- China Ocean Freight Index Collapses to Record Low
Wolf Richter wolfstreet.com
The amount it costs to ship containers from China to ports around the world, a function of the quantity of goods to be shipped and the supply of vessels to ship them, just dropped to a new historic low.
The China Containerized Freight Index (CCFI) tracks contractual and spot-market rates for shipping containers from major ports in China to 14 regions around the world. It reflects the unpolished and ugly reality of the shipping industry in an environment of deteriorating global trade.
For the latest reporting week, the index dropped 0.6% to 636.14, its lowest level ever. It has plunged 41% from the already low levels in February last year, and 36% since its inception in 1998 when it was set at 1,000. This chart shows the continuing collapse of containerized freight rates from China to the rest of the world:
The Shanghai Containerized Freight Index (SCFI), which tracks spot-market rates (not contractual rates) of shipping containers from Shanghai to 15 destinations around the world, dropped 3.6% for the latest reporting week to 472, after another failed price recovery. It’s down 58% from February last year.
Rates to Europe plunged $20 per twenty-foot equivalent unit container (TEU) to $271; to the Mediterranean, rates plunged $29 to $409 per TEU. To the US West Coast, rates plunged 9.3% or $79 to $770 per forty-foot equivalent unit (FEU).
A year ago, the spot rates to the West Coast had already fallen 10% year-over-year, and there had been a lot of hand-wringing about them. At the time, they were $1,932 per FEU. Now they’re at $770 per FEU. In one year, these spot rates have collapsed by 60%!
During the big plunge last year and earlier this year, the saving grace was the price of bunker fuel, which was plunging along with the price of oil. For example, according to Platts, bunker of the grade IFO380 in Los Angeles had hit a low of $118 per metric ton in mid-January. But it has since soared 91% to $225!
Bunker prices differ, depending on grade and location around the world, and not all made this sort of break-neck snap-back price reversal. For example, IFO380 in Rotterdam soared “only” 61% from $109/mt in mid-January to $176/mt. Other locations and grades experienced lower price increases. But all bunker prices everywhere have risen sharply.
So the ballyhooed notion that carriers, under pressure from competition, are simply passing on their fuel savings to their customers has now died an ignominious death. Instead, their margins are getting crushed.
But there are some real reasons for the collapse in freight rates from China to destinations around the world: China’s exports have plunged. For the January through March period – to iron out the monthly volatility associated with the Lunar New Year holiday – exports are down 9.6% year-over year. Specifically:
- To the US -8.8%
- To Hong Kong -6.5%
- To Japan -5.5%
- To South Korea -11.2%
- To Taiwan -3.7%
- To the countries in the ASEAN -13.7%
- To the EU -6.9%
- To South Africa -29.6% (!)
- To Brazil -47.2% (!!)
- To Australia -1.9%
- To New Zealand -12.4%.
Exports ticked up just a tiny bit to only two major countries: India (+0.2%) and Russia (+0.2%).
So demand for transporting containers from China to other parts of the world has withered, just when the supply of container ships has reached catastrophic levels of overcapacity.
Last year, what had already been an overcapacity problem turned into a self-inflicted nightmare for carriers. They’d assumed ever since the bouts of QE and zero-interest-rate policies started that central banks had their back. They’d smelled the lure of cheap money. And they’d fallen for the central-bank propaganda that “bold” monetary policies could actually stimulate the real economy, the goods-consuming economy. And so, imagining years of big-fat growth, they ordered ships, including the newest mega-sized container ships. And as these new ships were delivered over the past couple of years, carriers embarked on a fight for market share by cutting prices.
This culminated in 2015 with the delivery of new ships that added a record 1.7 million TEU of capacity to the global fleet, just when growth in global trade was grinding down. At the same time, according to Drewry, the amount of capacity scrapped in the year plunged by nearly half, with only 195,000 TEU of global capacity taken out.
Why? “Because demolition prices were less attractive….”
Like so many things in this world where free money created overcapacity, the rates paid for ships to be scrapped has plunged from around $475 per ldt (light displacement tonnage, the weight of the vessel including hull, machinery, and equipment) in 2012 to around $290/ldt recently.
So far this year, scrapping activity has picked up. And everyone is hoping that this will alleviate the problem. But it’s not going to help much, according to Drewry:
As we have highlighted before scrapping alone does very little to redress the supply-demand imbalance – last year’s scrapping total was equivalent to just 1% of the cellular fleet….
Now carriers are hoping that the huge general rate increases they announced for May 1 – in some cases more than doubling current rates – will stick. But they tried that last spring, when overcapacity wasn’t nearly as bad, and it didn’t work. So will they have more luck this year? The Journal of Commerce put it this way: “Conditions are hardly optimal for raising rates.”
The Chinese have among the highest savings rates in the world. But 75% of their wealth is in real estate. They’ve overinvested in one illiquid and bubbly asset that they wrongly believe can only go higher. But when prices break down, it will devastate consumer demand and reverberate around the world. Read… This Will Be Largest Evaporation of Wealth in Modern History
- The Real Reason Hillary Clinton Refuses To Release Her Wall Street Transcripts
Submitted by Mike Krieger via Liberty Blitzkrieg blog,
“It was pretty glowing about us,” one person who watched the event said. “It’s so far from what she sounds like as a candidate now. It was like a rah-rah speech. She sounded more like a Goldman Sachs managing director.”
– From the post: What Clinton Said in Her Speeches – “She Sounded More Like a Goldman Sachs Managing Director”
We’ve seen bits and pieces emerge from Hillary Clinton’s infamous $225,000 speech to Goldman Sachs in October 2013, but an article published by the Huffington Post yesterday adds some additional perspective. In a nutshell, the author believes that a release of these transcripts would be so damaging it would end her bid for the presidency.
Here are a few excerpts from the Huffington Post piece:
The reason you and I will never see the transcripts of Hillary Clinton’s speeches to Wall Street fat-cats — and the reason she’s established a nonsensical condition for their release, that being an agreement by members of another party, involved in a separate primary, to do the same — is that if she were ever to release those transcripts, it could end her candidacy for president.
In fact, it appears they’d cause enough trauma that Clinton would rather publicly stonewall — to the point of being conspicuously, uncomfortably evasive — in public debate after public debate, to endure damning editorial after damning editorial, and to leave thousands and thousands of voters further doubting her honesty and integrity, all to ensure that no one outside Goldman Sachs, and certainly no voter who wasn’t privy to those closed-door speeches, ever hears a word of what she said in them.
The real experts on this topic are the friends and acquaintances of Hillary’s who, for whatever reason, have chosen to be candid about what they believe is in those speeches. And it’s only that candor that helps explain the longest-running mystery of the Democratic primary — a mystery that’s been ongoing for over seventy days — which is this: why would anyone pay $225,000 for an hour-long speech by a private citizen who (at the time) claimed to have no interest in returning to politics?
Mr. Sanders has implied that there are only two possible answers: (a) the money wasn’t for the speeches themselves, but for the influence major institutional players on Wall Street thought that money could buy them if and when Clinton ran for President; or (b) the speeches laid out a defense of Wall Street greed so passionate and total that hearing it uttered by a person of power and influence was worth every penny.
Per Clinton surrogates and attendees at these speeches, the answer appears to be both (a) and (b).
Now here are a few examples of what we’ve heard from others:
1. Former Nebraska Governor and Senator Bob Kerrey (Clinton surrogate)
“Making the transcripts of the Goldman speeches public would have been devastating….[and] when the GOP gets done telling the Clinton Global Initiative fund-raising and expense story, Bernie supporters will wonder why he didn’t do the same….[As for] the email story, it’s not about emails. It is about [Hillary] wanting to avoid the reach of citizens using the Freedom of Information Act to find out what their government is doing, and then not telling the truth about why she did.”
2. Goldman Sachs Employee #1 (present at one of the speeches)
“[The speech] was pretty glowing about [Goldman Sachs]. It’s so far from what she sounds like as a candidate now. It was like a ‘rah-rah’ speech. She sounded more like a Goldman Sachs managing director.”
3. Goldman Sachs Employee #2 (present at one of the speeches)
“In this environment, [what she said to us at Goldman Sachs] could be made to look really bad.”
4. Goldman Sachs Executive or Client #1 (present at one of the speeches)
“Mrs. Clinton didn’t single out bankers or any other group for causing the 2008 financial crisis. Instead, she effectively said, ‘We’re all in this together, we’ve got to find our way out of it together.’”
5. Paraphrase of Several Attendees’ Accounts From The Wall Street Journal
“She didn’t often talk about the financial crisis, but when she did, she almost always struck an amicable tone. In some cases, she thanked the audience for what they had done for the country. One attendee said the warmth with which Mrs. Clinton greeted guests bordered on ‘gushy.’ She spoke sympathetically about the financial industry.”
6. Goldman Sachs Employee #3 (present at one of the speeches)
“It was like, ‘Here’s someone who doesn’t want to vilify us but wants to get business back in the game. Like, maybe here’s someone who can lead us out of the wilderness.’”
7. Paraphrase of Several Attendees’ Accounts From Politico
“Clinton offered a message that the collected plutocrats found reassuring, declaring that the banker-bashing so popular within both political parties was unproductive and indeed foolish. Striking a soothing note on the global financial crisis, she told the audience, ‘We all got into this mess together, and we’re all going to have to work together to get out of it.’”
The problem with the quotes above is not merely their content — which suggests a presidential candidate not only “gushingly” fond of Wall Street speculators but unwilling to admonish them even to the smallest degree — but also that they reveal Clinton to have been dishonest about that content with American voters.
Last night in Brooklyn Mrs. Clinton said, “I did stand up to the banks. I did make it clear that their behavior would not be excused.”
Yet not a single attendee at any of Mrs. Clinton’s quarter-of-a-million-dollar speeches can recall her doing anything of the sort.
During last week’s debate in New York, Hillary demanded that Bernie release his tax return, and he produced it the very next day.
As far as Clinton’s speech transcripts, we’re still left with the following:
- What If Nobody Showed Up To Vote?
Submitted by Dan Sanchez via AntiWar.com,
What if a presidential candidate threw a political rally, and nobody came? What if a government held an election, and nobody voted? What if that same government started a war, and nobody participated, whether in body or in spirit?
These questions are related.
Election season is trudging on, as are the wars. Many fans of peace hold out hope that if the former turns out a certain way, the latter may at last be mitigated.
Some are terrified of Hillary Clinton. And who can blame them? As Secretary of State, “Dick Cheney in a pantsuit” was midwife to so many of the disasters that wrack the world with bloodshed and chaos to this day. Many anti-war folk of a left-leaning persuasion are flocking to Bernie Sanders.
Others are more concerned with finally toppling the neocons from their perches of power. And who can blame them? The roots of our geopolitical plight reach back to before Clinton’s executive tenure, when the Bush administration neocons were launching their plans to remake the Greater Middle East. Many anti-war folk of the right-leaning persuasion are looking to Donald Trump to be their neocon-slayer.
But is this really the best we can do?
At the end of the day, Sanders is a moderate foreign interventionist who isn’t all too interested in foreign policy in the first place. Must anti-interventionists really settle for that in order to oppose hyper-interventionist Clinton?
And Trump actually out-hawks many Republicans when it comes to torture, the security state, civilian casualties, and blood-for-oil. Is such a man really to be the anti-war movement’s appointed champion against the neocons?
Thankfully, there is no need to support lesser warmongers in order to oppose greater ones.
Imagine if all the anti-war progressives now supporting Sanders, plus all the America-firsters now supporting Trump, were to stop flooding the internet and social media with electoral polemics. What if all that passion and digital ink was redirected to the message of peace.
Imagine “Stop the War on Yemeni Babies!” blazoned across the web instead of “Stop Hillary!” Or “Don’t Let the CIA Arm Al Qaeda in Syria” instead of “Don’t Let the Establishment Steal the Nomination from Trump.”
An intense focus on policies over personas could really turn public sentiment against the actual combat of war, and divert public attention away from its obsession with the theatrical combat of political Wrestlemania.
You may wonder, what about the consequences of the peace camp abandoning its stations in the electoral battle against the worst war hawks? What if as a result Hillary or Ted Cruz’s neocon allies sweep to victory?
A clique may seize office, but the new administration will not govern in a vacuum. All regimes must strive to preserve public legitimacy. And no regime can afford to flout too blatantly the prevailing spirit of the times. The new president may have won a majority of votes. But if only a small proportion of the country actually voted in the first place, that translates into a rather shrunken mandate.
And if the non-voting bulk of the public is stridently anti-war, that especially diminishes the president’s foreign policy mandate in particular. Faced with a sizable segment of the public intransigently opposed to war, even a militaristic president will be constrained, and may even need to draw back. Even Richard Nixon ended a war when public opinion demanded it.
Throughout history, most reductions in tyrannical violence have had nothing to do with the ideology or virtue of office-holders. Instead, such reforms were the result of shifts in public sentiment. Under such conditions, to be a “reformer,” a politician need no redeeming quality other than being self-serving enough to shift with the wind. And if Hillary Clinton, Ted Cruz, or any other politician are anything, it is self-serving.
I’m not saying we should hope Hillary or Ted will win. I’m saying that who wins doesn’t matter nearly as much as the public’s attitude toward war and toward the Washington war machine itself.
On election day, if fewer people lined up dutifully to choose between aspiring elective emperors, and more people assembled defiantly to decry the empire itself, peace would have much better prospects.
- Visualizing The History Of Credit Cards
Today, credit cards are one of the most important sources of big bank profits. However, a look at the history of credit cards shows that things weren’t always that way.
As VisualCapitalist's Jeff Desjardins points out, while it may seem today that credit is impersonal and calculated, credit was once a privilege built around personal trust and long-lasting relationships. In the late 19th century, stores began offering credit to their best and most trustworthy customers. Instead of paying each time they visited the shop, a regular could defer payments to the future by using store-issued metal coins or plates that had their account number engraved. Shops would record the purchase details, and add the cost of the item bought to the customer’s balance owed.
By the 1920s, shops started issuing paper cards instead of metal plates, but even these became cumbersome. Consumers had to hold different cards for each shop, and this made the sector ripe for disruption.
Diners Club, the first independent credit card company in the world, did just that in the 1950s. Their cards allowed people to make travel and entertainment purchases, even with different vendors.
Bank of America took this idea and ran with it, forever changing the history of credit cards. They launched the “BankAmericard” in Fresno, California, by sending it out to all 60,000 residents at once. Soon all consumers and vendors in the city were using the same card, and the concept of mass-mailing cards to the public spread like a wildfire.
After these risky mass mailings of credit cards eventually culminated in the Chicago Debacle of 1966, they were outlawed in the 1970s for causing “financial chaos”. With no applications required, many people including compulsive debtors, crooks, and narcotics addicts were able to receive easy credit. By the time such mass airdrops became illegal, 100 million cards had already been unleashed on the U.S. population without a need for an application.
In 1976, the BankAmericard system eventually became Visa. It was soon after this point that credit cards would enter their golden age for banks: as savings rates fell in the early 1980s, the interest rates on debt did not. Credit cards became a “cash cow”, and they’ve been a key source of bank profits ever since.
Today, 80% of U.S. households own multiple cards, and they account for just under $1 trillion of consumer debt.
- What Is The Worst-Case Outcome Of Helicopter Money: Deutsche Bank Explains
Now that the next and final phase of unorthodox monetary policy, i.e., helicopter money, has had the blessing of both Mario Draghi and Ben Bernanke, and is virtually assured, there are three questions: how to trade it; where will it be implemented first (and certainly not last), and how will it all end.
We covered the first part, how to trade it, late on Friday, courtesy of a Deutsche Bank report titled, don’t laugh, “Helicopters 101: your guide to monetary financing“
The next question then is: who will be (un)lucky enough to draw the first straw. The answer, according to DB, will be the same bank that as we shockingly reported at the end of January, was peer pressured into NIRP by Davos bankers, the Bank of Japan.
Global monetary policy is at a cross-roads. Japan’s experience this year demonstrates the limits of central bank policy with the bank running out of government bonds to buy, negative rates reaching their limits and inflation expectations having almost completely unwound their Abenomics move higher…. with Japan fast approaching the limits of its existing policy response to deflation, developments need to be followed closely for signs of the next global policy innovation.
Well, “policy innovation” sure is a polite way of putting “last ditch monetary idiocy” (the same idiocy which we predicted all the way back in March 2009 will be the ultimate endgame) but besides that we agree with Deutsche Bank: Japan will be the first nation to unveil helicopter money. After all, if it isn’t monetary or Keynesian experimentation, then simple demographics will destroy the nation… unless the Fukushima fallout doesn’t do it first.
Finally, how would helicopter money failure look like? Here are some ideas from DB’s George Saravelos:
A “successful” helicopter drop, defined as generating higher growth and inflation expectations but without a permanent overshoot of the inflation target, should lead to higher and steeper yield curves, a weaker currency (at least initially) and higher equity valuations.
This notwithstanding, it is important to emphasize that there are alternative equilibria too. At one extreme, if the policy is not perceived as sufficient in size and impact, then the supply/demand imbalances in fixed income may be exacerbated (less issuance and debt outstanding) without a corresponding move higher in inflation expectations. This would lead to a market reaction similar to the one that followed the BoJ cut to negative rates earlier this year: lower yields, weaker equities and a stronger currency. At the other extreme, if the long-term commitment to the inflation target is challenged and central bank credibility is lost, long-dated yields would spike higher, capital flight would ensue and risk assets would substantially underperform.
In other words, at one extreme, if the market perceives the policy as a failure, credit risk and demand/supply imbalances are likely to dominate, putting even further downward pressure on yields. At the other extreme, if the policy is perceived as a loss of monetary discipline, inflation expectations would spike, leading to an aggressive re-pricing of yields higher.
Simply said: too little, and the deflationary vortex will swallow all; too much, and yields will explode. DB continues:
A “successful” helicopter drop may therefore be easier said than done given the non-linearities involved: it needs to be big enough for nominal growth expectations to shift higher and small enough to prevent an irreversible dis-anchoring of inflation expectations above the central bank’s target. Either way, the behavior of the latter is the key defining variable both for the policy’s success as well as the asset market reaction.
Which brings us to DB’s politically correct conclusion: “under the assumption of policy “success” without fears of hyperinflation, we would conclude that bond yields rise“… the same success which DB also says “will be easier said than done”, which then means, drumroll, that the dominant outcome will be one in which “fears” of hyperinflation are justified.
In which case, please go ahead and sell your gold to Goldman: the vampire squid has repeatedly said it will buy everything you have to sell.
- Rousseff Party Admits Impeachment Vote Is Lost; Brazil ETF Surges
Update 2: While the official voting process continues and still about another 40 or so votes are needed before the formal threshold to impeach Dilma Rousseff of 342 is crossed, moments ago the leader of Rousseff’s lower house party, Gumaraes, threw in the towel and admitted the vote is lost:
- ROUSSEFF’S LOWER HOUSE LEADER SAYS IMPEACHMENT VOTE IS LOST
- BRAZIL’S GUIMARAES: THE COUP PLANNERS WON IN THE LOWER HOUSE
What happens next? The Senate showdown, and Rousseff who as we warned previously, will not go quietly:
- GUIMARAES: IT WILL BE A SLOW, GRADUAL, SECURE, PROLONGED WAR
For now however, bizarro world continues and as Brazil is about to plunge into an even deeper political crisis, the Brazilian stock ETF has surged 4.5% in Japan trading on hopes the removal of Rousseff will somehow fix the Brazilian economy overnight. It won’t, and if anything the 2016 Olympic games now appear more in jeopardy than ever.
* * *
Update: moments ago the Brazilian Congress began its impeachment vote. 504 members of the lower house of Congress are present for the vote, with nine absent. It appears that the 500+ members of Brazil’s lower house will vote 1-by-1, giving little mini-speeches each time.As we reported earlier below, newspaper surveys showed the opposition has only a few votes more than the two-thirds majority needed among 513 deputies to put Rousseff to trial in the Senate.
* * *
As reported on Friday afternoon, ahead of Dilma Rousseff’s impeachment vote to be held in Brazil’s Congress later today, a critical threshold was passed when, according to local Folha newspaper, more than the required 342 votes had been gathered.
Sure enough, today all the main Brazilian newspapers dedicate their entire covers to impeachment, with Folha and Estado bringing nominal list of lawmakers’ expected votes for and against, Bloomberg reports. Furthermore, according to the latest tallies from Folha, Estado and Globo the “For” impeachment vote is currently anywhere between 347 and 350 votes, above the 342 needed.
But while the popular sentiment is largely in the pro-impeachment camp (even if many of those standing to benefit from Rousseff’s ouster have been alleged to be as corrupt with participation in either the Carwash scandal, or to have funds parked in various offshore accounts), Rousseff refuses to go without a fight and earlier today Attorney General Jose Eduardo Cardozo wrote an op-ed in Folha saying the impeachment won’t pass if lower house respects constitution, adding that “whatever decision lower house makes today won’t solve Brazil’s political, economic and moral issues” and that many lawmakers show they don’t know the crimes on which impeachment request is based.
He is probably correct.
Meanwhile, PP, the party on which govt was relying on after PMDB split, may have 100% of its votes against Rousseff.
Bloomberg notes that if Rousseff survives the impeachment vote today, Rousseff plans calling meeting with opposition leaders including PSDB’s Aecio Neves and Fernando Henrique Cardoso, and adds that if the govt loses, it will likely focus attacks on Temer to try and stop process in the Senate.
For now however it is all about the Congressional vote, whose impeachment session started moments ago with the following headline:
- BRAZIL LAWMAKERS IN SHOVING MATCH AS IMPEACHMENT SESSION STARTS
Let the games begin (with shoving and shouting) pic.twitter.com/wJ8yzYRwIg
— Jan Piotrowski (@janppiotrowski) April 17, 2016
Expect more of the same for the next several hours.
Live feed from Brazil’s capital Brasilia below where thousands are already gathering ahead of tonight’s session which is expected to continue until around 10pm local time according to Eduardo Cunha, president of the chamber of deputies.
- Absurdity: When The Con Believes The Con
There are many infamous con games that have been foisted upon the public for millennia. Probably none more enduring than that of Charles Ponzi which bears his name as its moniker. Yet, there’s also been another who was also just as “daring” when it came to finding ways as to extract monetary gains by ill-gotten means: Victor Lustig.
Lustig is best known as “The man who sold the Eiffel Tower.” However, it was one of his other cons that came to mind as I was thinking about the current state of monetary policy we now find ourselves in.
Lustig’s other con was a device he slated would print $100 bills. But it had a problem.
Unbeknown to his mark, this problem was also part of the deception. The problem was (as stated by Lustig) – it could only print 1 bill every 6 hours. The genius was; located within the machine it contained two genuine $100 bills. After that – blanks. You could be long gone, and quite far with that kind of head start back then. Yet, it’s once the con, ruse, or scam is finally exposed one thing is certain: You don’t want to still be around or found.
As with any con game the perpetrator knows it’s all a con. In other words, “Duh!” Yet, if you listen closely to both past as well as present Fed. members you can’t help but notice by way of their current arguments, as well as, proposals for future monetary policy. The one’s who’ve truly bought into “the con” is: themselves!
Nowhere has this been on display more than the current public writings and musings of former Fed. Chair Ben Bernanke.
If you read his latest (which I’ve tried but can’t bear that much comedy in one sitting) he lays out what he thinks (or believes) should now take place involving Congress, the Administration, and the Fed. His great idea? Create and “fill” some arbitrary account which only the Fed. or its appointed designates have control of as to “empty” or “fill” as “Congress and Administration” see fit. But here’s the punchline, ready?
“Importantly, the Congress and Administration would have the option to leave the funds unspent. If the funds were not used within a specified time, the Fed would be empowered to withdraw them.” (Insert laugh track here)
Remember, this is coming not only from the former Chair, but also, one who is quite possibly the most emblematic of current thought residing throughout central bank policy makers with an additional caveat: He’s no longer bound by the position where his thoughts need to be guarded as a voting member of such policy lunacy. In other words: he can now speak his mind openly. To which I’ll muse – that’s no laughing matter when you consider how prevalent Keynesian economics now dominate.
The latest from Bernanke exposes just how far down this “rabbit hole” central bankers have gone. So far I’ll contend – its frightful. e.g., They actually believe this subterfuge.
When I’m giving a talk, or engaged in conversation, I often use the term “con game” when describing current monetary policy and its effect on business and more. Often the term “con” at first seems to put people on the defensive as if I’m using hyperbole, or trying to make a point by using over the top styled rhetoric.
The problem is (I’ll explain) it is exactly that. e.g., Many forget “con” stands for confidence in con-game. And now that the $Dollar along with just about every other currency is all fiat based: confidence is the only variable that supports it in a fiat system. Period. And once it’s lost just as with any “con” – it ends with blinding speed and consequences.”
This is the current danger now inherent after years of QE, NIRP, ZIRP, and every other acronym that represents some form or another of central bank intervention within the markets. So adulterated have the markets now become with central bank meddling; describing them without using quotes such as “markets” seems reckless. For these are far from the markets once thought to represent free market capitalism. Today they are “markets” in name only. For just like currencies – they’re no longer backed by anything once considered tangible like gold or actual net profits via 1+1=2 accounting.
At some point printing ad infinitum, as well as, companies reporting (ad infinitum!) losses of Billions in sales and revenue while declaring “We’re killing it!” via Non-GAAP accounting will make even the most ardent supporter of Keynesian thinking question this new reality. The absurdity can only go on for so long, because, to keep up the ruse (just like suckers) more absurdity is needed. We may be reaching that end point after all these years. And the latest clue might be in the absurd recommendations emanating from central bankers themselves. For it’s becoming clearer by the day if one reads Bernanke’s latest: they think this all makes perfect sense. Talk about absurdity.
Let me pose this question: Does anyone for a moment think China would (or will) allow the Federal Reserve along with the U.S. government carte blanche as to create “piggy banks” that can be used to help bolster its position without calling into attention the absurdity of it? Especially as it holds $TRILLIONS of U.S. debt on its own books? Imagine all this while not only the U.S. but the world of central bankers and other governments push, or brow beat Chinese current policies? Or, question their numbers for authenticity? How about Russia? Or Brazil? Or __________(fill in the blank.) Think they’ll all just stand idly by as their economies teeter on the brink of insolvency as the West just prints and points fingers?
If you listen to the musings emanating from many of the central bankers today whether currently holding an active position, or one which has returned to the “private” sector. One would have to construe that they believe exactly that. i.e., Don’t worry – they’ll buy it because that’s what we want them too. And that absurdity is a glaring warning sign from my viewpoint.
This shows just how far down this absurdity “rabbit hole” we’ve gone. And it can be directly contrasted with the con games of old. For it was always a given: for the ruse to work for the benefit of the perpetrator – one must have both the sense as well as alertness to “get outta Dodge” and not to be seen again as the game blows up. Today?
So enamored with the ruse they now fall all over themselves whether on TV, radio, or print, professing what absurdity should take place next to any and all that will listen. Again, even Lustig knew printing money ex nihilo was a con. Yet today, central bankers regard that as: prudent monetary policy. The difference for a contrast in the absurdity?
Before; it landed you a session in jail. Today? It lands you a speaking gig for $250K a session.
- Saudi King And Princes Blackmail The U.S. Government: What Happens Next
Submitted by Eric Zuesse, author of They’re Not Even Close: The Democratic vs. Republican Economic Records, 1910-2010, and of CHRIST’S VENTRILOQUISTS: The Event that Created Christianity.
Saudi King & Princes Blackmail U.S. Government
Saudi Arabia, owned by the Saud family, are telling the U.S. Government, they’ll wreck the U.S. economy, if a bill in the U.S. Congress that would remove the unique and exclusive immunity the royal owners of that country enjoy in the United States, against their being prosecuted for their having financed the 9/11 attacks, passes in Congress, and becomes U.S. law.
As has been well documented even in sworn U.S. court testimony, and as even the pro-Saudi former U.S. Secretary of State Hillary Clinton acknowledged privately, "Donors in Saudi Arabia constitute the most significant source of funding to Sunni terrorist groups worldwide.” She didn’t name any of those “donors” names, but the former bagman for Osama bin Laden, who had personally collected all of the million-dollar+ donations (all in cash) to Al Qaeda, did, and he named all of the senior Saud princes and their major business-associates; and, he said, "without the money of the — of the Saudi you will have nothing.” So, both before 9/11, and (according to Hillary Clinton) since, those were the people who were paying virtually all of the salaries of the 19 hijackers — even of the four who weren’t Saudi citizens. Here’s that part of the bagman’s testimony about how crucial those donations were:
Q: To clarify, you’re saying that the al-Qaeda members received salaries?
A: They do, absolutely.
So: being a jihadist isn’t merely a calling; it’s also a job, as is the case for the average mercenary (for whom it doesn’t also have to be a calling). The payoff for that job, during the jihadist’s life, is the pay. The bagman explained that the Saud family’s royals pay well for this service to their fundamentalist-Sunni faith. Another lifetime-payoff to the jihadists is that, in their fundamentalist-Sunni culture, the killing of ‘infidels’ is a holy duty, and they die as martyrs. Thus, the jihadist’s payoff in the (mythological) afterlife is plenty of virgins to deflower etc. But, the payers (the people who organize it, and who make it all possible) are the Saud family princes, and their business associates — and, in the case of the other jihadist organizations, is also those other Arabic royal families (the owners of Qater, UAE, Kuwait, Bahrain, and Oman). However, 9/11 was virtually entirely a Saudi affair, according to Al Qaeda’s bagman (who ought to know).
The report of the threat by the Saud family comes in veiled form in an April 15th news-story in The New York Times, headlined, “Saudi Arabia Warns of Economic Fallout if Congress Passes 9/11 Bill.” It says that the Saud family’s Foreign Minister is “telling [U.S.] lawmakers that Saudi Arabia would be forced to sell up to $750 billion in [U.S.] treasury securities and other assets in the United States before they could be in danger of being frozen by American courts.” The NYT says that this threat is nothing to take seriously, “But the threat is another sign of the escalating tensions between Saudi Arabia and the United States.” While the carrying-out of this threat would be extremely damaging to the Saud family, the NYT ignores the size of the threat to the Sauds if their 9/11 immunity were removed — which could be far bigger. Consequently, this matter is actually quite a bit more than just “another sign of the escalating tensions between Saudi Arabia and the United States.”
Russian Television is more direct here: “Saudi Arabia appears to be blackmailing the US, saying it would sell off American assets worth a 12-digit figure sum in dollars if Congress passes a bill allowing the Saudi Government to be held responsible for the 9/11 terrorist attacks.” (The Saudi Government is owned by the Saud family; so, even that statement is actually a veiled way of referring to the possibility that members of the royal Saud family — the individuals name by the bagman — could be held responsible for 9/11.)
Even immediately in the wake of the 9/11 attacks, there had been some mentions in the U.S. press of the U.S. Government making special allowances for Saud Prince Bandar al-Saud, a close friend of the Bush family (and he was also one of the Saudi Princes mentioned specifically by the bagman), to fly out of the country to avoid being sought by prosecutors. Furthermore, Newsweek’s investigative journalist, Michael Isikoff, headlined on 12 January 2001, “The Saudi Money Trail”, and he reported statements from royal Sauds, that they didn’t really mean for their donations to be going to such a thing as this. (Perhaps those individuals didn’t, but Bandar almost certainly did, because he was the Saud Ambassador to the U.S. at the time of 9/11.) However, now that the U.S. Government is relying heavily upon Saudi money to pay for the U.S. weapons and to help to organize the operation to overthrow Bashar al-Assad in Syria and to replace him with a fundamentalist-Sunni leader, there is renewed political pressure in the United States (from the victim-families, if no one else), for the arch-criminals behind the 9/11 attacks to be brought to American justice. After fifteen years, this process might finally start. That would be a drastic change.
Clearly, the threat from the Sauds is real, and the royal response to this bill in the U.S. Congress reflects a very great fear the owners of Saudi Arabia have, regarding the possible removal of their U.S. immunity, after 15 years.
Prosecution of those people will become gradually impossible as they die off. But a lot more time will be needed in order for all of the major funders of that attack to die natural deaths and thus become immune for a natural reason — the immunity of the grave. The U.S. Government has protected them for 15 years; but, perhaps, not forever.
To say that this threat from the Sauds is just “another sign of the escalating tensions between Saudi Arabia and the United States” seems like saying that a neighbor’s threat to bomb your house would constitute just “another sign of escalating tensions” between you and your neighbor. The passing-into-law of this bill in Congress would actually constitute a change from the U.S. Government being a friend and partner of the Sauds, to becoming their enemy.
Obviously, there is little likelihood of that happening; and, on April 20th and 21st, U.S. President Barack Obama is scheduled to meet with Saudi King Salman al-Saud. Without a doubt, this topic will be on the agenda, if it won’t constitute the agenda (which is allegedly to improve U.S. relations “with Arab leaders of Persian Gulf nations” — not specifically with Saudi King Salman and with his son Prince Salman).
If President Obama represents the American public, then the Sauds will have real reason to fear: the U.S. President will not seek to block passage of that bill in Congress. However, if the U.S. President represents instead the Saud family, then a deal will be reached. Whether or not the U.S. Congress will go along with it, might be another matter, but it would be highly likely, considering that the present situation has already been going on for fifteen years, and that the high-priority U.S. Government foreign-policy objective, of overthrowing Bashar al-Assad, is also at stake here, and is also strongly shared not only by the Sauds but by the members of the U.S. Congress. Furthermore, the impunity of the Saud family is taken simply as a given in Washington. And, the U.S. Government’s siding with the Sauds in their war against Shia Muslims (not only against one Shiite: Assad) goes back at least as far as 1979. (Indeed, the CIA drew up the plan in 1957 to overthrow Syria’s Ba’athist Government, but it stood unused until President Obama came into office.)
Furthermore, the U.S. Government is far more aggressive to overthrow Russia-friendly national leaders, such as Saddam Hussein, Muammar Gaddafi, Bashar al-Assad, and Viktor Yanukovych, than it is to stop the spread of fundamentalist Sunni groups, such as Al Qaeda, ISIS, etc.; and, a strong voice for U.S. foreign policy, the Polish Government, even said, on April 15th, that as AFP headlined that day, “Russia 'more dangerous than Islamic State', warns Poland foreign minister”; and Russia itself is, along with Shiite Iran, the top competitor against the fundamentalist Sunni Arab royal families in global oil-and-gas export markets. So, clearly, the U.S. Government is tightly bound to the Saud family. Terrorism in Europe and America is only a secondary foreign-policy concern to America’s leaders; and the Saud family are crucial allies with the U.S. Government in regards to what are, jointly, the top concerns of both Governments.
Consequently, there is widespread expectation that some sort of deal will be reached between U.S. President Barack Obama and the Saudi leaders, King and Prince Salman, and that the Republican-led Congress will rubber-stamp it, rather than pass the proposed bill to strip the Saud family’s immunity.
- "This Will All Blow Up In The Fed's Face," Schiff Warns "Trump's Right, America Is Broke"
Euro Pacific Capital's Peter Schiff sat down with Alex Jones last week to discuss the state of the economy, and where he sees everything going from here.
Here are some notable moments from the interview.
Regarding how bad things are, and what's really going on in the economy, Schiff lays out all of the horrible economic data that has come out recently, as well as making sure to take away the crutch everyone uses to explain any and all data misses, which is weather.
"It's no way to know exactly the timetable, but obviously this economy is already back in recession, and if it's not in a recession it's certainly on the cusp of one"
"We could be in a negative GDP quarter right now, and I think that if the first quarter is bad the second quarter is going to be worse"
"The last couple years we had a rebound in the second quarter because we've had very cold winters. Well this winter was the warmest in 120 years so there is nothing to rebound from."
On the Fed, and current policies, he very bluntly points out that nothing is working, nor has it worked, but of course the central planners will try it all anyway. He also takes a moment to agree with Donald Trump regarding the fact that the U.S. is flat out, undeniably broke.
"The problem for the fed is how do they launch a new round of stimulus and still pretend the economy is in good shape."
"Negative interest rates are a disaster. It's not working in Japan, it's not working in Europe, it's not going to work here. Just because it doesn't work doesn't mean we're not going to do it, because everything we do doesn't work and we do it anyway. It shows desperation, that you've had all these central bankers lowering interest rates and expecting it to revive the economy. And then when they get down to zero, rather than admit that it didn't work, because clearly if you go to zero and you still haven't achieved your objective, maybe it doesn't work. Instead of admitting that they were wrong, they're now going negative."
"The United States, no matter how high inflation gets, we'll do our best to pretend it doesn't exist or rationalize it away because we have a lot more debt. America is broke, if you look at Europe and Japan even though there is some debt there, overall those are still creditor nations. The world still owes Europe money, the world still owes Japan money, but America owes more money than all of the other debtor nations combined. Trump is right about that, we are broke, we're flat broke, and we're living off this credit bubble and we can't prick it. Other central banks may be able to raise their rates, but the Fed can't."
On how he sees everything unfolding from this point, Peter again points out that the economy is weak and it's only a matter of time before this entire centrally planned manipulation is exposed for what it is, and becomes a disaster for the Federal Reserve. He likens how investors are behaving today to the dot-com bubble, and the beginning of the global financial crisis.
"The trigger that's going to really send us into a higher gear is going to be the admission by the Fed that the economy is weak or the markets figure it out on their own. There's not a lot of stimulus left, all they've got is potentially negative rates and a huge round of quantitative easing, and this thing is going to blow up in the Fed's face."
"Investors still just don't get what's going on. For the past several years everybody has been positioned as if this recovery were real, that it was sustainable, and that the Fed could normalize interest rates and everything was going to be fine. The first quarter of this year investment returns, it was the worst quarter in eighteen years for actively managed funds."
"The federal reserve has not solved our problems, but exacerbated them."
"You've got big banks like Goldman Sachs shorting gold, telling their clients to short gold. A lot of people unfortunately listen to Goldman Sachs, and they're doing the wrong thing. A lot of times the markets are just mis-priced, because so many people don't get it. Just like all the people who were buying the subprime mortgages before the bottom dropped out of the market, or all the people who were buying thos dot-com stocks for several years before they collapsed. The same thing is going to happen now."
***
Full Interview Here
Digest powered by RSS Digest
Saving...