China

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Off The Cuff: Why The Market Has To Crash

Too much bad debt
Monday, September 3, 2018, 2:25 PM

In this week's Off The Cuff podcast, Chris and Mish Shedlock discuss:

  • Tax-Cut Sugar-High
    • Corporate earning shoot the moon, but wages are little changed
  • Emerging Markets Deja-Vu
    • Crisis always follows borrowing too much debt from foreign creditors
  • Our Captive Political System
    • The democratic dream has long been suffocated by those who control DC
  • A Gold Suprise?
    • Historical precendent strong suggests gold will rebound sharply soon

As the markets hang at record highs (yet again), Chris and Mish revisit the data -- are these levels justified by the data?

A fresh look makes it very hard to defend them. And while there are lots of reasons to support that conclusion, the core one is the same as it was prior to the 2008 crash: Too Much Bad Debt.

Click to listen to a sample of this Off the Cuff Podcast or Enroll today to access the full audio as well as all of PeakProsperity.com's other premium content. » Read more

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Off The Cuff: The Real Emerging Market Danger Lies In Asia

The debt bubbles there can gut-punch the world economy
Wednesday, August 22, 2018, 11:38 PM

In this week's Off The Cuff podcast, Chris and Wolf Richter discuss:

  • Commodity Carnage
    • Not just due to a strong dollar
  • Argentina Is Faltering
    • Its currency is collapsing (yet again)
  • More Trouble In Turkey
    • Threatening the EU banks who loaned it billions
  • The Real Threat
    • Asia is where the real damage will occur

Recorded last week, Wolf Ricther explains why the real Emerging Market contagion risk lies not in Turkey, or Venezuela or Argentina or Brasil -- but in Asia.

Click to listen to a sample of this Off the Cuff Podcast or Enroll today to access the full audio as well as all of PeakProsperity.com's other premium content. » Read more

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Bloomberg, ILLUSTRATION: 731

The Emerging Market Contagion Threat

How Turkey & the other EM countries can crash the world
Friday, August 17, 2018, 7:11 PM

Executive Summary

  • The dangers of contagion from Turkey
  • Which other countries pose an even bigger threat?
  • How I'm accelerating my personal preparations
  • Why the next crisis will happen swiftly when it arrives 

If you have not yet read We Are All Lab Rats In The Largest-Ever Monetary Experiment In Human History, available free to all readers, please click here to read it first.

It's Time To Talk Turkey

“Talking turkey” is an idiom which means to talk serious business or to talk frankly.  So let’s talk Turkey. 

Turkey, the country, is currently in a major currency crisis and heading towards a sovereign debt crisis.  

Its self-inflicted wounds include piling on massive new debts and making a big bet that the US dollar would continue to weaken, which it did not.

The huge predicament facing Turkey is that many of its debts are denominated in dollars and euros. So as the Turkish lira fell, those debts became more and more expensive for their holders to service. Just this year alone, the Turkish lira has fallen by nearly 40%(!) against the dollar.

Imagine that you're a Turk with a mortgage denominated in US dollars. Suppose it was for $200,000 and your payment in local currency was 5,625 lira ($1,500) for the month at the beginning of the year.  Today, your payment would be 9,090 lira (still $1,500) to account for the dollar translation.

Ouch!

That’s happening to businesses and consumers alike across Turkey.  To help ease the pain, the authorities are busy allowing inflation to run rampant which gives people more lira to work with. But that’s a two-edged sword that also causes the value of the lira to continue to fall against external currencies.  So it buys a bit of time, perhaps, at the risk of a full blown currency collapse that leads to a major sovereign debt crisis.

The effects are already rippling through the European banking system. We see that clearly here in... » Read more

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Off The Cuff: Yes, The Central Banks Really Are Starting To Tighten

Expect EVERYTHING you know about the markets to change
Tuesday, July 10, 2018, 10:40 AM

In this week's Off The Cuff podcast, Chris and Wolf Richter discuss:

  • Tesla As A Symbol Of Silicon Valley
    • Way more hype than substance right now
  • Are Central Banks Really Starting To Tighten?
    • It's looking like indeed so
  • How The Rising Dollar Is Killing Emerging Markets
    • It's just math. Really cruel math.
  • Popping Of The Global Housing Bubble?
    • Australia may be leading the way down

The Fed has reduced its balance sheet so far this year to the tune of $100 billion, and is hoping to be reducing at the rate of $50 billion per month by October. The ECB has announced it will stop making purchases by the end of the year. And, surpringly, even the profligate Bank of Japan is showing signs of reducing its balance sheet.

Click to listen to a sample of this Off the Cuff Podcast or Enroll today to access the full audio as well as all of PeakProsperity.com's other premium content.
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A Hard Rain's a-Gonna Fall

The prospects for the rest of the year are awful
Friday, June 15, 2018, 6:55 PM

As the Federal Reserve kicked off its second round of quantitative easing in aftermath of the Great Financial Crisis, hedge fund manager David Tepper predicted that nearly all assets would rise tremendously in response. 

History proved Tepper right: financial and other risk assets have shot the moon. Equities have long since rocketed past their pre-crisis highs, bonds continued rising as interest rates stayed at historic lows, and many real estate markets are now back in bubble territory. 

And everyone learned to love the 'Fed put' and stop worrying.

But as King Louis XV and Bob Dylan both warned us, what's coming next will change everything. » Read more

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6 Essential Strategies For Prospering Through The Next Crisis

Be one of the few positioned to prosper when crisis hits
Friday, April 6, 2018, 11:32 PM

Executive Summary

  • The trends that have driven the past 10 years are now ending/over. Ride their reversal wisely.
  • Crisis can destroy or magnify your prospects. Your decisions today will control which outcome you experience.
  • In many cases, you need to do the opposite of what the 'herd' is doing
  • The 6 essential strategies for prospering through the next crisis

If you have not yet read Part 1: This Is The Turning Point, available free to all readers, please click here to read it first.

Strategies For Prospering Through The Next Crisis

Those with the open-mindedness, courage and optimism to adapt in time will be far less impacted -- and indeed, will have much better odds of coming through this transition the better for it. Amazing opportunities will arise during this time to increase all aspects of your wealth (yes, money -- but also in all the other important Forms Of Capital, too).

Don’t count on currency “money” retaining its purchasing power. 

States (governments) always follow the same pathway: when financial promises can’t be kept, states debauch/devalue their currencies as a politically expedient short-term solution.

But alas, just like central bank stimulus, the short-term expediency becomes the permanent policy, and the unintended consequences start piling up, for example, a loss of trust in the state’s currency.

I see Venezuela’s destruction of its currency as the canary in the coalmine. The first canaries to drop lifeless from their perch will be non-reserve currencies.  Then the weakest of the reserve currencies will be over-issued (via credit rather than actual money-printing) and then even the mightiest will collapse.

Many people reckon the US dollar (USD) is the weakest, and perhaps they’ll be right, but I think the Chinese yuan (RMB), Japanese yen and EU euro will lose purchasing power first.

The RMB isn’t actually a “real currency,” it’s simply a derivative of the USD via the official peg. As for becoming gold-backed, please examine any chart of Chinese debt issuance (all of which is currency) and then compare that to... » Read more

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Off The Cuff: The Coming Crisis Is Not Only Inevitable, It's Needed

We'll be better off for it (if we survive it)
Thursday, April 5, 2018, 11:22 PM

In this week's Off The Cuff podcast, Chris and John Rubino discuss:

  • Manipulated Markets
    • The plunge protection team is not sidelined yet
  • Manipulated Politics
    • Trade, and possibly kinetic, wars are being engineered deliberately
  • The Silver Lining Of The Next Great Financial Crisis
    • It should put us on sounder footing, if we survive it
  • Positioning To Profit From The Next Crash
    • There are asset classes and trading strategies that hold great promise

John Rubino delivers a hard-hitting rebuke of the current debt-based global fiat money regime, along with its current massive volumes of money printing, and explains why he not only predicts the system must crash, but that we'll be better off for it (should we survive it).

Click to listen to a sample of this Off the Cuff Podcast or Enroll today to access the full audio and other premium content today.
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Off The Cuff: The High Cost Of 'Free' Trade

Corporate cartels win, the public gets shafted
Thursday, March 15, 2018, 10:55 PM

In this week's Off The Cuff podcast, Chris and Charles Hugh Smith discuss:

  • Funky Market Movement
    • A "bear pendant" in the making?
  • The False Claim Of Free Trade
    • Corporate cartels win, the public gets shafted
  • Media Mendacity
    • Google/Facebook increasingly censoring the content we see
  • Money Velocity Is Slowing
    • And tarrffs will only make things worse

Charles explains how the benefits of "free trade" that we've been sold over the past decades have been lopsided in the extreme.

Click to listen to a sample of this Off the Cuff Podcast or Enroll today to access the full audio and other premium content today.
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Art Berman: Like It Or Not, The Future Remains All About Oil

And competition for it is heating up
Tuesday, January 23, 2018, 1:19 PM

Art Berman, 40-year veteran in the petroleum production industry and respected geological consultant, returns to the podcast this week to talk about oil.

After the price of oil fell from its previous $100+/bbl highs to under $30/bbl in 2015, many declared dead the concerns raised by peak oil theorists. Headlines selling the "shale miracle" have sought to convince us that the US will one day eclipse Saudi Arabia in oil production. In short: cheap, plentiful oil is here to stay.

How likely is this?

Not at all, warns Berman. World demand for oil shows no signs of abating while the outlook for future production looks increasingly scant. And the competition among nations for this "master resource" will be much more intense in future decades than we've been used to. » Read more

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Off The Cuff: China's Warning Shot

The recent Treasury gambit is classic geopolitics
Thursday, January 11, 2018, 6:30 PM

In this week's Off The Cuff podcast, Chris and Wolf Richter discuss:

  • China's Warning Shot
    • The recent Treasury gambit is classic geopolitics
  • Downdraft Risk
    • Will it be possible to avoid a crash in 2018?
  • Real Estate Is Looking Vulnerable
    • Key markets are running out of buyers
  • Rising Oil Prices
    • A major candidate for the pin to pop this bubble

Wednesday, the markets lurched in fear as China announced it was thinking of slowing/stopping future purchases of US Treasurys. Later, a Chinese spokesman declared the story "fake news". But was it? Or was this a deliberate geopolitcal chess move meant to deliver a stern warning to America?

Click to listen to a sample of this Off the Cuff Podcast or Enroll today to access the full audio and other premium content today.