Why U.S. Economic ‘Statistics’ Get More and More Absurd – Jeff Nielson – Sprott Money News
March 26, 2015
Many recent commentaries have noted a distinct devolution in the numerical lies which the U.S. government calls its “economic statistics”. Numbers which used to be mere exaggerations (i.e. used to somewhat mirror the real world) have now become literally perverse: opposite to reality.
As U.S. “retail sales” collapsed at the end of last year (and now into this year) with a string of negative numbers; we’re told that somehow U.S. “consumer spending” surged by 4.3% in the fourth quarter of 2014, something which is mathematically impossible, since the two numbers must mirror each other.
With the U.S. economy showing even more obvious weakness than in previous years of this fantasy “recovery”; we’re supposed to believe that the U.S. economy just enjoyed its strongest quarters of growth in well over a decade. The economic lies are not merely far-fetched, they are totally ludicrous.
This begs the question: why pervert these “statistics” to such silly extremes? The answer will come immediately to readers the moment they turn on their business news, and hear about yet more “record highs” in the U.S.’s bubble-markets.
At this point; it’s necessary to turn the attention of readers to the themes of two previous commentaries which are of particular significance. The first commentary concerns the method by which all our markets are marched up and down like yo-yo’s, in near-perfect synchronicity – something which is absolutely/mathematically impossible in legitimate markets. Indeed, even in “rigged” markets there is only one means by which these markets can be led-by-the-nose, ever hour of every day: via a computerized Pied Piper.
The second commentary of note concerns the most likely time these bubble-markets will be torpedoed, allowing the sheep to be fleeced, and allowing Warren Buffett to ‘invest’ his hoard of money, which is now well in excess of $60 billion. Even in the Wonderland Matrix; no bubbles can be inflated forever. At some point the bubbles must be “popped”, or they will simply burst on their own – in an uncontrolled/uncontrollable manner.
Paul Craig Roberts – The United States Is Broke And Europe Looks To China As Insane U.S. Policymakers Push For War
March 28, 2015
With people around the world worried about the escalating conflicts in the Middle East and Ukraine, today former U.S. Treasury official, Dr. Paul Craig Roberts, warned King World News that the United States is broke and Europe is looking to China as insane U.S. policymakers push for war.
Eric King: “Dr. Roberts, the Chinese-led Asian Infrastructure Investment Bank (AIIB) has made tremendous inroads (with the Europeans). As you know, the UK, France, Italy, etc, joined. Countries are leaving the United States in droves here and looking to the East and saying, ‘Look, we understand you are protesting Washington DC, but we don’t hear you because we have to be part of this (AIIB) — your thoughts on that.”
Dr. Paul Craig Roberts: “That’s another example of where the world has decided that serving Washington doesn’t pay. And so the kind of enslaved, vassalage behavior of other governments toward Washington seems to be drawing to an end….
China wants to compel U.S. to engage it as an equal partner in AIIB
Author: M.K. Bhadrakumar March 26, 2015
The AIIB Charter is still under discussion. The media report that China is not seeking a veto in the decision-making comes as a pleasant surprise.
Equally, China is actively consulting other founding members (who now include U.K., Germany, France, Italy, etc). These would suggest that Beijing has a much bigger game plan of scattering the U.S.’ containment strategy. Clearly, the Trans-Pacific Partnership free-trade deal is already looking more absurd if China were to be kept out of it. The point is, AIIB gives financial underpinning for the ‘Belt and Road’ initiative, which now the European countries and Russia have embraced, as they expect much business spin-off.
China has said that its Silk Road projects are not to be confused as a latter-day Marshal Plan for developing countries, and that, on the contrary, the projects will be run on commercial terms. Which opens up enormous opportunities for participation by western companies. In geopolitical terms, therefore, China hopes that the ‘win-win’ spirit that permeates the AIIB and ‘Belt and Road’ will render ineffectual the American attempts to hem it in on the world stage and compel Washington to revisit a ‘new type of relations’ with China.
As for Bretton Woods, to my mind, China hopes that AIIB will force the pace of IMF reforms (which are stalled at the U.S. Congress for the past 4 years). China’s intention is not to destroy the current financial system but to seek a greater role for it in the decision-making and running of the institutions such as World Bank and IMF. China hopes to force a rethink on the part of the US as regards the IMF (ie, expand and reform the institution, accommodate the renminbi and so on.)
All things considered, therefore, I will not be surprised at all if at some point China decides to invite the U.S. to join the AIIB. The bottom line is that, increasingly as more and more indications of Chinese thinking become available, it appears to me that the AIIB is not really intended as an anti-American move (as many have caricatured it), but is more of an initiative that aims at compelling the U.S. incrementally to engage China as equal partner. China went the extra league to attract the western countries to join the AIIB, as that would put pressure on Washington. Indeed, there is much criticism within the U.S. itself that the Obama administration goofed up on the AIIB by clumsily attempting to throttle it in its cradle without comprehending the real thrust of the Chinese initiative – and getting splendidly isolated in the bargain.
How the Fed is ‘screwed,’ and what happens next
Jeff Cox | @JeffCoxCNBCcom
Friday, 27 Mar 2015 | 1:50 PM ET
Call it a box, or perhaps even a paradox, but the Federal Reserve finds itself in an uncomfortable position heading into its first rate-hiking cycle in nearly a decade.
A central bank that has prided itself on transparency during its ultra-easy cycle following the financial crisis is now doing an awkward dance with a market not quite sure what to make of the road to tightening financial conditions.
The essential problem is this: When the Fed could have raised rates it didn’t want to. Now that it wants to raise rates, it may not be able to, at least not without causing substantial turmoil in the same financial markets it has sought so strenuously to soothe.
The Fed hasn’t raised rates since June 2006.
"There will never be a good time to raise rates off zero when you’ve been there for six years," Peter Boockvar, chief market analyst at The Lindsey Group, told CNBC. "The Fed’s screwed, essentially."
The extension of the central bank’s dilemma, or box, or paradox, goes like this, as highlighted in Boockvar’s argument: Zero interest rates were a response to the worst U.S. economic crisis since the Great Depression. The economy, though, is far removed from its crisis days. The recession ended in mid-2009, gross domestic product has been on a steady if uninspiring march higher and financial markets, which have received by far the most benefit from Fed programs, have soared. While all that happened, the Fed could have begun the tightening process without disrupting the recovery.
Jim Sinclair’s Commentary
Maybe the West was a little too quick to count Russia out economically. Russia is still very much in the game.
Is Russia back in the game?
Matt Clinch | @mattclinch81
Friday, 27 Mar 2015 | 5:36 AM
With the ruble surging to new 2015 highs, a better-than-expected earnings report and a brief rally in the price of oil, analysts have been contemplating whether the Russian economy has turned a corner.
Benoit Anne, the head of emerging market strategy at Societe Generale said he was bullish on the Russian currency which gained around 1.7 percent against the dollar on Thursday before easing back lower on Friday morning.
"The ruble, I really like it. It’s actually trading on its own planet which, by the way, is a good thing these days," Anne told CNBC Thursday.
"The short term dynamics are much better, volatility is much lower. And it’s a behaved currency these days and the oil price up, that’s a good thing for the ruble."
Pierre Andurand, the managing partner and chief information officer of fund management firm Andurand Capital, predicts that oil prices will rise this year and told CNBC Thursday that this would benefit a Russia which doesn’t have "too much debt" and companies that are performing well.
A weaker dollar and higher oil prices have been the main driver for Russian assets this week as investors focus on tensions in Yemen and how it could affect a key trade route in the region. Russia is heavily reliant on the commodity for its oil and has also been hit by Western sanctions since the annexation of Crimea a year ago.
Russian stock markets have been fallen and the ruble was one of the worst-performing currencies of 2014 despite emergency measures by the country’s central bank. The currency has, nonetheless, seen a 20 percent rally from the lows seen in the depths of the crisis and the greenback was trading at 57.327 against the ruble on Friday morning.
Jim Sinclair’s Commentary
Some people would call this pilling on, I would call it making the playing field more even.
More countries say to join China-backed AIIB investment bank
SHANGHAI/RIO DE JANEIRO
(Reuters) – Russia, Australia and the Netherlands on Saturday became the latest three countries to say they plan to join the China-led Asian Infrastructure Investment Bank (AIIB), adding clout to an institution seen as enhancing China’s regional and global influence.
The AIIB, seen as a challenge to existing institutions the World Bank and Asian Development Bank, has drawn a cool response from the United States, despite which European U.S. allies including Britain, France, Germany and Italy have already announced they would join the bank.
Other countries such as Turkey and South Korea have also said they would join. Brazil, China’s top trading partner, said on Friday it would sign up and that there were no conditions set. "Brazil is very interested in participating in this initiative," the office of President Dilma Rousseff said in a statement.
Russian First Deputy Prime Minister Igor Shuvalov, speaking on Saturday at a forum in Boao on the southern Chinese island of Hainan, said the country plans to join the AIIB, according to the official Xinhua news agency.
Speaking at the same forum, Australian Finance Minister Mathias Cormann said the country was planning to apply to become a founding member, according to Xinhua.
And the Netherlands also plans to join, Dutch Prime Minister Mark Rutte said on his official Facebook page after a meeting with Chinese President Xi Jinping.
China’s Finance Ministry said earlier on Saturday Britain and Switzerland had been formally accepted as founding members of the AIIB, a day after Brazil accepted China’s invitation to join.