Daily Digest

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Daily Digest 10/4 - The Cobalt Pipeline, The End Of Dollar Dominance?

Tuesday, October 4, 2016, 12:00 PM

Economy

Prevailing Gray Swans: The Clear and Present Danger List for the Week Ending September 30, 2016 (James A.)

The present day value of all these items? Nearly USD 97K! No doubt there is a vast discrepancy between the price paid relative to the value of the asset acquired: a single Viceroy tulip. Unfortunately the MOB rivals the price-to-value gap of this example but the consequences — if manifested — given the scale, would destroy the global economy. How did this — or any — financial avalanche risk germinate and mature?

Collapsing Global Trade Growth Foreshadows Crash (Tiffany D.)

Global central banks have used every scrap of available monetary power to help the global economy take flight … yet nothing has gone quite according to plan.

The economy is now in the process of crashing back to earth, and central banks have no control and no buffer to even slow the situation down.

Merk Insights: The End Of Dollar Dominance? (Adam)

Yes, foreigners hold trillions in U.S. debt, and if they were to dump all their debt, borrowing cost in the U.S. might rise. Except it hasn't happened: in our analysis, as foreigners have been selling U.S. Treasuries, the dollar has neither plunged, nor have U.S. borrowing costs skyrocketed. Why is that? As we will discuss below, we believe, in the short-term, other market forces have been even stronger.

That said, the recent decision by Congress to override President Obama's veto to allow private citizens to sue Saudi Arabia should get our attention. Saudi Arabia has threatened to sell its U.S. assets in case this law passes, as it doesn't want a judge to freeze their assets. As this chart below shows, this may not be an empty threat...

Spain Is Without A National Government (And Spaniards Are Digging It) (reflector)

With neither major party able to secure a majority of seats in the national legislature and the two parties unable to agree on a coalition government, for the last 10 months Spain has had a do-nothing caretaker government for the first time in its history.

While basic government services continue, no new legislation is being proposed, foreign policy is stuck in place, and many infrastructure and other government projects are frozen.

The Cobalt Pipeline (jdargis)

The world’s soaring demand for cobalt is at times met by workers, including children, who labor in harsh and dangerous conditions. An estimated 100,000 cobalt miners in Congo use hand tools to dig hundreds of feet underground with little oversight and few safety measures, according to workers, government officials and evidence found by The Washington Post during visits to remote mines. Deaths and injuries are common. And the mining activity exposes local communities to levels of toxic metals that appear to be linked to ailments that include breathing problems and birth defects, health officials say.

Next ‘Renewable Energy’: Burning Forests, if Senators Get Their Way (jdargis)

If they succeed, from next year to 2030 they will have added a cumulative total of at least 830 million metric tons of carbon dioxide into the air, according to calculations by the Partnership for Public Integrity, an energy policy analysis group, based on a model used by the government’s Energy Information Administration to assess the impact of the Clean Power Plan.

Is The Oil Price War Finally Over? (Josh O.)

It’s more likely, however, a reluctant acknowledgement of a very simple truth – Saudi Arabia’s oil policy isn’t working. The Wall Street Journal says people ‘familiar with this matter’ (sounds deliciously creepy doesn’t it?) reported that the Kingdom’s energy minster Khalid al-Falih’s attention was drawn to an OPEC prediction that a global glut was likely to remain throughout 2017. Faced with the consequences of its policy to date – introducing unpopular domestic austerity measures and a decision by the U.S. Senate to allow 9/11 victims to sue the Kingdom for its potential involvement which saw Saudi’s currency plunge to its lowest level in four months – perhaps it decided to lick its wounds and live to fight another day.

California Drought Enters Its 6th Year (Adam)

Water year 2016, which ran from Oct. 1 to Sept. 30, was officially categorized as "dry" statewide, continuing California's five-year drought. The onset of the new water year has brought attention to the record reliance on groundwater by farmers and water wars between corporations and residents.

Gold & Silver

Click to read the PM Daily Market Commentary: 10/3/16

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."

6 Comments

LogansRun's picture
LogansRun
Status: Diamond Member (Offline)
Joined: Mar 18 2009
Posts: 1444
US and Russian tensions hitting high note...

I'm hoping Chris is paying attention to this situation and going to write on it soon.

White House Warns

US Suspends Diplomatic Ties with Russia over Syria

 

On another note, there has been a massive increase in traffic to Mt. Weather in the past 3 months.  My contacts say it's in regards to the election and what may happen that week/day.  Keep your eyes and ears up and ready.  

TechGuy's picture
TechGuy
Status: Gold Member (Offline)
Joined: Oct 13 2008
Posts: 453
Re:Merk Insights: The End Of Dollar Dominance?

I don't think the End of the Dollar Dominance is coming soon. The issue is that most of the world is in much worse shape. Who is better? Japan?, China?, Europe?, India?. All major industrialize powers are devaluing there currencies, engaging in financial shenanigans, have a severe demographics problem, resource, depletion, huge unfunded liabilities, etc. The US is by far the cleanest shirt in the laundry pile. The world is engaged in a massive game of race to the bottom. For the US to lose its dominance there has to be a superior option.

FWIW: I think with Britian pressing to complete Brexit next year, Germany on the ropes with refugees, declining exports, failing banks, etc,  that the breakup of the EU is coming. I don't think we will see a breakup next year, but I think more and more discussions about other nations leaving, will happen, which will drive the EURO lower. Mix in a few EU bank bailins will get European depositors to pull cash out and I suspect a lot of money from the EU will come to the USA driving up the US dollar value.

Over in Asia, I expect Japan to continue QE as it has no choice since its now completely insolvent with absolutely no chance to recovery. China Debt bubble has popped and the Chinese gov't is working behind the curtains to prop up its economy. I see China switching from industrial keynesium to Miltary keynesium as its ecomony already has extreme overcapacity. I expect India currency continue to devalue as its bad loan problems continue to take its toll, and as relations betweeen India and Pakastan continue to deteriate.

As far as Precious metals I don't think we will see the increases we saw between 2009 and 2012, but a slow and steady increase with some dips and spikes as geopolitical events unfold. I think most people don't have substantial savings and most households are slowly slipping into poverty as good paying jobs disappear and are replaced with low wage service jobs.Automation is also going to start taking a toll on low wage service jobs as business look to reduce labor costs caused by excessive regulations. Its possible that price of PM will decline as those with PM holding (mostly in Asia) start selling some of their PMs for basic needs (ie food, shelter, etc). 

I believe the biggest driver of PM increases in the 2009 to 2012 period was by initutional investors looking for low risk options as the US unleashed QE. I don't believe during the next round of QE that these fund managers will rush back into PMs. I suspect that many funds managers have invested in illiquid assets (ie real-estate, energy company bonds, etc) and will simple wait for QE to re-inflate  asset prices instead of dumping them at a loss and buying PMs. What liquid capital they have they are going to need to for pension outlays as more boomers retire and start collecting retirement benefits.

 

saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 4236
National debt now over $19.6 trillion

The Daily History of the Debt Results

Historical returns from 09/28/2016 through 10/03/2016

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
09/28/2016 14,134,459,589,754.46 5,385,472,778,092.82 19,519,932,367,847.28
09/29/2016 14,148,919,195,185.48 5,383,971,038,667.69 19,532,890,233,853.17
09/30/2016 14,173,423,516,895.82 5,400,021,197,040.97 19,573,444,713,936.79
10/03/2016 14,169,562,468,883.59 5,473,387,273,677.92 19,642,949,742,561.51

 

TechGuy's picture
TechGuy
Status: Gold Member (Offline)
Joined: Oct 13 2008
Posts: 453
Re: US and Russian tensions hitting high note

The title is an understatement considering that the Russia civilians are preparing for war with the US:

"Russia holds massive nuclear war exercise involving 40MILLION people"

https://www.thesun.co.uk/news/1907902/russia-holds-massive-nuclear-war-e...

"Obama administration considering strikes on Assad, again"

https://www.washingtonpost.com/news/josh-rogin/wp/2016/10/04/obama-admin...

I guess Obama's parting gift to Americans and the rest of the world, will be war or on the brink of war with Russia.

pinecarr's picture
pinecarr
Status: Diamond Member (Offline)
Joined: Apr 13 2008
Posts: 2259
Dire Free Speech Warning Issued By Exec Dir Kansas City Library

In a world of disturbing news, I still found this story -and what it says about our country- very disturbing. 

Submitted by Mike Krieger via Liberty Blitzkrieg blog,

The following story hasn’t received the attention it deserves.

Back in May, a man was arrested by a private security guard and an off-duty police officer after asking pointed questions to American diplomat and author Dennis Ross during a library discussion. When a library employee attempted to intervene, he was also arrested.

ABC News reports:

The executive director the Kansas City library system says he is “outraged” that prosecutors continue to pursue charges against a man who was arrested after asking pointed questions during a library discussion about the Middle East peace process and an employee who tried to intervene.

Although the arrests occurred in May following a speech by author and diplomat Dennis Ross, the library system only recently went public about its opposition to charges, the Kansas City Star reported.

R. Crosby Kemper III, executive director of the city’s library system, said “we’re going to be living in a different kind of country” if people can be arrested for asking questions at a library. “If this kind of behavior is unacceptable to the police, then I guess we’re going to have to shut the library down.”

Issues arose after Ross finished speaking and took a question from Jeremy Rothe-Kushel concerning whether Jewish Americans like Rothe-Kushel should be concerned about actions by the U.S. and Israel that amount to “state-sponsored terrorism.”

“When are we going to stand up and be ethical Jews and Americans?” Rothe-Kushel asked.

When Rothe-Kushel tried to ask another question, a private security guard grasped his arm, followed by an off-duty police officer, both employed by the Jewish Community Foundation. Rothe-Kushel then shouted, “Get your hands off of me right now!”

Kemper said the private security guards had no right to remove a patron for asking a question.

Ross’ speech was the inaugural Truman and Israel Lecture, established by the Truman Library Institute and the Jewish Community Foundation of Greater Kansas City.

 

Reference: http://www.zerohedge.com/news/2016-10-04/dire-free-speech-warning-issued-executive-director-kansas-city-library-system

 

KennethPollinger's picture
KennethPollinger
Status: Platinum Member (Offline)
Joined: Sep 22 2010
Posts: 656
Mike Maloney: Episode 7
Print allIn new window

New Episode 7, Hidden Secrets of Money 

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