Category: maxkeiser

Iraq War Architect, Paul Wolfowitz, is Becoming Optimistic on Trump

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I spent the last 50 minutes listening to an interview of neocon Iraq war architect Paul Wolfowitz, a truly unfortunate experience which felt like a tomahawk missile attack against my cerebrum. Regrettably, we still live in a world where you have to listen to the musings of such war criminals, as they continue to have considerable influence in certain circles of American power, and quite possibly within the Trump administration itself…

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Vía Max Keiser http://ift.tt/2oxL9Ce

Where There’s Smoke…There’s central bank manipulation

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Central banks around the world have colluded, if not conspired, to elevate and prop up financial asset prices. Here we’ll present the data and evidence that they’ve not only done so, but gone too far.

Here are three questions most alert investors are asking:

  • Question #1: When will financial assets ever ‘correct’ and fall in price?
  • Question #2: How much does overt propping by the central banks have to do with today’s elevated prices?
  • Question #3: How much does covert propping by central banks play a role in these inflated markets?

These are important questions to consider because if central banks have been too involved and gotten themselves mixed up in trying to ‘wag the dog’ by using elevated financial asset prices as a means to drive economic expansion — then the risk is a big implosion in financial asset prices if their efforts fail.

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Vía Max Keiser http://ift.tt/2qeGIZk

Gold Imports Into China via Hong Kong Double

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Gold bullion imports into China via main conduit Hong Kong more than doubled month-on-month in March, data showed on Tuesday as reported by Reuters.

China’s net-gold imports via Hong Kong more than doubled in March to 111.6 tonnes. Chart not updated as official data not publicly available yet. Source: Goldchartsrus.com 

Net-gold imports by the world’s top gold consumer through the port of Hong Kong rose to 111.647 tonnes in March from 47.931 tonnes in February, according to data emailed to Reuters by the Hong Kong Census and Statistics Department.

China’s net-gold imports rose to its best since May 2016. Total gold imports rose to 116.68 tonnes in March from 49.026 tonnes in February.

Both total and net imports in March rose for a second straight month.

Gold has risen over 10 percent so far this year, driven by geopolitical worries.

Read full story here…

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Vía Max Keiser http://ift.tt/2phTua0

Internet of Coins: One hybrid asset to rule them all?

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Their goal to let every cryptocurrency autonomously become part of a massive swarm of decentralized global financial interaction. They will be represented by hybrid tokens and the programming code for this would be open source.

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Vía Max Keiser http://ift.tt/2pkDyWJ

Housing’s Echo Bubble Now Exceeds the 2006-07 Bubble Peak

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A funny thing often occurs after a mania-fueled asset bubble pops: an echo-bubble inflates a few years later, as monetary authorities and all the institutions that depend on rising asset valuations go all-in to reflate the crushed asset class.

Take a quick look at the Case-Shiller Home Price Index charts for San Francisco, Seattle and Portland, OR. Each now exceeds its previous Housing Bubble #1 peak:

Is an asset bubble merely in the eye of the beholder? This is what the multitudes of monetary authorities (central banks, realty industry analysts, etc.) are claiming: there’s no bubble here, just a “normal market” in action.

This self-serving justification–a bubble isn’t a bubble because we need soaring asset prices–ignores the tell-tale characteristics of bubbles. Even a cursory glance at these charts reveals various characteristics of bubbles: a steep, sustained lift-off, a defined peak, a sharp decline that retraces much or all of the bubble’s rise, and a symmetrical duration of the time needed to inflate and deflate the bubble extremes.

It seems housing bubbles take about 5 to 6 years to reach their bubble peaks, and about half that time to retrace much or all of the gains.

Bubbles have a habit of overshooting on the downside when they finally burst. The Federal Reserve acted quickly in 2009-10 to re-inflate the housing bubble by lowering interest rates to near-zero and buying over $1 trillion of mortgage-backed securities.

When bubbles are followed by echo-bubbles, the bursting of the second bubble tends to signal the end of the speculative cycle in that asset class. There is no fundamental reason why housing could not round-trip to levels below the 2011 post-bubble #1 trough.

Consider the fundamentals of China’s remarkable housing bubble. The consensus view is: sure, China’s housing prices could fall modestly, but since Chinese households buy homes with cash or large down payments, this decline won’t trigger a banking crisis like America’s housing bubble did in 2008.

The problem isn’t a banking crisis; it’s a loss of household wealth, the reversal of the wealth effect and the decimation of local government budgets and the construction sector.

China is uniquely dependent on housing and real estate development. This makes it uniquely vulnerable to any slowdown in construction and sales of new housing.

About 15% of China’s GDP is housing-related. This is extraordinarily high. In the 2003-08 housing bubble, housing’s share of U.S. GDP barely cracked 5%.

Of even greater concern, local governments in China depend on land development sales for roughly 2/3 of their revenues. (These are not fee simple sales of land, but the sale of leasehold rights, as all land in China is owned by the state.)

There is no substitute source of revenue waiting in the wings should land sales and housing development grind to a halt. Local governments will lose a majority of their operating revenues, and there is no other source they can tap to replace this lost revenue.

Since China authorized private ownership of housing in the late 1990s, homeowners in China have only experienced rising prices and thus rising household wealth. The end of that “rising tide raises all ships” gravy train will dramatically alter China’s household wealth and local government income.

If you need some evidence that the echo-bubble in housing is global, take a look at this chart of Sweden’s housing bubble. Oops, did I say bubble? I meant “normal market in action.”

Who is prepared for the inevitable bursting of the echo bubble in housing?Certainly not those who cling to the fantasy that there is no bubble in housing.

NOTE: James Collins, please email me re: your generous contribution via Dwolla.

If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com.

Vía Max Keiser http://ift.tt/2piLibF

Meet Emmanuel Macron – The Consummate Banker Puppet, Bizarre Elitist Creation

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The last thing I ever wanted to do was write about France’s likely next president, Emmanuel Macron, but here we are. This post was inspired by a very telling Financial Times article sent to me by a reader, but we’ll get to that in a bit.

Most Americans paying attention to global affairs have some conception of his opponent, nationalist firebrand Marine Le Pen, but Macron is likely to be very much a black box. I hope today’s post changes that.

Any knowledge you may have on Macron probably comes from mainstream news outlets, which have been uniformly gushing about the socialist-centrist Rothschild protege…

Read the rest here.

Vía Max Keiser http://ift.tt/2q2pzCD

[KR1062] Keiser Report: Silicon Valley Destruction

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We discuss the fact that Silicon Valley is being destroyed and $400 juicers are the evidence. Max interviews Dan Collins of TheChinaMoneyReport.com about China’s tech sector coming up with all the innovations while drawing in all the investment. While Silicon Valley wastes capital on complex juicers, China attracts 50% of global fintech investment and its digital payments market is 50 times larger than America’s.

Vía Max Keiser http://ift.tt/2q1HiKy

New Florida bill targets Bitcoin Money Laundering: A progressive step or a regressive measure?

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Florida lawmakers are considering a new legislation that aims to stop virtual currency dealers who indulge in money laundering activities. The bill, sponsored by Miami-Dade Representative Jose Diaz, has already passed through the state’s House Appropriations Committee.

 

Will this prove out to be detrimental to Bitcoin’s image?

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Vía Max Keiser http://ift.tt/2pvRiPe

LePen Euro Panic Over – “For Now”

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LePen Euro Frexit Panic Over – “For Now”

by John Stepek, Editor of Money Week

OK, drama’s over.

The French election has turned out pretty much exactly as expected.

For all that some of the papers are leading with “French revolution” headlines, the reality is that a face-off between the right-wing Marine Le Pen of the Front National and independent/socialist candidate Emmanuel Macron of En Marche! has been on the cards for months now.

LePen and Gold bars (Metalor 100g). Concerns about Frexit and the end of the euro has seen strong demand for gold in France and throughout jittery EU countries

So what happens now? And what does it mean for your money?

Looks as though Macron will win the French presidency

Emmanuel Macron, the French Tony Blair, won about 24% of the votes in yesterday’s first round of the French presidential election. Marine Le Pen, the French Nigel Farage, won around 22%.

They go through to the final round on 7 May. The rest of the candidates are out of the race.

Who will win?

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Vía Max Keiser http://ift.tt/2pgRqBi

Who Will Live in the Suburbs if Millennials Favor Cities?

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Longtime readers know I follow the work of urbanist Richard Florida, whose recent book was the topic of Are Cities the Incubators of Decentralized Solutions?(March 14, 2017).

Florida’s thesis–that urban zones are the primary incubators of technological and economic growth–is well-supported by data that shows that the large urban regions (NYC, L.A., S.F. Bay Area, Seattle, Minneapolis,etc.) generate the majority of GDP and wage gains.

Cities have always attracted capital, talent and people rich and poor alike.Indeed, “city” is the root of our word “civilization.” So in this sense, Florida is simply confirming the central role cities have played for millennia.

More recently, Florida has addressed the rising wealth/income inequality that is making desirable urban areas unaffordable to all but the top 10% or even 5% wage earners. This is a critical concern, because vitality is a function of diversity: a city of wealthy elites paying low wages to masses of service workers is not an economic powerhouse.

What happens as buying a home in a desirable city becomes out of reach of all but the most highly paid tranche of workers?

The larger question is: what happens to home ownership as housing prices continue higher while the next generation’s wages remain significantly lower than previous generations’ incomes?

Millennials are typically earning less than Baby Boomers and Gen-X did in their 20s and 30s, and if this continues–and history suggests it will–then how many Millennials will be able to buy a pricey house?

One consequence of stagnating wages and rising home valuations is a “nation of homeowners” morphs into a “nation of renters.”

The other big question is: if Millennials aren’t earning enough to buy pricey homes, who is going to buy the tens of millions of houses Baby Boomers will be selling as they downsize/move to assisted living? As for inheriting Mom and Dad’s house–that’s not likely if Mom or Dad need the cash to fund their retirement/assisted living.

This question is especially relevant to suburban homes, especially those far from employment centers. Though data on this trend is sketchy, it seems Millennials strongly favor city living over exurban/suburban living.

Anecdotally, I can’t think of a single individual in their 20s or 30s that I know personally who has bought a house in a distant suburb. Everyone in this age group has bought a house in an urban zone. Not a highrise condo in the city center, but a house in a ring city near public transport.

Though data on this is hard to find (if it exists at all), Millennials seem more willing to make the sacrifices necessary to live in the urban core, either by renting rather than buying a cheaper suburban home, or by purchasing a modest bungalow on a small lot rather than an expansive suburban home on a big lot.

(This could change if Millennials start having lots of children, but to date small bungalows in urban regions appear big enough for families with two children.)

In a turn-around from the postwar era, which saw a mass exodus of the middle class from city centers to suburbia, the upper middle class is moving back to urban centers and the lower-income populace–once the urban poor–are being pushed out to the suburbs. We can now speak of the suburban poor.

To some degree, the suburbs have become victims of their own success. Long commutes in heavy traffic are the inevitable result of the vast expansion of suburban subdivisions, shopping malls and business parks. These killer commutes detract from the desirability of suburbs, especially to auto-agnostics of the Millennial generation, who exhibit low enthusiasm for auto ownership.

Rather than symbolizing freedom, auto ownership is viewed as a burdensome necessity at best.

If we overlay these trends (assuming they continue into the future), we discern the possibility that marginal suburban housing could crash in price and morph into suburban ghettos of isolated low-income residents.

The Pareto Distribution may play a role in this transformation. Should 20% of the suburban housing stock fall into disrepair, that could trigger the collapse of valuation in the remaining 80%.

Not all suburbs are equal. Those with diverse job growth may well act as magnets much like small cities. Those with few jobs and long commutes are less desirable and have smaller tax bases to support services.

The asymmetry between modest/stagnant Millennial wages and the soaring cost of housing cannot be bridged. If these trends continue, only the top tranche of highly paid young workers will be able to afford housing in desirable areas. Given a choice between affordable ownership in a small city or in a distant suburb, Millennials may well choose the affordable small city rather than the distant exurb or low-services suburb.

Note that most incomes have gone nowhere since about 1998. Even the top 5% has made modest gains in real (inflation-adjusted) income.

Meanwhile, home prices are back in bubble territory. “Hot” urban areas such as Seattle, Portland, the San Francisco Bay Area, Los Angeles, Brooklyn NYC, etc. have logged double-digit gains in recent years.

So who’s going to pay bubble-valuation prices for the millions of suburban homes Baby Boomers will be off-loading in the coming decade as they retire/ downsize? We know one part of the answer: it won’t be Millennials, as they don’t have the income or savings to afford homes at these prices.

These trends promise to remake the financial geography of cities (large and small) and suburbia–and in the process, radically shift the financial assets of households, renters and owners alike.

NOTE: James Collins, please email me re: your generous contribution via Dwolla.

This essay was drawn from Musings Report 15. The weekly Musings Reports are emailed exclusively to major contributors/ subscribers /patrons ($5/month or $50/year).

If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com.

Vía Max Keiser http://ift.tt/2pZeHbC