Gold surged on Monday after a spike in coronavirus cases worldwide dashed hopes of a quick economic recovery. Within 24-hours the number of infections globally rose 183,020, a new record, the World Health Organization reported, Reuters said the US saw a 25% increase in new COVID-19 cases over the week ending June 21st.
By Marcus Holtkoetter – Re-Blogged From AGWeb
The European Commission has a plan to eliminate modern farming in Europe.
The details emerged last month, as part of a “European Green Deal” announced late last year that calls for the continent to become “climate neutral” by 2050.
The commission speaks of “turning climate and environmental challenges into opportunities.” It also talks about “making the transition just and inclusive for all.”
It should have added three words: “except for farmers.”
Such goals are required if the world is to stick within limits scientists say are needed to avoid devastating fallout from global warming, the lead author of the document, Swedish lawmaker Jytte Guteland, said.
The destiny of the world is now in the hands of 6 central banks, Fed, ECB, BoE (England), PBOC (China), BoJ (Japan), SNB (Swiss). This in itself bodes extremely badly for the global financial system. This is like putting the villains in charge of the judicial system. For decades these central banks have totally abused their power and taken control of the world monetary system for the benefit of their banker friends and in some cases their private shareholders.
The central banks have totally corrupted and destroyed the financial system, by printing money and extending credit that doesn’t exist. Everyone knows that creating money out of thin air makes the money totally worthless. These bankers know, that if you stand next to the printing press and get the money first, it does have some value before it circulates. And this is exactly what they have done. Once the money reaches the people, it devalues rapidly. As Mayer Amschel Rothschild said over 200 years ago: “Permit me to issue and control the money of a nation, and I care not who makes its laws.”
The EU and euro face a sudden deterioration in economic conditions due to the coronavirus, which seems certain to widen the differences between Germany and the spendthrift Mediterranean members. But a more immediate problem is the increasing likelihood that the ECB will lose control over financial asset prices, particularly those of government bonds.
In the short-term, it seems likely the euro will rise against the dollar as currency and financial distortions, principally in the fx swap market, are unwound. However, the eurozone faces a developing financial crisis comprised of the following elements: a collapse in economic activity, escalating payment failures, a drastic contraction of bank credit and a collapse in bond prices, as well as the medium used to buy them (the euro).
Eventually, Germany is could go it alone by introducing a gold-backed mark, which will only happen after the European Project is finally abandoned.
Britain left the EU on the last day of January and is an independent nation once more. The new Johnson government is confident that Britain will do well outside the EU. Free trade will be embraced, and a no-deal outcome, now dubbed an Australian trade relationship, holds no fears for the British government.
This article summarises the political and economic consequences of this historic moment. The fly in the ointment is there is no sign that Britain’s government understands the importance of sound money, which will be crucial in the event a global economic and financial credit crisis materialises.
Independence and trade negotiations
Having given independence to all its colonies, now it’s Britain’s turn. On 1 February the UK became politically independent and entered an eleven-month transition period while trade terms with the EU and other trading nations are negotiated, with the objective of entering 2021 with freedom to trade without tariffs with as many nations as possible. If Britain succeeds in its initial objectives these trade agreements will include not only the EU but also America, Japan, South Korea, Canada, Australia, New Zealand, the other trans-Pacific Partnership nations and a host of sub-Saharan African nations in the Commonwealth. It amounts to about two-thirds of the world measured by nominal GDP, of which only 21% is with the EU.
The Week That Was: February 8, 2020, Brought to You by www.SEPP.org
By Ken Haapala, President, Science and Environmental Policy Project
Quote of the Week: “Judges ought to be more leaned than witty, more reverent than plausible, and more advised than confident. Above all things, integrity is their portion and proper virtue.” – Francis Bacon
Expanding the Orthodoxy: Writing a post on Project Syndicate, Johan Rockström, Lars Heikensten, and Marcia McNutt announced:
“…the Nobel Foundation is hosting its first-ever Nobel Prize Summit, with the theme ‘Our Planet, Our Future,’ in Washington, DC, from April 29 to May 1. The summit – supported by the US National Academy of Sciences, the Potsdam Institute for Climate Impact Research, and the Stockholm Resilience Centre/Beijer Institute – will bring together more than 20 Nobel laureates and other experts from around the world to explore the question: What can be achieved in this decade to put the world on a path to a more sustainable, more prosperous future for all of humanity?”
Re-Blogged From WUWT
From the EARTH INSTITUTE AT COLUMBIA UNIVERSITY and the “Columbia’s press release writers have no shame” department comes this load of tosh presser trying to give readers a lesson on Brexit. On the plus side, the paper shows the MWP being warmer than today on Scotland and says nary a word about “Brexit”.
In ancient Scottish tree rings, a cautionary tale on climate, politics and survival
A 1600s famine with echoes in the age of Brexit
Using old tree rings and archival documents, historians and climate scientists have detailed an extreme cold period in Scotland in the 1690s that caused immense suffering. It decimated agriculture, killed as much as 15 percent of the population and sparked a fatal attempt to establish a Scottish colony in southern Panama. The researchers say the episode–shown in their study to have been during the coldest decade of the past 750 years–was probably caused by faraway volcanic eruptions. But it was not just bad weather that brought disaster. Among other things, Scotland was politically isolated from England, its bigger, more prosperous neighbor that might have otherwise helped. Propelled in part by the catastrophe, the two nations merged in 1707 to become part of what is now the United Kingdom. Such a famine-related tragedy was never repeated, despite later climate swings.
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.
Global policy planners intend to deliver replacements for both dollar hegemony and fossil fuels. Plans may appear uncoordinated and in their early stages, but these issues are becoming increasingly linked.
A monetary reset incorporating state-sponsored cryptocurrencies will enable exchange controls to be introduced between nations by separating cross-border trade payments from domestic money circulation. The purpose will be to gain greater control over money and to direct its investment into green projects.
The Brexit saga continues. Both the U.S. and China’s industrial sectors suffer from the trade war. How will the Fed react to these downside risks tomorrow? The expectation is that it’ll cut rates, but will that really happen? And how will gold take to that?
Brexit Dance Goes On
Last week, we wrote about the Brexit saga, diving into the latest battles between Johnson and Parliament. But the drama has not ended yet. As we concluded one week ago, “Brexit is far from over, and British politics may surprise us again.” Indeed, Johnson wanted to call a snap general election in December to gain more leverage in the House of Commons, but the UK parliament has rejected Johnson’s proposal. For the third time. But Boris does not like losing, so he proposed today a new bill that lowers the number of MPs requires to pass the decision to hold an early election from two thirds to simple majority.
In the meantime, the EU agreed to the Brexit extension until the end of January 2020. Importantly, the EU offered a “flextension,” which means that the UK could leave before the deadline if a deal is approved by the British Parliament. Brexit is still far from concluded and snap elections could significantly change the political landscape. But one thing is sure for now, the possibility of a non-deal Brexit has been postponed until January 31, 2020 at least. This should reduce the safe-haven demand for gold, but also support the pound and euro against the U.S. dollar, gold’s nemesis.
China has made some silly errors in its conflict with the US, reflecting the arrogance that often afflicts every state actor. But the appearance that China is being backed into a corner over Huawei, trade tariffs and Hong Kong is misleading. China is progressing her own plans, and they do not require an accommodation with America. With Russia in tow, she is now the chief foreign influencer for up to three-quarters of the world’s population, so it is American hegemony that’s being backed into a corner. One day, this will be reflected in a currency shoot-out. This article concludes that the dollar is more at risk than the yuan, the opposite of perceptions in western capital markets.
In the undeclared war between the US and China, the focus has been on the obvious battles. Huawei has been badly wounded but looks like surviving. The trade tariff battle continues and the battle in Hong Kong is ongoing and yet to be resolved.
By Alina Grace of Haulystic Innovations
Aren’t you getting frustrated listening to different scenarios about Brexit every day? Brexit is around the corner and we still do not have a clear picture on what is going to happen to UK and the world after the 31ST of October, 2019. Logistics is an industry that has adapted to economic and political changes throughout the years.
So, why do we worry about Brexit?
Is the fact that United Kingdom will leave the EU, with or without a deal, so important that will change the landscape of the global supply chain services forever?
It should have been no surprise that Boris Johnson is now Prime Minister. It should also be no surprise he will implement Brexit on 31 October, the last date agreed between Mrs May’s government and the EU. Johnson was elected by Conservative constituency members to do just that. His cabinet appointees are fully supportive, including ex-Remainers (that’s politics!) and he has appointed an aggressive rottweiler, Dominic Cummings, as his Brexit enforcer. Already, his influence over Brexit strategy can be detected. There are no compromises to be had, a point which slower minds in the commentariat find difficult to comprehend and accept.
It is likely there will be an agreement on the way forward after Brexit, which could involve a transition period, but nothing like that agreed with Mrs May. If, as seems unlikely, the EU digs its heels in, the UK will walk away. That is the message being given by the new administration.
By Frances Coppota – Re-Blogged From Forbes
Europe has found a way of circumventing U.S. sanctions on Iran. The governments of France, Germany and the United Kingdom have developed a special purpose vehicle (SPV) to enable European businesses to maintain non-dollar trade with Iran without breaking U.S. sanctions. That SPV, known as INSTEX, is now up and running.
The three governments announced the successful implementation of INSTEX at a meeting of the Joint Commission of the Joint Comprehensive Plan of Action (JCPOA) on June 28, 2019. The meeting was chaired on behalf of the EU by the Secretary General of the European External Action Service (EEAS), Helga Schmid, and was attended by representatives of China, France, Germany, Russia, the United Kingdom, and Iran.
Europe took competition to a new level last week in the global currency-devaluation olympiad. Nominating the politically-minded IMF chief Christine Lagarde rather than a blue-blooded financier to run the ECB is akin to making Trump chairman of the Federal Reserve. No longer can we pretend that the staid protocols of old-school banking still obtain in the financial realm. Instead, there is a strong whiff of desperation as Europe readies a last-ditch attempt to stimulate itself out of a liquidity trap with the ECB’s deposit rate already at minus 0.4%.
That didn’t take long. On Saturday, well before the US stock market opened post-China-trade-talks, I wrote:
The next step for the market would likely be that the remaining stock indices that have not pushed past their own previous peaks would now punch through. By that … I meant those indices like the Dow that were very close to breaking past their old heights
The buy and hold mantra from Wall Street Carnival Barkers should have died decades ago. After all, just buying stocks has gotten you absolutely crushed in China for more than a decade. And in Japan, you have been buried under an avalanche of losses for the last three decades. And even in the good old USA, you wouldn’t want to just own stocks if the economy was about to enter another deflationary recession/depression like 2008. Likewise, you wouldn’t want to own any bonds at all in a high-inflation environment as we had during the ’70s.
The truth is that the mainstream financial media is, for the most part, clueless and our Fed is blatantly feckless.
The Fed has gone from claiming in late 2018 that it would hike rates another four times, to now saying that it is open to actually start cutting rates very soon.
My friend John Rubino who runs the show at DollarCollapse.com recently noted: “bad debts are everywhere, from emerging market dollar-denominated bonds to Italian sovereign debt, Chinese shadow banks, US subprime auto loans, and US student loans. All are teetering on the edge.” I would add that the banking system of Europe is insolvent—look no further than Deutsche Bank with its massive derivatives book, which is the 15th largest bank in the world and 4th biggest in Europe. Its stock was trading at $150 pre-crisis, but it has now crashed to a record low $6.90 today. If this bank fails, look for it to take down multiple banks around the globe.
US leaders are demanding the rest of the world recognize economic sanctions and stop buying Iranian oil. The U.K., Germany, France, Russia, China, and India are among the nations who don’t fully support the sanctions and would rather not pay higher prices for oil elsewhere.
American officials more and more often resort to delivering ultimatums, both to adversaries and allies alike. Nations that do not follow orders stand to lose access to the US financial system and could face trade sanctions of their own. That is a serious threat.
The huge majority of international trading is underpinned by US. banks and the dollar. Other currencies and banking systems cannot offer the same level of liquidity and convenience.
…when the stock market’s decade-long bottom trend becomes its new top trend and then it can’t even make it back up to that line as a top trend.
We’re sloughing away now, and it can be a long slide to the bottom or endless side-winding of big ups and downs that go nowhere, just as the market has now gone nowhere for fifteen months.
Yes, if you bought in January, 2018, (when I said the market would fall) and held, you have made nothing (unless you did well on dividends)! If you continue to hold, the odds are you will do worse than nothing; but, hey, you did get to enjoy a heck of a roller-coaster ride. If, on the other hand, you sold in January of 2018 and put your money in cash, you made 2% a year with worry-free smooth sailing every day of the year. Here’s the proof on stocks:
There are trillions of dollars of bonds in the world with negative yields – a fact with which future historians will find baffling.
Until now those negative yields have been limited to the safest types of bonds issued by governments and major corporations. But this week a new category of negative-yielding paper joined the party: mortgage-backed bonds.
Bankers Stunned as Negative Rates Sweep Across Danish Mortgages
(Investing.com) – At the biggest mortgage bank in the world’s largest covered-bond market, a banker took a few steps away from his desk this week to make sure his eyes weren’t deceiving him.
Re-Blogged From Telesur
Indonesia’s Coordinating Minister for Maritime Affairs Luhut Binsar Pandjaitan referenced the U.S. and Brazil’s withdrawal from the agreement.
As the European Union proceeds with a plan to ban crude palm oil (CPO) from use in raw bio-fuel materials, the government of Indonesia is threatening to back out of the Paris Agreement under the United Nations Framework Convention on Climate Change.
The European Commission has approved acts that classify CPO as a non-sustainable product, removing it from a list of raw materials for the eco-friendly transport fuel. The European Union’s parliament will decide in a couple of months whether or not this classification will be enforced by 2030.
The recent collapse in world trade volume is the worst since the financial crisis and as dangerous as during the dot-com bubble of the early 2000s, according to The Telegraph.
Data from the CPB Netherlands Bureau for Economic Policy Analysis revealed that world trade volume dropped 1.8% in the three months to January compared to the preceding three months as a synchronized global downturn gained momentum.
The aftermath of the Dieselgate scandal is pushing drivers to switch from diesel to gasoline cars, undermining efforts to cut carbon dioxide emissions from road transport.
Average CO2 emissions from new cars rose in 2017 for the first time since 2010 — largely due to the fuel change, according to final data released by the European Environment Agency (EEA) on Thursday.
Life is full of mysteries. Each mystery is like a straw in the wind, which individually means little, but tempting us to speculate there’s a greater meaning behind it all. Yes, there is a far greater game in play, taking Kipling’s aphorism to a higher level.
One of those straws is Russia’s continuing accumulation of gold reserves. Financial pundits tell us that this is to avoid being beholden to the US dollar, and undoubtedly there is truth in it. But why gold? Here, the pundits are silent. There is an answer, and that is Russia understands in principal the virtues of sound money relative to possession of another country’s paper promises. Hence, they sell dollars and buy gold.
But Russia is now going a step further. Izvestia reported the Russian Finance Ministry is considering abolition of VAT on private purchases of gold bullion. We read that this could generate private Russian annual demand of between fifty and a hundred tonnes. More importantly, it paves the way for gold to circulate in Russia as money.
(Bloomberg) — Vladimir Putin’s quest to break Russia’s reliance on the U.S. dollar has set off a literal gold rush. Within the span of a decade, the country quadrupled its bullion reserves, and 2018 marked the most ambitious year yet.
And the pace is keeping up so far this year. Data from the central bank show that holdings rose by 1 million ounces in February, the most since November.
The data shows that Russia is making rapid progress in its effort to diversify away from American assets. Analysts, who have coined the term de-dollarization, speculate about the global economic impacts if more countries adopt a similar philosophy and what it could mean for the dollar’s desirability compared with other assets, such as gold or the Chinese yuan.
(The Telegraph) — Odds of a ‘no deal’ Brexit next week have risen markedly, as the Commons fails to coalesce around a viable alternative to Theresa May’s deal, while once again rejecting the “best possible deal” negotiated between the prime minister and the EU27, albeit by a smaller, yet still considerable, margin than in the past.
This is why, for the first time in a while, speculation about ‘no deal”s impact, not only on the UK, but on the European, and broader global, economy is at the forefront of the market’s mind, as investors have finally been forced to confront the reality that the UK crashing out of the EU next week isn’t only possible, but extremely probable.
By Larry Hamlin – Re-Blogged From WUWT
In a spectacular climate alarmist policy failure the EU dumped its “carbon neutrality by 2050” commitment and targets driven by the sacred but highly arbitrary and unsubstantiated 1.5 degree C global temperature “limit” and ended its Brussels summit with no climate commitments or targets for year 2050.
The global economic outlook is deteriorating. Government borrowing in the deficit countries will therefore escalate. US Treasury TIC data confirms foreigners have already begun to liquidate dollar assets, adding to the US Government’s future funding difficulties. The next wave of monetary inflation, required to fund budget deficits and keep banks solvent, will not prevent financial assets suffering a severe bear market, because the scale of monetary dilution will be so large that the purchasing power of the dollar and other currencies will be undermined. Failing fiat currencies suggest the dollar-based financial order is coming to an end. But with few exceptions, investors own nothing but fiat-currency dependent investments. The only portfolio protection from these potential dangers is to embrace sound money – gold.
The global economy is at a cross-road, with international trade stalling and undermining domestic economies. Some central banks, notably the European Central Bank, the Bank of Japan and the Bank of England were still reflating their economies by supressing interest rates, and the ECB had only stopped quantitative easing in December. The Fed and the Peoples’ Bank of China had been tightening in 2018. The PBOC quickly went into stimulation mode in November, and the Fed has put monetary tightening and interest rates on hold, pending further developments.
By Larry Hamlin – Re-Blogged From WUWT
Climate alarmist propaganda activists and their supporting media here in the U.S. and EU have perpetrated a badly flawed fiction that somehow the U.S. and EU have the ability to control how the rest of the world deals with future energy use and emissions growth.
The hard and unequivocal reality is that neither the U.S. nor the EU will play a defining role in determining how much future global energy use or emissions growth will increase.
The energy use and emissions growth of both the U.S. and EU have become insignificant relative to future global growth.
This reality is illustrated by the emissions graph below which clearly displays that declining emissions by both the U.S. and EU coupled with continuing huge growths in emissions by the developing nations renders both the U.S. and EU inconsequential regarding future global emissions growth.
By Benny Peiser, GWPF – Re-Blogged From WUWT
Presentation at the De-Greening Day, Amsterdam 7 March 2019
The EU’s green energy policies have
* increased energy prices significantly
* reduced competitiveness of European industries
* failed to solve the technological Achilles’ heel of intermittent renewables
* increased energy insecurity and dependence on Russian energy imports
* increased division between Western Europe and Central & Eastern Europe
* given rise to widespread public discontent and the rise of populist parties opposed to the green energy agenda
Here is a link to the complete presentation. Worth a read and spreading around~ctm
Some important pieces of the US economic reports, including the latest nonfarm payrolls, have disappointed recently. May indicators (including the leading ones) have hit a soft patch it seems. Will that push the Fed to downgrade its dot-plot or fine-tune the monetary policy mix anyhow? Can gold jump in reaction to the Wednesday’s FOMC policy meeting?
February Payrolls Disappoint
U.S. nonfarm payrolls plunged in February, falling way short of expectations. The economy added just 20,000 jobs last month, following a rise of 311,000 in January (after an upward revision) and significantly below 172,000 forecasted by the economists. The number was the smallest increase since September 2017, as one can see in the chart below. On an annual basis, the pace of job creation increased slightly last month to 1.8 percent.
Chart 1: Monthly changes in employment gains (red bars, in thousands of persons) from February 2014 to February 2019
- Mr Barclay voted against a Government plan for a delay to Brexit last night
- He said he would support a short extension to Article 50 but not a long one
- Mrs May expected to make third attempt to get a Brexit deal thought next week
- Mr Barclay said: ‘If we don’t have a deal then we should leave with no deal ‘
Is May about to lose her THIRD Brexit secretary? Stephen Barclay hints he could quit if PM backs a long extension to Article 50 saying ‘we shouldn’t be afraid to leave with no deal’
The explanation for the sudden halt in global economic growth is found in the coincidence of peak credit combining with trade protectionism. The history of economic downturns points to a rerun of the 1929-32 period, but with fiat currencies substituted for a gold standard. Government finances are in far worse shape today, and markets have yet to appreciate the consequences of just a moderate contraction in global trade. Between new issues and liquidation by foreigners, domestic buyers will need to absorb $2 trillion of US Treasuries in the coming year, so QE is bound to return with a vengeance, the last hurrah for fiat currencies. However, China and Russia have the means to escape this fate, assuming they have the gumption to do so.
It may be too early to say the world is entering a significant economic downturn, but even ardent bulls must admit to it as an increasing possibility. Financial analysts, both bovine and ursine, face a complex matrix of factors when judging the future effect of any downturn on currencies, and of the prospects for the dollar in particular.
By John Constable – Re-Blogged From GWPF
Those advocating climate change mitigation policy have hitherto wagered everything on the success of renewable energy technologies. The steadily accumulating data on energy and emissions over the period of intense policy commitment suggests that this gamble has not been successful. Pragmatic environmentalists will be asking whether sentimental attachment to wind and solar is standing in the way of an effective emissions reduction trajectory.
For almost as long as there has been a climate policy, emissions reduction has been seen as dependent on the replacement of fossil fuels with renewable energy sources. Policies supporting this outcome are ubiquitous in the developed and developing world; markets have been coerced globally, with varying degrees of severity it is true, but with extraordinary force in the OECD states, and particularly in the European Union. The net result of several decades of such measures has been negligible. Consider, for example the global total primary energy mix since 1971, as recorded in the International Energy Agency datasets, the most recent discussion of which has just been published in the World Energy Outlook (2018):
Figure 1: Global Total Primary Energy Supply: 1971–2015. Source: Redrawn by the author from International Energy Agency, Key World Energy Statistics 2017 and 2018. IEA Notes: 1. World includes international aviation and international marine bunkers. 2. Peat and oil shale are aggregated with coal. 3. “Other” Includes geothermal, solar, wind, tide/wave/ocean, heat and other.
Powell’s testimony before the Congress is behind us. The ECB meeting is ahead of us. Will Draghi support the gold prices after recent declines?
Gold Falls Below $1,300
Gold bulls might be disappointed. The upward trend apparently ended. As one can see in the chart below, gold fell below $1,300 on Friday.
Chart 1: Gold prices from March 1 to March 4, 2019
By Michael Pento – Re-Blogged From Pento Portfolio Strategies
Wall Street’s absolute obsession with the soon to be announced most wonderful trade deal with China is mind-boggling. The cheerleaders that haunt main stream financial media don’t even care what kind of deal gets done. They don’t care if it hurts the already faltering condition of China’s economy or even if it does little to improve the chronically massive US trade deficits—just as long as both sides can spin it as a victory and return to the status quo all will be fine.
But let’s look at some facts that contradict this assumption. The problems with China are structural and have very little if anything to do with a trade war. To prove this let’s first look at the main stock market in China called the Shanghai Composite Index. This index peaked at over 5,100 in the summer of 2015. It began last year at 3,550. But today is trading at just 2,720. From its peak in 2015 to the day the trade war began on July 6th of 2018, the index fell by 47%. Therefore, it is silly to blame China’s issues on trade alone. The real issue with China is debt. In 2007 its debt was $7 trillion, and it has skyrocketed to $40 trillion today. It is the most unbalanced and unproductive pile of debt dung the world has ever seen, and it was built in record time by an edict from the communist state.
By Michael Pento – Re-Blogged From Pento Portfolio Strategies
Jerome Powell threw Wall Street a lifeline recently when he decided to temporarily take a pause with the Fed’s rate hiking campaign. The Fed Head also indicated that the process of credit destruction, known as Quantitative Tightening, may soon be brought to an end. This move towards donning a dovish plume caused the total value of equities to soar back to a level that is now 137% of GDP. For some context, that valuation is over 30 percentage points higher than it was at the start of Great Recession and over 90 percentage points greater than 1985. So, the salient question for investors is: will a slightly dovish FOMC be enough to support the massively overvalued market?
The S&P 500 is now trading at over 16x forward earnings. But the growth rate of that earnings will plunge from over 20% last year to a minus 0.8% in Q1 of this year, according to FACTSET. It might have made sense to pay 19x earnings back in 2018 because it was justified by a commensurate rate of earnings growth. But only a fool would pay 16x or 17x earnings if growth is actually negative?
By Arkadiusz Sieroń – Re-Blogged From Gold Eagle
The economic development of China is one of the most important events in the history of the world. In an unprecedentedly short time, millions of people have been taken out from poverty. But, as no country has ever developed so fast, that great story raises important worries.
We invite you to read our today’s article about the great progress China made in the last forty years and find out whether it’s too good to be true and it must end with some catastrophe, triggering rally in the gold prices.
One of the biggest risks for the global economy which can materialize this year is the slowdown of China’s economic growth. So, it is wise to analyze the current state of the Chinese economy – its implications for the gold market and what will happen next. As December 2018 marked the forty years of market reforms in China, we will adopt a long-term perspective, explaining how China transformed itself from a poor, backward and isolated country to the world’s economic power. We will examine what the global economy and the precious metals market can expect in China’s fifth decade of reform and development.
By Mark O’Byrne – Re-Blogged From Gold Eagle
ITALEXIT: Italy to crash out of Euro and ‘rock EU to its foundations’
– Italy’s debt crisis will lead to default, exit from the euro, or both claims respected economist Bootle
– Italy has fallen back into recession with its economy shrinking by 0.2% in the last quarter
– “When Italy finally blows up, it will cause both a banking crisis that will shake the European economy and a political crisis that will rock the EU to its foundations”
Last week’s data showing a drop in Italian GDP in Q4 of last year confirmed what many observers had already suspected: Italy is in recession.
Or rather, in another recession, for this follows similar phases in 2008, 2011 and 2012.
Where is this going to end?
Germany should gradually close down its coal-fired power plants by 2038, an advisory commission has said in its final report, published at the weekend.
“We made it. … This is a historic effort,” said the commission’s chairman Ronald Pofalla on Saturday (26 January).
By John Rubino – Re-Blogged From Dollar Collapse
Are you sick of your gold just sitting there when it was supposed to have long since made you rich? Have you been fantasizing about a world in which your gold really does make you rich?
If so you’re in good – or at least numerous – company.
So let’s sketch out such a world.
Start by envisioning an America in which a handful of oligopolies have captured banking, media, healthcare and several other important industries, while a tiny group of super-rich neo-aristocrats control as much wealth as the 200 million least-rich citizens.
By Associated Press – Re-Blogged From Newsmax
British lawmakers on Tuesday overwhelmingly rejected Prime Minister Theresa May’s divorce deal with the European Union, plunging the Brexit process into chaos and leading to a no-confidence vote in her government.
Moments after the vote, May said it was only right to test whether the government still had lawmakers’ support to carry on. Lawmakers will vote Wednesday in a no-confidence motion from opposition leader Jeremy Corbyn that could trigger a national election.
The House of Commons’ 432-202 vote against May’s plan was widely expected, but it was still devastating for her fragile leadership. It came after more than two years of political upheaval — and was the biggest defeat for a government in the House of Commons in more than a century.
By Alasdair Macleod – Re-Blogged From Silver Phoenix
After two decades, the euro’s minders look set to drive the Eurozone into deep trouble. December was the last month of the ECB’s monthly purchases of government debt. A softening global economy will increase government deficits unexpectedly. The consequence will be a new cycle of sharply rising bond yields for the weakest Eurozone members, and systemically destabilising losses in the bond portfolios owned by Eurozone banks
It’s the twentieth anniversary of the euro’s existence, and far from being celebrated it is being blamed for many, if not all of the Eurozone’s ills.
Emissions-producing diesel trucks and cars pass windmills (David McNew/Getty Images)Getty
2018 was an important year for EU energy legislation, as lawmakers rushed to complete the promises of President Jean-Claude Juncker before the end of the term in just four months time. But it is still uncertain whether these new energy laws, including the bloc’s first limits on CO2 emissions from trucks, will be passed before the March deadline.
If lawmakers run out of time, it could mean that new lawmakers have to start over from the beginning when they take office this summer, following the pan-European election in May.
By Mike Gleason – Re-Blogged From Silver Phoenix
Mike Gleason: It is my privilege now to welcome in Gerald Celente, publisher of the renowned Trends Journal. Mr. Celente’s perhaps the most well-known trends forecaster in the world and it’s always a joy to speak with him. Mr. Celente, thanks for the time again today and welcome back.
Gerald Celente: Always great being on with you, thank you.
Mike Gleason: Well, Gerald, as always, there’s no shortage of topics to discuss with you. Why don’t we start with Europe? The Yellow Jacket Protests have been making headlines. The French President Macron is extraordinarily unpopular and citizens there are more than a little frustrated on how out of touch the government is, both in France and in Brussels at the EU. People have taken to the streets, Macron has responded by delaying the very unpopular fuel tax hike and he plans to increase wages and pensions.
By John Mauldin – Re-Blogged From Gold Eagle
Someone asked recently how many times I had “crossed the pond” to Europe. I really don’t know. Certainly dozens of times. It’s been several times a year for as long as I remember.
That makes me an extremely unusual American. Most of us never visit Europe, except maybe for a rare dream vacation. And that’s okay because our own country is wonderful and has a lifetime of sights to see. But it does affect our perspective on the world.
Graphic: European Central Bank
By Jack Montgomery – Re-Blogged From BlabberBuzz
U.S. President Donald Trump has weighed in on the growing chaos in Emmanuel Macron’s France, calling it “very sad” and suggesting it is time the scrap the Paris climate agreement and “return money back to the people in the form of lower taxes”.
By Alasdair Macleod – Re-Blogged From Goldmoney
This weekend, the G20 nations meet at Buenos Aires. The most important issue will be America’s use of trade policy, ostensibly to bring an end to China’s unfair trade practices. Rather, it could mark a significant milestone in the cold war against China and drive the global economy into a slump.
President Trump initiated the trade war with China. There is a widespread assumption he is pursuing his “art of the deal”, coming into negotiations aggressively to get a satisfactory compromise. Therefore, the script goes, China will be forced to climb down on its restrictive practices, technology and patent theft, and modify its Made in China 2025 (MiC2025) initiative to open it to American corporations. Trade negotiators from both sides have been working in the background to achieve some sort of progress before Presidents Trump and Xi meet at the G20 this weekend, which buoys up hopes of a positive outcome.