Category Archives: Trade

Oil, Military And Nuclear Tech: Russia’s Influence In Africa, by Vanand Meliksetian

Russia, China, and the US are scrambling to secure Africa’s resources. From Vanand Meliksetian at oilprice.com:

Virtually all great powers have set their eyes on Africa as the continent’s global importance grows. Its population is set to double by 2050 and its economy is expected to expand significantly alongside its energy consumption. It is these projections that have driven Russia to invest heavily in strong relations in the region for when the continent’s explosive growth takes off. The Kremlin’s goal is to emulate China’s success in fostering economic, diplomatic, and military links with Africa. To become an important partner, Moscow is organizing the first-ever Russia-Africa summit on 23-24 October.

Sochi, Russia’s de facto capital after Moscow, will host the summit where Egypt’s President Sisi is invited as co-chair. The event is a major test for Russia’s corps diplomatique and the country’s rise as a global power. To showcase the ineffectiveness of Western sanctions and their failure in isolating Moscow, 50 heads of state are invited to the summit.

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The Beginning of the End, by Sven Henrich

Never have central banks and the president labored so mightily to keep the stock market aloft. From Sven Henrich at northmantrader.com:

They sure are trying their best. To do what? To goose markets higher. It’s been quite the spectacle all year, but this Friday sure took the cake. The entire week had been a giant jerk fest of sudden rips and dips as headline chasing algos were ripping through support and resistance levels unleashed like fat kids at the candy shop. But this Friday was something else, almost designed to have markets overdose on an insulin spike.

Ever more hyped up on an impending China deal, every meeting, and movement of negotiators caused market spikes, a Trump tweet about “warm feelings”, a $82.7B repo operation by the Fed to keep things tidy, a sudden out of the blue $60B/month Treasury buying operation announced by the Fed, multiple Fed speakers to boot, what a scene.

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Geopolitical Signals Of Global Economic Crisis Abound, by Brandon Smith

The globalists want crises, which includes an economic crisis. From Brandon Smith at alt-market.com:

As I write this, news feeds are buzzing with questions and confusion over the October US/China trade talks. In September there was a massive propaganda campaign within the mainstream media to push the notion that a deal with China was imminent, which boosted markets otherwise on the verge of a plunge due to a hailstorm of bad financial news. This media campaign also indicated to me that there would be no deal in October – best case, there will be an announcement of “progress” and a temporary pause in tariffs, which will fall apart once again in a month’s time. Worst case scenario, the talks will falter before they ever really begin. Either way, the trade war will continue well into next year.

As I predicted in my article ‘The Ugly Truth About The Trade War’ in September:

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Oh My God, They Killed CNY! You Bastards, by Michael Every

Is Trump withdrawing from the Middle East to better focus US efforts against China? From Michael Every at Rabobank via zerohedge.com:

Cartman Blanche

Tipping points are funny things in markets and in life in general. Sometimes you see them clearly ahead of time, sometimes only in hindsight. Sometimes you still don’t see them even afterwards. But they are there regardless.

Most Americans have paid no attention at all to developments in China aside from not liking tariffs. But touch basketball and suddenly things get serious! Daryl Morey, general manager of the Houston Rockets, recently tweeted support for pro-democracy protests in Hong Kong, and the immediate reaction was China–an avid NBA market of 500m–banning the team. Morey deleted the tweet and made a very humble apology, as did the Rockets, which didn’t assuage Chinese fury; but it did create a backlash against the Rockets from the US public, who are pro-democracy, and from US politicians, who are anti-China, and whom are noticing that the outspoken-on-domestic-politics NBA runs a training camp in Xinjiang(!) Indeed, there is new focus on the issue of US firms ‘having to kowtow to Beijing’. Is it a tipping point in US-China relations as trade talks begin? Hard to say. But it’s a discussion the average American will be part of for once.

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Nixon Shock, the Reserve Currency Curse, and a Pending Dollar Crisis, by Mish Shedlock

When Nixon closed the gold window in 1971, he opened a Pandora’s box of economic evils. From Mish Shedlock at moneymaven.io:

Many problems today including deficit spending, trade deficits, and income inequality have their roots in 1971.

Nixon Shock

A reader asks “What Forced Nixon to Close the Gold Window in 1971?”

The answer is called “Nixon Shock“.

Nixon wanted to fight the war in Vietnam, not raise taxes, and not hike interest rates to finance it.

Arthur Burns, not Volcker was at the Fed.

American economist Barry Eichengreen summarized: “It costs only a few cents for the Bureau of Engraving and Printing to produce a $100 bill, but other countries had to pony up $100 of actual goods in order to obtain one”.

Vietnam War and the Dollar Exodus Beginning

The dollar exodus had its beginnings way back in February 1965 when President Charles de Gaulle announced his intention to exchange its U.S. dollar reserves for gold at the official exchange rate of $35 per ounce.

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An Inflationary Depression, by Alasdair Macleod

The current times bears some ominous parallels to the 1929-1932 period. From Alasdair Macleod at goldmoney.com:

Financial markets are ignoring bearish developments in international trade, which coincide with the end of a long expansionary phase for credit. Both empirical evidence from the one occasion these conditions existed in the past and reasoned theory suggest the consequences of this collective folly will be enormous, undermining both financial asset values and fiat currencies.

The last time this coincidence occurred was 1929-32, leading into the great depression, when prices for commodities and output prices for consumer goods fell heavily. With unsound money and a central banking determination to maintain prices, depression conditions will be concealed by monetary expansion, but still exist, nonetheless.

Introduction

The unfortunate souls who are beholden to macroeconomics will read this article’s headline as a contradiction, because they regard inflation as a stimulant and a depression as the consequence of deflation, the opposite of inflation.

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Beware Awakening China, by Eric S. Margolis

In a relatively short time China has reinstated itself as a super power, and the US is going to have to live with it. From Eric Margolis at lewrockwell.com:

“China is a sleeping giant.  Let her sleep, for when she wakes she will move the world.”  Napoleon

France’s future emperor never saw China, but he was wise enough to understand its immense latent strength and future importance.  Two centuries after making this prediction, China has proved the Corsican correct.

Last week, China feted the 70th anniversary of the Communist takeover of the mainland.  It was a gala demonstration of the nation’s military and social power.  I recall watching the 60th anniversary celebration in Hong Kong and wondering at how amazingly far China had come since I first went there in the early 1980’s.

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