge with the forced integration of Europe into a single political and economic construct. Unsurprisingly, the old solutions have not worked and indeed their application is making Europe’s various problems worse. The interesting thing is that members of the elite are starting to openly admit this:

• Mervyn King, the former governor of the Bank of England, wrote in his recent book, The End of Alchemy, that European leaders pushed for the adoption of the euro as a single currency knowing that it would cause an economic disaster in Southern Europe. The idea was that the impact of weakened economies would force national politicians to accept “reforms” imposed by Brussels. Put simply, Lord King argues that these elites consciously organized a huge decline in living standards in the expectation that it would undermine the legitimacy of local politicians. The problem is that most regular people (rightly) believe that their state is the best guarantor of their society being able to “live together,” which is the basic contract binding a nation.
• Last week, the International Monetary Fund’s independent watchdog offered a scathing assessment of the agency’s handling of the eurozone crisis with the allegation that staffers willfully ignored fatal flaws in the euro project due to an emotional attachment. It became a totem of IMF thinking that in a common payment area, there could not be a solvency crisis. Moreover, the “solutions” imposed on Greece hurt the most vulnerable part of society, causing a collapse in living standards. In an indictment of the IMF’s competence, its assessments (forecasts) about the impact its policies would have on the Greek economy were shown to border on the ridiculous. To boot, the processes followed by IMF staff were shown to be unprofessional, with decisions being taken without proper discussion and documentation.

Our “experts” (the brilliant men of Davos) have thus been shown to protect their own particular tribal interests, rather than the common good. These testimonies are part of a revelatory exercise in Europe which must accelerate a collapse in the legitimacy of both know-better technocrats and the trans-national institutions, which have been all over the European project since 2011 with such deleterious effects. As such, not only the IMF but the European Commission and the European Central Bank have all seen their credibility decimated.

The really worrying thing with these demonstrably incompetent institutions is their continued power grab without any proper authority. Such hubris has seen them break pretty much every agreed rule of national economic management that existed prior to the crisis (it seems a quaint detail now that the ECB was not supposed to buy government bonds) in a bid to sustain a project which is manifestly pushing European economies toward a disaster. So where does this leave us?

Historically, when an unelected “mafia” has seized control of the political domain, the two remedial options available to the citizenry have been elections, and failing that a revolution. As usual, the British moved first—through an election (England’s last revolution was in 1688). The Brits’ decision to break free should not have been that surprising, given that in the normal course of events the EU system had been rigged to stop the genius “elites” from being fired democratically.

Yet for all the significance of the Brexit vote, the UK is not part of the eurozone and so could leave without dooming the system. Italy, Greece, the Netherlands, Portugal, and Finland, by contrast, are subjected to that straitjacket. And getting out of the euro implies exiting the EU. For this reason, the next exit (Italy looks like a prime candidate) is going to be far more momentous, with very clear investment implications.

The savings of the problematic countries will likely move to Frankfurt (in expectation of the deutschemark coming back), London, or New York on the basis of a slightly revised Gresham’s law that bad currency will chase out the good ones. The result will be a big rise in German M1 and a banking crisis in the weak countries, with banks being bled dry of their deposits. The value of the pound and the US dollar can be expected to appreciate. Since it appears that Europe’s banking crisis is already under way, my advice would be to watch these variables very closely. If the pound and the dollar start to rise against the euro, it will probably mean that German M1 is rocketing upwards. And at that point the advice would be to adopt the brace position.

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If you wonder what the future might hold for the US and global economies and stock markets, get answers in the free Q&A session “When the Future Becomes Today” with John Mauldin and his colleagues Patrick Watson and Robert Ross, on Aug. 23, 2:00 PM EDT. Click here to register for the call and to submit your questions.

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Europe’s establishment powers just can’t catch a break: following an unprecedented attempt to reduce the average age of its aging workforce (in a ploy that appears to have had the explicit backing and funding of none other than George Soros) and boost the flailing economy by accepting over a million, mostly young, Syrian refugees in 2015, the plan backfired spectacularly when “irreconcilable cultural differences” emerged leading to mass rapes, assaults, a failure to assimilate and increasingly more frequent terrorist attacks conducted by the new migrants.

And, when it comes to Austria, the latest such attack could not have come at a worse time for the status quo.  According to The Telegraph, nine Iraqi refugees have been arrested in Austria on charges of gang-raping a 28-year-old German woman in a case that could ignite debate of immigration and crime ahead of this Autumn’s presidential election re-run.

Far-right Freedom Party candidate Norbert Hofer is leading in Austria’s
presidential election polls

The arrest of the nine Iraqis, all either asylum seekers or recently granted asylum, comes as Austria is preparing for a rerun of its May 22 presidential election, which the anti-immigrant Freedom Part lost by a margin of just 31,000 votes, despite leading handily in the polls, as a result of mailed in ballots, which in turn prompted accusations of voter tampering and manipulation. As a result, an Austrian Court ordered a re-vote to take place on October 2; and with just over one month left until the election, Hofer suddenly finds himself enjoying a substantial boost to his popularity as a result of events such as this one, sending shivers down the spine of Europe’s status quo politicians.

The arrests were made this past weekend after DNA evidence and CCTV camera footage was used to build a case against the nine asylum seekers.

Inexplicably, it took nearly 8 months for the charges to be made: the woman filed the complaint on January 1 but it took nearly eight months of what Austrian police called a “protracted and difficult” investigation before the nine were finally arrested. 

The alleged attack took place on New Year’s Eve at an apartment in Vienna where the woman, who was visiting from the German state of Lower Saxony, was visiting to celebrate the New Year with a friend. The suspects range in age from 21 to 47, said Vienna police spokesman Paul Eidenberger. “There is no doubt about the gang rape according to the biological traces,” the police spokesman told Der Spiegel.

While the investigation was long, it was at least exhaustive so as to leave no trace of error: “The investigations were difficult and protracted. On the trail of the suspects, investigators came by DNA material, interviews with witnesses and images from surveillance cameras.” They are alleged to have taken the woman from Vienna’s central Schwedenplatz and then assaulted her in an apartment where two of the suspects lived, between the hours of 2am and 6am.

The men  – five of whom were arrested in Vienna, three in Styria and one in Lower Austria – have all denied the accusations and police added they were unable to say how many of the men had participated in the alleged attack, and how many were possible accessories in the case.

The woman, who had been drinking and suspects she was drugged, had no recollection of being taken to the apartment, the police added. “The presumed perpetrators are likely to have taken advantage of the female victim’s high level of inebriation,” they said in a statement. On news websites in Austria some readers demanded the men be “immediately deported” if they are convicted of the rape.

That said, if it weren’t for the nationality of the attackers, it would have been a rather straightforward case of criminal, mass rape. However, the issue is precisely the origin of the sexual fanatics – they are part of the refugee wave that was unleashed in Europe thanks to Merkel, and which the anti-immigrant Freedom Party is seeking to block in its tracks… very much like Trump is hoping to do in the US.

The news of the attack comes as Austria prepares for a re-run of its presidential election which last June saw the far-Right Freedom Party losing out to a Green Party candidate by less than one per cent of the vote.

 

Although Austria did not experience scenes like those in the German city of Cologne on New Year’s Eve, when hundreds of women told police they had been groped, attacked and robbed by mobs of men, immigration and crime has become a super-sensitive political issue.

Although Austria’s government initially supported Angela Merkel’s open immigration policies, it has since adopted a tougher line, organizing a conference in February to close the so-called “Western Balkan route” by which refugees were streaming in to Europe.

Immigrants have been accused of isolated sexual and other attacks committed in Austria, and the far-right Freedom Party, which is running first in opinion polls, has seized on cases in which immigrants have been accused of crimes to press for stricter immigration policies. Norbert Hofer, the Freedom Party candidate, has further stoked anti-immigrant sentiment, promising to ban burqas and take his country out of the European Union if Turkey is ever allowed to join. Not unexpectedly, his popularity has been surging.

On news websites in Austria some readers demanded the men be “immediately deported” if they are convicted of the rape.

Meanwhile, Austria already made waves two weeks ago when its Chancellor Christian Kern urged Europe to stop all Turkish accession talks and to block the refugee deal struck with Erdogan in March, in what was the starkest assessment of the post-coup European-Turkish relations. The Turkish Foreign Minster Mevlut Cavusoglu promtply responded by calling Austria the “capital of radical racism.”

In light of sex attacks such as the one above, perhaps Austria will have no problem with that designation if it means a return to calmer times.

via http://ift.tt/2bqi80U Tyler Durden

Submitted by Eugen von Bohm-Bawerk via Bawerk.net,

A month on from Turkey’s failed coup attempt, and you’ll find endless op-eds opining the supposed strategic implications of Erdogan’s rear-guard offensives. In a nutshell, it breaks down into four key arguments…

• The first is that Erdogan will oversee a ‘brutal crackdown’ to consolidate power wherever and whenever possible out to 2019 against any form of political opposition (Gulenist or not). The net result supposedly secures Erdogan’s tenure towards 2023 ‘Ataturk’ landmarks, and beyond.
• The second facet is that Mr. Erdogan will continue to inflict collateral Kurdish damage to secure internal gains along the way. PKK-Ankara relations basically go back to square one, while the slightly more politically savvy HDP gets caught in Erdogan’s crossfire, undermining consistent Kurdish supplies through Turkey.
• The third factor is Ankara turning towards Russia as a new ‘strategic’ axis against NATO interests, and indeed Turkey’s vexed relations with the transatlantic military body. A relationship that’s likely to go from bad to worse given Mr. Erdogan’s underlying belief that ISIS gains remain the lesser of two evils compared to Kurdish consolidation on his Southern border. Not to mention the minor fact that most AKP members think the US was all in on the ‘Gulenist’ plot to oust the sitting President.
• Beyond other blindingly obvious points that Turkey’s now subject to far more terror attacks by failing to ride two competing ‘ISIS / Kurdish camels’, that doesn’t really leave us much beyond point four: The failed Turkish mutiny still supposedly portends a major trigger point for another ‘Arab Autumn’, where MENA states are susceptible to enhanced political risk on the back of depressed benchmark prices. While all these arguments have elements of truth, our position is they don’t constitute a serious discussion of the Turkish question, at least without significant caveats raised across all four points. Those same caveats also happen to have sharp resonance for how tangible any KSA-Turkish relations are in future.

But enough with all the pre-amble stuff, what about the political facts here? The first point to raise on ‘internal political consolidation’, is although Erdogan will continue to wield heavy sticks – probably with fresh elections in 2017 to ram through a two-thirds AKP parliamentary majority to pave the way for a strong arm executive branch on the back of Constitutional reforms – Mr. Erdogan’s not in a credible position to oversee ‘total crackdowns’ across the board. This is still a political game he has to play in a politically sensitive manner to get the consolidation he wants. Part of that’s to prevent another ‘coup 2.0 scenario’ that remains a real concern in Turkey. Hence, while the AKP has locked up vast numbers of military staff and public servants (50,000 and counting), the President wasn’t allowed to resurrect military barracks in Gezi park despite declaring ‘emergency rule’ to do so. Erdogan’s also been forced to play nicer with opposition MHP and CHP factions to present a united ‘anti-Gulenist’ front. The longer Erdogan keeps opposition consent in play, the further anti-Gulenist purges can go, in what’s basically going to be a long term cycle of ‘part of reconciliation, part crackdown’ for secular (long term) consolidation. Ultimately Mr. Erdogan will get his way, creating a strong executive to dominate all branches of government into 2017-18. But that’s not driven by crude ‘crackdowns’, but far more politically intricate games the President will play. Presidential apotheosis yes, but secured through politically nuanced means.

Unsurprisingly, the same nuances play into Kurdish questions, and especially with the PKK. Recent attacks in the South East were probably inspired by Ocalan to highlight just how weak a post-purge Turkish army has become. Yet that’s not necessarily with a ‘hard-baked’ view of returning to violence for violence sake, but purely to start playing the political game with Erdogan instead. Although very poorly understood by Western analysts, the PKK remains sharply opposed to Gulenist nationalist trappings, and actually holds them responsible for some of the blunter military tactics deployed in South East Turkey last year. To be clear, we’re not saying that anti-Gulenist positions are anywhere enough to consistently bring Ankara and Ocalan to the table for long term accommodation, but it’s probably still sufficient for both sides to play the political game of tactical ‘on-off’ discussions to secure proximate political aims. The PKK wants to remain the ‘go to’ Kurdish group to eclipse growing HDP influence, and more importantly, keep one step ahead of intra-Kurdish contests between the KRG (KDP, Goran and PUK), and YPG / PYD (Rojava) in Syria for regional leadership. Speaking to Erdogan helps secure that status on ‘diplomatic paper’, with ongoing attacks on the Iraq-Turkey (Kirkuk-Ceyhan) the parallel ‘physical insurance policy’ to remind Ankara’s who’s ultimately calling the transit shots, not to mention keeping the KDP in a very difficult spot trying to monetise Kurdish crude. Exactly like our internal crackdown commentary, expect Ankara-PKK relations to keep shifting between ‘jaw-jaw’ and ‘war-war’ calculations on this, purely depending on where the political points can be scored.  Even though the long term ‘Presidential’ prognosis is anything but good for the PKK.

Turn to Russia and that’s where the entire ‘Turkish thesis’ becomes far more tenuous. Despite the clear political aesthetics of Erdogan’s first ‘post-coup’ trip to St Petersburg, this is ultimately a relationship that both Presidents’ want to dominate on key strategic issues, not share. Don’t forget, from President Putin’s perspective, Turkey was always ear marked as a ‘Eurasian Union’ state that basically relegates Ankara to a Russian satellite interest, while Mr. Erdogan clearly thinks Turkey has far more regional clout in the Levant when it comes to shaping Middle East results. With that said, both sides understand that Russia is increasingly well placed to prevent the emergence of a Kurdish state in Norther Syria, given Washington doesn’t have any other anti-Assad cards to play. But whether Russia and Turkey ever truly see eye to eye on Damascus is a less certain prospect. Erdogan won’t like it, but if he genuinely wants Russia on-board as a consistent ‘partner’, that probably means toning down the anti-Assad rhetoric in Syria; it certainly means being more ‘flexible’ over Russian naval presence in the Black Sea. It means scaling down residual support for Crimean Tatars; but most of all, it means increasing Turkish import dependence on Russian energy supplies, where gas is the most politically tradable commodity in play. Putting Turk Stream back on the table with Ankara (as a footnote for our readers, it’s basically a modest version of previous South Stream designs) tries to kill two birds with one pipeline for President Putin.

a) It regains the political initiative over Ukraine, where Mr. Putin’s long lost the Donetsk war, but could still win the political peace ahead of 2018 Presidential polls in Russia, provided he can cut Kiev out of Wester European transit routes.

 

b) It makes life far harder for President Aliyev to bring competing Azeri gas to European markets, reducing Baku to its historical status of a Russian outpost. BP merely raises the ‘red flag’ over SOCAR HQ on a daily basis by Caspian / Rosneft proxy.

But unfortunately for Ankara, that rather reinforces the fundamental problem they have with Russia here. This is all one-way political traffic for President Putin to gain the upper hand over Mr. Erdogan, where Moscow rightly sees that a post-coup Turkey is absolutely prime for ‘political plucking’. Whether Erdogan is willing to be stripped to the ‘bare bones’ remains highly unlikely. At best, Turkey and Russia make for politically promiscuous ‘frenemies’. At worst, they’re at strategic cross-purposes on all points of the map, with mismatching vectors inexorably starting to show. In a truly worst case scenario, Mr. Erdogan might even find himself caught in collateral NATO-Russia crossfire, where everyone decides if Turkey can’t be part of a regional ‘solution’, it’s much easier to make them part of the ‘problem’.

On that final note, nobody’s quite said it yet, but that’s precisely what’s already on Erdogan’s mind. Behind all the ‘CIA’ coup bluster, the President’s real concern is how many regional players might have played a part in the coup antics. GCC states are undoubtedly on his ‘list’ of suspects, where Turkish realignment hasn’t exactly played through the way major Sunni states hoped over the past few months. Whatever your particular take on that one, the fourth (and final) analytical point to register over any supposed ‘Arab Autumn’ ideas here, isn’t so much that military leaders start getting nervous to make internal MENA moves in a low price environment, but whether regional power grabs start destabilising internal political interests as a new trend. Admittedly, that’s normally the stuff off Iranian intrigues, but in the current political environment, any wrong moves – or perceived wrong moves – will assuredly come with very high political costs.

Bottom line, Mr. Erdogan will be around for a long time to come in Turkey. But his interim answers don’t look particularly convincing right now. If anything, they’re merely laying the ground for more costly mistakes in future. Probably circa 2023, when Turkey celebrates 100 years from its modern incarnation, but before Erdogan gets ‘quite that far’, he has the minor issue of growing external debt problem to deal with.

As everyone knows, Turkey has relied on FX denominated debt, a large tranche of which happens to be short term to fund its persistent current account deficit.

While the debt load may seem sustainable in ‘boom times’, calculations from the IMF shows that a 30 per cent depreciation of the lira would push Turkey’s external debt stock to more than 80 per cent of GDP by 2020. In 2016 Turkey’s gross financing need is likely to exceed 25 per cent of GDP and could quickly spiral out of control if the FX mismatch carried by Turkey’s banks becomes acute. Right on cue, with tanks rolling down the streets of Istanbul, who in their right mind would willingly fund Mr. Erdogan’s adventure toward more red ink and inexorable Turkish turmoil.

via http://ift.tt/2bcWor4 Tyler Durden

Submitted by Jeremiah Johnson (nom de plume of a retired Green Beret of the United States Army Special Forces) via SHTFPlan.com,

Yes, we are all well aware the Constitution limits the Presidency to two consecutive four-year terms of office.  Then again, if you weigh the track record of the Obama administration, the Constitution is nothing more than a challenge that he bypasses and circumvents with every given opportunity.  Small wonder that he may very well do the same thing with the upcoming presidential elections.  Already a sham, the presidential elections are actually a vehicle he can use to grab that “Third Term” for himself.

First we’re going to quote straight out of the Huffington Post, an article from August 9, 2016, entitled “Does He Deserve a Third Term?  Obama is S.T.U.P.I.D!”  The acronym “STUPID” is supposed to stand for Super Human, Tough, Unequalled, Proactive, Ingenious, and Demi-god.

No, your eyes did not deceive you: that last was “Demi-god,” this article from a “Contributor” to the Huffington Post.  The last paragraph is very alarming, and here it is:

“D         –           Demi-god

 

What more can qualify a man as god?  A loving father to his children, best friend to his wife, a friend to his subordinates, a mentor to growing young men, hope to the hopeless, a victor in his challenges, the most powerful man on earth, yet a simple man in all his ways.  You will forever live in hearts of all as a god among men.”

A “god” among men, eh?

Akin to a professional boxing match, the slow and careful buildup in words by the media has begun.  Those sentiments are not a trumpet call, however; they are an echo of the mind of a narcissistic, soft-dictator that has systematically destroyed the United States over the past 7 years.  If you want the source of the reverberations, feast your eyes on this.  David Feherty of the Golf Channel conducted an interview with Obama and asked him some questions about his golf game.  Obama replied to the questions, and added:

“But I’m not quitting my day job.”

Feherty’s response: “Actually you are quitting your day job fairly shortly,” referring to Obama leaving the White House in January.  Obama’s next reply gives it all away.  In the first part, he suggests his golf game might improve.  Then he talks about the presidency (the underlined portion), leaving no guesswork about his true feelings on the matter.

“Then I may get good. I’m being forced out, I didn’t quit,” Obama said.

How do you like that one?  So how could this potentially happen?  Firstly, the states are the ones with either state-enacted provision to suspend elections or emergency powers to do so.  We saw an example of this with the September 11, 2001 attacks where a New York judge suspended primary elections.  We also saw it with “Superstorm Sandy,” where several states either postponed elections or re-stationed polling locations.

Barring such actions or state constitutional provisions, a governor can use emergency powers to postpone an election.  Feasibly under some “extraordinary” circumstance, Obama could direct the 18 Democratic state governors to jump on board and postpone the election.  This is secondary, however, and probably wouldn’t be needed.  Why?

Because Obama has the power to declare Martial Law, reinforced by the NDAA that declares the U.S. in a perpetual state of war against terror.

A false flag is the stimulus that Obama would use in order to suspend the elections and the Constitutional rights.  Make no mistake: there is no “love” for Hillary from Obama, and the election is a sham.  It either comes down to Hillary or Obama, and the entire decision is based upon what the globalists want.

The Posse Comitatus Act (18 USC 1385) was effectively nullified by the Warner Defense Act of 2006, and then it was further shredded and burned with the NDAA and this, out of United States Code 332 (10 U.S. Code § 332) as such:

10 USC 331. When a state is unable to control domestic violence and they have requested federal assistance, the use of the militia or Armed Forces is authorized.

 

10 USC 332. When ordinary enforcement means are unworkable due to unlawful obstructions or rebellion against the authority of the United States, use of the militia or Armed Forces is authorized.

 

10 USC 333. When a state cannot or will not protect the constitutional rights of the citizens, due to domestic violence or conspiracy to hinder execution of State or Federal law, the use of the militia or Armed Forces is authorized.

And this is augmented as such, here:

House Joint Resolution 1292. This resolution directs all departments of the U.S. government, upon request of the Secret Service, to assist in carrying out its statutory duties to protect government officials and major political candidates from physical harm.

Looking at the situation in the U.S. and the turmoil in the world it will be astonishing if we even make it to the “elections” this November.  Obama does not want to leave the office.  He has not completed his “fundamental transformation” and there are several avenues available to him that have not yet been pursued.  All of them involve a dramatic event that will enable him to suspend elections and remain in office until the end of the emergency (therefore indefinitely).

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