Daily Digest

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Daily Digest 1/14 - Deflation Is Now 'Possible', Oil States Brace For Crude Awakening

Wednesday, January 14, 2015, 11:14 AM

Economy

Venezuelan shortages, long lines spark violence, arrests

Venezuela is suffering from chronic shortages of goods ranging from diapers to flour that have worsened since an ebb in deliveries over Christmas. The scarcity has forced shoppers across Venezuela to line up in front of stores before dawn.

Rise in Bank of Italy liabilities fuels worries of capital flight

Germany's Ifo economic research institute on Monday noted Italy's position within the so-called Target2 system - which settles cross-border payments in the euro area - was worsening, with Bank of Italy liabilities rising to 209 billion euros in December from a low of 130 billion euros in July.

SYRIZA Will Face a €7 Billion Funding Gap if Creditors Back Out (Greece)

Greece will face a 7-billion-euro funding gap in March if SYRIZA comes to power and clashes with the country’s international creditors who will stop the 7.2-billion-euro installment of the current bailout program, said a report of Greek newspaper “Proto Thema.”

In March, Greece has to come up with 4.6 billion euros for bond maturities. Total bond maturities for 2015 come up to 31 billion euros.

Illinois AG: State can use 'police powers' to cut pensions

Attorney General Lisa Madigan is arguing that a landmark Illinois pension overhaul should be upheld because the state has "police powers" that allow it to change a contract in extraordinary circumstances.

Oil States’ Budgets Face Crude Awakening

Alaska now has a $3.5 billion hole in its $6.1 billion budget, and Gov. Bill Walker has called on state agencies to reduce budgets by 5% to 8% for the coming fiscal year. The state expects to dip heavily into its $14 billion in reserves to bridge the gap, but officials acknowledge that is not a sustainable solution.

BOJ said to view oil adding to risk of inflation-target miss (Japan)

Takeshi Minami, an economist at Norinchukin Research Institute, said the central bank is unlikely to expand stimulus when the policy board meets next week. Further out in the year, some analysts predict the BOJ will need to add to its stimulus efforts yet again.

China’s Swap Rate Declines Most Since November on Stimulus Bets

China’s one-year interest-rate swaps fell the most since November on speculation the central bank will roll over special loans to commercial lenders this week.

BoE Governor warns deflation is now 'possible' (UK)

The UK economy is in danger of falling into deflation, the Bank of England’s Governor warned on Tuesday as data showed that inflation had fallen to a 14-year low.

Price growth fell to 0.5pc in December, a bigger slump than economists had anticipated. A poll of analysts before the numbers were release predicted that inflation would ease from 1pc to 0.7pc.

Court decision could narrow ECB’s quantitative easing options

For the ECB to embark on a policy as controversial as government bond buying, it could not tolerate such a high level of dissent. The issue is all the more charged because of Greece, and the growing fears that its bonds may ultimately be subjected to some form of restructuring, implying losses for whoever ends up holding them.

Gold & Silver

Click to read the PM Daily Market Commentary: 1/13/15

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."

10 Comments

saxplayer00o1's picture
saxplayer00o1
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pinecarr's picture
pinecarr
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Russia Just Pulled Itself Out Of The Petrodollar

http://www.zerohedge.com/news/2015-01-14/russia-just-pulled-itself-out-petrodollar

As Bloomberg reports Russia "may unseal its $88 billion Reserve Fund and convert some of its foreign-currency holdings into rubles, the latest government effort to prop up an economy veering into its worst slump since 2009."

These are dollars which Russia would have otherwise recycled into US denominated assets. Instead, Russia will purchase even more Rubles and use the proceeds for FX and economic stabilization purposes. 

"Together with the central bank, we are selling a part of our foreign-currency reserves,” Finance Minister Anton Siluanov said in Moscow today. “We’ll get rubles and place them in deposits for banks, giving liquidity to the economy."

Call it less than amicable divorce, call it what you will: what it is, is Russia violently leaving the ranks of countries that exchange crude for US paper.

Thetallestmanonearth's picture
Thetallestmanonearth
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And they cut off gas supplies

And they cut off gas supplies to Ukraine and six European nations that were supplied through the same.  Here goes nothing!

Scouts motto is: Be prepared....are you?

cmartenson's picture
cmartenson
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this is HUGE news
Thetallestmanonearth wrote:

And they cut off gas supplies to Ukraine and six European nations that were supplied through the same.  Here goes nothing!

Scouts motto is: Be prepared....are you?

I am going to have to spend some time analyzing this....this move to cut off gas supplies was something we'd been discussing as a possibility as a big, strategic move that Russia could take, and that it would have the most impact if done when the weather was cold.

Well, it's been done.  This has huge implications.

More on this tomorrow....

 

pinecarr's picture
pinecarr
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Links to articles re Russia cutting off gas supplies

For those interested, here's the link to the article in the Daily Mail, "Europe plunged into energy crisis as Russia cuts off gas supply via Ukraine", that  ZH references in their article:

http://www.dailymail.co.uk/news/article-1106382/Europe-plunged-energy-crisis-Russia-cuts-gas-supply-Ukraine.html

And here's the article from ZH that references the Daily Mail article: http://www.zerohedge.com/news/2015-01-14/russia-cuts-ukraine-gas-supply-6-european-countries

 

cmartenson's picture
cmartenson
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Error on the Russian Ukriane gas story
pinecarr wrote:

For those interested, here's the link to the article in the Daily Mail, "Europe plunged into energy crisis as Russia cuts off gas supply via Ukraine", that  ZH references in their article:

http://www.dailymail.co.uk/news/article-1106382/Europe-plunged-energy-crisis-Russia-cuts-gas-supply-Ukraine.html

And here's the article from ZH that references the Daily Mail article: http://www.zerohedge.com/news/2015-01-14/russia-cuts-ukraine-gas-supply-6-european-countries

Okay, I've been looking into this and there's some sort of error...to begin the Daily Mail article is actually one I recognize from 2009...I know because I ran across it a few months ago and it caused a flurry of investigation on my part....

So no immediate cut off has happened here...

What has happened is that Russia has decided to begin the process of re-routing away from Ukraine...and Europe is not happy with that for a variety of reasons...

...more coming as I figure it out...

Time2help's picture
Time2help
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Thetallestmanonearth's picture
Thetallestmanonearth
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Posts: 320
Alternatively, someone wants

Alternatively, someone wants us to think something is going on. Just because it's moving fast doesn't mean we stop paying attention.

Arthur Robey's picture
Arthur Robey
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Motives?

Through Georgia south towards Syria (Isn't there a war there or something?) and on through the Baltics.

Is this a message to the Powers That Be to settle down and ensure a stable southern flank to Russia?

Inscrutible chess move.

 

Bankers Slave's picture
Bankers Slave
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