When the global economy is doing well, the amount of stuff that is imported and exported around the world goes up, and when the global economy is in recession, the amount of stuff that is imported and exported around the world goes down. It is just basic economics. Governments around the world have become very adept at manipulating other measures of economic activity such as GDP, but the trade numbers are more difficult to fudge. Today, China accounts for more global trade than anyone else on the entire planet, and we have just learned that Chinese exports and Chinese imports are both collapsing right now. But this is just part of a larger trend. As I discussed the other day, British banking giant HSBC has reported that total global trade is down 8.4 percent so far in 2015, and global GDP expressed in U.S. dollars is down 3.4 percent. The only other times global trade has plummeted this much has been during other global recessions, and it appears that this new downturn is only just beginning.
Submitted by Tyler Durden on 10/20/2015 - 08:23 Investors are too complacent (the Minsky-Moment). Too many are still trying to profit from the Fed subsidy of past stimulus. Investors remain loaded in risk assets, incentivized by the need to beat peers and benchmarks and comforted into complacency by the Fed ‘put’. The true level of risk is being ignored. The pervasive mentality of seeking maximum risk has become a terrible risk/reward trade for two main reasons...
The collapse of the Western Financial System already occurred years ago. Even though the top banks continue to behave as if they are solvent institutions with functioning balance sheets, they are totally bankrupt without Fed & Central Bank intervention.
This was explained in detail in the video: FED AUDIT SHOCKER: They Came From Planet Klepto. I posted this video on my site last month and I continue to urge readers to watch it as it provides actually data showing how the Federal Reserve propped up the top U.S. banks with trillions of Dollars in sweetheart deals.
While the majority of Western Investors fell for this scam, HOOK, LINE & SINKER, a small percentage of the population realized this signaled the peak and end of the U.S. Fiat Dollar Monetary System. We can see this huge world-changing event take place in chart below.
Brien Lundin from Gold Newsletter joins me to discuss the Fed’s only remaining bullet, further debasement of the fiat currency. Of course for those who understand what “debasement” is code for, it means that ultimately we will see hyperinflation of the US dollar.
The only question is, when will it start? As Brien points out “Of course It depend on how you define hyperinflation… Since they removed silver from US coinage, the US dollar has lost about 90 percent of its purchasing power. So by some people’s definitions of hyperinflation we have already seen that.” Brien reminds us that the only way to protect yourself from the Federal Reserve’s currency debasement is with physical gold and sil
Submitted by Tyler Durden on 10/20/2015 - 08:05 "In the West, they talk about ‘moderate opposition,’ but we so far haven’t seen any in Syria. Any person who takes up arms and fights the legal authorities, how moderate can he be?"
Submitted by Tyler Durden on 10/20/2015 - 09:25 Current oil prices are simply not low enough to stop over-production. Unless external investment capital is curtailed and producers learn to live within cash flow, a production surplus and low oil prices will persist for years.
Growth of exports from China has been dropping relentlessly, for years. Now this “growth” has actually turned negative. In September, exports were down 3.7% from a year earlier, the “inevitable fallout from China’s unsustainable and poorly executed credit splurge,” as Thomson Reuters’ Alpha Now puts it. Most of these exports are manufactured goods that are shipped by container to the rest of the world.
And imports into China – a mix of bulk and containerized freight – have been plunging: down 20.4% in September from a year earlier, after at a 13.8% drop in August.
That kind of decline in shipping volume comes as a nasty surprise for the shipping industry that has been betting on boundless increases, and has been adding capacity in quantum leaps.
Bob The Bear Stopped Out: "I Did Not Expect Such A Strong Risk-On Move In Response To Such Bad Data"Submitted by Tyler Durden on 10/20/2015 - 09:08 "Even though I had expected Q4 to contain lots of two-way volatility my expectation was generally for another risk-off quarter, and I felt that my S&P stop loss (weekly close above 2020 on the cash index) would afford me a prudent degree of cushion and comfort to absorb this expected two-way volatility. I did not expect such a strong risk-on move in response to such bad data!"
A funny thing happened in 2012 after Andrew Ross Sorkin, a financial writer at the New York Times, wrote his spectacularly false narrative telling readers that the repeal of Glass-Steagall Act had nothing to do with the crash because problem firms like Lehman Brothers, Merrill Lynch and AIG didn’t own insured commercial banks — which would have been prohibited under the Glass Steagall Act, had it not been repealed in 1999. In fact, all three of the firms did, indeed, own banks insured by the FDIC at the time of the crash.
We figured that Sorkin had just made an error, or, well, three monster errors, so we wrote to his editor. We heard nothing. We wrote to the New York Times public editor who is supposed to uphold the integrity of the paper. Nothing. We wrote to the publisher. Nothing. To this very day, the errors remain in the Sorkin article. When the so-called paper of record allows three outrageously wrong errors to persist as fact, it doesn’t look like sloppy journalism, it looks like a conspiracy to deny the public an honest narrative.
One of the greatest con jobs in history was convincing ordinary people that Central Bankers care about the “economy” or Main Street.
Aside from the complete lack of relevance that Main Street has for Central Bankers from a professional perspective (more on this in a moment), when do you think was the last time that Janet Yellen or her ilk spent an evening with non-banker/financial types? Years ago? Decades ago?
Yellen lives in a super-affluent, gated part of Washington DC. And even within that subset of the US population she lives in a higher echelon: her entourage of security annoys her wealthy neighbors… though I suspect part of the annoyance stems from jealousy.
Submitted by Tyler Durden on 10/20/2015 - 08:52 The current detachment between the financial markets and the real economy continues. The Federal Reserve's continued accommodative stance continues to support asset prices despite a decline in profit margins, an increase in deflationary pressures and a weak economic backdrop. So, while jobless claims and job openings may be touted as signs of an improving job market, the data suggests that we have likely seen the peak for this current economic cycle.
Submitted by Tyler Durden on 10/20/2015 - 08:41 Having missed for the last 2 months, Housing Starts bounced 6.5% in September back to cycle highs (which previously occurred right before the last recession). The South and West regions both saw housing completions drop notably (as The Midwest soared as housing starts slid in that region). However, the more forward-looking Building Permits remains well off the June pre-reg change spike highs. Despite soaring homebuilder sentiment, permits plunged to 1.103mm SAAR - the lowest in 7 months - thanks to a collapse in multi-family permits to the lowest since 2014.
Life in the countryside has changed.
It used to be hard, rude, and isolated. Now, with a little bit of money, the Internet, and a combination of ancient and modern technology, it can be much more amusing…
We came out to Normandy on Saturday to help renovate an old farmhouse and spent much of the weekend cutting firewood.
Normandy can be wet, dark, and cold in the autumn. It helps to have an open fire – especially when you are working on a grim project.
Good evening Ladies and Gentlemen:
Here are the following closes for gold and silver today:
Gold: $1172.50 down $11.10 (comex closing time)
Silver $15.83 down 27 cents.
In the access market 5:15 pm
First, here is an outline of what will be discussed tonight:
At the gold comex today, we had a very poor delivery day, registering 3 notices for 300 ounces Silver saw 0 notices for nil oz.
I’ve mentioned John Kiriakou several times before on these pages. In case you forgot, he was the only person jailed for the CIA’s torture program. Unsurprisingly, he was the guy who blew the whistle on it.
Fortunately, John has served his time and, rather than riding off into the sunset, he continues to courageously speak out against the ever expanding injustices perpetrated on the American people by their own government. Here are some excerpts from his powerful piece at Truth Dig, The Sad Fate of America’s Whistleblowers: