Thursday, March 5, 2015
MARC FABER - World Economy Grinding to a Halt. Don't Trade With Leverage
The world was slow to wake up to the new reality in which China is now the de facto IMF sovereign backstop, as Zero Hedge described two weeks ago in “China Prepares To Bailout Russia” when we noted that a PBOC swap-line was meant to reduce the role of the US dollar if China and Russia need to help each other overcome a liquidity squeeze, something we first noted over two months ago in “China, Russia Sign CNY150 Billion Local-Currency Swap As Plunging Oil Prices Sting Putin.”
In fact, it was only this week that Bloomberg reported that “China Offers Russia Help With Currency Swap Suggestion.” But in order to fully backstop Russia away from a SWIFT-world in which the dollar reigns supreme, one extra step was necessary: the launching of direct FX trade involving the Russian and Chinese currencies, either spot or forward – a move away from purely theoretical bilateral FX trade agreements – which would not only enable and make direct currency trading more efficient by sidestepping the dollar entirely, but also allow Russian companies to budget in Chinese Yuan terms. It is no surprise then that this is precisely the missing step that was announced overnight, and will be implemented starting Monday.Fasten your seatbelts; 2015 will be a whirlwind pitting China, Russia and Iran against what I have described as the Empire of Chaos.
So yes – it will be all about further moves towards the integration of Eurasia as the US is progressively squeezed out of Eurasia. We will see a complex geostrategic interplay progressively undermining the hegemony of the US dollar as a reserve currency and, most of all, the petrodollar.
For all the immense challenges the Chinese face, all over Beijing it’s easy to detect unmistakable signs of a self-assured, self-confident, fully emerged commercial superpower. President Xi Jinping and the current leadership will keep investing heavily in the urbanization drive and the fight against corruption, including at the highest levels of the Chinese Communist Party (CCP). Internationally, the Chinese will accelerate their overwhelming push for new ‘Silk Roads’ – both overland and maritime – which will underpin the long-term Chinese master strategy of unifying Eurasia with trade and commerce. "marc faber" china u.s. "united states" usa america economy states recession industry commodity growth 2015 2016 investment "investment strategy" media future prediction bank banking "savings account" savings chinese portfolio leverage property "real estate" gold silver "silver bullion" shares bonds "stock market" sleep happy happiness demand australia ANZ trading hk "hong kong" asia bubble consumer shopping collapse "elite nwo agenda" gold mining costs gold cash wealth earnings trouble federal reserve fiat currency money printing prepper alex jones rant crazy gerald celente trends in the news debt gdp u.s. dollar collapse louis farrakhan anonymous max keiser value how to make money rich dad poor dad interest rate jp morgan negative yield
The absolutely stunning decision by the Swiss National Bank to decouple from the euro has triggered billions of dollars worth of losses all over the globe. Russia’s increase is the most dramatic, according to the recent report from the IMF. The Russian central bank has almost doubled its gold holdings within the last 5 years to 1,094.8 tonnes in June of this year. China’s Central Bank followed with an increase of 75% from its holdings in 2009.
If you’re like most Americans, then you are absolutely loving the price you paid this week for a gallon of gas. Just a couple of years ago it was not uncommon to see a $75 price tag for filling up your car. Today, you might be driving off for half that amount.
On the surface the recent drop in the price of oil has been a huge boost to America’s pocket books. But according to some analysts we shouldn’t be to quick to celebrate. The U.S. Oil and Gas industry has seen incredible job growth during the recession, with nearly 800,000 new jobs being attributed to domestic fracking and drilling expansion. At over $100 barrel, there was plenty of money to go around.
Armstrong, who correctly predicted the 1987 Black Monday crash as well as the 1998 Russian financial collapse, asserts that the downfall of the system will be its inability to gauge the anger that Americans currently feel towards their government.
The Baltic Dry Index (BDI) is used by economists and stock traders alike as a leading economic indicator because it predicts future economic activity. The index tracks in US dollars and measures global supply and demand for commodity shipments among bulk carriers including raw materials like lumber, coal, metallic ores, and grains.
Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.Dr. Doom also trades currencies and commodity futures like Gold and Oil.
Posted by Nicole Bourbaki