Global Economic Periscope # 3

 

rolled currency on a chess board


 

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Live 24 hours gold chart [Kitco Inc.]


 



Trader: If You’re Looking For A Canary In The Coal Mine…

…watch gold

The Day Before a Big Event Is Hardest to Trade

The European PMIs that were released earlier today beat forecasts. And it felt positively quaint when the euro and bund yields rose to their respective highs of the day. If that is all it takes to change the mood, then economists should be enlisted to keep low-balling any economic estimates. Algorithms can be forgiven for reacting to the prints. No human trader should have been doing anything else besides fading the move for better intraday trade location.

That’s harsh. But it reflects two realities.

  1. The market fully expects central banks to be dovish.
  2. And the market is relying on that fact for its investing thesis.

Yet deep down inside, investors worry, probably even know, that further monetary policy stimulus will be of dubious value in actually getting the global economy moving at a quicker pace. Expensive money is not what ails us.

Trading volumes remain, understandably, very low. Earlier in the week, that didn’t mean there weren’t things to be learned from the price action. Whatever today brings should probably be taken with a little bit more wariness. Traders have a tendency to talk themselves into all sorts of notions when the event they have been preparing for suddenly looms.

A few days ago, everyone was sure exactly what Fed Chairman Jerome Powell was going to say and what the central banks were going to do. Today will be about traders torturing themselves by questioning those assumptions. Whether they have been right or wrong in formulating their expectations, nothing in Wednesday’s Fed minutes nor this morning’s PMIs will change what ends up happening in September.

Having said that, the short end of the Treasury curve is probably right in being just a little bit more circumspect about pricing beyond next month. Emphasis on the word “just.” There has been a lot built into expectations that go well beyond data-dependence. And there are plenty of domestic and international challenges that are very much known unknowns. Some of which, it would seem, can change on a whim or political expediency.

Whatever path markets take to get there, they have confidently assumed that the central banks are very focused on asset prices and will try to maintain their buoyancy. That will get harder to accomplish over time. But timing is everything.

The euro is the most interesting currency trade of the day. It needs to start holding up for more than short bursts of time or risks taking a new look at year-to-date lows. I guess it will wait until after the G-7 to decide what it is going to do. But it is really just hanging on. It seems even more in play than the dollar, which refuses to break out higher but also doesn’t back off. It’s becoming a frustrating exercise to trade. The yen is also worth keeping a close eye on. It’s hard to find anyone who isn’t bullish on it, which raises the question, why isn’t USD/JPY lower? Maybe it, rather than the euro, will decide which way the dollar indexes end up going.

If looking for a canary in the coal mine, given all of the interest-rate assumptions that current market pricing is based on, watch gold.



CNBC’s Jim Cramer: It’s a trap!

Published: Aug 19, 2019

Getty
Cramer urges investors to beware of the trap.

If you’re frantically buying or selling stocks based on what the inversion and the subsequent uninversion of the yield curve is signalling, Jim Cramer has a message for you: Calm down.

‘Everything seems like a trap now. It was a trap to sell off the inverted, and now they have to go buy back on the uninverted. What happens if we get inverted again?’

That’s Cramer questioning the wisdom of traders who seem to be reacting to every headline popping up in the financial news cycle these days.



Trump Does Not Want to do Business With China’s Huawei

August 19, 2019

MORRISTOWN, New Jersey—President Donald Trump on Aug. 18 said he did not want the United States to do business with China’s Huawei even as the administration weighs whether to extend a grace period for the company.

Reuters and other media outlets reported on Friday that the U.S. Commerce Department is expected to extend a reprieve given to Huawei Technologies that permits the Chinese firm to buy supplies from U.S. companies so that it can service existing customers.

The “temporary general license” will be extended for Huawei for 90 days, Reuters reported, citing two sources familiar with the situation.

On Sunday, Trump told reporters before boarding Air Force One in New Jersey that he did not want to do business with Huawei for national security reasons.

“At this moment it looks much more like we’re not going to do business,” Trump said. “I don’t want to do business at all because it is a national security threat and I really believe that the media has covered it a little bit differently than that.”

He said there were small parts of Huawei’s business that could be exempted from a broader ban, but that it would be “very complicated.” He did not say whether his administration would extend the “temporary general license.”



Euro, Bond Yields Tumble As ECB Official Says Stimulus Measures “May Overshoot”

And the jawboning begins:

As Europe’s banking system collapses, ECB is resorting to over-promising more of the same and as ECB Governing Council member Olli Rehn said, the ECB “will announce a package of stimulus measures at its next policy meeting in September that should overshoot investors’ expectations.” More from Bloomberg:

“It’s important that we come up with a significant and impactful policy package in September,” ECB Governing Council member Olli Rehn (governor of Finland’s central bank) says in interview with Wall Street Journal.

“When you’re working with financial markets, it’s often better to overshoot than undershoot, and better to have a very strong package of policy measures than to tinker



Bitcoin Back Below $10k As $3 Billion China Ponzi Allegedly Dumps Crypto

Bitcoin is back below $10,000 for the first since July (testing below $9500 intraday before rebounding)…

Source: Bloomberg

Yesterday saw a big dump across all cryptos…

Source: Bloomberg

The broad-based selling has created the worst three days for Bitcoin since Nov 2018, and while immediate catalysts are unclear (as HK tensions, ARG chaos, and China currency turmoil remain), CoinTelegraph’s Marie Huillet reports on one possible driver of the selling pressure.

Amid a downturn in the cryptocurrency markets, the apparent swathe of Bitcoin sell-offs from a $3 billion Chinese Ponzi scheme could be to blame.

On Aug. 14, Dovey Wan – founding partner of blockchain-based investment company Primitive Ventures – called attention to the ongoing mass sell-offs from the fraudulent Chinese investment scheme, dubbed PlusToken.

10 million investors scammed of $3 billion

As Wan outlines, PlusToken was created in mid-2018 and promised high yield investment returns at different rebate percentages to its four tiers of member — a classic Ponzi scheme structure. By early 2019, the project claimed to have over 10 million members.

Wan has attached data on all the wallet addresses — including Bitcoin (BTC), Ether (ETH) and EOS— known to be associated with PlusToken and urgently called on exchanges and over-the-counter platforms to blacklist them.

She notes that Chinese police hunted down a core team member of the scheme two months ago and have revealed that investors were scammed of a whopping $3 billion.

Alongside the addresses, Wan has attached investigative data from security audit firm Peckshield that reveals the money flow from PlusToken’s wallet as of early July, the date the sell-offs are thought to have begun:

Graph showing PlusToken’s money flow in early July. Source: Peckshield via @DoveyWan

Incessant sell-offs

Despite the arrest, the cryptocurrency cannot reportedly be rolled back, as Wan explains:

“Many of their BTC addresses are started with P2SH which commonly used for mutil-sig, most likely some ppl who hold the keys are not being caught hence police can’t unlock the wallet. For EOS/ETH wallet can be diff case but so far police was not able to touch any of those.”

In an attempt to curb the impact of the sell-offs, she has recommended that Peckshield and blockchain analytics firm Chainalysis analyze the flows more closely, noting that PlusToken appears to be moving their funds in small batches of 50-100 BTC into exchanges.

Chinese traders have reportedly claimed that an unknown address has in recent days been dumping 100 BTC incessantly on crypto exchange Binance, which Wan suspects to be connected to the scheme.

As just reported, the PlusToken scheme was identified as being the largest single incident of loss in a recent summary of 2019 crypto-related theft from blockchain security firm CipherTrace, having purportedly defrauded investors of $2.9 billion.



Lunatic Amazon Employee and Trans Activist Paige Thompson Hacked into Capitol One’s Network – Stole Sensitive Data on 106 Million People

Lunatic Amazon Employee and Trans Activist Paige Thompson Hacked into Capitol One’s Network – Stole Sensitive Data on 106 Million People



Macri Massacre Monday: Goldman Says CFK Coming Back As Argentina Slides Into The Abyss

Rather than incoming polls or specific political maneuvers, going forward investors may want to center their attention on any hints about the broad contours of the economic agenda of a probable Fernandez-Kirchner administration.



 

 

 

Global Times Shows Dramatic Video Of Chinese Army Preparing For Hong Kong Invasion



Paul Craig Roberts Slams Dems & Western Media: “It’s Open Season On All White People”

As the US government has lied to us about so much for so long about so many big events, we have no alternative but to question everything



 

Germany Stalls And Europe Craters

The darkening outlook is forcing the European Central Bank to contemplate ever more perilous measures



The Biggest Migration Since The Barbarian Invasions Of Rome (Is Not Where You Think)

“Rich Chinese are smart to diversify to developed Western countries. Poor Chinese go to backward countries to try to become wealthy. Africa is the prime recipient…”



Turkey Received $1 Biollion Bailout From China As Reserves Ran Out

The last few months have seen the Turkish Lira rallying, rebounding off record lows, despite nothing positive coming from that country… and now we may have a better idea of how this lift was achieved (or how investors were fooled).



Bailout #3: Chinese Bank With $200 Billion In Assets Is Nationalized

Step aside Baoshang Bank and Bank of Jinzhou, it’s time for Chinese bank bailout #3.



One More Higher High In Gold, Then Down We Go - David Brady (26/07/2019)

 

One More Higher High In Gold, Then Down We Go – David Brady (26/07/2019)

By David Brady, CFA 7 days ago

July 26, 2019

Once again we are approaching another FOMC meeting, upon which we will learn whether Gold has already peaked or has one more higher high before doing so. Either way, it is only a matter of time before we get a significant reversal. Until then, unless 1385 is broken, I am only looking up for now.

We have enjoyed a $287 rally from 1167, a rise of 25% since August, and a $187 rally from 1267, a rise of 15% since May 2, to a high of 1454. These numbers will be even bigger if we have not seen the peak yet, but by then, a sizeable reversal will be overdue. We may have to wait until after the FOMC and a spike higher before such a reversal occurs.

The data is piling up against Gold here, just as it did in the opposite direction at the low last August, but it can become more extreme before it matters.

TECHNICALS

Daily

There is a bearish ending diagonal or flag playing out on the daily chart, allowing for one more higher high. A break of that flag to the downside will be first sign that a bigger drop is coming.

The RSI and MACDs are set-up for another negatively divergent higher high, assuming the high is not already in place.

Should Gold rise further, the RSI will become extreme overbought again while also being negatively divergent.

Lower lows occur below 1400 (bottom of E in ABCDE of wave 4) and 1385 in particular, confirming the beginning of the drop.

Seeing the 20D EMA break the 50D MA would also be a confirmation, but a delayed one.

Weekly

The RSI was beyond extreme overbought at its peak of 77 recently, its highest level since the August 2011 high. Each time the RSI was 70 or above in 2010-11, whether followed by a negative divergence or not, it soon led to a fall of over $100 next.

The weekly RSI was also negatively divergent at 1454 and is still extreme overbought at 74.

The MACD Histogram is coming off its highest level since April 2016, and the MACD Line from its highest since August 2016.

A weekly close below 1400 would likely signal the peak is in. The MACD Histogram crossing zero to the downside also.

FIBONACCI LEVELS – 1485 is the 50% Fib of the entire drop from 1923 to 1045. I expect this to be strong resistance, just like the 38.2% resistance was at 1377, and certainly not broken the first time around.

ELLIOTT WAVES

As with all Elliott wave analysis, there are several possible counts, but the common theme in all of these scenarios is that we’re going to get a sizeable pullback one way or the other soon. Possibly to ~1350, 1270, 1170, or even sub-1000, but the latter is a very low probability event, and only if 1167 is broken.

SENTIMENT is extremely bullish up here. There are very few bears left, which increases the likelihood of a major turn downward. I am a long-term bull, by the way, but I go where the data leads me in the short-term, and the signals are pointing south.

POSITIONING

Commercials hit their highest net short position since September 2016 recently. The Banks, since October 2016. One final spike higher in Gold could see them hit new record high short positions before the drop occurs. This would be a mirror image of their record long levels back in August 2018, and we all know what happened next.

Funds have increased their net long position by 228k contracts since April, a massive move, and now are close to 200k net long.More than sufficient for a peak to already be in place , but even more so if we do get one more pop before we drop.

 

INTER-MARKET ANALYSIS

USDCNH & XAUCNY

USDCNH remains stuck around 6.88. Could it be the calm before the storm? Could we see a spike higher on an escalation in the trade war? This would weigh on Gold in dollar terms.

XAUCNY tagged 10000 and retreated, as forecast, and is now hitting lower lows.

The daily RSI has reset to 54, so plenty of room for this to spike higher to a negatively divergent higher high and then dump.

The weekly RSI is coming off an extreme peak of 80 and is now down to 75. This is sufficient for a spike higher to establish that negative divergence before it dumps. Alternatively, the peak is already in.

TIPS / REAL RATES

Real Yields may have bottomed out, based on the 5-Year in particular.

Momentum higher is clearly failing in TIPS, but there is room for one more spike higher here too. (TIPS are basically the inverse of real yields).

A break of 114 would signal trouble.

The weekly chart is even more concerning.

The RSI and MACD Histogram are both negatively divergent here, and the RSI remains extreme overbought.

Perhaps even more importantly, the MACD Line is rolling over from extreme levels.

The ending diagonal is precarious, to say the least, as is the steepness of the rally. This is vulnerable to a violent break to the downside, which would likely weigh on Gold also.

FUNDAMENTALS

Once again, all eyes are on the Fed. The FOMC decision next week is pivotal.

Beyond the short-term, the return to ZIRP, possibly NIRP, QE, and ultimately MMT means Gold and Silver are going multiples higher once the dollar peaks and falls.

In the meantime, an escalation in the trade war could send USD/CNH through 7, coupled with a peak and drop in XAU/CNY at or above 10000 yuan, which would send Gold tumbling lower.

A stock market crash would be deflationary in the short term, and we could see a repeat of April-October 2008 sell-off in Gold ahead of the return to QE.

CONCLUSION

Technicals, Sentiment, Positioning, Elliott Waves, USDCNH & XAUCNY, and real yields all signal a peak in Gold is imminent, if it has not already occurred, but we may get one more spike higher before that happens. Wait for a break of support at 1400 or, more conservatively, 1385 for confirmation.

That said, unless 1167 is broken (and that’s a long way away) we’re still in a bull market, and the dips should be bought. At the same time, remain patient in doing so. No one wants to catch a falling knife.



Fed Lowers Interest Rates as Expected, Leaves Door Open to More Cuts

July 31, 2019

WASHINGTON—The Federal Reserve cut interest rates on July 31 for the first time since 2008, citing concerns about the global economy and muted U.S. inflation, and signaled a readiness to lower borrowing costs further if needed.

Financial markets had widely expected the quarter-percentage-point rate cut, which lowered the U.S. central bank’s benchmark overnight lending rate to a target range of 2.00 percent to 2.25 percent.

In a statement at the end of its latest two-day policy meeting, the Fed said it had decided to cut rates “in light of the implications of global developments for the economic outlook as well as muted inflation pressures.”

The Fed said it will “continue to monitor” how incoming information will affect the economy, adding that it “will act as appropriate to sustain” a record-long U.S. economic expansion.

The decision drew dissents from Boston Fed President Eric Rosengren and Kansas City Fed President Esther George who argued for leaving rates unchanged.

Both have raised doubts about a rate cut in the face of the current expansion, an unemployment rate that is near a 50-year-low, and robust household spending.



More Trump Miracles! Latest Data Shows Job Openings and New Hires Reached Historic All-Time Highs in 2018!

More Trump Miracles! Latest Data Shows Job Openings and New Hires Reached Historic All-Time Highs in 2018!



Capital One Hacker Steals Personal Data of 6 Million Canadians

Capital One Financial Corp., the North American bank holding giant, announced on Monday that a hacker had……..



Get Ready for the World Economy’s Biggest Week of 2019

 Updated on 
  • U.S. jobs report, China-U.S. trade talks jostle for attention
  • Bloomberg Economics’ guide to the world economy’s week ahead

‘Bloomberg Surveillance’ (07/29/2019)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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‘Bloomberg Surveillance’ (07/29/2019)
Economist Reinhart Says Fed Should Cut 50-Basis Points, Then Move On
Economist Reinhart Says Fed Should Cut 50-Basis Points, Then Move On
There will be no chance of a summer break for investors or policy makers in coming days as they brace for what might be the busiest week for the world economy this year.

The highlight is Wednesday’s decision by the Federal Reserve with markets and economists virtually united in predicting Chairman Jerome Powell and colleagues will cut interest rates for the first time in more than a decade.

What’s Likely to Happen?

Median probability assigned to potential outcomes

Some Fed watchers predict officials will cut their benchmark by half a percentage point, but the signal is that they will eschew a bigger move in favor of a quarter point reduction. They will likely also leave open the possibility of further action down the road as they seek to sustain the record-long U.S. expansion and kick start inflation.

“While the Fed cutting rates by a quarter point will hardly be a surprise to financial market participants — as it has been well advertised and is priced in with a relatively high probability — the broader question will be how the Fed telegraphs its intentions regarding additional easing,” said Carl Riccadonna, chief U.S. economist at Bloomberg Economics. “Policy makers are keen to avoid getting ‘bullied’ by the markets into more than 50 to 75 basis points of rate reductions.”

The Fed isn’t the only event with the ability to shape the outlook for the global economy this year.

On Monday, U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin are set to travel to China for for the first high-level, face-to-face trade negotiations between the world’s two biggest economies since talks broke down in May.

Then on Friday, the monthly payrolls report will shed light on whether the Fed’s move was necessary. Economists surveyed by Bloomberg predict a 166,000 gain in non-farm jobs in July, slower than the 224,000 of June.

If that’s not enough, Bank of Japan policy makers meet on Tuesday amid calls to reinforce their commitment to low rates and Brazil’s central bank may cut rates on Wednesday. Thursday sees the release of global manufacturing data amid concerns many industries are already suffering recession.

Economist Reinhart Says Fed Should Cut 50-Basis Points, Then Move On.

There will be no chance of a summer break for investors or policy makers in coming days as they brace for what might be the busiest week for the world economy this year.

The highlight is Wednesday’s decision by the Federal Reserve with markets and economists virtually united in predicting Chairman Jerome Powell and colleagues will cut interest rates for the first time in more than a decade.

Median probability assigned to potential outcomes

Some Fed watchers predict officials will cut their benchmark by half a percentage point, but the signal is that they will eschew a bigger move in favor of a quarter point reduction. They will likely also leave open the possibility of further action down the road as they seek to sustain the record-long U.S. expansion and kick start inflation.

“While the Fed cutting rates by a quarter point will hardly be a surprise to financial market participants — as it has been well advertised and is priced in with a relatively high probability — the broader question will be how the Fed telegraphs its intentions regarding additional easing,” said Carl Riccadonna, chief U.S. economist at Bloomberg Economics. “Policy makers are keen to avoid getting ‘bullied’ by the markets into more than 50 to 75 basis points of rate reductions.”

The Fed isn’t the only event with the ability to shape the outlook for the global economy this year.

On Monday, U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin are set to travel to China for for the first high-level, face-to-face trade negotiations between the world’s two biggest economies since talks broke down in May.

Then on Friday, the monthly payrolls report will shed light on whether the Fed’s move was necessary. Economists surveyed by Bloomberg predict a 166,000 gain in non-farm jobs in July, slower than the 224,000 of June.

If that’s not enough, Bank of Japan policy makers meet on Tuesday amid calls to reinforce their commitment to low rates and Brazil’s central bank may cut rates on Wednesday. Thursday sees the release of global manufacturing data amid concerns many industries are already suffering recession.

 

 

 

 

 

 

 

 

 

World’s Central Banks End Pact That Limited Selling Of Gold

“Signatories of the fourth Central Bank Gold Agreement no longer see need for formal agreement as market has developed and matured.”



July 25, 2019

European Central Bank Joins Fed in Paving Way for Rate Cut

European Central Bank Joins Fed in Paving Way for Rate Cut



Trump Reaches Budget Deal With Democrats

July 22, 2019

President Donald Trump announced on July 22 that the White House has reached a deal with Democratic and Republican leaders on a two-year budget, amounting to an against-the-odds victory for Washington pragmatists seeking to avoid politically dangerous tumult over fiscal deadlines.

“I am pleased to announce that a deal has been struck with Senate Majority Leader Mitch McConnell, Senate Minority Leader Chuck Schumer, Speaker of the House Nancy Pelosi, and House Minority Leader Kevin McCarthy – on a two-year Budget and Debt Ceiling, with no poison pills,” Trump wrote on Twitter. “This was a real compromise in order to give another big victory to our Great Military and Vets!”

Aides on both sides of the talks say the deal would restore the government’s ability to borrow to pay its bills into the next administration and build upon recent large budget gains for both the Pentagon and domestic agencies. It would mostly eliminate the risk of a repeat government shutdown this fall.

The agreement is on a broad outline for $1.37 trillion in agency spending next year and would represent a win for lawmakers eager to return Washington to a more predictable path amid political turmoil and polarization, defense hawks determined to cement big military increases, and Democrats seeking to protect domestic programs. Both sides view it as better than a protracted battle this fall that probably wouldn’t end up much differently.



Bank Run: Deutsche Bank Clients Are Pulling $1 Billion A Day

The similarities to Lehman are growing by the day.



The Parable Of Deutsche Bank And Investment Banking

Authored by William Wright via Reaction,

It’s not often that job cuts in the City of London make the same sort of headlines as layoffs at a car plant in Swindon or a steelworks in Scunthorpe – so you know something’s up when the 18,000 job losses at Deutsche Bank hit the front pages of all the wrong newspapers.

The decision by Deutsche Bank to finally throw in the towel on its 25-year attempt to build a global investment bank to rival the Wall Street giants is a parable of the past 25 years in global banking. You might even say it was the moment that the full impact of the financial crisis finally sunk in for the industry, albeit perhaps 10 years too late.

Deutsche Bank will cut a fifth of its global workforce over the next three years, effectively shut down some businesses altogether, and significantly reduce the giant bond and derivatives trading business on which the entire Deutsche Bank project had been built. Perhaps a few thousand of the 8,000 or so staff at Deutsche Bank in the UK could be at risk. It can sometimes be hard to feel sorry for bankers, but for every one of them it will be a devastating personal blow.




DEUTSCHE BANK IN RED
INVESTIGATIONS SWIRL



Consumer Sentiment Better Than Expected in June



US Senate Backs Massive Defense Bill, Targets China

June 28, 2019

WASHINGTON— The U.S. Senate on June 27 passed a $750-billion defense policy bill with provisions that target China on issues from technology transfers to the sale of synthetic opioids, pushing to counter growing Chinese influencearound the world.



Metals Bulls Need This Indicator To Turn Higher, To Confirm Recent Gold Rally!

 



Over 600 US Companies Support Trump’s Tariffs on China: Letter




 



 



Bitcoin Soars Above $9K, And This Time Is Different: “It’s Mostly Institutions Now

Corporations motivated by insatiable greed endanger us all and must be stopped before it’s too late, veteran journalist Chris Hedges told RT, warning that future generations will suffer immeasurably unless action is taken now.

Appearing on George Galloway’s political talk show ‘Sputnik’, Hedges decried how the “psychopaths” who run the world’s largest multinational corporations are “hurling us all over a cliff” in the pursuit of “short-term profit.”

We’re going to talk about the destruction of the ecosystem that sustains life. And [that’s] what is happening in the hands of the oligarchic elites in the fossil fuel industry – and let’s not forget the defense industry, the largest emitter of greenhouse gasses is the US military.

Asked by Galloway if their grandchildren will “have a world to live in,” Hedges offered a grim assessment:

“Not unless we – and I don’t use this word lightly – overthrow corporate power. Otherwise it’s very clear that these people will kill us.”

Watch the full interview below:

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China Buys Most Gold In Over 3 Years Amid “Determined Diversification” From Dollar

China continued its renewed (public) gold-buying spree in May adding almost 16 tons of the precious metal to its reserves – the biggest monthly increase since January 2016.



President Trump Is Confident Mexico Will ‘Try Very Hard’ to Enforce New Immigration Deal

President Donald Trump is optimistic about the new immigration deal reached between the United States and Mexico on …



Dollar dump? Russia & China agree to bilateral trade in national currencies during Putin-Xi meeting

Dollar dump? Russia & China agree to bilateral trade in national currencies during Putin-Xi meeting
Russia and China took another step away from the US dollar after the two countries agreed to develop bilateral trade using the ruble and the yuan.

It was just one of the major deals reached after the presidents of the two countries, Vladimir Putin and Xi Jinping, held talks in Moscow on Wednesday.

“Russia and China intend to develop the practice of settlements in national currencies,” Putin told journalists at the news conference following the talks. He added that the states have signed intergovernmental agreements on expanding the use of the yuan and the ruble in bilateral financial operations.

A draft government decree on the national currencies trade was released earlier during the day. The document stipulates that Moscow and Beijing will cooperate on development of national payment systems, as well as facilitate cross-border payments in national and other currencies.

ALSO ON RT.COMChinese businesses consider moving production to Russia as trade war with US escalatesDuring the signing ceremony other major agreements were reached. Russia’s state nuclear company Rosatom and China National Nuclear Power (CNNP) penned a general contract on building the third and fourth units at Xudapu nuclear plant in northeastern China.

It was earlier reported that the deal is worth $1.7 billion and construction is scheduled to begin in October 2021 and August 2022.

In another major deal, inked following the high-level talks, the Russian Direct Investment Fund (RDIF), China’s Alibaba, and Russia’s Mail.Ru Group agreed to invest a total of $382 million into an e-commerce joint venture. Alibaba Group is to provide some $100 million, while the rest will be funded by the Russian side.

ALSO ON RT.COMRussia could take hold of China’s entire gas marketThe RDIF also signed a deal with China Investment Corporation (CIC) to create a joint scientific innovation fund and invest $1 billion into it.

“We expect that its activities will make a significant contribution to the development and implementation of the most advanced technologies and solutions for the development of the economies of our countries and the further strengthening of our partnership,” RDIF CEO Kirill Dmitriev said.

After the Moscow talks, presidents Putin and Xi Jinping will depart for St Petersburg to take part in Russia’s key annual business event. Dozens of multi-billion dollar deals related to energy, industry, and finance, are expected to be signed during the St. Petersburg Economic Forum, which runs from June 6 to June 8.



Venezuela Defaults On $750 Million Gold-Backed Swap With Deutsche Bank

Somewhere Hugo Chavez, who several years ago successfully repatriated much of Venezuela’s gold, is spinning in his grave.

It started in March, when Venezuela’s embattled leader Nicolas Maduro defaulted on a $1.1 billion gold-backed loan with Citi, in the process losing several tons of gold placed as collateral by Venezuela’s central bank after the deadline for repurchasing them expired. Now, Bloomberg reports that Venezuela has also defaulted on a gold swap agreement valued at $750 million with Deutsche Bank, prompting the German bank to seize the precious metal which was used as collateral, and close out the contract.

Maduro and a stack of 12 Kilogram gold ingots

Deutsche Bank and UBS Explored the Idea of Creating Europe`s Biggest Bank

Citi`s Buiter: MMT Describes an Economy Stuck in a Liquidity Trap

Markets Should Reflect Higher Risk of Hard Brexit or Corbyn Premiership:

As part of a financing agreement signed in 2016 which we profiled here, Venezuela received a cash loan from Deutsche Bank and put up 20 tons of gold as collateral. The agreement, which was set to expire in 2021, was settled early due to missed interest payments as Venezuela has now effectively run out of foreign reserves.

 

Meanwhile, as Bloomberg reports, opposition leader Juan Guaido’s parallelgovernment has asked the bank to deposit $120 million into an account outside President Nicolas Maduro’s reach, which is the difference in price from when the gold was acquired to current levels.

“We’re in touch with Deutsche Bank to negotiate the terms under which the difference owed to the central bank will be paid to the legitimate government of Venezuela,” said Jose Ignacio Hernandez, Guaido’s U.S.-based attorney general. “Deutsche Bank can’t risk negotiating with the central bank’s illegitimate authorities,” particularly after it was sanctioned by the U.S. government, Hernandez said, even though the military has stubbornly refused to go along with the US attempted government coup, leaving the seized gold in limbo.

While insolvent Venezuela, which defaulted on its dollar-denominated bonds in 2017, is becoming increasingly cut off from the global financial network due to sanctions, it still managed to sell $570 million in gold last month, prompting total foreign reserves to tumble to a 29-year low of $7.9 billion.

 

 

Meanwhile, Venezuela has not only become a symbol of the destructive influence of socialism and associated hyperinflation, but a case study of how to obliterate the only real hard currency left when everything else is gone: the government managed to blow through more than 40% of Venezuela’s gold reserves last year, selling to firms in the United Arab Emirates and Turkey in a desperate bid to fund government programs and pay creditors.



68% of Outside Facebook Investors Want Mark Zuckerberg Out as Chairman



Trump Calls for AT&T Boycott to Fix ‘Fake News’ CNN



This Cycle’s Most Dangerous Bubble, In Three Charts

One of the lessons of the past few decades’ boom/bust cycles is that each financial bubble emerges in a different asset class. In the 1970s it was precious metals, in the 1980s junk bonds, in the 1990s tech stocks and in the 2000s mortgage-backed bonds.

Today the only one of these with a reasonable chance of blowing up the economy is Big Tech, which is wildly overvalued by any historical measure.

But a better candidate for the title of most dangerous bubble is emerging: Corporate debt, specifically the “almost junk” portion of that market.

Let’s start with the ongoing surge in overall corporate borrowing, which as a percentage of GDP is now back to the high achieved during the Great Recession, and higher than before the previous two recessions:

But not all corporations are misbehaving. The clear and present danger is coming from BBB rated debt, which means low-rated borrowers that aren’t quite as dicey as actual junk borrowers. This category was less than $1 trillion in the 2000s housing bubble and has since about tripled.

Meanwhile, the terms of these loans are increasingly of the “covenant-lite” variety that don’t require companies to keep their finances within reasonable boundaries. This kind of bond is now 80% of the speculative-grade, or leveraged, loan market, up from just 6% in 2006.

 

American Soil Is Being Globalized: Nearly 30 Million Acres Of US Farmland Now Owned By Foreigners

All across America, U.S. farmland is being gobbled up by foreign interests.  So when we refer to “the heartland of America”, the truth is that vast stretches of that “heartland” is now owned by foreigners, and most Americans have no idea that this is happening.  These days, a lot of people are warning about the “globalization” of the world economy, but in reality our own soil is rapidly being “globalized”.  When farms are locally owned, the revenue that those farms take in tends to stay in local communities.  But with foreign-owned farms there is no guarantee that will happen.  And while there is plenty of food to go around this is not a major concern, but what happens when a food crisis erupts and these foreign-owned farms just keep sending their produce out of the country?  There are some very serious national security concerns here, and they really aren’t being addressed.  Instead, the amount of farmland owned by foreigners just continues to increase with each passing year.



Exclusive: Purging Brazil of Socialism, an Ongoing Battle—Eduardo Bolsonaro

Stephen Gregory
PUBLISHER

March  2019  Updated: May  16,

The Epoch Times had the opportunity recently to sit down with Eduardo Bolsonaro, a congressman in Brazil and the son of Brazil’s president, Jair Bolsonaro, to discuss the situation in Brazil, on the occasion of his father’s state visit to the White House on March 19.

The Epoch Times: You have served two terms in Congress in Brazil, and in this last election, I understand you won in a huge landslide—you had more votes than any Brazilian congressperson has ever won?

Eduardo Bolsonaro: Yes. It was a surprise for us. We weren’t expecting that much, but it was historic. It says a lot about the moment that we are living in and not only in Brazil. If you look around in the whole region, you have other people with the same thinking, the same way as President Jair Bolsonaro, and as Trump, too. You look to Chile, you have [President] Sebastian Pinera; Colombia, [President] Ivan Duque [Márquez]; Paraguay, [President] Mario Abdo Benítez; [President Mauricio] Macri in Argentina.

So it’s not a movement about the extreme right, as the press usually sees that we are. It’s something that is natural and is a huge message that we don’t want socialism anymore



Global Investors Flee Chinese Stocks at Fastest Pace Since 2015

Global Investors Flee Chinese Stocks at Fastest Pace Since 2015
WASHINGTON—The recent U.S.–China trade dispute has prompted the biggest capital outflow from Chinese equities in nearly four years. …





 



Dow Drops More Than 600 Points After China Hits Back with Tariff Hike



The Tariff Scare Narrative Has Collapsed–Latest Price Data Show No Inflation



By Hans Seidenstuecker and Arno Schuetze

FRANKFURT, May 8 (Reuters) – Deutsche Bank faces a possible public rebuke from shareholders after two influential investor advisory groups urged them to issue a vote of no confidence in the lender’s management.

In a highly critical report, U.S. proxy advisor

Deutsche Bank’s very existence



U.S. Economy Grows 3.2% in Q1, Smashing Expectations



Venezuela Sells $400 Million Worth Of Gold Bullion

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  • The best performing metal this week was palladium, up 3.52 percent as CPM Group noted that the price could climb to $1,800 on supply constraints. Gold traders and analysts switched from bullish to mostly neutral or bearish on the yellow metal this week, according to the weekly Bloomberg survey.
  • Turkey’s gold reserves reversed this week by rising $227 million from the previous week. The central bank’s holdings are now worth $20.9 billion as of April 12, according to official figures. Kazakhstan also increased its gold holdings to 11.63 million ounces in March, up from 11.46 million in February. Mexico, too, raised gold reserves by 3.86 million ounces last month.
  • Bloomberg’s Cormac Mullen writes that currency traders should get ready for a big move in the dollar, if past periods of low volatility are a guide. Over the last 25 years, there have been three previous troughs in the JPMorgan Global FX Volatility Index, and each time the U.S. Dollar Index has moved around 10 percent over the subsequent six months, according to Bloomberg data. A weaker U.S. dollar has historically been positive for the gold price as the two trade inversely.

 

Recent Market Updates

– World’s Central Banks Want More Gold – India May Buy 1.5M Ounces In 2019

– Russia’s 2019 Gold Rush Continues: Buys 600,000 Ounces of Gold In March

– When Should You Sell Your Gold and Silver? (GoldCore Video)

– Understanding Gold: A Step By Step Guide To Gold As An Asset Class

– World Trade Suffers Biggest Collapse Since Financial Crisis

– Exclusive Offer: Secure Gold and Silver Storage In Zurich For Free For Six Months

– There Is Too Much Debt In The World – World Bank

– How to Store Gold in an Uncertain World



Billionaire JP Morgan chief attacks socialism as ‘a disaster’

  • Jamie Dimon: socialism leads to ‘corruption and favouritism’
  • America’s top banker, paid $31m last year, defends capitalism
Jamie Dimon said capitalism was ‘the most successful economic system the world has ever seen’.
 Jamie Dimon said capitalism was ‘the most successful economic system the world has ever seen’. Photograph: Jacquelyn Martin/AP

The world’s most powerful banker has attacked socialism, saying it produces “stagnation, corruption and often worse”.

JP Morgan’s chief executive, Jamie Dimon, took aim at socialism in his annual letter to shareholders, and warned it would be “a disaster for our country”.

Dimon, who was paid $31m last year as the head of America’s largest bank and who is estimated by Forbes to be worth $1.3bn, took his swipe as a new wave of left politics has emerged in the US.

Democratic socialism has been embraced by a new generation of politicians, including New York congresswoman Alexandria Ocasio-Cortez, and supporters of Bernie Sanders, a longtime socialist now making a second bid for the presidency.

Dimon’s attack also comes as many leftwing Democrats, including Sanders and Senator Elizabeth Warren, have called for the breakup of big businesses and greater regulation of banking in particular.

In his letter, Dimon wrote: “When governments control companies, economic assets (companies, lenders and so on) over time are used to further political interests – leading to inefficient companies and markets, enormous favoritism and corruption.”

He went on: “Socialism inevitably produces stagnation, corruption and often worse – such as authoritarian government officials who often have an increasing ability to interfere with both the economy and individual lives – which they frequently do to maintain power. This would be as much a disaster for our country as it has been in the other places it’s been tried.”

Socialism is set to be one of the key issues of the 2020 election cycle. Donald Trump has already begun campaigning against socialism and used his State of the Union address to declare that “America will never be a socialist country.”

Dimon has previously warned income inequality is dividing America.

“It is absolutely obvious that a big chunk of [people] have been left behind,” Dimon said last month. “Forty percent of Americans make less than $15 an hour. Forty percent of Americans can’t afford a $400 bill, whether it’s medical or fixing their car. Fifteen percent of Americans make minimum wages, 70,000 die from opioids [annually].”

In his letter, Dimon acknowledged capitalism’s “flaws” but praised it as “the most successful economic system the world has ever seen”.

He wrote: “This is not to say that capitalism does not have flaws, that it isn’t leaving people behind and that it shouldn’t be improved. It’s essential to have a strong social safety net – and all countries should be striving for continuous improvement in regulations as well as social and welfare conditions.”



 

Another P2P Lending Crisis in China, 220,000 Investors Losing 14.5 Billion Yuan

BY OLIVIA LI, EPOCH TIMES

April 6, 2019

One of China’s top peer-to-peer (P2P) lending platforms, tuandai.com, collapsed last week, resulting in financial losses for scores of Chinese investors. The platform owners Tang Jun and Zhang Lin surrendered themselves to police on March 27.



Deutsche Bank’s Decades-Long History Of Compliance Failures Exposed

Compliance workers were treated as “a step above janitors”…

Related image



Bitcoin Bursts Above $5,000 As Crypto Melt-Up Continues

Never say never, but it would take a massive shift in the appetite for risk assets globally for us to go retest the lows or make new lows for the crypto market now.



Gold-fall-through-green-line-would.jpg (1278×855)
April Gold’s tortuous slog toward an ‘easy’ rally target at 1332.00 warrants a closer look at the bearish case. For if the futures were to fall just $9 to the green line shown in the chart (click on inset), that would trip a theoretical sell signal to as low as 1255.90 — a 4.5% plunge from current levels. Although the bull trend begun last August from 1182 still dominates the daily chart, the A-B countertrend shown in the chart is sufficiently compelling to imply that a sharp correction may be imminent.  The danger would be averted by a rally exceeding 1356. 80, where a small but technically significant peak was notched on the way down from 1400 last spring.

 



“There isn’t much guessing on how this will end, and history tells us that such things rarely end well.”



How Turkey Committed Financial Suicide

Image result for images of turkey the country

“The extraordinary stress currently seen in Turkey’s lira funding market may appear to be a niche issue, but the repercussions will be far-reaching…”



North Korean Leader Kim Jong-un Visits Vietnam

North Korea’s military has stolen more than half a billion dollars in cryptocurrency

A panel of experts has told the United Nations Security Council that North Korea stole more than half a billion dollars’ worth of cryptocurrency from online trading platforms during 2017 and 2018, and used blockchain technology to cover its tracks. The… Read more



“The Berkshire Trade”: How Deutsche Bank Conspired To Conceal A $1.6 Billion Loss

The resulting loss was nearly four times its entire 2018 profit – and the biggest loss in the bank’s history. And it never even had to disclose it.




Salvini Proposes Seizing Control Of Italy’s Gold Reserves From Central Bank

“The gold is the property of the Italian people, not of anyone else”



2019: The Three Trends That Matter

Look no further than Brexit in Britain, the yellow vests in France and the Deplorables in the U.S. for manifestations of a broken social contract and decaying social order



Indy media starting to admit Adams was right: Crypto industry “riddled with con artists, scammers and fraud”

A Canadian cryptocurrency exchange is reportedly filing for bankruptcy following the highly questionable “death” of its CEO and corresponding “loss” of nearly $200 million worth of customers’ crypto assets, once again raising the question: Is there anythinglegitimate going on in the crypto world that isn’t a total scam?

QuadrigaCX, which had been Canada’s largest cryptocurrency exchange prior to its sudden collapse, was seemingly a trustworthy storehouse of its customers’ crypto wallets – its CEO, Gerry Cotten, also a seeming humanitarian who, prior to his alleged “passing away,” was supposedly traveling in India where he was “opening an orphanage to provide a home and safe refuge for children in need.”

But many are asking serious and pertinent questions following the news that Cotten was allegedly the only person at QuadrigaCX who possessed the “keys” to the company’s crypto wallets, and that he somehow failed to share these keys with anyone else – even though he knew he was sick.

The official story is that Cotten let out his final breath after suffering “complications” associated with his “Crohn’s disease,” and that remaining employees at QuadrigaCX have had “no luck” gaining access to the hundreds of millions of dollars’ worth of crypto coins that are now supposedly inaccessible by anyone.

“Since his death, 115,000 customers of the exchange have been struggling with Mt. Gox-style ‘liquidity issues’ as those trying to withdraw their funds have suddenly found it extremely difficult – if not impossible – to do so successfully,” explains ZeroHedge.com.





Crypto  General News

Binance has partnered with Israel-based payments processing firm Simplex to allow purchases with Visa and MasterCard. At launch, credit card purchases will be enabled for BTC, ETH, LTC and XRP – tradable against the 151 other tokens Binance offers.

Boerse Stuttgart Group, Germany’s second-largest stock exchange, has launched a mobile app for crypto trading after a year of development. The Bison app is available on iOS 9+ and Android 4.4+ devices in Germany, and allows users to trade in BTC, ETH, LTC and XRP and fund their accounts with euros – along with zero trading fees and a built-in wallet.

B2C2, an electronic OTC trading firm and crypto liquidity provider, has received the green light to offer crypto derivatives in the U.K. The FCA regulated firm will offer crypto contracts for difference (CFDs) for BTC, BCH, ETH, LTC and XRP.

Cboe has resubmitted its joint proposal with VanEck and SolidX after being withdrawn earlier this month due to the U.S. government shutdown.

Cottonwood Vending LLC is the latest company to receive New York’s coveted BitLicense and is now the third Bitcoin ATM operator to do so.

Fidelity announced its crypto trading and custody platform is in its “final testing” phase. The release noted the company has on-boarded “a select set of eligible clients” already.

IBM has completed a trial of blockchain technology to track a shipment of 28 tons of mandarin oranges from China to Singapore. IBM created an electronic bill of lading, or e-BL, which sped up administrative processes “to just one second” along with reducing costs.

Prime Trust, the Nevada trust company, announced it has removed all fees for storing cryptocurrencies – in line with what it charges to custody stocks and bonds.

QuadrigaCX, the Canadian crypto exchange, is filing for protection from creditors, a step taken to avoid bankruptcy. QuadrigaCX has asked the Nova Scotia Supreme Court to appoint Ernst & Young (EY) to act as independent third party to oversee its proceedings.

Staked, a startup that provides institutional investors with the infrastructure for non-custodial staking, has received $4.5 million in a seed round led by Pantera Capital. Notably, a Bloomberg article published today suggests proof-of-stake (PoS) token investors have a unique option to survive the protracted crypto market slump: staking their holdings.

Bitcoin News

Cryptocurrencies

Ethereum $107.72 USD (0.17 percent) anticipated test net solution, Görli blockchain, launched today. Görli will function as the test network to initiate new validators, as part of “phase zero” – Prysmatic Labs test for Ethereum’s shift towards proof-of-stake (PoS).

Stellar’s $0.083537 USD (0.32 percent) micropayments startup SatoshiPay is partneringwith Axel Springer, a publishing house owning some of Europe’s largest newspapers.

Ripple $0.309756 USD (0.49 percent): SBI CEO Yoshitaka Kitao just gave a speech on the impact Ripple and R3 will have on international payments: “Swift have run out of options, Swift have given up on what they can do internally.”



The Coming Global Financial Crisis: Debt Exhaustion

The global economy is way past the point of maximum debt saturation, and so the next stop is debt exhaustion.






CBO Unveils Apocalyptic Long-Term Debt Picture With US Set To Borrow Over $1 Trillion For Second Year

America’s growing budget deficit, and surging debt issuance, has so far not been a major issue allowing the US to fund itself with relative ease. However, one look at the CBO’s long-term debt forecast, and the skies may turn cloudy fast.



Bitcoin is NOT decentralized: Just 1,000 accounts control 85% of all Bitcoins in the world… and they easily rig market swings to skim profits from the masses

A sizable number of formerly dormant Bitcoin wallets are mysteriously coming alive, new reports indicate – including the relatively small handful of Bitcoin wallets that collectively hold upwards of 85 percent of the world’s total Bitcoin supply.

Following the recent mega-decline in Bitcoin’s value, where the popular cryptocurrency dropped in value from around $20,000 per coin last year to around $3,500 per coin at present, many Bitcoin wallets that have been inactive for anywhere between six months to two-and-a-half years are suddenly “waking up” – which has investors projecting more wild price swings for Bitcoin in the near future.

It would appear as though Bitcoin’s earliest adopters, many of whom have been sitting on somewhat large amounts of the cryptocurrency and doing nothing with it, are suddenly getting in on the action. According to Flipside Crypto, the number of inactive Bitcoin accounts has plummeted from nearly four million back in September to well under three million as of this writing.

“The owners of some of bitcoin’s oldest accounts — many of which have long been dormant — have shown signs of life starting in October,” explains Zero Hedge, citing data recently published by Bloomberg about where Bitcoin could be headed now that the old dogs are starting to play the game.

“The actively-traded supply of bitcoins has risen 40% since last summer … This is important because a similar pattern preceded large price swings in 2015 and 2017, most recently foreshadowing the frenzy of (manipulation aided) buying that sent the price of a bitcoin to $20,000 briefly before prices cratered the following year.”


As rumors about a possible Deutsche Bank merger with rival troubled German lender Commerzbank continue to swirl despite the seemingly never-ending investigations into a suite of alleged misdeeds by the bank, Bloomberg has given would be merger arbs weighing whether to buy the German lender’s battered shares one more reason to hold off.

DB

The West’s Descent Into ‘Cultural Revolution’

The goal of the Cultural Revolution isn’t to persuade, it’s to enforce compliance…

Bankruptcy is a when, not an if… Whether they realize it or not, they’re playing with nuclear warheads that could annihilate not just the French, but Europe’s and the entire world’s financial system…”

Russia Prepares To Buy Up To $10 Billion In Bitcoin To Evade US Sanctions

“[The] Russian government is about to make a step to start diversifying financial reserves into Bitcoin since Russia [is] forced by US sanctions to dump US Treasury bonds and [take] back US dollars,”

 

Guideposts For Powell’s Direction On Quanto-Tightening

“…it will probably take more negative market action to prompt the Fed to stop even if it may have effectively paused as regards the prospects for more Fed rate hikes…”


Jan 14, 2019

Despite cost controls, increased efficiency, and higher activity offshore Norway, oil production at Western Europe’s largest oil producer fell in 2018 compared to 2017 and is further expected to drop this year to its lowest level since 1988.



Jan 14, 2019