Daily Digest

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Daily Digest 5/16 - The Italian Disaster, CA Wildfire Season Begins

Friday, May 16, 2014, 11:08 AM

Economy

The Italian Disaster (jdargis)

In Germany, Gerhard Schröder’s government guaranteed a billion-euro loan to Gazprom for the building of a Baltic pipeline within a few weeks of his stepping down as chancellor and arriving on the Gazprom payroll at a salary larger than he received for governing the country. Since his departure, Angela Merkel has seen two presidents of the Republic in succession forced to resign under a cloud: Horst Köhler, a former chief of the IMF, for explaining that the Bundeswehr contingent in Afghanistan was protecting German commercial interests; and Christian Wulff, the former Christian Democrat chief in Lower Saxony, over a questionable loan for his house from a friendly businessman.

They Don't Need Us... We Need Them! (Thomas C.)

So why would Saudi Arabia want to begin talks with their arch enemy? Simple, because mommy and daddy told them to. China and Russia have aligned and obviously taken Iran along under their wing. If Saudi Arabia wants to be in this family… then they must “make nice” or they are on their own. People, please put this, and all of the timing together. Russia has announced this “triad” of “de dollarators” for a lack of a better term. China and Russia have the highest level talks scheduled for May 20th and we know what is being discussed and most probably announced. We also know that Saudi Arabia has been none too pleased with the U.S. for quite some time and now plan to have talks with Iran. I see this as Saudi Arabia choosing sides. “Choosing sides” as in abandoning the losing side!

High Tide for the Dollar: Revenge of the Sith (June C.)

I had assigned this somewhat unilateral devaluation of the Dollar to Gold outcome a low probability, thinking that the US and its allies, Britain, Japan, and parts of the EU, would continue supporting each other's currencies and policies of foreign exchange valuations through non-transparent swaps and buying, in a managed devaluation amongst themselves of course. But I thought they would at least open the door to allowing the SDR to be reconstituted with a broader basket of currencies and metals not under NATO control.

The Fall Of The Dollar Based Monetary System (Taki T.)

We have detected three different trends by analyzing the events and announcements in the last couple of months. Do not confuse ongoing with imminent. These trends are so fundamental in nature that it takes a long time till they have run their course; so don’t expect an immediate fall of the dollar (although we should never exclude anything).

201 Dead, Many Trapped in Turkish Coal Mine (jdargis)

Television footage showed people cheering and applauding as some trapped workers emerged out of the mine, helped by rescuers, their faces and hard-hats covered in soot. One wiped away tears on his jacket, another smiled, waved and flashed a "thumbs up" sign at onlookers.

Dozens of ambulances ferried back and forth bodies and the injured extracted from the mine and rescue workers were massed at the entrance of the mine on a hill side. Family members at the scene pleaded for news of their loved ones.

Peter Schiff and Nouriel Roubini duke it out—again (Herman J.)

Roubini: “And it’s my opinion that economies are served by falling prices, by increased production, increased efficiencies, that lower consumer prices, that that’s what makes people better off. And I think the idea that central banks need to deliberately create inflation because it’s somehow a necessary ingredient to economic growth is wrong. Inflation is actually worsening the problems in the economy.”

OPEC Questions Sustainability Of North American Oil Boom (James S.)

OPEC Secretary-General Abdalla el-Badri said oil supplies from North America “will play an important role in the coming few years,” but he cast doubt on their sustainability over the long term. Speaking May 15 in Moscow, el-Badri acknowledged that oil supply from producers outside of OPEC are expected to increase by more than 4 million barrels per day (bpd) between 2013 and 2018, with much of that coming from North America. But he cautioned that the addition of non-OPEC oil supplies to the global market “should be viewed as a periodic shift."

Southern California Wildfires: Body Found in Blaze's Ashes (jdargis)

"Please evacuate," Gore urged residents at an afternoon press conference. "There will be no vandalism. We want you to return safely and not get hurt in these fires."

On Wednesday, intense heat and dry winds whipped the various fires and scorched more than 9,000 acres across 14 square miles. About 21,000 homes were evacuated.

Gold & Silver

Click to read the PM Daily Market Commentary: 5/15/14

Provided daily by the Peak Prosperity Gold & Silver Group

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3 Comments

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Time2help
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saxplayer00o1
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Arthur Robey
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No Maths Required.

Some time ago I posted that the world's industrial engine is capable of oversupply and that I thought that humans were going to be excluded from the economy.

Here is an interesting visual of oversupply from Unsold cars via Zerohedge. Even better, type in "unsold cars" into Google and choose pictures.

What ever happened to price discovery?

I think we have a new candidate for James Kunstler's suburban stranded assets.

The biggest waste of wealth in History

Let me prognosticate. It will soon dawn upon the Left Brain dominated economists that producing a product that has no buyer is dumb. Then the world's extremely rational economists will logically conclude that humans are not a suitable market. And they will rationally produce only for cashed-up entities which would be, ta-da , the Big Banks. (And their war-dogs, the military)

I wonder if there is any chance at all that we can persuade the extremely rational minds to go on some strong medicine before it is too late?

Or is it already too late? Anyway, here are some pretty pictures.

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