Rickards: The Fed Is “Triple Tightening” Into Crisis

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If you have defective and obsolete models, you will produce incorrect analysis and bad policy every time. There’s no better example of this than the Federal Reserve.

The Fed uses equilibrium models to understand an economy that is not an equilibrium system; it’s a complex dynamic system.

The Fed uses the Phillips curve to understand the relationship between unemployment and inflation when 50 years of data say there is no fixed relationship.

The Fed uses “value at risk” modeling based on normally distributed events when the evidence is clear that the degree distribution of risk events is a power curve, not a normal or bell curve.

China’s Red October

 

The 19th National Congress of the Communist Party of China, CCP, will be held in the fall of 2017. The exact date has not yet been announced, but late October is a reasonable estimate. This will be the most important CCP meeting since the death of Mao Zedong and the rise of Deng Xiaoping in the late 1970s.

Communist societies such as China have a dual or parallel government structure. On one side is a normal government with a president, vice premier, cabinet ministers and other subordinate posts. On the other side is the CCP leadership consisting of a General Secretary, Politburo Standing Committee, Politburo, and Central Committee.

The seven-member Politburo Standing Committee runs the CCP. The General Secretary is the single most powerful person in the leadership. The conventional government is controlled by the CCP, which holds the real power.

The world economy can’t handle even one US rate hike, strategist Sri-Kumar says

Please see the source for the video.

 

Even one small interest rate increase by the Fed could have a sweeping impact on U.S. and world economies, Komal Sri-Kumar told CNBC on Monday.

“I think they are going to hike” on March 15, Sri-Kumar said on “Squawk Box,” echoing a theory shared by many analysts. “But that is going to prompt capital outflows from the euro zone, especially with the political risk. It is going to increase the capital outflow from China, and the U.S. economy will feel the impact.”

These moves would strengthen the dollar against other currencies, putting downward pressure on the euro, said Sri-Kumar, president of Sri-Kumar Global Strategies.

Chinese nationals top foreign buyers of US homes

Chinese nationals bought more than $110 billion worth of both residential and commercial real estate over the past five years. Last year’s surge in purchases moved them past Canadians, to become the largest group of foreign buyers of US homes, according to a study from the Asia Society and Rosen Consulting Group.

Over the past five years, the desire of Chinese nationals to find safe offshore assets helped the US real estate market recover from the 2008 economic crisis.

China’s giant threat to global financial stability

It would only take three months of burning through reserves before China’s once mighty arsenal looks less than adequate for such a large economy

For stock markets, it’s been a grim start to the year, and it may be that things will get grimmer still before getting better. Everything rests on China, which is engaged in a herculean battle to defend its currency, the renminbi, against a veritable flood of capital outflows.

For those of us who spent the best part of a decade railing against the iniquities of Chinese reserve accumulation – designed to keep the currency from appreciating and by that means bolster the competitiveness of Chinese goods – this is a somewhat ironic turn of events.

China Orders Banks in Some Hubs to Limit Dollar Buying

SHANGHAI (Reuters) – China’s foreign exchange regulator has ordered banks in some trading hubs to limit dollar purchases this month, three people with direct knowledge said on Friday, in the latest attempt to stem capital outflows.

New China stock market plunge prompts global jitters

Another day, another slide. The CCP is running out of tricks in its bag and the endgame for the global financial system is almost near. As a previous article had stated, after China loses control, there’s no one else left to prop up the global economy and all will come down like a ton of bricks.

 

Devaluation of yuan and Beijing’s moves to halt shares sell-off fails to prevent biggest one-day fall in three weeks for Shanghai Composite Index

China’s Shanghai Composite Index plunged more than 6% in its biggest drop in three weeks, amid fears that the recent change in exchange rate policy may accelerate flows of capital out of China.

ECB “Blesses” Greek Bank Runs, Says Unsure If Banks Will Reopen Monday

The previous post quotes what Benoit said. These ‘experts’ don’t even know what they’re talking about or which lies they have to cover up from the previous day. They suffer instant amnesia syndrome. Or, perhaps they’re intentionally blurring the facts so that people don’t see the system is about to teeter into collapse or give false hope that everything is stable. This keeps riots and panic off the streets… until the mask comes off.

 

Update: what else – an official denial: EU OFFICIAL: ECB DIDN’T SAY GREEK BANKS MAY NOT OPEN MONDAY

So, Benoit did not say what he said?

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Just minutes after Greek FinMin Varoufakis warned people were trying to “incite capital flight” from Greece and Dijsselbloem stated that “capital outflows from Greece are worrying,” Reuters is reporting that The ECB dropped the bank run hammer: