Yellen’s Conundrum: Forestall Monetary Mayhem Or Release Political Pandemonium

As has been said here oft: It doesn’t matter who wins the election. Dozens, if not hundreds, of poison pills will be left behind in a very paralyzed four years for Trump should he win. In a Hillary win, you could expect an accelerated decline. Economics, as discussed here is but one facet of the multiple fronts about to face impact.

Regardless of who wins the election, one thing is certain: the vote that takes place in December within the confines of the Eccles Building cast by a dozen un-elected, Ivy Leagued, academic bankers whose combined real world business experience is near nonexistent (less for that read in some wood-paneled library) will decide monetary policy that will have more implications for not only the U.S., but the world as a whole. Effecting not only the global financial markets, but quite possibly, the entire international political stratum as well. And the new President (as well as every other world leader) will have to adjust to that outcome.

November 8th is only the first-act of this very real, “landmine” infested global drama playing out on the world stage. On December 14th the world will truly witness just how much power has really been transferred to this unelected cohort. Continue reading

RED ALERT — Get ready for a ‘severe fall’ in the stock market, HSBC says

HSBC’s technical-analysis team has thrown up the ultimate warning signal.

In a note to clients released Wednesday, Murray Gunn, the head of technical analysis for HSBC, said he had become on “RED ALERT” for an imminent sell-off in stocks given the price action over the past few weeks. Continue reading

Europe’s banks to be promised UNIMITED FUNDING to stem economic meltdown sparked by Brexit

FEARS of a financial catastrophe in Europe if Britain votes to leave the union, has prompted the bloc’s top policymakers to plot an emergency Brexit plan of action.

A vote to Leave on June 23 could immediately plunge Europe’s stock markets into meltdown amid fears the union is heading for collapse.

In a bid to stop the chaos, the European Central Bank (ECB) has now decided it would publicly pledge to do “whatever it takes” to prop up markets if and when a Brexit is announced, according to reports. Continue reading

Chinese stock markets suspended after shares fall 7pc

The Shanghai and Shenzhen exchanges closed early after poor economic data triggered a sell-off

Trading on China’s stock markets ended early after steep losses triggered a new ‘circuit-breaker’ mechanism, installed to curb volatility.

The 7pc drop in China’s blue-chip CSI300 index prompted an automatic early closure of the Shanghai and Shenzhen stock exchanges on the first day of trading since the new safety measure was introduced.

Continue reading

The Next Financial Crisis is Unfolding Now

Money Morning Members should know two things. First: the 2008 financial crisis was caused by a housing bubble, centered in the U.S., that radiated out through the rest of the world and almost destroyed the global financial system.

Second: The next financial crisis – which is starting to unfold as we speak – was caused by a commodities bubble centered in China that radiated out through the rest of the world and will cause enormous financial damage, threatening the global financial system.

Both crises were aided and abetted by central banks printing massive amounts of debt that can never be repaid. That leaves the world with three choices for how to deal with that debt – currency depreciation (which is why you should buy gold), inflation, and default. Continue reading

James Dale Davidson: Current Global Crash Is a ‘Rerun of 1929’

Please see the website for the video.

 

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The current global stock-market crash is eerily reminiscent of the Wall Street crash of 1929, investment expert and author James Dale Davidson told Newsmax TV.

“What we’re seeing, if I could say it this way, is a rerun of 1929 with the main crash falling in Shanghai rather than in Wall Street,” he told “Newsmax Prime.”

“If you’re not scared, you’re not watching,” he said. “Since the last time I was on Newsmax TV on the 11th of August to discuss the Chinese devaluation, which was a small step, I said it was only the beginning of a major change that was going on. And since that time, $5 trillion have gone to money heaven, which is a significant change,” he said. Continue reading

Peter Schiff on U.S. Dollar Crisis: “The Dollar Bubble Is Going to Burst”

Peter Schiff, economist, best-selling author, and CEO of Euro Pacific Capital, believes a U.S. dollar crisis is underway.

“The dollar is very overvalued…and the dollar is a bubble,” he told Newsmax Prime on Aug. 11. “This dollar bubble is going to burst.”

Indeed, less than two weeks after Schiff’s interview, the U.S. dollar index, which measures the greenback against a basket of currencies, has retreated 2.1% to 93.063 for a fourth-straight loss.

And U.S. markets are getting rocked with a major sell-off – last week finished out as the worst for stocks in four years… Continue reading

Global markets tumble as commodity prices fall into ‘death spiral’

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Britain’s benchmark index falls into correction territory as US stocks suffer biggest fall since February 2014

The FTSE 100 fell into official correction territory on Thursday, one point shy of January’s year-low hit, after an eighth consecutive day of losses.

Fraught with concerns about slowing growth in China and the after-effects of last week’s devaluation of the yuan, investors fled to the side lines, bringing this week’s losses to 2.5pc. The FTSE 100 closed 35.56 lower at 6,367.89.

Continue reading

Bank of America warns of ‘lethal’ damage to China’s financial system as deflation deepens

‘Deflation, Devaluation, and Default’ loom in China this year. The denouement for Shanghai’s bourse will not be pretty, says the US bank.

China is at mounting risk of a financial crisis this year as growth sputters and deflationary pressures trigger a wave of defaults, Bank of America has warned.

The US lender told clients that a confluence of forces are coming together that threaten to chill the speculative mania on the Shanghai stock exchange and to expose the underlying fragility of China’s $26 trillion edifice of debt.

“A credit crunch is highly probable,” said the bank in a report entitled “Deflation, Devaluation, and Default”, written by David Cui and Tracy Tian.

Continue reading

‘Violent’ stock market crash could be round the corner as hidden liquidity crunch ‘blows up’ in investors’ faces, warns think-tank

  • Bank of International Settlements warns of ‘violent’ market crash
  • Low levels of market volatility persist despite conflicts and crises across the world
  • Investors buying assets on the misguided presumption of a level of liquidity
  • Share prices continue to plummet as investor confidence decreases

A potentially ‘violent’ stock market crash could be on the horizon as financial markets become dangerously stretched, a think-tank has warned.

The Bank of International Settlements said that suspiciously low levels of volatility in the markets seen this year suggest a lack of liquidity that could trip up investors who assume they can dispense of assets when a sell-off begins. Continue reading

Central bankers may have no quick fix as markets swoon, economy weakens

Stocks slumped again on Wednesday pushing S&P 500 losses to almost 8 percent since mid-September. The dollar fell and U.S. bond prices soared after weak Chinese inflation and U.S. producer price and retail sales data fanned fears the world economy could be even weaker than thought.

When stock markets turned south last week after rallying for much of this year, many policymakers initially played that down. In fact, the sell-off could be seen bringing some healthy volatility back to markets that officials worried had become too complacent to risks ranging from tensions surrounding the conflict in Ukraine to the Ebola outbreak.

But the deepening of the sell-off may have put major central banks on their heels, by raising the prospect of the market rout going too far too fast, threatening to hurt confidence and potentially triggering a pullback in spending.

“It reminds me of the massive flight to quality we saw during the (2008) banking crisis, when there were fears that the whole global economy would tip into depression,” said Nick Stamenkovic, a strategist at Edinburgh-based RIA Capital Markets. Continue reading