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Has “It” Finally Arrived?

Is this week's 6% market drop the start of the Big One?
Friday, October 12, 2018, 6:54 PM

With the recent plunge in the S&P 500 of over 5%, has the long-anticipated (and long-overdue) market correction finally begun?

It’s hard to say for certain. But the systemic cracks we've been closely monitoring definitely got an awful lot wider this week. » Read more

Insider

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

Insider

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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Art Berman: Think Oil Is Getting Expensive? You Ain't Seen Nothing Yet.

A global supply crunch approaches...
Tuesday, May 29, 2018, 11:28 AM

After issuing clear warnings on this program that sub-$50 oil prices were going to be short-lived, oil expert and geological consultant Art Berman returns to the podcast this week to explain why today's $70 oil prices will go higher -- likely much higher -- and start materially contricting world economic growth.

Art explains how the current glut of oil created by the US shale boom -- along with high crude output by both OPEC and non-OPEC  producers -- is a temporary anomaly. Fundamentally, we are not finding nearly as much oil as we need to continue the trajectory of the global demand curve. And at the same time, we're extracting our reserves at a faster rate than ever. That's a mathematical recipe for a coming supply crunch -- it's not a matter of if, but when.

Click the play button below to listen to Chris' interview with Art Berman (60m:06s). » Read more

Insider

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Off The Cuff: Look Out Below!

We're on the cusp of major asset deflation
Thursday, September 24, 2015, 5:15 PM

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

  • The Periphery Is Collapsing Fast
    • Emerging market currencies are falling hard vs the US dollar
  • China Is Running Off The Rails
    • We're witnessing a bust in progress
  • Europe's Black Swan Has Landed
    • A migrant crisis no one saw coming this quickly
  • The US Is Sliding Back Into Recession
    • The data is bad and getting worse
Insider

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The Unraveling Continues

Time to buckle up
Monday, February 3, 2014, 8:03 PM

The U.S. stock markets had a bad day, as did Japan's and Europe's. Of course, the whole world is linked now, so that's no surprise.

As goes one, so go the others. » Read more