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WARNING: We Are Going To Be Living In An Incredibly Chaotic World

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Posted by King World News

on Friday, 30 September 2016 07:44

King-World-News-If-This-Is-True-We-Will-Be-Living-In-An-Incredibly-Chaotic-And-Unstable-World-864x400 cAs the monetary madness continues, some of what you will read below is difficult to comprehend because it seems totally unimaginable.

If you have the power to print money, you’ll do it. Regardless of any ideologies or statements, that you should limit your counterfeit operations to three percent a year as the Friedmanites want to do. Basically you print it. You find reasons for it, you save banks, you save people, whatever, there are lot of reasons to print.” — Murray N. Rothbard

....continue reading HERE

...also from Martin Armstrong:

Why Are the Markets Coiling?



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Asset protection

Scams & Fantasies – An Even Dozen

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Posted by Gary Christenson - The Deviant Investor Deviant Investor

on Wednesday, 28 September 2016 07:27

scamSteve Saville: “…there is no limit to how much new money the central bank can create.”

 

  • The Federal Reserve – the central bank of the United States – issued over $16 trillion in loans, swaps, guarantees and more following the 2008 financial crisis. They also increased their balance sheet by nearly $4 trillion – thanks to their (digital) printing press. Much of that newly created currency was used to purchase dodgy bank debt that was worth little. “Money from nothing” is their specialty and they used it to “stimulate” the economy, a fantasy. The ECB and BOJ indulged in the same fantasy/scam.
  • The Swiss Central Bank has created billions in new Swiss currency and used that currency to purchase the stocks of corporations. They created the currency from nothing, thereby diluting all existing Swiss currency units, and then purchased assets that have real value. Something from nothing is used by all central banks and is both a fantasy and a scam.
  • If the Swiss Central Bank can create currency from nothing and purchase Facebook stock or gold mining stocks, other central banks can create currency from nothing and purchase physical gold from anyone who will sell the metal. Creating currency and using it to purchase gold is a great scam for those who can get away with it.


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What Blows Up First, Part 3: Really, Deutsche Bank?

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Posted by John Rubino - DollarCollapse.com

on Tuesday, 27 September 2016 06:28

Calling Wall Street’s banks stupid and dangerous is like calling the sun “big and warm.” It’s a clear understatement of an obvious fact. The same goes for calling Japan and China economically clueless. Their actions pretty much guarantee that they’ll ultimately enter some sort of death spiral. 

Germany, meanwhile, is many things, but clueless and stupid aren’t normally on the list. So why is that country’s biggest bank causing nightmares for global policy makers and investors? Because – in a sign of just how close we are to the end of the fiat currency/fractional reserve banking era – Deutsche Bank is behaving in ways that would make executives at Lehman Brothers and Bear Stearns step back in alarm. It seems, for example, to have become a derivatives junkie. Like a Vegas high-roller who can’t stop raising his bets, DB’s exposure to this unregulated, largely off-balance-sheet market now exceeds not just its host country’s GDP, but that of its entire continent:

DB-derivatives-Sept-16-1

And it recently joined its Wall Street cousins-in-crime by attracting a $14 billion fine for mortgage fraud. This amount seems puny next to a trillions-with-a-T derivatives book, but it’s enough to force DB to raise capital at an extremely inauspicious time. Here’s an excerpt from a Bloomberg article on the bank’s — and Germany’s — plight:



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Outside the Box - The BIS Warns on China

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Posted by John Mauldin - Outside The Box

on Thursday, 22 September 2016 04:45

china-market-meltdownI’ve been saying for the past couple years that the next recession here in the US will probably be triggered by an external macro event or cascade of events, coming out of Europe or China. Today’s Outside the Box sharpens our focus on China, which had already got quite a lot sharper with Michael Pettis’s piece in Outside the Box on Sept. 2.

Today’s post comes from Ambrose Evans-Pritchard of the London Telegraph. He is commenting on the recently released quarterly report of the Bank for International Settlements (“the central banks’ bank”), in which the BIS repeats Pettis’s warning that China faces escalating risk of a major debt and banking crisis.

The BIS is also rightly concerned about spillover from China to the global economy. After noting that outstanding loans in China have reached $28 trillion – as much as the commercial banking loan books of the US and Japan combined – Ambrose adds, “The scale is enough to threaten a worldwide shock if China ever loses control. Corporate debt alone has reached 171pc of GDP, and it is this that is keeping global regulators awake at night.”

Total Chinese debt reached 255% of GDP at the end of 2015, a jump of 107% in the past eight years – and still rising fast. Every year, China’s leadership promises to rein in debt growth, and every year the growth just keeps accelerating. That is because China’s GDP growth is fueled by debt, and that debt is becoming increasingly inefficient in producing GDP.

Does China still have the resources to deal with this issue? The answer is a qualified yes – but then there may not be the resources to deal with the other little items on China’s shopping list. The New Silk Road that China seems to be actually in the process of building is estimated to cost $1 trillion, and that’s without cost overruns. Plus, the Chinese leadership has promised massive spending on the interior part of the country to bring up the quality of people’s lives there.

One trillion here and one trillion there, and pretty soon you have run through your reserves and are getting into monetization problems; and then you have all sorts of currency and related issues, not to mention potential inflation, unemployment, the slowing of the economy, the associated public unrest, and so on.

No, I do not think China is going to massively implode, but the world is really not ready for a China that is only growing at 2% or 3% a year. (Even though 2–3% growth would sound pretty good if it was happening in the US.) That will feel a lot like a hard landing as far as world growth is concerned. All happening when there are unsettled political agendas in a number of countries (starting with this one) with regard to globalization and trade treaties.

I am back in Dallas after spending the past few days with Shane in Denver. I got to catch up with David Rosenberg and Mark Yusko and have lunch with George Will. George, who is normally upbeat as he looks to the future, spoke after lunch at the conference and delivered one of the most depressing speeches I have heard in a long time. He was just not in a good mood. I should have tried to engage him on baseball, and the afternoon might have been more enjoyable.

Have a great week and savor the last few days of official summer.

Your seeing global risk everywhere he looks analyst,


John Mauldin, Editor
Outside the Box
JohnMauldin@2000wave.com

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China facing full-blown banking crisis, world's top financial watchdog warns

By Ambrose Evans-Pritchard
Originally published in the Telegraph, Sept. 19, 2016

China has failed to curb excesses in its credit system and faces mounting risks of a full-blown banking crisis, according to early warning indicators released by the world’s top financial watchdog.

A key gauge of credit vulnerability is now three times over the danger threshold and has continued to deteriorate, despite pledges by Chinese premier Li Keqiang to wean the economy off debt-driven growth before it is too late.

The Bank for International Settlements warned in its quarterly report that China’s "credit to GDP gap" has reached 30.1, the highest to date and in a different league altogether from any other major country tracked by the institution. It is also significantly higher than the scores in East Asia's speculative boom on 1997 or in the US subprime bubble before the Lehman crisis.

Studies of earlier banking crises around the world over the last sixty years suggest that any score above ten requires careful monitoring.  The credit to GDP gap measures deviations from normal patterns within any one country and therefore strips out cultural differences.

It is based on work the US economist Hyman Minsky and has proved to be the best single gauge of banking risk, although the final denouement can often take longer than assumed. Indicators for what would happen to debt service costs if interest rates rose 250 basis points are also well over the safety line.

China’s total credit reached 255pc of GDP at the end of last year, a jump of 107 percentage points over eight years. This is an extremely high level for a developing economy and is still rising fast .

Outstanding loans have reached $28 trillion, as much as the commercial banking systems of the US and Japan combined. The scale is enough to threaten a worldwide shock if China ever loses control. Corporate debt alone has reached 171pc of GDP, and it is this that is keeping global regulators awake at night.

Image 1 20160921 OTB

The BIS said there are ample reasons to worry about the health of world’s financial system. Zero interest rates and bond purchases by central banks have left markets acutely sensitive to the slightest shift in monetary policy, or even a hint of a shift.



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No investor is paying attention to this important anniversary

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Posted by MarketWatch

on Friday, 09 September 2016 07:17

Screen Shot 2016-09-09 at 7.19.51 AM


Lehman Brothers’ bankruptcy, eight years ago, reminds us that we can rarely predict a calamity

Next week we observe not only one anniversary, but two.

The first, of course, is the 15th anniversary of the Sept. 11 terrorist attacks on the World Trade Center and the Pentagon. The second is the eighth anniversary of Lehman Brothers’ collapse.

Unsurprisingly, the former is getting the lion’s share of attention. And the latter is getting virtually no attention.

And that’s a shame, since many valuable investment lessons can be learned by reviewing it from the emotional distance of eight years.

For those of you with hazy memories, the New York-based company declared bankruptcy Sept. 15, 2008. It had been the fourth-largest investment bank in the U.S.; its bankruptcy was the biggest in U.S. history.

The aftershocks were disastrous.....continue reading HERE

....also Michael with some smiles and head scratchers:

A Machine Gun Burst of Friday Dispatches



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