Крупнейший в Китае производитель рисовых пирогов и молока с вкусовыми наполнителями Want Want China Holdings отчитался о финансовых результатах за 2014 год. Так, чистая прибыль в отчетном периоде уменьшилась на 9,7% до $620,5 млн по сравнению с $687,3 млн годом ранее. Выручка за рассматриваемый период упала на 1,1% до $3,78 млрд. При этом компания снизила годовые дивиденды с 2,27 американского цента до 1,21 цента.
Want Want China Holdings, the Chinese snack food and beverage flagship controlled by Taiwan’s richest man Tsai Eng-Meng, warned shareholders today of declines in sales and profits during last year. After growing for about 20% annually in 2008-13, sales and profits for 2014 “may record a low single-digit percentage decrease due [...]
SINGAPORE, Sept 24 (Reuters) - Want Want China Holdings Ltd , the country's top food and beverage maker and distributor by market value, has obtained approval from the Taiwan stock exchange to delist its Taiwan depositary receipts, it said on Tuesday.
Follow ZeroHedge in Real-Time on FinancialJuice There are dates that go down in history and some will be remembered as landmark signals of changing times. Russia has the upper hand in Syria. The USA is not as gung-ho as they might have led the rest of the world to believe about starting another war. Russia and China have both given lessons of a preaching-tone on the way that theNational Security Agency has eavesdropped on the world and the Obama administration has gone haywire on giving secret information to the Israelis so that they too can exploit it. What has happened to the world? Now, one other date will probably go down in memory as a historic change of our times. That date will be today, Monday September 16thand the reopening of the joint North and South Korean industrial zone that has reopened its operations in Kaesongfive months after been closed down due to military tensions between both sides. In 2010 the sinking of a naval vessel that belonged to the South (that the latter blamed on its arch rival the North) created issues between both parties. The military tensions came to a head when a South Korean tourist was shot dead. At one time, it was the common belief that crushing your enemies was the only way in a dog-eat-dog world to do business. Reduce them to jittering rubble and pound them into dust to be scattered and forgotten was how business used to get done in the past. That was before the world realized that enemies are a good source of business themselves and if we want to be global rather than selling in our back-yard, you have to wear the smile of hypocrisy sometimes to sell to the people you hate. The two Koreas’ tale is one such story; living in each other’s backyard and for decades keeping them at bay. Now they have got their acts together and are almost moving in with each other. Oscar Wilde once said ‘always forgive your enemies, nothing annoys them so much’. How very true. I am certain there are a few people we would all like to annoy just as much. Kaesong Industrial Complex: the Two Koreas Kaesong So, maybe the re-opening of the border and the industrial zone inKaesong is the forgiveness to the other side that will crush the opponent or it’s a world gone mad in which North Korea has come to realize that it needs its neighbor and vice-versa. Since April Kaesong has been a ghost town, devoid of the hordes of Koreans working there. There were 53, 000 North Korean workers back then until they were pulled out. Today, 820 South Koreans (businessmen and workers) crossed over the border again and it’s a clear sign of thawing in the relations in the on-going tale between the two countries. There are 123 companies from South Korea that manufacture in Kaesong, making household goods and appliances. That brings in about $2 billion per year in terms of trade for the North. It also pays roughly $80 million in wages for North Koreans too. Wages But, it should be remembered that wages are paid to the North Korean state and in good organized and centralized fashion, it’s the state that pays the workers after taking its hefty cut. Statistics on minimum wages or average salaries are not issued by the North-Korean state, but analysts have made estimates (based upon reports of foreign visitors, for example). Wages in North Korean stood at between 50 and 100 won per month in the 1980s. Most people earned about 70 wan on average. By 2000, that had reached an average of 100 wan per month. 100 wan works out to roughly 0.0924 US Dollars. 100 wan is the average salary of an unskilled worker in North Korea. A party official would earn two to three times that amount. This is the official estimated salary that the state provides the people with along with rations to live on. But, many North Koreans work outside of the state sector in order to earn more than the basic subsistence amount that is provided. It is possible (according to reports) that some may earn today about $30 per month if they have influence in North Korea. Just having a small shop will bring in some $100 per month. Businessmen that are involved in manufacturing and that won workshops may have incomes of up to $500 per month. However this is only true for a very small percentage of the population. It is also impossible to obtain anything more than an estimate and the figures cannot be proved for certain. Unification or Unity After the opening of Kaesong today once again, North Korea stated via the state-run news agency KCNA: “The Korean peninsula's peace and peaceful reunification is our republic's consistent and firm stance”. Kaesong has long been seen as a showcase for the perfect reason to reunite the two Koreas. The South provides its know-how and its technological prowess, while the North provides the slave labor to manufacture that. Kaesong has existed for a decade now and was launched in 2003. It was South Korea that provided the financing. The South Korean Ministry of Unification has been attempting to bring both sides into a close dialogue since 1998, promoting trade exchanges and negotiations for cooperation. The Ministry was downsized in the wake of the financial crisis in 2008. The target would be the unification of the two nations, which might seem highly unlikely both in the past and still today. But, if the two parties actually work more closely together, then that would be a step in the right direction. Unite them perhaps not; become more liberal in their reactions towards and trade with each other is a different matter. Working together and tying the two countries in a common project such as Kaesong will inevitably lead to greater trust, which will in turn open North Korea to the rest of the world. Cutting off trade between the two countries would mean forgoing $230 million imports that are ordered by the South from the North. The North also provides $50-million worth of textiles for the South. Being stopped from using South Korean waters would also mean that merchant and cargo ships from North Korea would have to make detours, involving increased use of fuel and therefore would result in greater costs that the poverty-stricken North already wouldn’t be able to put up with. Both sides have everything to gain. Just last spring North Korea made threats that it would attack South Korea and also the USA (preemptive nuclear attacks). But, the North has been out of business for so long and isolated economically that it has no idea of how to do business. It is hardly known for its skills in diplomacy. Threatening trade partners and then backing down and carrying on as usual means that people are wary of the volatility of the North and that’s bad for business. Kaesong should have held a fair to attract foreign investors inOctober this year. Some are doubtful of wishing to invest in a country that has a high-rate of volatility and for which it is almost impossible to determine what road they will be taking in the next few months and years. But, there are some, the most adventurous perhaps, that have taken the plunge into North Korea (notably the Netherlands). The scene of the two Koreas is straight out of the Charles Dickens novel, a Tale of Two Cities. North Korea and South Korea have spent the past decades living a life of antagonistic difference that has unfurled an acrimonious and until-now ceaseless hatred between the two countries, where there has been an illusionary belief that each side was better than the other: “It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair”. Both have believed that they had the best of times in their own country. Both believed that it was the worst of times over the border for the others. Today that has changed and the epoch of belief is the idea that working together can only be beneficial to both North and South Korea. It may certainly be an epoch of incredulity not only for the Koreans but for the rest of the world. What on earth will the world think of two arch-enemies that will be working together in a like-minded route to prosperity together? Septaper Will Open Floodgates | How Sinister is the State? | Food: Walking the Breadline | Obama NOT Worst President in reply to Obama: Worst President in US History? Obama's Corporate Grand Bargain Death of the Dollar | Joseph Stiglitz was Right: Suicide | China Injects Cash in Bid to Improve Liquidity Technical Analysis: Bear Expanding Triangle | Bull Expanding Triangle | Bull Falling Wedge | Bear Rising Wedge | High & Tight Flag
Mark Weisbrot The Guardian Unlimited, September 18, 2013 En Español | Em Português See article on original website Yesterday’s cancellation of Brazilian President Dilma Rousseff’s state visit to the White House, scheduled for next month, came as little surprise. Documents leaked by Edward Snowden, and reported by Glenn Greenwald and TV Globo, had caused an uproar in Brazil. According to the documents and reports, the U.S. government had spied on Dilma’s personal communications, and had targeted the computer systems of Brazil’s Petrobras, the big oil company that is majority-owned by the state. TV Globo’s report indicated that there was information in the targeted Petrobas computer network that could be very valuable to foreign oil companies. Former President Lula da Silva said that Obama should “personally apologize to the world,” and Dilma also demanded a full public apology – which was not forthcoming. The rift with Brazil comes at a time of worsening U.S. relations with Latin America, and especially South America. It is indicative of a much deeper problem. The administration’s refusal to recognize the results of the Venezuelan elections in April of this year, despite the lack of doubt about the results and in stark opposition to the rest of the region, displayed an aggressiveness that Washington hadn’t shown since it aided the 2002 Venezuelan coup. It brought a sharp rebuke from South America, including Lula and Dilma. Less than two months later U.S. Secretary of State John Kerry launched a new “détente,” meeting with his Venezuelan counterpart Elías Jaua in the first such high-level meeting in memory, and implicitly recognizing the election results. But new hopes were quickly dashed when several European governments, clearly acting on behalf of the United States, forced down President Evo Morales’ plane in July. “They´ve definitely gone crazy,” President Cristina Kirchner tweeted, and UNASUR (the Union of South American Nations) issued a strong denunciation. The gross violation of international law and diplomatic norms was another flamboyant display of Washington’s lack of respect for the region. It seems that every month there is another indication of how little the Obama administration cares about improving relations. On July 24 the IMF, at the direction of the U.S. Treasury Department, abandoned its plan to support the Argentine government in its legal battle with “vulture funds.” The IMF had previously committed to filing a brief with the U.S. Supreme Court supporting the Argentine government. This was not out of love for Argentina, but because the lower court’s decision – which would try to prevent Argentina from paying 92 percent of its creditors in order to satisfy the vulture funds – was seen as a threat to future debt restructurings and therefore to the world financial system. But anti-Argentina lobbyists were allowed to prevail, even against the Treasury Department’s legitimate concern for international financial stability. There are structural reasons for the Obama administration’s repeated failures to accept the new reality of independent governments in the region. Although President Obama may want better relations, he is willing to spend about $2 in political capital to accomplish this. And that is not enough. When he tried to appoint an ambassador to Venezuela in 2010, for example, Republicans (including the office of then-Senator Richard Lugar) successfully scuttled it. For President Obama, there are generally no electoral consequences from having bad relations with Latin America. Unlike Afghanistan, Pakistan, Syria, or other areas of armed conflict or potential war, there is no imminent danger that something could blow up in his face, and cause political harm to his administration or party. The main electoral pressure comes from those who want to more aggressively oppose the left governments – e.g. right-wing Florida Cuban-Americans and their allies in Congress, who currently prevail in the House. Most of the foreign policy establishment doesn’t care about the region at all, and the ones who do mainly share the view that the leftward shift is a temporary thing that can and should be reversed. In the meantime Washington is expanding its military presence where it has control (e.g. Honduras), and is ready to support the overthrow of left governments when the opportunity arises (Honduras in 2009, and Paraguay last year). Back in 1972, President Richard Nixon made a historic visit to China, which opened a new era of U.S.-China relations. He expressed a number of reasons for the shift in policy: “We're doing the China thing to screw the Russians and help us in Vietnam and to keep the Japanese in line,” he told his national security adviser Henry Kissinger. But he had also recognized something important, some 22 years after the Chinese revolution: that country’s independence was not going to be reversed. Unfortunately, Washington has not yet reached the same conclusion about Latin America, and especially South America, whose “second independence” is perhaps one of the most important geopolitical changes in the world over the past 15 years. There is virtually no recognition among the foreign policy establishment here – both inside and outside of government – that something important has changed, and that the U.S. government must accept these changes and alter its policy accordingly. Until that happens, don’t expect U.S.–Latin American relations to get much warmer.
Residential real estate prices surged in China in August - up 18-19% in first-tier cities - as it appears the slowing of several tightening measures earlier in the year has sparked a full-fledged recovery in the bubble-growing in the Chinese property market. [Prices have once again surged after a temporary haitus] As The FT reports, some investors and analysts have started to express concern about whether China’s property market is veering into dangerous bubble territory, but the government has so far taken a much more dovish line. The fact that the government juxtaposed the soaring prices in the big cities with relative stability in smaller cities merely stoked the fires of hot-money inflows as one analyst noted, "continued effort to paint a picture of still-benign housing price conditions may imply that the central government wants to deal with other issues first before making a very clear stand on the overall housing policies." Restrictions on purchases remain but it seems clear that no new tightening has given developers and investors the green light to blow the bubble even bigger. Via The FT, Residential prices soared in China’s biggest cities in August, raising the possibility that the government will take fresh measures to cool the red-hot market. Prices for new homes in Beijing, Shanghai and Shenzhen – the country’s three largest cities – surged 18-19 per cent year-on-year, accelerating from previous months. ... The sharp increase in prices in the biggest cities is the latest evidence of a full-fledged recovery in the Chinese property market after it was smothered by several tightening measures earlier this year. ... Some investors and analysts have started to express concern about whether China’s property market is veering into dangerous bubble territory, but the government has so far taken a much more dovish line. ... The “continued effort to paint a picture of still-benign housing price conditions may imply that the central government wants to deal with other issues first before making a very clear stand on the overall housing policies,” he said in a note to clients. ... Over the past four years the Chinese government has waged a continuous battle to rein in the housing market, raising mandatory mortgage downpayments, placing restrictions on the number of homes people can buy and levying a tougher capital gains tax on sales. But since the country’s new leaders – Xi Jinping and Li Keqiang – took office in March, there have been no big new tightening policies enacted on top of the measures already in place. Analysts believe this has given developers and investors the confidence to flood back into the property market. So clearly, China is back to its old tricks. Having tried (and not liked the results - as we noted here) to 'taper' in June - sending SHIBOR to 25% and almost crashing the entire banking system in the process - the new regime has reverted to the old regime of credit pumping (as seen in the chart below's uptick at far right to around CNY18tn total debt once again)... This simply means the credit bubble will get worse and more and more unsustainable. So, in summary, as the Fed is about to learn we suspect; once you have made the market entirely dependent on the flow of credit and threaten to taper/deleverage, the cracks appear very fast. Perhaps this is why the PBOC has taken its eye off the domestic real estate bubble for now as the growth in 2-way trade volumes collapses... (Charts: Sean Corrigan)
Here are a few things to keep in mind – and to keep handy – for when President Obama speaks with business executives at the Business Roundtable later this morning. First up – this graphic, a reminder of how every major effort to deal with the deficit over the last 30 years has been tied to debt limit legislation: The Associated Press says the president will be “cautioning Republicans not to precipitate a government shutdown or an unprecedented debt default” – which is odd since the White House hasn’t taken its threat to shut down the government off the table. And the president and administration officials are the ones saying they “won’t negotiate” over spending cuts and reforms, instead demanding a “clean” debt limit increase – even though using debt limit bills for deficit reduction has a long, bipartisan history. Second -- this staggering chart from the Congressional Budget Office’s (CBO) latest report, which underscores the importance of acting now to rein in our debt and deficits: Unprecedented levels of government spending – and four straight years of trillion-dollar deficits – under the Obama administration contributed to a shocking increase in government debt. And “[t]he aging of the baby-boom generation, rising health-care costs, and Obamacare are ‘expected to steadily boost the government’s spending’” even more in the years ahead, explains Budget Committee Chairman Paul Ryan’s (R-WI) office. Maybe worse: the CBO notes that its forecast “does not factor in ‘the harm that growing debt would cause to the economy’,” says Jim Pethokoukis at AEI. “[W]hen you take into account stuff like how deficits might ‘crowd out’ investment in factories and computers and how people might respond to changes in after-tax wages, you find the debt is much, much larger…” The CBO report is basic proof that now is not the time for the president to rule out needed spending cuts and reforms. Third – this fact sheet on the spending cuts and reforms that have been coupled with previous debt limit bills. For example, debt limit legislation signed by President Bill Clinton in 1996 included a series of small business regulatory relief proposals. The 1985 Gramm-Rudman-Hollings deficit reduction bill included a debt limit increase. And so on. Both parties recognized the problem and worked together on solutions. And fourth – this quote from then-Senator Obama on raising the debt limit, when he had a vote on it: “Mr. President, I rise today to talk about America’s debt problem. The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. government can’t pay its own bills. “It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our government’s reckless fiscal policies. Over the past five years, our federal debt has increased by $3.5 trillion to $8.6 trillion. That is ‘trillion’ with a ‘T.’ That is money that we have borrowed from the Social Security trust fund, borrowed from China and Japan, borrowed from American taxpayers… “Leadership means that ‘the buck stops here.’ Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better. I therefore intend to oppose the effort to increase America’s debt limit.” – Senator Barack Obama, March 16, 2006 Those comments were more than $8 trillion in debt ago. Republicans who want to use debt limit legislation to tackle Washington’s spending problem and strengthen our economy are following a trail well-worn by both parties. “The president and his party should be honest with the American people about the fiscal challenges we face,” said Speaker Boehner, “and demonstrate the courage necessary to work in a bipartisan way to solve our spending problem.”
Liberal party prime minister is accused of lowering glass ceiling after appointing cabinet with just one womanAustralia's newly elected conservative prime minister, Tony Abbott, has been officially sworn in amid criticism of the lack of women in his cabinet.Just one of his 19-strong front bench is a woman, Julie Bishop, the minister for foreign affairs. There is no cabinet portfolio for women. Instead, responsibility for women's issues will be held by Abbott in the prime minister's office.In a statement, Abbott said it would ensure that this "key whole-of-government priority" is at "the centre of government".The move has been roundly criticised by the opposition Labor party, which has long branded Abbott as out of touch with women."Women aren't getting the same deal as men in our society," said the former senior Labor minister Bill Shorten, describing the new cabinet as a "sort of Dad's army"."Tony Abbott has just lowered the glass ceiling for women's expectations in Australia," he said.On Monday, Abbott defended the paltry representation of women when his cabinet was first announced."Plainly, I am disappointed that there are not at least two women in the cabinet," Abbott said."Nevertheless there are some very good and talented women knocking on the door of the cabinet and there are lots of good and talented women knocking on the door of the ministry," he said."You can expect to see as time goes by more women in both the cabinet and the ministry."Australia now ranks behind Afghanistan (three women in cabinet), China (two) and Zimbabwe (five) according to a graphic published by Labor. Britain has four female members of cabinet.Abbott has appointed two women to his outer ministry – including one who becomes "minister assisting the prime minister for women" – but of the government's 12 parliamentary secretaries, only one is a woman and she was demoted to that position.The prominent media commentator and Australian of the year Ita Buttrose was scathing: "You can't have that kind of parliament in 2013. It's unacceptable," she told the ABC.In a bizarre twist, government sources told the Guardian that opposition forces were partly to blame for the lack of women in Abbott's government.One of his shadow ministers, Sophie Mirabella, who had been expected to take up a cabinet portfolio, lost her seat at the 7 September election to an independent, Cathy McGowan."All this talk of a lack of women in cabinet – that's a direct consequence of Cathy McGowan winning," the source said.On the night of the election, Mirabella claimed that an alliance of the Greens, Labor, unions and the activist group GetUp! had conspired to topple her in favour of McGowan. "We warned of the bad consequences of putting an independent into [Mirabella's seat] and we'll now see those play out," a senior coalition staffer said.McGowan denied she was responsible for the lack of representation of women. "I can't take any responsibility for Tony Abbott's choices," she told the Guardian.During his three years as opposition leader, Abbott repeatedly polled worse with women than with men. He was famously the target of the former prime minister Julia Gillard's sexism and misogyny speech to parliament last year, when she told him if he wanted to know what misogyny in modern Australia looked like, he should get a mirror.She criticised his suggestions that men were more adapted to "exercise authority or to issue a command" than women. She also attacked his suggestion that abortion was the "easy way out".During the election campaign, Abbott tried to insulate himself from suggestions that he was out of touch with women by surrounding himself with his three adult daughters – then said he was "the guy with the not bad-looking daughters".He also quipped that one of his female MPs had "sex appeal" and wasn't "just a pretty face".An email from Abbott to Liberal party supporters on Wednesday night said his government was "committed to make your life better and our country stronger". It outlined a list of his priorities. There were no references to women, in cabinet or otherwise.Tony AbbottAustralian politicsWomenAustraliaGenderAsia PacificAlison Rourke theguardian.com © 2013 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds
Court almost certain to find former politician guilty of corruption and abuse of power following last month's trialA Chinese court will announce its verdict on ousted former senior politician Bo Xilai on Sunday, following his trial last month on charges of corruption and abuse of power.China's courts come under the control of the ruling Communist party and are certain to find Bo guilty. State media have already all but condemned him."The Jinan intermediate people's court hereby announces that it will announce a verdict in defendant Bo Xilai's bribery, corruption and abuse of power case on Sept 22, 2013, at 10 am (0200 GMT)," the court in eastern China's Shandong province, where Bo was tried, said on its microblog.Prosecutors demanded a heavy sentence for Bo on the final day of his divisive, dramatic trial, saying his "whimsical" challenge to the charges flew in the face of the evidence.Hong Kong's South China Morning Post cited a source as saying the case could drag on as Bo is likely to appeal.Bo was a rising star in China's leadership circles when his career was stopped short last year by a murder scandal in which his wife, Gu Kailai, was convicted of poisoning a British businessman, Neil Heywood, who had been a family friend.Bo, who was Communist party chief of the south-western metropolis of Chongqing, had mounted an unexpectedly feisty defence during his five-day trial, denouncing testimony against him by his wife as the ravings of a mad woman.Bo repeatedly said he was not guilty of any of the charges, though he admitted making some bad decisions and shaming his country by his handling of former Chongqing police chief Wang Lijun, who first told Bo that Gu had probably murdered Heywood.Wang fled to the US consulate in the nearby city of Chengdu in February last year after confronting Bo with evidence that Gu was involved in the murder. Wang was also jailed last year for covering up the crime.The state prosecutor said Bo should not be shown leniency as he had recanted admissions of guilt provided ahead of the trial.Bo could theoretically be given the death penalty for the charges, but many observers say that is unlikely as the party will not want to make a martyr of a man whose left-leaning social welfare policies won much popular support.Legal experts have said they thought the details of the actual charges laid against Bo suggested he would be spared the death penalty.Bo XilaiGu KailaiNeil HeywoodChinaAsia Pacific theguardian.com © 2013 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds
Canadian Billionaire Predicts The End Of The Dollar As Reserve Currency; Warns "It's Likely To Get Ugly"
Beginning with how Kissinger and Nixon enabled the USD as the world's de facto reserve currency through oil, Canadian Billionaire Ned Goodman explains in the brief but far-reaching clip how it is both inevitable (and rapidly approaching) that the rest of the world will turn its back on the dollar. With China and Russia (among many others that we have detailed in the past) agreeing on non-USD swap terms for energy, the cracks are starting to show and as Goodman details, "in the 1930s, everyone wanted USD (backed by silver)," but today, backed by nothing, "everyone wants to get rid of them." Buying hard assets is crucial (he has never been more bullish of gold) as we head into a period of stagflation or even high inflation; and as Goodman previously commented "the world is totally upside down right now - it's completely crazy," in fact, he adds, "I'm keen on anything that's going to live with higher inflationary numbers, because I can't see the world getting out of the problems that it's in." Grab your pre-FOMC popcorn and watch for a brief few minutes as sense is spoken on everything from the reality of the USD reserve currency's dwindling support, the stupidity of Obama's Syrian debacle, China and Russia's deals, the inevitable inflation when "the United States losing the privilege of being able to print at its will." Goodman warns - "during this period, it is likely to get quite ugly...." and its all related to politics and money... interest rates and confidence will turn overnight... there is no time to hedge when the truth takes place He goes on to discuss part-time jobs, the understating of employment, the looming US recession, the US can't afford higher rates of interest, don't deserve their bond rating, and will be downgraded... And previously Goodman's thoughts (via Financial Post), Goodman, 75, said in an interview at Bloomberg’s Toronto office Aug. 1. “I’m more bullish on gold now than I’ve ever been.” ... “The world is totally upside down right now — it’s completely crazy,” Goodman said, clicking off his Rolex watch and slinking the chain between his fingers. “I don’t know of another time when every country in the world was printing money.” ... Goodman said he doesn’t know when inflation will rise or how drastically, but that his investment strategy is a pre-emptive strike against that risk. “I don’t wait for inflation,” he said. “It’s hard to call, but it’s impossible for me to see the U.S. getting out of trouble without printing more money and it’s impossible to see how Europe survives in the form that it’s in. You look around the world and you say: ‘We’re going to have to have some inflation.’ I want to own assets that are inflation-proof.” ... Miners of precious metals are “dirt cheap,” Goodman said. ... “I’m keen on anything that’s going to live with higher inflationary numbers, because I can’t see the world getting out of the problems that it’s in.”
Michael Snyder Activist Post The largest mountain of debt in the history of the world just continues to grow even larger, and everyone knows that this colossal debt spiral is not going to end well. But we all keep playing along because nobody wants the party to end. Right now, there is an unprecedented ocean of red ink covering the planet. Globally, governments have never been in so much debt, corporations have never been in so much debt and consumers have never been in so much debt. But every time someone suggests that this is a problem and that we should at least try to get debt levels to settle down a bit, people start screaming that “austerity” will hurt the global economy. And of course it will. But we can’t continue to live way, way above our means indefinitely. Well, we can try, but at some point this entire house of cards is going to come crashing down and we are going to be facing the greatest economic crisis the world has ever seen. It is kind of like watching a slow-motion train wreck that you have no chance of possibly stopping that you know will end up killing lots of innocent people. This debt crisis is going to end up destroying the global financial system, but there is not a thing that you or I can do to prevent it from happening. The unprecedented debt binge that we are witnessing right now is going to continue until someday we hit a brick wall of financial disaster. We can yell and we can scream, but it isn’t going to stop what is happening. google_ad_client = "pub-1897954795849722"; /* 468x60, created 6/30/10 */ google_ad_slot = "8230781418"; google_ad_width = 468; google_ad_height = 60; As the Telegraph recently noted, even the Bank for International Settlements is warning that debt levels are way too high. According to the BIS, total public and private debt levels are now 30 percent higher than they were in 2008… “This looks like to me like 2007 all over again, but even worse,” said William White, the BIS’s former chief economist, famous for flagging the wild behavior in the debt markets before the global storm hit in 2008. “All the previous imbalances are still there. Total public and private debt levels are 30pc higher as a share of GDP in the advanced economies than they were then, and we have added a whole new problem with bubbles in emerging markets that are ending in a boom-bust cycle,” said Mr White, now chairman of the OECD’s Economic Development and Review Committee.The BIS can see the disaster coming, but even they have no chance of preventing it. For the rest of this article, I am going to focus on government debt, but please keep in mind that corporate debt and consumer debt are also totally out of control globally. It would be very hard to overstate the nightmare that we are facing. But of course national governments are the biggest offenders when it comes to debt… Asia Japan now has a debt to GDP ratio of more than 211 percent, and as Simon Black of the Sovereign Man blog recently detailed, they are rapidly heading toward a national financial meltdown… Looking purely at the numbers, Japan’s medium-term fundamentals are among the bleakest in the world. Total government debt amounts to over 200% of the country’s entire GDP– a figure so large that the Japanese government spends 51.5% of the 43 trillion yen ($430 billion) they collect in tax revenue just to pay interest! Perhaps even more astounding is that ‘primary balance expenses,’ i.e. normal government expenditures, totaled 70.3 trillion yen, or 163% of tax revenue. The only way they’ve managed to stay afloat is by issuing more debt, which makes the problem even worse. In fact, 46% of the 2013 budget is being financed by debt. These guys are running out of rope. And fast.China is facing a different sort of a problem. In that nation, the growth of private domestic debt is wildly out of control. According to a recent World Bank report, private domestic debt in China has grown from 9 trillion dollars in 2008 to 23 trillion dollars today. There is no way that is sustainable, and at some point that massive bubble is going to burst. Europe Even though some European nations have supposedly implemented “austerity measures” in recent years, debt levels continue to rise rapidly. The following are some numbers that were recently released which show that government debt to GDP ratios for some of the most financially troubled nations in Europe are absolutely soaring… Euroarea: 92.2%, up from 88.2% a year ago Greece: 160.5%, up from 136.5% a year ago Italy: 130.3%; up from 123.8% a year ago Portugal: 127.2%, up from 112.3% a year ago Ireland: 125.1%, up from 106.8% a year ago Spain: 88.2%, up from 73.0% a year ago Netherlands: 72.0%, up from 66.7% a year ago Anyone that tells you that the crisis in Europe is “over” is lying to you. The debt crisis is getting worse, not better. The United States The biggest mountain of debt of all can be found in the United States. 30 years ago, the national debt was a little bit above a trillion dollars. Today, it is rapidly approaching 17 trillion dollars. At this point, the U.S. already has more government debt per capita than Greece, Portugal, Italy, Ireland or Spain. And since Barack Obama entered the White House, the debt to GDP level has soared to unprecedented heights… Sadly, this is just the beginning. One reason for this is that the U.S. is facing some tremendous demographic challenges in the years ahead. In other words, our population is getting older. It is being projected that the number of Americans on Social Security will rise from 57 million today to more than 100 million in 25 years. How in the world are we possibly going to pay for that? Already, we are very heavily dependent on foreigners to pay our bills. According to the U.S. Treasury, foreigners hold approximately 5.6 trillion dollars of our debt at this point. China and Russia account for about one-fourth of that total. Right now, China owns approximately 1.275 trillion dollars of our debt, and Russia owns approximately 138 billion dollars of our debt. So what would happen if we went to war with Syria and they decided to quit borrowing from us and they started dumping our debt instead? That is a very good question. And actually, according to Zero Hedge foreigners have already started to dump a little bit of our debt… Today’s TIC data showed something disturbing: for the fourth month in a row, foreigners were net sellers of US Treasury paper in July, as total foreign holdings declined from $5.600 trillion to $5.590 trillion which represents 49% of total marketable debt (including the debt owned by the Fed of course). In other words, since peaking at $5.724 trillion in March, foreign-held debt has declined by $134 trillion, at a time when yields have surged on fears the Fed’s tapering of its own purchases of bonds will mean less Fed frontrunning opportunities.We certainly cannot afford for that to continue, because we desperately need other nations to finance our reckless spending. Our debt is wildly out of control, and the only way we can keep the entire system from collapsing is to go into even more debt. As I noted recently, if the U.S. national debt was reduced to a stack of one dollar bills it would circle the earth at the equator 45 times. That is a whole lot of money. But most Americans do not consider it to be a problem because disaster has not struck yet. Unfortunately, they simply don’t understand how quickly an exponential problem can overwhelm you. I think that the following illustration from Simon Black is particularly helpful… Let’s say you’re at a party in a small apartment that’s about 500 square feet in size. Then suddenly, at 11pm, a pipe bursts, starting a trickle into the living room. Aside from the petty annoyance, would you feel like you were in danger? Probably not. This is a linear problem– the rate at which the water is leaking is more or less constant, so the guests can keep partying through the night without worry. But let’s assume that it’s an exponential leak. At first, there’s just one drop of water. But each minute, the rate doubles. So by 11:01pm, there’s 2 drops. By 11:02, 4 drops. And so forth. By 11:27pm, there’s only six inches of standing water. Yet by 11:31pm, just four minutes later, the entire room is under nearly 8 feet of water. And the party’s over. For nearly half an hour, it all seemed safe and manageable. People had all the time in the world to leave, right up until the bitter end. 11:27, 11:28, 11:29. Then it all went from benign to deadly in a matter of minutes.By the time that our politicians and the talking heads on the mainstream media admit that we have a debt emergency on our hands, it will probably be far, far too late. The greatest debt crisis the world has ever seen is coming, and there is nothing that anyone can do to stop it. But you can take measures to get prepared for it. Please get prepared while you still can. About the author: Michael T. Snyder is a former Washington D.C. attorney who now publishes The Truth. His new thriller entitled “The Beginning Of The End” is now available on Amazon.com.
The outlook has improved for emerging markets, according to the BAML fund manager survey, with 36% saying global EM stocks are the cheapest of all regions - it's the strongest undervalued reading in almost 10 years. Allocators have been steadily decreasing their underweight positions, with now just 16% underweight EM vs. 26% in July.Those saying EM is the region they most want to underweight have fallen to a net 21% from 29% a month ago.Optimism is spiking towards China too, with 28% percent of those from the Pacific Rum believing China's economy will strengthen in the next year, a swing of 60 percentage points from last month when 32% forecast a weakening.EM ETFs: AGEM, EEM, ADRE, SCHE, GMM, VWO, DEM, EWEM, PXH, PIE, EWX, DGS, EMLB, EDC, EET, EMSA, EDZ, EEV, EUM, TLTE, HILO, EELV, EEMA, EMFT, DVYE, FEMS, EVAL, EGRW, EMCR, IEMG, EMDR, EEME.More from the BAML survey. Post your comment!
Follow ZeroHedge in Real-Time on FinancialJuice Just when you think that the worst has come, been and gone, there will be more stuff hitting the fan in the very near future and that should serve as a lesson to the next head of the Federal Reserve that central banks don’t usually necessarily have the people in mind when they take things over and end up doing a pitiful job. But little reminders are just nudges in the ribs and there is a lot more needed than somebody elbowing the Federal Reserve of the United States right now. Inflation is set to rise in the United States and that will be beset the people that have savings as well as drag the retirees down and create more hardship than is being experienced and endured by the people already today. The Federal Reserve has been unable so far to bring about any form of positive inflation level in the US economy and the current inflation rate stands at 2%. But the economy is not growing enough and it is certainly not seeing worker salaries approaching anything near the increases in prices that are taking place. Prices are just outpacing salaries and jobs aren’t being created. That’s the problem with using U3 unemployment levels and not U6 unemployment levels (including all the people that have been discouraged from seeking employment as well as those that are underemployed in the economy). The latter stands at nearly double the official figure issued by the Bureau of Labor Statistics. Just looking at the figures for Friday 6th September that were issued by the Bureau it can be seen that 312, 000 people gave up looking for employment and dropped out of the job market due to discouragement through not finding work. In one survey carried out people actually stated that they were dissatisfied with the job market and they would prefer to wait for the right job to come along. The Federal Reserve has expanded its balance sheet by $3.6 trillion and the administration is touting the benefits of what it believes Quantitative Easing has actually done in the job creation area. But, if for one moment we do take U3unemployment as the rate, then it doesn’t look like money well spent. Since we are still in the area of just-in-time economics applied to the employment sector. The jobs are few and far between and they are certainly not being stored somewhere for someone to come along later and snap up; they are being created slowly and sluggishly, if at all. Whatever happens, whether that be a push or pull in the Federal Reserve balance sheet the effect ripples into the lives of people slowly but surely, for good or for bad. Inflation has been fixed at the target rate of 2.5% by the Federal Reserve and unemployment needs to come down to under 6.5% (from the official 7.3%). Then interest rates can be raised. For the time being however it’s only the speculators that have managed to reap the rewards of low interest rates. The American people have just temporarily imagined that they were wealthy by being able to contract cheap loans and get granted easy credit. But, soon they will realize that they are only debt-wealthy and that will be the crunch in the future when interest rates rise again. Financial imbalances and excessive inflationary pressure can only be hiding just round the corner in the not too distant future. Some analysts believe that we will be in for a period of stagflation, unemployment will be high and inflation will have set in in a stagnant economy. It has been predicted that prices will rise for the US consumers by at least 10% in the next 30 years. So the Federal Reserve wants inflation and it will most certainly end up getting it. But, it will probably get more than it bargained for. Although, it is very much debatable as to whether or not the guys at the Fed have actually considered what will happen afterwards. Or do they also actually believe that the improvements are really there and the figures are a true representation of the economic health today of the USA? Septaper Will Open Floodgates | How Sinister is the State? | Food: Walking the Breadline | Obama NOT Worst President in reply to Obama: Worst President in US History? Obama's Corporate Grand Bargain Death of the Dollar | Joseph Stiglitz was Right: Suicide | China Injects Cash in Bid to Improve Liquidity Technical Analysis: Bear Expanding Triangle | Bull Expanding Triangle | Bull Falling Wedge | Bear Rising Wedge | High & Tight Flag
For years, I’ve wanted to go to Davos, and last week finally got my chance – sort of -- by participating in the so-called Summer Davos in Dalian. Wrapping up Silicon Dragon Shanghai, I caught a China Eastern flight to the northeastern Chinese city of Dalian, exaggeratedly referred to as the San Francisco of China. It was unfortunately covered with thick smog rather than fog while I was there.
Joe Zhang is Chairman of Guangzhou Wansui Micro Credit Company, and the author of "Inside China's Shadow Banking: The Next Subprime Crisis?".ON A Monday morning three autumns ago, I was at my brother's home in Jingmen City in Hubei Province. There were some gentle knocks at the door. I opened it to see two smiling, well-dressed young officers from the Government Audit Office. They asked to speak with my brother, Hualiang. The officers wanted Hualiang to spend the next few days with them to collect some unpaid debts local companies owed to the then-defunct state-owned lender, Golden Shrimp Credit Union. Hualiang had been the head of the Golden Shrimp Credit Union until the lender went belly up amid mounting bad debts seven years earlier.I was very surprised, and impressed. I had worked at the People's Bank of China, the country’s central bank, in the 1980s, and later at foreign banks for nearly two decades. But I had not known of a place where senior bankers would be held accountable for bad lending decisions seven years after the bank had gone bust. By 2003, most Chinese banks and credit unions had phased in a "Life-time Responsibility System" for senior credit officers, Hualiang explained to me. Later on, I conducted a straw poll with a few banks. Sure enough: they all had some variant of that scheme in place.That was good for the country,...Continue reading
Joe Zhang is Chairman of Guangzhou Wansui Micro Credit Company, and the author of "Inside China's Shadow Banking: The Next Subprime Crisis?".ON A Monday morning three autumns ago, I was at my brother's home in Jingmen City in Hubei Province. There were some gentle knocks at the door. I opened it to see two smiling, well-dressed young officers from the Government Audit Office. They asked to speak with my brother, Hualiang. The officers wanted Hualiang to spend the next few days with them to collect some unpaid debts local companies owed to the then-defunct state-owned lender, Golden Shrimp Credit Union. Hualiang had been the head of the Golden Shrimp Credit Union until the lender went belly up amid mounting bad debts seven years earlier.I was very surprised, and impressed. I had worked at the People's Bank of China, the country’s central bank, in the 1980s, and later at foreign banks for nearly two decades. But I had not known of a place where senior bankers would be held accountable for bad lending decisions seven years after the bank had gone bust. By 2003, most Chinese banks and credit unions had phased in a "Life-time Responsibility System" for senior credit officers, Hualiang explained to me. Later on, I conducted a straw poll with a few banks. Sure enough: they all had some variant of that scheme in place.That was good for the country, though it ruined my plan to spend ...
The U.S. bull market rages on five years after the collapse of Lehman Brothers, although not everyone on Wall Street is convinced that we’re out of the woods just yet. The stock markets’ stellar run-up since the March 2009 bottom is undeniably encouraging, but stagnant growth in the domestic labor market coupled with a lackluster outlook for Europe and China has left many questioning the health of the global economic recovery [see Visual Guide To Major Index returns by Year]. In light of recent talks of the Fed starting to scale back on stimulus, many have started to ponder about re-allocating their portfolios given the impressive gains seen on Wall Street in recent years; furthermore, the expectation of rising interest rates has only made it more difficult to pinpoint the opportune time to lock-in profits. As such, we’re taking a stroll down memory lane and taking a look at how nine major asset [...]Click here to read the original article on ETFdb.com.Related Posts:Free ETF Trading: Comparing All The Options17 ETFs For Day TradersETFs: The $10 Billion ClubWant A Simple, 3-ETF Portfolio? Here Are 25 Of Them25 Wild ETF Charts From 1H 2013