What Went Up Came Down And Up And Will Come Down Again

By David Haggith – Re-Blogged From Silver Phoenix

It can’t come as any surprise that the stock market’s lofty balloon ride during the past couple of months fell because of a few words this week. It only rode up on sweet tweets by Trump about trade, which created a thermocline for it to ride. So, of course, the market plummeted this week in the unexpected downdraft of Trump’s out-of-the-blue statement that his trade deal may be a year away … even for phase one.

I don’t know if ignorant traders drive these vain accessions and declensions or just ignorant machines that have no ability to discern truth, so blindly they take all presidential headlines at face value.

Who could be surprised that stocks got off to their worst December start since the beginning of the Great Recession when Trump said a trade deal might best be shelved until after the 2020 elections? It was, however, apparently a fleeting horror to those who had actually believed Trump about a phase-one deal being imminent this month. One could only watch the surprised reactions with amusement, given there was no reason there should have been any surprise at all.

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2020 Vision

By USAGOLD – Re-Blogged From Gold Eagle

Five charts to contemplate as we prepare for the New Year

 1. Gold’s annual returns 2000 to present

In the February edition of this newsletter, we ran an article under the headline:  Will 2019 be the year of the big breakout for gold? Though we would not characterize gold’s move to the upside so far this year as ‘the big breakout,’ 2019 has been the best year for gold since 2010 even with the recent correction taken into account.  Back in September when the price gold reached $1550 per ounce – up almost 22% on the year – 2019 was looking more like a breakout year. Now with the move back to the $1460 level, the market mood has become more restrained. As it is, gold is up 15 of the last 19 years and still up 14.45% so far this year.

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A Submerging Global Economy

By Egon von Greyerz – Re-Blogged From Gold Eagle

Many emerging markets are now turning to submerging markets as country after country is experiencing falling economies, currencies and stock markets.

The currency is often the best indication of a country’s economic health. Just look at these six currencies submerging into obscurity:

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Argentina Currency Crisis Pain Is Spreading

By Bloomberg – Re-Blogged From Newsmax

Tommy Samson is explaining why he’s been forced to scale back business amid Argentina’s financial-market rout. His Buenos Aires firm imports surgical equipment such as sutures for stitching wounds, paying in foreign currency. Then he sells them to local customers in pesos.

The last link in that chain is breaking down — because Argentina’s currency is in freefall. It’s lost half its value this year, and some 20 percent this week alone. The slump threatens to spread havoc through the $640 billion economy, rupturing supply chains for businesses and straining the finances of households.

And it’s casting a shadow over President Mauricio Macri’s prospects of winning re-election next year. Even Argentina’s most market-friendly leader in more than a decade has struggled to restore investor confidence.

Image: Argentina Currency Crisis Pain Is Spreading
(Dreamstime/Siempreverde22)

“There’s no clear price reference after the peso plunge.”

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China May Have to Resume US Soybean Purchases in Weeks

By Thomson Reuters – Re-Blogged From Newsmax

China may have to start buying U.S. soybeans again in coming weeks despite the trade war between the two countries as other regions cannot supply enough soybeans to meet China’s needs, Hamburg-based oilseeds analysts Oil World said on Tuesday.

In July, China imposed import tariffs on a list of U.S. goods, including soybeans, as part of the trade dispute with the United States. China is the world’s largest soybean importer and has been seeking alternative supplies, especially in South America, where supplies available for export are down.

2018 Third-Quarter Forecast

Re-Blogged From Stratfor

Table of Contents

(ALY SONG-POL/JOHANNES EISELE/HULTON ARCHIVE/MLADEN ANTONOV/TIMOTHY A. CLARY/ABID KATIB/KATJA BUCHHOLZ/DAVID MCNEW/ATTA KENARE/FOverview

China Remains in the U.S. Crosshairs. The United States will impose tariffs, sanctions and blocks on investment and research in a bid to frustrate China’s development of strategic technologies. China not only has the tools to manage the economic blow, but will also accelerate efforts to lessen its reliance on foreign-sourced technological components.

Trade Battles Fall Short of a Full-Fledged War. Trade frictions will remain high this quarter as the White House continues on an economic warpath in the name of national security. U.S. tariffs will invite countermeasures from trading partners targeting U.S. agricultural and industrial goods. As Congress attempts to reclaim trade authority, the White House will refrain from escalating these trade battles into an all-out trade war.

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Why Argentina’s Leader Is in for a Tough 2019

Re-Blogged From Stratfor

Highlights

  • Argentina’s request for a standby loan from the International Monetary Fund will force the country to carry out tighter fiscal measures, such as reducing the transfer of funds to the provinces.
  • As a result of his decision to negotiate a deal with the IMF, President Mauricio Macri will have a more difficult time gaining congressional support for economic and labor reforms.
  • Although divisions persist in Argentina’s political opposition, worsening economic conditions will encourage Macri’s rivals in the next quarter, hurting the president’s chances of winning re-election in 2019.

State workers demonstrate outside Argentina's Congress in Buenos Aires in September 2016 during a national strike to demand the reopening of wage negotiations to compensate for high inflation.

(EITAN ABRAMOVICH/AFP/Getty Images)

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Inflation: The People’s Enemy…The Government’s Friend

By David Smith – Re-Blogged From http://www.Gold-Eagle.com

We can argue about the definition(s) of inflation until the cows come home – To be sure some economists spend a career trying to nail it down.

But for clarity’s sake, we’ll use the definition of the Austrian School (Mises.org) as an increase in the money supply. This is really the correct one, regardless of any bias of dogma, “schooling” or the mainstream media. Although most everyone defines inflation as an increase in the price of goods and services, this is actually a result.

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Here’s When Everyone Should Have Known That Argentina Would Implode

By John Rubino – Re-Blogged From Dollar Collapse

About a year ago, Argentina – which has inflated away and/or defaulted on its currency every few decades for the past century – issued 100-year government bonds. And the issue was oversubscribed, with yield-crazed developed-world institutions throwing money at the prospect of a lifetime of 7% coupon payments.

A contemporaneous media account of the deal:

Argentina sees strong demand for surprise 100-year bond

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Argentina Joins Venezuela In The Currency Crisis Club

By John Rubino – Re-Blogged From Dollar Collapse

In interviews, whenever I try to make the case that US policies are leading to the kinds of currency disruptions common in developing countries, I say something like, “For a glimpse of America’s future, take a look at Argentina, where they’re eating cats and dogs because of hyperinflation … wait, no, I meant Venezuela.”

Mixing up countries kind of dilutes the power of the statement, but for some reason I can’t seem to help it.

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Hezbollah in South America: The Threat to Businesses

Re-Blogged From Stratfor

Analysis Highlights

South America is a strong base of operations for the Lebanese militant group Hezbollah, which has had a presence in the continent dating back to the 1980s. The group established finance and logistical networks, which it used to facilitate two bombings in Argentina in the 1990s. The first bombing in 1992 targeted the Israeli Embassy in Buenos Aires, killing 29 people and injuring 242 more. A second bombing in 1994 targeted the Asociacion Mutual Israelita Argentina (AMIA), a Jewish community center in Buenos Aires, killing 85 and injured over 300. Since then, Hezbollah has shifted its operational focus from terror attacks to criminal activity to raise money, entering South America’s lucrative drug-trafficking business and dealing primarily with cocaine and heroin. Previously, we explored what Hezbollah now does in South America, and where it does it. Here, we will explore the threat Hezbollah poses to businesses in South America.

(Stratfor)

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On the Ground in Paraguay

By Mark Svoboda – Re-Blogged From International Man

Over the course of the last several months, we’ve followed the journeys of Mark Svoboda as he’s traveled from Singapore to Tanzania, Malaysia to Colombia. Today Mark stops off in Paraguay, where he and his wife traveled to start their residency process…

Paraguay – the Heart of America

In April of 2012, my wife and I traveled to Paraguay to start our residency process in the so-called “heart of America.” Our hope is to eventually receive a citizenship in the country without actively residing there. Since I suspect many International Man readers are, like me, interested in 1) obtaining Paraguayan residency in hopes of eventually receiving a citizenship, and 2) buying some of that cheap productive land, I thought it was high time I report on the country.

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Is It Time to Escape to Your Personal Alamo?

By Nick Giambruno – Re-Blogged From International Man

Doug Casey, Jeff Thomas, and Nick Giambruno recently discussed a topic they all think about often—pulling the trigger and leaving your home country to sit out an economic or political crisis.

Nick Giambruno: It seems like each week there’s a new attack or mass shooting. Racial tensions are on the rise. Europe is experiencing a migrant crisis that’s tearing the continent apart.

There’s no doubt the world has become a crazier place in the past couple of years. Unfortunately, I think it’s only going to get worse.

At what point do you decide that conditions at home are likely to worsen and set up an escape route with the intention of moving to another country?

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Crisis Investing in Brazil

By Doug Casey – Re-Blogged From International Man

Editor’s Note: Brazil is in crisis once again.

This time, Brazil’s president, Michel Temer, has been accused of corruption, bribery, and obstruction of justice.

When news of this scandal broke, it triggered a huge selloff in Brazilian stocks. The iShares MSCI Brazil Capped ETF (EWZ), which tracks Brazil’s stock market, plummeted 18% in one day. It was the fund’s worst day since the 2008 financial crisis.

Most investors now want nothing to do with Brazilian stocks. But we’re not like most investors. We understand crises can actually lead to huge moneymaking opportunities.

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China Makes a Power Play in Brazil and Argentina

The last two years have been hard on Argentina and Brazil. A sweeping corruption investigation and the impeachment of President Dilma Rousseff have sent Brazil’s currency tumbling. The country’s economy contracted by 3.8 percent in 2015 and by another 3.6 percent the following year. The Argentine peso, meanwhile, fell 40 percent against the U.S. dollar after the government lifted currency controls in late 2015. But for foreign investors, the two South American nations’ economic hardship presents an opportunity. The depreciated currencies in both countries, combined with their governments’ need for investment, has enabled Chinese companies to buy up cheap assets and launch major infrastructure projects in Argentina and Brazil alike. The electricity sector in particular has been a focus of their activities.

(YASUYOSHI CHIBA/AFP/Getty Images)

Mexico Warns U.S. of Alternatives on Trade, Points to China

By Thomson/Reuters – Re-Blogged From Newsmax

Mexico sent a stark message to U.S. President Donald Trump on Thursday, saying an upcoming visit by officials from Latin America’s No. 2 economy to China made it clear it had many other export markets if he tore up the NAFTA trade deal.

The North American Free Trade Agreement (NAFTA) underpins Mexico’s economy, prompting the government to try and diversify away from the United States, which takes 80 percent of its exports. Mexico runs a sizeable trade deficit with China, the destination of about 10 percent of its exports.

Trump indicated, in an interview with The Economist published on Thursday, that he wanted to get the U.S.-Mexico trade deficit down to about zero. He wants to renegotiate NAFTA to get a better deal for U.S. companies and workers, and has threatened to end the agreement if he does not get his way. Talks are expected to start later this year.

Lithium Suppliers Can’t Keep Up with Skyrocketing Demand

By Frank Holmes – Re-Blogged From http://usfunds.com

Near the extinct volcano known as Monte Pissis, high in the Andes on the Chile-Argentina border, the air is thin and animal life scarce. It’s also a prime location for lithium, the silvery-white metal used in the production of lithium-ion batteries.

Next year, Tesla plans to make 500,000 electric cars all of which will require lithium-ion-batteries

According to Sam Pelaez, an analyst on our team who recently visited the deposit, the seasonal meltdown of the snowy peaks collects lithium, sodium and other minerals from the soil and underwater hot springs, all of which flows down to the flats and settles—hence the name salt flats or, in Spanish, salares. Over long periods of time, with seasonal temperature variations, the salt builds a crust on top of the “lake,” making for a stunning landscape. Under the crust are high concentrations of lithium.

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China Pulling The Strings

By Bill Holter – Re-Blogged From http://www.Silver-Phoenix500.com

China announced swap agreements with Argentina over this past week-end, they also said their mutual trade would be settled in Renminbi/yuan.  If you recall, Argentina just recently defaulted on debt.   A New York judge then ruled against Argentina’s plan to hopefully restructure.  This looks to me like China has ruled against the New York judge!

China has also in recent months been globetrotting while putting in place “swaps” and lines of credit with many potential trading partners.  Unlike the U.S., they have not ignored African nations either.  They have also set up “yuan trading” hubs in some very “Western” nations including Britain, Germany and France.  Very methodically, China has put in place trade and finance systems which have no need for dollars and/or clearing functions performed by the U.S.

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Hyperinflation Is Nigh

By Egon von Greyerz – Re-Blogged From http://www.Gold-Eagle.com

This coming autumn we are likely to see the beginning of the hyperinflationary phase of the sovereign debt crisis. Hyperinflation normally hits an economy very quickly and unexpectedly…and is the result of the currency collapsing. Hyperinflation does not arise as a result of increasing demand for goods and services.

The course of events in a hyperinflationary scenario can be summarised as follows:

  • Chronic government deficits
  • Debt issuance and money printing escalating rapidly
  • Bonds falling – interest rates rising fast
  • Currency collapsing

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Whoever Does Not Respect the Penny is Not Worthy of the Dollar

By Nick Giambruno – Re-Blogged From International Man

This definitive sign of a currency collapse is easy to see…

When paper money literally becomes trash.

Maybe you’ve seen images depicting hyperinflation in Germany after World War I. The German government had printed so much money that it became worthless. Technically, German merchants still accepted the currency, but it was impractical to use. It would have required wheelbarrows full of paper money just to buy a loaf of bread.

At the time, no one would bother to pick up money off the ground. It wasn’t worth any more than the other crumpled pieces of paper on the street.

Today, there’s a similar situation in the U.S. When was the last time you saw someone make the effort to pick up a penny off the street? A nickel? A dime?

Walking around New York City recently, I saw pennies, nickels, and dimes just sitting there on busy sidewalks. This happened at least five times in one day. Even homeless people wouldn’t bother to bend over and pick up anything less than a quarter.

The U.S. dollar has become so debased that these coins are essentially pieces of rubbish. They have little to no practical value.

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