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    Daily Digest 1/14 – The International War On Cash, Legionnaires’ Disease Spikes In Flint Amid Water Crisis

    by DailyDigest

    Thursday, January 14, 2016, 3:29 PM


When successful investors warn of a global market crash, we should all be nervous (Afridev)

Interest-rate hikes are always a shock to the system but they have happened numerous times before over the past few decades: so why should they be such a problem now? The answer is that, this time, the situation is different in three crucial respects. First, interest rates have been stuck at unusually low levels for an unusually long period of time. (In Britain, the Bank of England’s rate has been 0.5 per cent since 2009.) Borrowers throughout the economy have got used to easy money; a generation of homeowners and investors has never seen anything else. After more than seven years of cheap debt, the shock of the old will be all the worse.

Is this the Final Leg Down in the Commodity Cycle? How Much Lower for How Much Longer? (Kevin J.)

These increased geopolitical and financial stresses have served to absolutely crush commodity currencies such as the CAD, ZAR, and RUB with the USD as the beneficiary (though this USD strength may turn out to be a phyrric victory). It appears that all commodities are headed lower, and the “lower for longer” mantra should only be ignored at your peril. We may or may not be at the bottom, but how long we stay here is the crucial question to answer. The continued collapse in oil with WTI and Brent currently below $32 per barrel and copper trading below $2.00 per pound currently are but two examples.

More Than Half of Americans Reportedly Have Less Than $1,000 to Their Name (jdargis)

It’s a reminder that, while the larger economy has steadily recovered from the Great Recession, the gains have not yet surfaced at the local level. Another study reports that just 65 of the 3,069 counties in the U.S. have fully recovered from the near-collapse in 2008. But it also speaks to the enduring effect of decades of wage stagnation, when many Americans’ pay has not kept up with inflation and they have been left further and further behind.

The China Syndrome: The Coming Global Financial Meltdown (Aaron M.)

But once China’s slowdown starts impacting the American economy, the mainstream financial media trundles out the usual pundit suspects to declare that the U.S. and Chinese economies are decoupled , so a meltdown in China will have little impact on America–and vice versa.

Senate shoots down ‘audit the Fed’ proposal (richcabot)

“Requiring the Government Accountability Office to conduct a full and independent audit of the Fed each and every year, would be an important step towards making the Federal Reserve a more democratic institution that is responsive to the needs of ordinary Americans rather than the billionaires on Wall Street,” Sanders said in a statement following the vote.

Stay The Course! Which One? (Axel M.)

If you think you have a good process in place, what have you been doing with your portfolio in recent years to manage risk and ensure you are properly diversified? I am asking because in my conversations with hundreds of investors – professional and retail alike – the common thread was that investors enjoyed the ride. Now, if your investment philosophy is to “enjoy the ride,” then good for you. But if you think to have a process of managing risk and diversification, you may have noticed at least two phenomena…

Is the Auto Loan Bubble Ready to Pop? (richcabot)

While the media claims that this record has been reached because of drastic improvements to the US economy, they are once again failing to account for the central factor: credit expansion.

Is the American Worker Obsolete? (Tiffany D.)

But here’s what has me ruminating on the subject: Sometime in the next few months, Adidas — the world’s third-largest maker of sneakers — said it will power up its first Speedfactory in Ansbach, Germany — a manufacturing operation staffed entirely by robots with about a dozen human technicians.

China may slow Fed’s interest rate rises: Fed officials (richcabot)

Rosengren, who votes on the Fed’s rate-setting committee this year, also said a second hike will face a strict test as the Fed looks for tangible evidence that U.S. growth will be “at or above potential” and inflation is moving back up toward the Fed’s 2 percent target.

Chicago Fed chief Charles Evans, who like Rosengren is one of the central bank’s most dovish policymakers, expressed similar concerns.

The International War On Cash (thc0655)

When I first wrote on the subject, there was considerable criticism as to the possibility that such a programme would ever be attempted, let alone succeed. And, granted, it was so Orwellian that it was understandably seen as a crackpot idea. But since that time, the programme has been developing extremely rapidly. In the last six months alone, it has become so visible that it has even garnered a name – “the War on Cash”.

Last Days Of The House Of Saud (Aaron M.)

Forced by his brothers to nominate Prince Mohamad ben Nayef as heir, King Salman quickly isolated him and restricted his powers to the advantage of his own son, Prince Mohammed ben Salman, whose reckless and brutal nature is not restrained by the family Council, which no longer meets. De facto, he and his father govern alone, as autocrats with no counter-power, in a country which has never elected a Parliament, and where political parties are forbidden.

The Man Who Studies The Spread Of Ignorance (Afridev)

It comes from agnosis, the neoclassical Greek word for ignorance or ‘not knowing’, and ontology, the branch of metaphysics which deals with the nature of being. Agnotology is the study of wilful acts to spread confusion and deceit, usually to sell a product or win favour.

Gold – No Time Left for Conspiracy Theories (Aaron M.)

If you just step back and look objectively at what is unfolding from electronic currency to G20 demanding info on everyone and every penny that changes hands, then you can see where the future is headed. We do not have a democracy; that is total nonsense. The president appoints the heads of all departments. Nobody stands for election right down to the head of the Federal Reserve.

Volkswagen likely to buy back 115,000 cars in U.S: German report (richcabot)

Some U.S. regulators and lawmakers have said VW may have to buy back older models. Diess did not say whether VW was discussing that, but said he was optimistic an agreement with U.S. regulators would be reached soon.

Russia Breaking Wall St Oil Price Monopoly (richcabot)

The sale of oil denominated in dollars is essential for the support of the US dollar. In turn, maintaining demand for dollars by world central banks for their currency reserves to back foreign trade of countries like China, Japan or Germany, is essential if the United States dollar is to remain the leading world reserve currency. That status as world’s leading reserve currency is one of two pillars of American hegemony since the end of World War II. The second pillar is world military supremacy.

Legionnaires’ disease spikes in Flint amid poisoned water crisis; National Guard activated (richcabot)

The source of the drinking water in Flint was changed from Lake Huron to the Flint River in April 2014. Although the river water was sent to a city water treatment plant, its salt levels were overlooked, causing the lead pipes to corrode. The changeover was noticed by residents right away. Though they complained of bad tastes and smells after the changeover, the Department of Environmental Quality only conceded its failure in October of 2015. DEQ had not added the chemicals necessary to combat corrosion in the pipes, leaving the water to dissolve lead, a poisonous metal.

Gold & Silver

Click to read the PM Daily Market Commentary: 1/13/16

Provided daily by the Peak Prosperity Gold & Silver Group

Article suggestions for the Daily Digest can be sent to [email protected]. All suggestions are filtered by the Daily Digest team and preference is given to those that are in alignment with the message of the Crash Course and the "3 Es."

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  • Thu, Jan 14, 2016 - 5:35pm



    Status Silver Member (Offline)

    Joined: Jul 30 2009

    Posts: 2932

    A Towering Chinese Debt Mountain Looms Behind Market Gyrations

    Bank of Korea Cuts Growth, Price Forecasts on Instability

    Bloomberg12 hours ago
    A recent sell-off in Korean equities by foreign investors triggered by China's … p.m. in Seoul, compared with 2.08 percent for Treasuries of similar maturities.

    S.Korea's 2015 foreign outflows highest since 2008

    Reuters19 hours ago
    … since September as redemption on matured debt outweighed net purchases. … Foreign outflows from the stock market amounted to 3.46 trillion won during the …

    Azerbaijan suspends some forex sales in effort to head

    Reuters2 hours ago
    BAKU/LONDON, Jan 14 Azerbaijan's central bank said on Thursday it had banned the sale of foreign exchange in standalone bureaux de change run by …

    Indonesia's central bank cuts key rate to help weak economy

    The Straits Times – ‎8 hours ago‎
    JAKARTA (REUTERS) – Indonesia's central bank, which resisted cutting its benchmark interest rate for months, did so on Thursday in a bid to lift an economy growing at its slowest rate in six years. The benchmark policy rate was lowered by 25 basis

    China, Russia lead central banks gold buying spree – ‎Jan 13, 2016‎
    China and Russia added more gold to its reserves in November, leading the latest global central banks buying spree that saw them adding 55 tonnes of the yellow metal to their coffers, up almost 90% from the prior month. According to the latest World

    FOREX-Oil price slide sends Canadian dollar to lowest since 2003

    Reuters6 hours ago
    The euro was up across the board on a Reuters report that European Central Bank policy makers are sceptical about the need for further policy action in the …

    Canadian Liberals set to bust deficit pledge as oil tumbles

    Reuters18 hours ago
    The prospect of a C$10 billion deficit caused little concern in financial markets given Canada's triple-A credit rating and a federal debt-to-GDP ratio of 31.0 …

    Alberta to freeze some civil servants' pay amid plunging energy prices

    The Globe and Mail13 hours ago
    Alberta faces its largest budget deficit in two decades, and Ms. Notley's government plans to end the province's debt-free status and take on nearly $50-billion in …

    BOE Keeps Key Rate at Record Low as Oil Damps Inflation Outlook

    Bloomberg4 hours ago
    The central bank also noted the turmoil in financial markets. Global equities slid by the most in more than four years last week and the FTSE-100 Index has fallen …

    Japan's 10-Year Yield Drops to Record on Flight to Haven Assets

    Bloomberg11 hours ago
    Japanese sovereign debt is advancing as the central bank buys about as many bonds as the government is selling to stimulate the economy and crude oil's …

    A Towering Chinese Debt Mountain Looms Behind Market Gyrations

    Bloomberg7 hours ago
    "China is nowhere close to reining in its debt problems," said Charlene Chu, the … of foreign exchange reserves plunged by $513 billion in 2015 to $3.33 trillion.


    Gulf Widens in Credit Markets Fraught With Danger for Investors

    Bloomberg4 hours ago
    After years of central bank stimulus that drove demand for just about any and all corporate debt, investors who gobbled up $12.5 trillion of bonds globally in the …

    Oil credit crunch may be worse than housing crisis
    Yahoo7 News40 minutes ago

    Emanuel's Winter of Discontent Chills $3 Billion Bond Plan

    Bloomberg – ‎3 hours ago‎
    All of Chicago's tumult is “a negative headline, and we don't particularly want to see the mayor weaker,” said John Miller, co-head of fixed income in Chicago at Nuveen Asset Management, which oversees about $100 billion in munis, including the city's

    Energy Industry to Face a $100 billion-plus Cash-flow Gap in 2016, Says

    BOE Report (press release) – ‎Jan 13, 2016‎
    pump jack NEW YORK, Jan. 13, 2016 (GLOBE NEWSWIRE) — The year 2016 will likely be another year of low oil prices and deteriorating energy-industry revenues and profits, turning it into a watershed for the already-troubled industry, including for the

    US Treasury to sell $57 billion in bills next week

    Reuters39 minutes ago
    U.S. Treasury to sell $57 billion in bills next week … 5 myths about U.S. government debt … Three winners emerge in $1.6 billion Powerball jackpot | Video. 1.

    Coalition renews call for action to fix Detroit school system

    Michigan Radio17 hours ago
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    Lansing has up to $650M challenge, MSU expert says

    Lansing State JournalJan 13, 2016
    Scorsone estimates the city faces about $400 million in unfunded health care liabilities and at least $250 million in pension obligations over the next 20 to 30 …

    Lansing's financial health team to meet to discuss city pensions

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    S&P's debt report says global debt has outstripped income growth

    FTSE Global Markets4 hours ago
    The world has amassed debt at a faster pace than income growth since the … rapid economic growth and relatively low government debt-to-GDP ratio in China.

    Global Junk-Rated Company Defaults Doubled in 2015, Moody's Says

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    Behind Chinese Yuan's Tiny Drop, Indications of True Crisis Lurk

    Bloomberg – ‎Jan 12, 2016‎
    Deterring speculators and attracting investors with off-the-chart rates can help contain a currency crisis, but it can also send an economy into a tailspin by cutting companies and consumers off from credit. That is unlikely to be the case in China

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  • Fri, Jan 15, 2016 - 12:17am



    Status Silver Member (Offline)

    Joined: Jul 30 2009

    Posts: 2932

    $19 Trillion National Debt Will Be hit Soon

    The Daily History of the Debt Results

    Historical returns from 01/01/2016 through 01/13/2016

    The data for the total public debt outstanding is published each business day. If there is no debt value for the date(s) you requested, the value for the preceding business day will be displayed.

    ( Debt Held by the Public vs. Intragovernmental Holdings )

    Date Debt Held by the Public Intragovernmental Holdings Total Public Debt Outstanding
    12/31/2015 13,672,522,257,291.59 5,249,656,752,129.30 18,922,179,009,420.89
    01/04/2016 13,669,500,801,836.00 5,231,431,888,181.04 18,900,932,690,017.04
    01/05/2016 13,670,583,998,983.56 5,247,861,651,601.14 18,918,445,650,584.70
    01/06/2016 13,670,031,542,154.47 5,248,348,675,418.70 18,918,380,217,573.17
    01/07/2016 13,634,966,776,002.99 5,252,909,985,102.14 18,887,876,761,105.13
    01/08/2016 13,635,120,704,335.12 5,253,519,296,094.57 18,888,640,000,429.69
    01/11/2016 13,634,547,255,405.73 5,257,322,346,719.43 18,891,869,602,125.16
    01/12/2016 13,634,464,144,154.11 5,263,218,081,433.78 18,897,682,225,587.89
    01/13/2016 13,634,512,503,358.73 5,321,266,111,682.46 18,955,778,615,041.19

    As the press keeps saying that the deficit is getting lower and lower, looking for anything on the exponential growth of our national debt in the press will only bring you:

    If you haven't heard this version of the song don't miss it.

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  • Fri, Jan 15, 2016 - 1:24am


    Mark Cochrane

    Status Platinum Member (Offline)

    Joined: May 24 2011

    Posts: 1189

    Jakarta attacks

    A colleague of some of my research team in Indonesia is among the injured. Apparently it is very serious. Makes this sort of thing all too real…

    Jakarta attacks: Dutch United Nations worker critically injured


    A United Nations employee has been confirmed among the critically injured in attacks in Central Jakarta.

    Dutch native Johan Kieft, who was the head of a Green Economy Unit, was in Starbucks during the explosions.



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  • Fri, Jan 15, 2016 - 5:45pm


    Mark Cochrane

    Status Platinum Member (Offline)

    Joined: May 24 2011

    Posts: 1189

    Accidental suicide bombers...

    What won't be likely to show up in the Western Media about yesterday's Jakarta attacks is the account of why the death toll was likely so low. Apparently, after concentrating people in the Starbucks, the would be bombers were going to attempt something more like Paris. Fortunately the police immediately shot the legs out of the would-be bomber. He still tried to throw the bomb but to little effect. Managing only to martyr himself and another friendly terrorist in the process.

    Following up on yesterday, the Dutch UN member who was seriously wounded by gunfire is apparently stable now after lengthy surgery.

    Having worked for years now in Indonesia I have to say that security is one thing they do well. All major hotels and other buildings have metal detectors and equipment for screening packages. Bringing cars into malls, government offices or hotels requires screening for car bombs. Armed guards screen people entering malls and such. The thing that really amazes me though is just how efficient they are about it. These processes barely register as a delay in your life after a while. They make TSA look positively ponderous, all while not making you feel like you are losing your dignity.

    Yesterday was tragic, but it could have been far worse.

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  • Fri, Jan 15, 2016 - 6:21pm



    Status Platinum Member (Offline)

    Joined: Apr 13 2011

    Posts: 1837

    Thanks for Indonesia Report, Mark

    Having never traveled in Asia I have very little feel for life, the terrain, the social climate.  Thanks for the report.

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