ECONOMY | WHAT REALLY HAPPENED


ECONOMY

May 16 11:50

Russia boosting gold & dumping dollar from foreign currency reserves

The Central Bank of Russia reports that foreign exchange reserves saw a significant boost of nearly $3.3 billion in April as the country pursues a policy of increasing its forex funds and diversifying them away from the US dollar.

The latest growth of 0.7 percent brought Russian international reserve funds to nearly $492 billion against $487.8 billion seen at the end of March, the latest data published by the regulator shows.

The state international reserves are highly liquid foreign assets comprising stocks of monetary gold, foreign currencies and Special Drawing Right (SDR) assets, which are at the disposal of the Central Bank of Russia and the government.

May 16 11:03

Something Just Broke In The Chinese Yuan

Having been well-managed all week, amid various headlines (and extreme hopium in US equities), something just snapped in the Chinese yuan...

As we just detailed, from Deutsche Bank, who worry that USD/CNY will break through 7...

Asia is the region we expect to suffer most from the renewed global headwinds. We argue that policymakers in China are now going to be more accepting of USD/CNY appreciation through 7: years of regulatory measures should make outflows more manageable, easier monetary policy will add upside pressure and a weakening FX is the natural means of offsetting tariffs.

May 16 10:58

The Lunacy Of Waging A War On Iran Which China And Russia Will Win

The scare mongering about an attack on Iran continues. Bolton must be laughing his ass off how easy he can play the issue based on nothing. He simply counters any debunking of the alleged 'thread from Iran' by upping the ante. Yesterday a British general denied that any such threat exists in the area of his responsibility:

“No – there’s been no increased threat from Iranian-backed forces in Iraq and Syria,” Maj. Gen. Christopher Ghika, deputy commander of Operation Inherent Resolve (OIR), the coalition responsible for counter-terrorist operations against ISIS in Iraq and Syria, said in a video briefing, according to the Guardian.

Today Bolton countered that by again raising the noise level around the imaginary threat:

The U.S. Embassy in Iraq says the State Department has ordered all non-essential, non-emergency government staff to leave the country right away amid escalating tensions with Iran.

Webmaster's Commentary: 

The most intelligent thing President Trump could do right now, would be handing Bolton his hat; unfortunately, the Israeli government wants this war in the worst possible way, and seeing that they have turned Bolton so brilliantly to their casus belli (of course, filled with unsubstantiated rumors, which no one in any government can yet define), I am concerned that Trump may well take action against Iran, because he doesn't really understand the costs and consequences of moving forward with it.

May 16 10:58

US threatens EU with trade war over weapons

The United States has all but threatened the European Union with war – albeit a trade war – over E.U. plans to boost cooperation between member states on military spending.

First reported by Germany’s Der Spiegel and later confirmed by Reuters, the Financial Times and AFP (among others) – although sadly unpublished in full – Under Secretary of Defense for Acquisition, Technology and Logistics Ellen Lord (previously the CEO of U.S. defense contractor Textron Systems) and Undersecretary of State for Arms Control and International Security Andrea Thompson on May 1 sent a letter to the E.U.’s chief diplomat, the High Representative for Foreign Affairs and Security Policy Federica Mogherini outlining U.S. concerns about access to E.U. funds for American corporations.

May 16 10:37

AOC Smacks Down 'How We Gonna Pay For It' With Pentagon Receipts

Alexandria Ocasio-Cortez brought more light and heat to a Congressional Oversight Committee hearing on Wednesday.

And more importantly, she connected the issue at hand with why those who wonder "how can we pay for" The Green New Deal and Medicare for All when there is plenty of money in excess profits for defense contractors.

AOC pointed out one example: non-vehicular clutch discs, which cost $32.00 to manufacture and for which the Pentagon pays $1443.00. That's a 4436% profit.

AOC asked the Pentagon contractor, TransDigm CEO Kevin Stein, "Are you aware how many doses of insulin we could get for that?"

"...for the cost of your price-gouging of the public on a non-vehicular clutch disk alone I could have sent 21 kids to college. I could have sent 18 toddlers to free preschool for a year, in the most expensive city in America."

May 16 10:33

Steve Bannon: There is ‘no chance’ Trump is going to back down in the China trade war

There is “no chance” President Donald Trump will back down in the U.S. trade war with China, former Trump advisor Steve Bannon told CNBC on Wednesday.

“China has been running an economic war against the industrial democracies for now 20 years,” said the hardline ex-White House chief strategist, who helped craft Trump’s nationalist message.

May 16 10:21

Canadian drug makers hit with $1.1B lawsuit for promoting opioids despite risks

Canadian drug makers enriched themselves at the expense of vulnerable patients by illegally and deceptively promoting highly addictive opioids that have killed thousands in recent years, a proposed class action filed Wednesday asserts.

The untested statement of claim filed in Ontario Superior Court seeks more than $1.1 billion in various damages from almost two dozen companies, including some of the biggest pharmaceutical names in the country such as Apotex, Bristol-Myers Squibb, Johnson and Johnson, and the Jean Coutu Group.

The suit, filed on behalf of patients who became addicted to prescribed opioids, also seeks a declaration that the companies were negligent in how they researched, developed and marketed opioids starting in the 1990s

Webmaster's Commentary: 

Good; this should happen to any drug company which declared the risks of opioid pain killers to be "reasonable and manageable".

May 16 10:10

‘National emergency’: Trump bans Huawei & other ‘adversary tech’ from US telecoms

US President Donald Trump has declared a national emergency over technology designed or produced by ‘foreign adversaries,’ an act widely understood to target China’s ZTE and Huawei in an effort to freeze them out of 5G market.

Arguing that “foreign adversaries are increasingly creating and exploiting vulnerabilities in information and communications technology and services” the US increasingly depends on, Trump’s executive order on Wednesday declares an emergency over foreign-designed, developed, manufactured or supplied information and communications technologies.

May 16 09:58

Cash-Strapped Cities Are Turning Citizens Into Ticket Vigilantes

Washington, D.C. plans to join a growing list of cash-strapped cities that turn citizens into ticket vigilantes.

According to a Fox5 News article, Bill B23-0288 would allow 80 citizens, ten in each of D.C.'s eight wards to print out parking tickets and citations.

These government shills will be tasked with spying on motorists and ticketing them if they park too long or violate parking rules.

Reason.com warns, "these new citizen parking enforcers would be accountable to no one."

If you think you had problems with your neighbor(s) before, just wait until they have the power to ticket anyone.

Webmaster's Commentary: 

WOW! things are really getting ugly out there.

May 16 08:05

The Current Monetary Order Is Nearing Its End

May 16 07:16

How Strong Is The US Economy?

May 15 15:06

Widespread layoffs across Disney and Fox...

May 15 14:45

The Social Security Black Hole Has Arrived

May 15 11:47

Trump administration has paid farmers $8.52 billion in aid to offset trade war

As of Monday, the Trump administration has made $8.52 billion in direct payments to farmers through a 2018 aid program designed to counter losses stemming from the trade war with China, a U.S. Department of Agriculture spokesperson said.

Why it matters: President Trump promised aid of up t0 $12 billion, but the program stalled during the month-long government shutdown and major flooding in the Midwest has caused farmers additional pain. A prolonged trade war, which seems to be where the U.S. and China are headed, could force the Trump administration to renew the program.

May 15 11:44

China Calls For "People's War" Against The US, Vows To "Fight For A New World"

While market mood has shifted diametrically from yesterday, with stocks sharply higher on Tuesday following what has widely been interpreted as conciliatory comments from both president Trump and various members of China's ruling elite, one would be hard pressed to find any de-escalation amid the Chinese press commentaries written in the aftermath of the latest escalation in trade war between the US and China.

In a series of editorials and op-ed articles published Monday and Tuesday, Chinese state media slammed what it labeled the Trump administration's "greed and arrogance", called for a "people's war" targeting the US "with precision" as China begins a "fight for a new world."

"The most important thing is that in the China-US trade war, the US side fights for greed and arrogance ... and morale will break at any point. The Chinese side is fighting back to protect its legitimate interests," the nationalist, state-owned Global Times tabloid wrote .

May 15 11:40

Markets Slide Despite Stimulus Hopes After Dire Chinese Data; Yields Plunge

It's about time we had some bad news which, as everyone knows, is great news for central-bank supported, centrally-planned markets.

The global equity bounce following what many misinterpreted as softer rhetoric by President Donald Trump on the trade dispute with China, fizzled on Wednesday despite dismal Chinese data, while fresh Italian debt woes kept BTFDers on the sidelines.

Ironically, China's data miss was not the catalyst for the drop. As we reported last night, in April every Chinese economic metric posted a sharp decline and missed expectations:

May 15 11:39

Latest Trade War Developments

Between Trump tweets and Chinese whispers via state-controlled media, it can be difficult to pinpoint precisely where things stand in the ongoing battle between the world’s two economic superpowers. Saxo's Christopher Dembik says the CNYUSD rate is the best proxy we have. Here’s why.

May 15 11:38

Central Banks Are Buying Gold At The Fastest Pace In Six Years

Earlier this month the World Gold Council published its quarterly report– and it shows that central banks and foreign governments from around the world are buying up gold at their fastest pace in six years.

This is pretty big news, and it says a LOT about the future of the dollar.

Remember, central banks and foreign governments hold literally TRILLIONS of dollars of reserves… and traditionally they do this by buying US government debt.

It sounds strange, but to big institutions, banks, etc., US government debt is equivalent to cash. They use it as a form of money.

May 15 11:37

Is The Market Too Complacent About Soaring Iran Tensions

Are equity markets too complacent about fast-rising Middle East tensions? Perhaps – oil shocks have killed more US economic expansions over the last 40 years than any other single cause. US Energy stocks are a reasonable hedge, given that they handily win the prize for “most neglected group” in the S&P 500 at just a 5.2% weighting versus a 10-year average of 9.3%.

This morning we had a client write in to ask if markets were too complacent about rising Middle East tensions and what that might do to oil prices. It is a fair point:

Investors are glued to one channel – US-China trade talks – and therefore less engaged on other topics.

Iran has recently dialed up tensions in the Middle East as US led sanctions have taken a toll on its economy.

For example, Iranian-backed Houthi rebels in Yemen have launched drone attacks against Saudi Arabian oil industry infrastructure. Also, Tehran has visibly amped up its missile defenses against possible US airstrikes.

May 15 11:37

Lloyd Blankfein Is A Trade Warrior Now

The fallout from the collapse of the trade deal with China has created some unlikely bedfellows among those who have publicly backed President Trump's decision to push for the "great" trade deal that he promised - or walk away.

That dynamic was on full display Wednesday morning when Steve Bannon appeared on CNBC to discuss the importance of Trump's trade fight, and guest host Tom Friedman - yes, that Tom Friedman - said he agreed with the entirety of Bannon's position.

Even Chuck Schumer has urged Trump not to capitulate and to make sure the US gets the best deal possible. Mitch McConnell, on the other hand, has stuck to somberly reminding the world that a trade war would produce 'no winners'.

May 15 11:36

RaboBank: "Some In The Market Are Starting To Get The Real Reason Behind The Trade War"

The ‘play of the day’ above comes against a backdrop of markets trying to accentuate the positive in the latest US-China trade war deterioration. Indeed, Moody’s has declared a trade deal will still be done and a Bloomberg survey of US economists shows around two thirds think a deal will be signed by year-end, a fifth by 2020, and only 13% don’t see a deal for at least five years. Field Marshall, please take these men and women out and have them shot, there’s a good chap.

May 15 11:34

Global Trade Collapsing To Depression Levels

With the trade war between the US and China re-escalating once more, investors are again casting frightened glances at declining global trade volumes, which as Bloomberg writes today, "threaten to upend the global economy’s much-anticipated rebound and could even throw its decade-long expansion into doubt if the conflict spirals out of control."

"Just as tentative signs appeared that a recovery is taking hold, trade tensions have re-emerged as a credible and significant threat to the business cycle," said Morgan Stanley's chief economist, Chetan Ahya, highlighting a “serious impact on corporate confidence" from the tariff feud.

To be sure, even before the latest trade war round, global growth and trade were already suffering, confirmed most recently by last night's dismal China economic data, which showed industrial output, retail sales and investment all sliding in April by more than economists forecast.

May 15 11:26

'We ALWAYS win!' Trump boasts that he'll prevail over Xi in 'little squabble' as he threatens even more tariffs and tells Americans to buy products 'from someplace else other than China'

Donald Trump predicted Tuesday that the U.S. will notch a trade victory in what he described as 'a little squabble with China.'

Speaking to reporters as he left the White House, the president grinned as he asked: 'You want to know something? You want to know something? We always win.'

And Trump warned that he might stack even more tariffs on a growing pile of anti-China duties in order to put additional pressure on Beijing.

'We're looking at it very strongly,' Trump said.

'This has never happened to China before,' he said of the already painful tariff regime that shows no sign of letting up.

May 15 10:49

Sudan seizes Morocco plane filled with gold

Sudan’s Rapid Support Forces have seized 241 kilograms of gold from a Moroccan plane flying from the country’s River Nile state, which landed in the capital Khartoum.

Major General Othman Mohamed said that only 93 kilograms of the gold on board the plane has an export license, while the legal status of the remaining quantity has not been clarified. The Major General explained: “We must deliver this large amount [of gold] to the Bank of Sudan, and then we will go on with the necessary legal procedures.”

Mohamed did not name the private Moroccan company which had allowed the exportation of the gold, nor did he give further details. However, he pointed out that the status of the company in Sudan is legal and registered.

May 15 10:45

Middle East tensions push up oil prices

Tensions in the Middle East appear to be pushing up the price of oil, with a barrel of Brent crude now costing $71.75, an increase of 1.9 per cent. The cost of a barrel of US crude, meanwhile, is now $62.48, up 2.6 per cent.

The increases came after Saudi Arabia’s Energy Minister, Khaled Al-Falih, announced that a terrorist attack targeted two installations on Tuesday morning which pump oil through a pipeline from oil fields in the Kingdom’s Eastern Province to Yanbu Port on the west coast. The official added that Saudi Aramco will assess the damage and repair the plants. He stressed that Saudi oil production and exports will continue without interruption.

May 15 10:28

The Tariff Issue

Wherever I look at US policy, foreign or domestic, I see only insanity, ignorance, and incompetence.

Take the issue of tariffs, which is Trump’s mistaken approach to bringing the jobs back home. The tariff “solution” overlooks that offshored US production counts as imports when US firms bring their goods into the US to be marketed.

May 15 10:23

Trump Seeks New $15 Billion Subsidy To Protect Farmers From His Own Trade War

President Donald Trump is seeking an additional $15 billion in U.S. subsidies in an effort to protect farmers from the devastating impact of his trade war with China. That’s on top of $12 billion already earmarked for the farmers to help them weather the fallout.

That would be an additional bill for U.S. taxpayers already shouldering the cost of increased tariffs in the form of higher costs for products and parts from China.

Trump revealed the subsidy figure in a tweet Friday. He suggested the government use the funds to buy agricultural products to ship to other nations for humanitarian aid, though setting up such a system would be extremely complicated. In his most recent budget proposal, Trump proposed eliminating three food aid programs, Politico noted.

May 15 10:20

Bernie Sanders Delivers Online Address: 'We Must Not Go to War With Iran'

Source: Common Dreams

Democratic presidential candidate Sen. Bernie Sanders on Tuesday came out forcefully against the Trump administration angling the United States into another costly and unnecessary war of choice in the Middle East—this time against Iran—delivering an online address in which he warned that any military action without approval from Congress would be an "unconstitutional and illegal" breach of office.

"Let me be as clear as I can be: a war with Iran would be an absolute disaster," said Sanders in the roughly six-minute speech. "Sixteen years ago, the United States committed one of the worst foreign policy blunders in the history of our country by attacking Iraq. That war was sold to the American people based on a series of lies about weapons of mass destruction. We should remember that one of the leading advocates for that war was John Bolton."

Webmaster's Commentary: 

Bernie, Mike and I are with you one thousand percent on this issue, although there are other issues where we may not agree.

May 15 10:17

U.S. senators offer bill targeting Russia-Germany pipeline

A group of Republican and Democratic U.S. senators introduced legislation on Tuesday seeking sanctions targeting the Nord Stream 2, a planned gas pipeline from Russia to Germany under fire from the United States and some European Union countries.

The bill introduced by Republican Senators Ted Cruz, John Barrasso and Tom Cotton and Democrat Jeanne Shaheen, seeks to impose travel and financial sanctions on companies and individuals involved in constructing the pipeline.

The legislation reflects continued U.S. concerns over Russian influence in Europe, but the measure is many steps from becoming law. It would need to pass both the Senate and House of Representatives and be signed by President Donald Trump to go into effect.

May 15 10:16

HOUTHIS STRIKE KEY SAUDI OIL PIPELINE AMID GROWING CONCERN OVER NEARING US-IRANIAN ARMED CONFLICT

On May 14, Saudi Arabia halted pumping on its 1,200km-long East-West pipeline after it had been targeted by suicide unmanned aerial vehicles (UAVs).

The kingdom’s Minister of Energy, Industry and Mineral Resources Khalid al-Falih confirmed the attack on the pipeline, which carries crude oil from the country’s main eastern oil fields to the Red Sea port city of Yanbu in the western part of the country. He described the attack as “an act of terrorism” and said that it “proves the importance of confronting all terrorist organizations.”

The targeted facilities were located in the towns of al-Duwadimi and Afif. No casualties were reported.

The energy minister stressed that Saudi oil production and exports will still continue uninterrupted. Despite this, global oil prices rose after the incident.

May 15 10:04

Crazy Not! Much Higher Gold Prices

Egon von Greyerz discussed “3 Dozen Reasons to Hold Gold” and mentioned price targets of $30,000 for gold and $3,000 for silver. Gold sells for $1,310 and silver sells in the mid-$15s. His numbers suggest that gold could increase by a factor of 20 and silver by nearly 200. For perspective, refer to the table below.

May 15 10:02

China-US trade war heats up: 3 reasons it won’t cool down anytime soon

The truce in the U.S.-China trade war is in tatters.

China said on May 13 that it will impose new tariffs on a range of American goods in retaliation for President Donald Trump’s decision to raise duties on US$200 billion in Chinese imports.

Although trade talks may continue, for now the trade war that Trump began in January 2018 is back on, which will mean more economic pain for companies and consumers in both the U.S. and China.

As an economist who focuses on international trade, I believe there are three reasons the conflict could continue for a long time.

May 15 09:35

The US-China Trade Scuffle Will Kick Off the Great Meltdown

The be-Muellered, bothered, and bewildered American public may find US-China trade talks about as interesting as a rain delay in an Orioles-Chisox game, but the Friday collapse of negotiations may be marked by historians as the day that the global economy died. The Big Box blue-light-special orgy of bargain shopping ran about thirty years, with China exuberantly pumping out cheap consumer goods to feed the US beast-of-Mammon. Americans happily payed for it all with IOUs based on long daisy chains of previous IOUs. Tom Friedman of The New York Times said it would last forever. Alas….

May 15 09:35

The U.S. And China Will Never Return to the Ways Things Were. That World Is Over.

Today’s the first day in a long time financial markets appear willing to at least consider the reality of the geopolitical situation on the ground for what it is, as opposed to what most people would like it to be. As I’ve noted for months, the “trade war” is just one battle in a much larger, increasingly unstable struggle between the U.S. and China for global power and leverage to shape the next paradigm of world history.

May 15 09:19

Medical Insurance Companies Can Decide Who Lives and Dies

Whistleblower Wendell Potter says the death of a young woman denied care by the insurance company he worked for was a turning point in his life; he says these practices are still taking place under the Affordable Care Act

May 15 09:19

It's time to restore US-Russia ties, Putin tells Pompeo

Russian President Vladimir Putin told US Secretary of State Mike Pompeo that he had the impression President Donald Trump wanted to restore relations between the US and Russia after the Mueller inquiry exonerated him.

“As you know, just a few days ago, I had the pleasure of talking with the US president on the phone,” Putin told Pompeo on Tuesday, as the two met in Sochi. “I got the impression that the [US] president was inclined to re-establish Russian-American relations and contacts to resolve together the issues that are of mutual interest to us.”

May 15 06:33

Your Pension May Be Monetized

May 14 16:52

"We're Gonna Need More Bagholders..."

May 14 11:56

First assessment blames Iran for Middle East ship explosions, official says

An American military team assessing blasts that damaged four commercial ships off the coast of the United Arab Emirates (UAE) Sunday has blamed Iran or Iranian-backed proxies using explosive charges, a source told Fox News on Monday evening.

Each ship had a 5-to-10-foot hole in it, near or just below the water line, a U.S. official told The Associated Press. A Norwegian-flagged vessel, two Saudi oil tankers and a bunkering tanker flagged in Shariah, one of the UAE's seven emirates, all suffered similar damage Sunday.

The UAE asked the U.S. to help investigate the damage, which Gulf officials have characterized as sabotage. UAE's state media said Sunday there had been "no injuries or fatalities on board the vessels" and "no spillage of harmful chemicals or fuel."

The U.S. has warned ships that "Iran or its proxies" could be targeting maritime traffic in the region, and America has moved additional ships and aircraft into the region.

Webmaster's Commentary: 

So, there is zero surveillance footage in any of these cases, but the US military has already accused Iran of this?!?

Anyone out there remember the firm accusation of President Bush, when he claimed that Iraq had "weapons of mass destruction"?!?

This accusation is on par with that; if the Iranians had really bombed these ships, with the intention of never having them seaworthy again, they would have left NONE of these ships as mildly damaged as they actually are, and would have zotted the heck out of them.

May 14 11:27

Houthi Drones Attack Aramco Pipeline Booster Stations

Yemen's Iran-backed Houthi rebels carried out drone attacks on two Aramco pipeline booster stations, a strike that was intended to disrupt world oil supplies, according to Saudi Energy Minister Khalid al-Falih.

Al-Falih told Saudi-funded news agency Al-Arabiya that the attacks targeted two pipeline booster stations between the Eastern province and the city of Yanbu.

Webmaster's Commentary: 

Notice that the second set of words in this article are "Iran-backed Houthi rebels"

So, by creating the syntax in this manner the first thoughts should be, "Houthi Rebels are bad, Saudi Arabia is good", in their reckless bombings of what is left of Yemeni schools, hospitals, infrastructure. children, infants, and the medically fragile elderly.

But of course, that is the reality about to where this article dare not go; it's like this reality is Kryptonite, because any disruption of oil supplies will make everything more costly. ]

But a decisions has obviously been made, that all Yemeni people killed and maimed by this genocide, are expendable, anyway; that at least is where Crown Prince bin Salman and President Trump are.

In the immortal words of Tony Soprano "Fuggetaboutit!!", when it comes to a lasting ceasefire, and a negotiated settlement.

That the Butcher of Yemen, Crown Prince Mohamed bin Salman, is getting consistent help from his American allies, under the watch of President Trump, means that Americans - all of us - are complicit in this

slaughter, until the US finally does the right thing and leaves.

This never was our fight to begin with.

And, unsurprisingly, oil jolted up after the news of the drone bombing.

https://www.blacklistednews.com/article/72668/oil-prices-jump-on-drone-attack-on-saudi-aramco.htmlOil prices jump after dron attack on Saudi Aramco.

May 14 11:00

Senior Admin Official: "A Trade Deal Isn't Close; US Could Be In For A Long Trade War"

Despite a flurry of meandering hot-then-cold trade war tweets from President Trump, US futures have been powering higher all morning. But then along came Axios to pour cold water all over the growing trade-deal optimism after the stock market's worst one-day selloff since January.

According to Axios, senior administration officials told senior White House reporter Jonathan Swan that a trade deal with China "isn't close" and that the US "could be in for a long trade war."

Swans' sources said the differences between the two sides "are so profound taut, based on his read of the situation, he can't see the fight getting resolved before the end of the year."

That's a much longer timeline than the three-four weeks Trump touted Monday night, who touted the possibility that the a meeting with President Xi at the G-20 in Japan next month could yield an agreement.

Webmaster's Commentary: 

Perhaps a slight bit of flexibility on both sides, might work to get these talks moving again; but until that happens, get really ready for a really tough economic time ahead.

SHARE THIS ARTICLE WITH YOUR SOCIAL MEDIA