Canary On The HIBOR——Dollar Shortage Pressures Mounting in Hong Kong
The difference of Hong Kong and HKD is one of time; it mostly sat out 2015’s “rising dollar” but is apparently unable to resist the “something” that has been building since this summer (July). That would seem to indicate, quite strongly, escalation. And while US markets continue to be blissfully unconcerned, you can be sure that there is no such sanguinity and complacency right now in Asia. To further highlight that point, as well as to bring it all back to the “dollar” again, Japan basis swaps dropped today to a new negative low. Rising dollar = dollar shortage = global money shortage. Hong Kong is just the latest to be caught up in it, and that is significant.
Gold Price Skyrockets in India after Currency Ban
The economic and social mess that Modi has created is unprecedented. It will go down in history as an epitome of naivety and arrogance due to Modi’s self-centered desire to increase tax-collection at any cost…..Fear has gripped the bullion market, for one is deemed to be guilty until proven otherwise. People with perfectly legal cash are afraid of cameras recording their purchases and having to pay outrageous bribes. After an adjustment period people will buy more — not less — gold. For now, the gold market has gone mostly underground with the gold price hovering around US$1,700 per ounce.
Wall Street Calling—-A Narrative For Every Season
As investors, we must understand the popular narrative and respect it as it is a formidable short- term force driving the market. That said, we also must understand whether there is logic and truth behind the narrative. In the late 1990’s, investors bought into the new economy narrative. By 2002, the market reminded them that the narrative was borne of greed not reality. Similarly, in the early to mid-2000’s real estate investors were lead to believe that real-estate prices never decline. The bottom line is that one should respect the narrative and its ability to propel the market higher. However, think for yourself and truly understand the pros and cons of Trumps proposals as well as the daunting odds of enacting them. Your investing success is dependent on determining whether the narrative is the truth or simply a rationalization to provide comfort and control when desperately needed.
The Coming Collapse Of The World’s Biggest Economy—-Europe
The Social Democratic, Christian Democratic, Socialist, Communist, and similar parties have ruled Europe since the end of World War 2. They’re all pretty similar in that they promote massive welfare benefits, strong labor unions, large state bureaucracies, very high taxes, strict regulations, and an atmosphere of Cultural Marxism. Then, every few generations, the voters react and install a “fascist” regime. These keep most of the socialist characteristics but tend to be supported by, and friendly to, Big Business. That, and they add on nationalism, xenophobia, and militarism….
Italy: The Next Stop on Populism’s Global March
The founder of Italy’s populist 5 Star Movement showed off his growing confidence in a video posted ahead of Sunday’s pivotal national referendum. “An era is going up in flames,” Beppe Grillo said as Donald Trump’s Election Night acceptance speech played in the background. “It’s the risk-takers, the stubborn, the barbarians who will carry the world forward…We will end up in government, and they will be asking, ‘How did they do it?’ ”
Housing Update: Eight Bubblicious Markets
Both easy mortgage credit (Bush: Bubble 1.0) and the manufactured crushing of interest rates (Obama: Bubble 2.0) do the exact same thing to real estate (and other debt-backed assets). They promote house price inflation. In other words, they allow somebody to pay more for a house using the same amount of income. Both the Bush and Obama administrations oversaw manufactured housing bubbles. And for numerous reasons I have argued for two-years I believe this bubble is far more dangerous that the last one.
The Uselessness of NATO
The latest entrant into the NATO alliance, Montenegro, underscores both the absurdity of this archaic cold war relic and the dangers it poses to the United States. Yes, Montenegro is a real country, kind of: with a little over 600,000 citizens, and around 5,000 square miles, it has an army of under 2,000 soldiers and sailors. During the medieval era it was divided into warring clans who were unified only by their fierce opposition to Ottoman rule: the boundaries, and the rulers who presided over what became a duchy, were fluid, like the boundaries of neighboring Balkan states whose instability and propensity for conflict gave rise to the phrase “balkanization” as a synonym for volatility…..
How To Become Fake News—–Doubt The Washington Post or New York Times
The mainstream U.S. media’s hysteria over “fake news” has reached its logical (or illogical) zenith, a McCarthyistic black-listing of honest journalism that simply shows professional skepticism toward Officialdom, including what’s said by U.S. government officials and what’s written in The Washington Post and New York Times. Apparently, to show skepticism now opens you to accusations of disseminating “Russian propaganda” or being a “useful idiot” or some similar ugly smear reminiscent of the old Cold War. Now that we have entered a New Cold War, I suppose it makes sense that we should expect a New McCarthyism.
Viva Cuba Libre!
Fidel Castro was regarded as a revolutionary and a “change agent.” But he is better understood as a throwback, more of a counter-revolutionary than a real revolutionary. The real revolution in human affairs happened long before he was born… and is still going on – the revolution led by civilized free-market capitalism.
After Brexit And The Donald—–The Italian Job And The French Connection
Perhaps the true underlying message is that globalization, for all of its merits, simply didn’t work out the way it was designed on paper. The hollowing out of the middle class is anything but contained to one country or even a handful of them; it too is a global phenomenon as evidenced by the breadth of the countermovement. It can’t help that the monetary policy response has not only widened the global inequality gap further, but managed to do so in such a deeply insulting way as to incite economic riots. When, thus, does political risk become economic, financial and the dreaded systemic? And how far does the contagion spread? Technocrats under the influence of truth serum must be asking themselves if populism will be contained within the developed world or spread to the likes of Cuba and Venezuela. Is blood shed within the realm of possibilities? Has it really come to that?
