JAN 11 17 SIT EC
y POL
ZERO HEDGE, BLOOMBERG & WS-J
ECONOMICS
The
history of previous civilizations rising and eventually collapsing is well
documented. Our current economy seems to be following a similar
pattern... Our fundamental problem is the fact thatneither high nor low energy prices are now able to keep the world economy
operating as we would like it to operate.
Some people would
argue that 2016 was the year that the world economy started to come apart, with
the passage of Brexit and the election of Donald Trump. Whether or not the
“coming apart” process started in 2016, in my opinion we are going to see many
more steps in this direction in 2017. Let me explain a few of the things I see.
[1] Many economies have collapsed in the past. The
world economy is very close to the turning point where collapse starts in
earnest.
[2] Figures to be released in 2017 and future years
are likely to show that the peak in world coal consumption occurred in
2014. This is important, because it means that countries that depend heavily on
coal, such as China and India, can expect to see much slower economic growth,
and more financial difficulties.
[3] If we assume that coal supplies will continue to
shrink, and other production will grow moderately, we can expect total energy
consumption to be approximately flat in 2017.
[4] Because world population is rising, the
forecast in Figure 4 suggests that per capita energy consumption is likely to
shrink. Shrinking energy consumption per capita puts the world (or individual
countries in the world) at the risk of recession.
[5] Because countries are in this precarious position
of falling resources per capita, we should expect to see a rise in
protectionism, and the addition of new tariffs.
[6] China can no longer be expected to pull the world
economy forward.
China’s economic
growth rate is likely to be lower, for many reasons. One reason is the
financial problems of coal mines, and the tendency of coal production to
continue to shrink, once it starts shrinking. This happens for many reasons,
one of them being the difficulty in obtaining loans for expansion, when prices
still seem to be somewhat low, and the outlook for the further increases does
not appear to be very good.
[7] While Item [2] talked about peak coal, there is a
very significant chance that we will be hitting peak oil and peak natural gas
in 2017 or 2018, as well.
If we look at
historical prices, we see that the prices of oil, coal and natural gas tend to
rise and fall together.
[8] Unless oil prices rise very substantially, oil exporters will
find themselves exhausting their financial reserves in a very short time
(perhaps a year or two). Unfortunately, oil importerscannot
withstand higher prices, without going into recession.
[9] US interest rates are likely to rise in the next
year or two, whether or not this result is intended by the Federal reserve.
In Conclusion
The situation is indeed very concerning. Many things
could set off a crisis:
- Rising energy prices of any kind (hurting energy importers), or energy prices that don’t rise (leading to financial problems or collapse of exporters)
- Rising interest rates.
- Defaulting debt, indirectly the result of slow/negative economic growth and rising interest rates.
- International organizations with less and less influence, or that fall apart completely.
- Fast changes in relativities of currencies, leading to defaults on derivatives.
- Collapsing banks, as debt defaults rise.
- Falling asset prices (homes, farms, commercial buildings, stocks and bonds) as interest rates rise, leading to many debt defaults.
Things don’t look too
bad right now, but the underlying problems are sufficiently severe that we seem
to be headed for a crisis far worse than 2008. The timing is not clear. Things
could start falling apart badly in 2017, or alternatively, major problems may
be delayed until 2018 or 2019. I hope political leaders can find ways to keep
problems away as long as possible, perhaps with more rounds of QE.Our fundamental problem is the fact
that neither high nor low energy prices are now able to keep the world economy
operating as we would like it to operate. Increased debt can’t seem to fix the
problem either.
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Every point have its own explanation and graphics. To see them OPEN :
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Gold is now up almost 4% year-to-date,
approaching $1200 - 8 week-highs - as the USD Index plunges to 2017 lows after
Trump's disappointing press conference...
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The USD Index whipsawed higher and lower as
Trump teased and un-teased comments on trade policies, only to tumble to the
day's lows by the end. This rippled
through risk assets, leaving gold higher, stocks lower, peso higher (after
initial crashing), but idiocyncratic issues slammed drug stocks, and aircraft
makers.
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If you
can't beat em, join em... at least that seems to be the mantra of long-short
hedge fund managers who, after underperforming the S&P consistently over
the past 8 years, have decided to ditch their shorts, sending net exposures
soaring.
….
We have frequently
written about the underwhelming performance of hedge funds over the last
several years and continue to be perplexed by the seemingly misinformed
decisions of the largest pensions and endowments to pay ridiculous fees for
consistently lackluster performance (for example, see "Why
Hedge Funds Remain The Worst Performing Asset Class Of 2016").
As Bloomberg recently
noted, long-short funds tracked by Credit Suisse returned negative 4.3% in 2016
compared to a positive 9.5% return for the S&P, the worst relative
performance for hedgies since 2011.
Of course, nothing
illustrates the idiocy of the "2 and 20" hedge fund fee structure
better than Warren Buffett's $1 million bet with a hedge fund manager in 2008,
in which Buffett bet that the S&P would outperform hedge funds over a
10-year period. (see "The
Traditional "2 & 20" Fee Structure Is Taking A Hit As Hedge Funds
Continue To Underperform"). And, for those who like to keep
score, the S&P is currently winning by well over 40%, on a cumulative
basis.
And while effectively buying the
S&P will help dress up the relative performance of these funds, we're not
sure it's is a strategy worthy of a "2 and 20" fee structure.
Meanwhile, as the
S&P continues to soar to new highs on a daily basis, earnings trends for
the past couple of years would seem to suggest that hedge funds may be dropping
their shorts at precisely the wrong time.
Of course, when your
lack of short exposure blows up your "hedge" fund, it's not really a
big deal because you'll be able to point to all the other funds that did the
same thing and simply raise a fresh billion dollar fund and start the game all
over again.
….
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According to BofA, retail sales ex-autos
declined 1.0% mom seasonally adjusted in December. "This contrasts with
other indicators of consumer strength including reports of a robust holiday
shopping season, a rebound in consumer confidence and strong autos sales... we think it is prudent to prepare for a
similarly negative number in Friday's report."
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It's not the economy, stupid...
It's Trump!
See all graphics
at: http://www.zerohedge.com/news/2017-01-11/dollar-dumped-stocks-trumpd-gold-jumped
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After six straight days higher and the best
start to a year ever, Biotech/Pharma stocks were just crashed lower on the
heels of comments from president-elect Trump promising more competitive drug pricing.
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Oil prices have risen over 20% since the OPEC
production cut agreement at the end of November.While concerns abound on quota cheating and increased
production from Libya, Nigeria and US shale, the incoming US administration could change the market completely
through strategic oil sales and new import taxes.
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We're
accustomed to "rotation," the nice little game where bonds can be
sold and the capital invested in real estate or stocks, or vice versa. We're less accustomed to all the conventional
asset classes toppling like dominoes. Where do the fleeing
trillions go when stocks, bonds and real estate are all going down in a chaotic
sell-off?
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POLITICS
Empezaron las tentaciones .. he
rejected .. this time
"I
could actually run my business and run government at the same time. I
don’t like the way that looks, but I would be able to do that if I
wanted to. Over the weekend,
I was offered $2 billion to do a deal in Dubai with a very, very
amazing man, a great developer from the Middle East. I turned it down."
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While we learned earlier today that John McCain
was responsible for handing over the 35-page "dossier" of compromising,
if potentially fake, revelations about Trump's connections to Russia to the
FBI, the identity of the actual creator, who was said to be an ex-British
intelligence service, remained a mystery. No longer.
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WORLD ISSUES and ME
China's President Xi Jinping will promote
"inclusive globalization" at this month's World Economic Forum
in Davos, where he was prepared to meet with members from Trump's team, and
will warn that populist approaches can lead to
"war and poverty."
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"You must control your forex deficit, but
you can't say that SAFE is controlling capital outflows," a high-ranking
government official told Chinese bankers. The banks were told to "manage sentiment" to prevent
public panic, the banker said, and the banks' research analysts should not
broadcast any negative views on the yuan.
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DEMOCRACY NOW
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Nuestros terroristas son –al parecer- mas
inhumanos que los del ISIS
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GLOBAL RESEARCH
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Mysterious
Pseudo Intelligence “Dossier”: How “4Chan Message Board” Fooled John McCain,
Buzzfeed, and the CIA Into Believing “Trump’s Golden Showers By Zero Hedge
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U.S.
Tanks and Troops at Russia’s Border: German Politicians up in Arms Over US-NATO
Buildup Directed against Russia By RT News
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FBI
Director James Comey Testimony on “Russian Hackers”: FBI was Refused Access to
DNC Servers, “Multiple Times” By Alex Christoforou
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INFORMATION CLEARING HOUSE
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The CIA has escalated
its attack on the president-elect.
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The Neocon’s Declaration of War Against Trump By The Saker
The USA is about to
enter the worst crisis in it's history.
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This is the real
meaning of the “Russia hacking” story.
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The New Great Game in
Eurasia By Pepe Escobar y
el beso de la muerte
It’s no secret that
the “urbane”, “cerebral”, “legendary” Kissinger is now advising Trump
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The U,S. has produced
two strong strains of fascism that now vie for supremacy.
[ How to eliminate Trump? is their main problem. If they don’t do it ..
Trump must do it. ]
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Obama The War Criminal Butcher of Women and
Children By Paul Craig
Roberts
Barak Obama is a war
criminal as are his milit and intellig officials and most of House n Senate.
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Hidden behind the
heroic narratives is a darker, more troubling story of “revenge ops,”
unjustified killings, mutilations, and other atrocities.
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U.S. media has
remained mostly mute on the situation in Mexico, even as the unfolding civil
unrest has closed the U.S.-Mexico border.
[[ si se logra darle
giro antimperialista a la revuelta en MX
.. se incendia el norte ]]
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COUNTER PUNCH
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John Wight Israel
is a Rogue State
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Michael J. Sainato Extreme
Xenophobia: Jeff Sessions and Syrian Refugees
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Pepe Escobar Shadow
Play: The New Great Game in Eurasia
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SPUTNIK and RT SHOWS
‘Tremendous Blot on Their Record’ - Trump Slams Intel
Community Over Fake Report
https://sputniknews.com/us/201701111049491996-donald-trump-presser-russia-report/
https://sputniknews.com/us/201701111049491996-donald-trump-presser-russia-report/
Related 1
Trump Sex Blackmail, New Twist in Witch-Hunt
https://sputniknews.com/columnists/201701111049487158-trump-sex-blackmail-new-twist-witch-hunt/
https://sputniknews.com/columnists/201701111049487158-trump-sex-blackmail-new-twist-witch-hunt/
Related 2
Trump to CNN: 'You Are Fake News' [nbc-fox.. la misma
porqueria.. This is why we see alter-news]
https://sputniknews.com/us/201701111049496206-trump-cnn-is-fake-news/
https://sputniknews.com/us/201701111049496206-trump-cnn-is-fake-news/
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'God Created the World in 7 Days; Obama has Just Over a Week
Left to Destroy It'
https://sputniknews.com/politics/201701111049491630-new-sanctions-obama-trump-transition-concerns/
https://sputniknews.com/politics/201701111049491630-new-sanctions-obama-trump-transition-concerns/
Related 1
It's Raining Bombs: Why US Bombing Campaigns Remain Unnoticed
by Americans
https://sputniknews.com/politics/201701111049488843-us-obama-bombing/ "In 2016, the United States dropped 3,027 more bombs — and in one more country, Libya — than in 2015. Most (24,287) were dropped in Iraq and Syria," Zenko stressed.
https://sputniknews.com/politics/201701111049488843-us-obama-bombing/ "In 2016, the United States dropped 3,027 more bombs — and in one more country, Libya — than in 2015. Most (24,287) were dropped in Iraq and Syria," Zenko stressed.
Related 2
Obama Administration Wants to 'Complicate Ties With Russia
Even More'
https://sputniknews.com/politics/201701101049450315-us-sanctions-russia-comments/
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https://sputniknews.com/politics/201701101049450315-us-sanctions-russia-comments/
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El “amigo” de Russia in fake news of OB-Clinton + neocons
UNDER FIRE: here the TRUTH
US Senate to Question Tillerson on Newly Introduced Russia
Sanctions Bill
https://sputniknews.com/politics/201701111049491630-new-sanctions-obama-trump-transition-concerns/
https://sputniknews.com/politics/201701111049491630-new-sanctions-obama-trump-transition-concerns/
Related 1
Tillerson Would Use Media, Internet to Share US Perspective
With Russians
https://sputniknews.com/us/201701111049496376-tillerson-media-internet/
https://sputniknews.com/us/201701111049496376-tillerson-media-internet/
OTHER RELATES:
Tillerson: UN Resolution on Israel 'Not Helpful', US Must
Reaffirm Obligations
….
Tillerson: US Must Prioritize Defeating Daesh in Syria Before Dealing With Assad
….
Tillerson: US Must Prioritize Defeating Daesh in Syria Before Dealing With Assad
….
Tillerson Would Support NATO Obligation to Defend Allies if
Russia Invades
….
Tillerson: US Diplomacy Ineffective if Not Backed by Threat
of Force
World: https://sputniknews.com/us/201701111049496376-tillerson-media-internet/
World: https://sputniknews.com/us/201701111049496376-tillerson-media-internet/
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What the Venezuelan 'Coup' Attempt Has in Common with Failed
Color Revolutions
https://sputniknews.com/latam/201701111049496134-maduro-coup-attempt-analysis-commentary/
https://sputniknews.com/latam/201701111049496134-maduro-coup-attempt-analysis-commentary/
RELATED
Crisis in Venezuela: the Oligarchs Want 'Their' Country Back
https://sputniknews.com/radio_hard_facts/201701111049445247-venezuela-hugo-chavez-bolivarian-revolution/
https://sputniknews.com/radio_hard_facts/201701111049445247-venezuela-hugo-chavez-bolivarian-revolution/
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RT SHOWS
On
contact Strategies
of resistance with Michael Gecan
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WASHINGTON BLOG
Posted on January 11, 2017 by WashingtonsBlog
By Norbert Haering, a German financial journalist, blogger and
PhD economist
His best-selling book (in German) “The abolition of cash and the consequences” was
published in 2016. Originally published on norberthaering.de (http://norberthaering.de/en/home/27-german/news/745-washington-s-role-in-india).
Republished with permission of the author.
In early November, without warning, the Indian
government declared the two largest denomination bills invalid,
abolishing over 80 percent of circulating cash by value. Amidst all
the commotion and outrage this caused, nobody seems to have taken note of the
decisive role that Washington played in this. That is surprising, as
Washington’s role has been disguised only very superficially.
US-President Barack Obama has declared the strategic
partnership with India a priority of his foreign policy. China needs to be
reined in. In the context of this partnership, the US government’s
development agency USAID has negotiated cooperation agreements with the Indian ministry of finance. One of these has the declared goal to push back the use of cash in favor of digital payments in
India and globally.
On November 8, Indian prime minster Narendra
Modi announced that the two largest denominations of banknotes could
not be used for payments any more with almost immediate effect.
Owners could only recoup their value by putting them into a bank account before
the short grace period expired at year end, which many
people and businesses did not manage to do, due to long lines in front
of banks. The amount of cash that banks were allowed to pay out to individual
customers was severely restricted. Almost half of Indians have no bank account
and many do not even have a bank nearby. The economy is largely cash based.
Thus, a severe shortage of cash ensued. Those who suffered the most
were the poorest and most vulnerable. They had
additional difficulty earning their meager living in the informal sector or
paying for essential goods and services like food, medicine or hospitals.
Chaos and fraud reigned well into December.
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Posted on January 11, 2017 by Charles
Hugh Smith
As my colleague Davefairtex
observed recently, the paint isn’t quite dry on bitcoin and the expanding host
of other cryptocurrencies. Initial enthusiasm for the latest
cryptocurrency that’s going to eat bitcoin’s lunch generates outsized returns
for early investors, but as glitches in the vision arise, the bubble of initial
euphoria pops.
Differing visions of bitcoin’s future have divided its
community of participants and miners, and hard forks have split other
cryptocurrencies into competing camps.
Meanwhile, the spectre of
outright bans on bitcoin and cryptocurrencies by nations such as China adds
uncertainty to the entire sector. Many observers expect that China’s
increasingly pervasive attempts to staunch the flow of capital out of China via
capital controls will lead inevitably to strict limits on bitcoin or even a
total ban on bitcoin transactions and mining in China.
Since the majority of
mining and transactions occur in China, severe limits or a ban would have an
outsized impact on the bitcoin community. Many observers foresee the potential
for a massive decline in the price of bitcoin should such a ban be imposed.
As if all these issues didn’t generate enough uncertainty and
skepticism, it seems as if every time the general public starts getting
interested in cryptocurrencies, another exchange is hacked or another entry in
the cryptocurrency sweepstakes blows up, sending the sector back into the
“untrustworthy” abyss.
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NOTICIAS IN SPANISH
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Res latinoamericano (I Parte) " Ataque enmarcado en escalada
que comprende no solo a nosotros"
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Insumisión del arte: entre
romanticismo y surrealismo Ivonaldo
Leite
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El imperio de la estafa y el cohecho Paul Walder
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Año 2017: lucha y rebelión contra los imperios Luis Arce Borja
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[Debilidad porque
muestra que votar por mal menor no es solo trampa.. es colapso imperial Oportunidad?
.. solo posible si T adopta FDR plan: dejar de financiar oligarquía Fin y él lo
es.]
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ES acaso peor que sacar el 57% de votos y
gobernar para el 1%? Fue el caso Obama.
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[Su apoyo a la corrupta
Hillary que concluye en la farsa del montaje mediático contra RU, mas su
derrota en Syria, fue lo peor para
él y para el imperio . Es Obama quien
inicio el colapso del modelo neoliberal y del sistema político duo-polico.
Lo que viene ya se sabe: desmonatje Imp o Revolucion.]
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[Continuismo es lo que
va y viene.. Nada nuevo bajo el sol.. aunque la rotación de la tierra puede cambiar
si el deep-state asesina a Trump y la nación se levanta en
armas e inicia el separatismo.]
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[ el secreto es no
casarse ni divorciarse pero criar hijos en unión a mujer que aprenda a ser
madre.]
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[ Sin contar los
diminutos países de centro-am y caribe, Perú es el país grande que crecerá al 4.5% y más aún, si logra controlar o
re-negociar sus recursos estratégicos (oro-plata-cobre y amazonia.]
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Keiser
report 1017 Los mortíferos 'tuits' de Trump
sacuden la economía de EE.UU.
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PRESS TV
Turkey,
Israel drafting ‘roadmap’ for closer cooperation
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