How cold was it?

Growth Freezes Up as U.S. Business Investment Slumps: Economy: 

 

How cold was it?

 

It was so cold this winter that business executives' brains partially froze, so they were unable to execute orders for equipment and new plants that they so desperately wanted to make.

By Jeanna Smialek Apr 30, 2014 1:18 PM ET

Bloomberg News

Photographer: Paul Sancya/AP Photo

Ford CEO Alan Mullaly setting off through the snow to order auto parts and accessories. 12, 2014.

Related

• Economy in U.S. Stalls on Business Investment

The harsh winter sent a chill through the U.S. economy in the first quarter as slumps in business investment and home construction stalled growth.

Gross domestic product grew at a 0.1 percent annualized rate from January through March, compared with a 2.6 percent gain in the prior quarter, figures from the Commerce Department showed today in Washington. American consumers were a lone bright spot as households spent more to heat their homes and access health care.

The pullback in growth came as snow blanketed much of the eastern half of the country, keeping shoppers from stores, preventing builders from breaking ground and raising costs for companies including United Parcel Service Inc. (UPS) Another report today showing a surge in regional manufacturing this month adds to data on retail sales, production and employment that signal a rebound is under way as temperatures warm.

COOL STUFF DEPT:

More evidence of the man who destroyed Solomon’s Tem - See more at: http://blog.the-saleroom.com/sold-at-auction/evidence-man-destroyed-solomons-temple/#more-1952

More evidence of the man who destroyed Solomon’s Tem - See more at: http://blog.the-saleroom.com/sold-at-auction/evidence-man-destroyed-solomons-temple/#more-1952

The star entry in a sale of rare books, autographs and manuscripts at Doyle in New York on April 9 proved to be an example of one of the most ancient forms of writing. And it featured one of the best-known Old Testament figures - See more at: http://blog.the-saleroom.com/sold-at-auction/evidence-man-destroyed-solomons-temple/#more-1952

NEBUCHADNEZZAR II BABYLONIAN CYLINDER SETS WORLD AUCTION RECORD AT DOYLE NEW YORK

Clay Cylinder Achieves $605,000 at Doyle New York on April 9, 2014 -- A World Auction Record for a Babylonian Cylinder

Clay Cylinder Describes the Rebuilding of the Temple of Shamash by Nebuchadnezzar II and Dates to the Neo-Babylonian Period, Circa 604-562 BC

Babylonian King Nebuchadnezzar II Was Responsible for the Destruction of Solomon's Temple in Jerusalem and the Babylonian Exile of the Jews, as well as the Construction in Babylon of the Monumental Ishtar Gate and the Legendary Hanging Gardens

On April 9, 2014, Doyle New York auctioned a rare and important Nebuchadnezzar II Babylonian cuneiform cylinder that set a World Auction Record for a Babylonian Cylinder. The price of $605,000 achieved by Doyle New York far surpassed the prior record of £264,000 (approx. $440,000) set in London in 2011. The cylinder sold to a bidder participating on the telephone.
The clay cylinder describes the rebuilding of the temple of Shamash in Sippar (modern Tell Abu Habbah in Iraq) by Nebuchadnezzar II and dates to the Neo-Babylonian Period, circa 604-562 BC. At 8 1/4 inches (20.8 cm) in length, it is the largest example to come to market in recent times and was estimated at $300,000-500,000. In 1953, it was sold through Dawson’s of Los Angeles. The price of $605,000 includes the Buyer's Premium; the hammer price was $500,000.

The star entry in a sale of rare books, autographs and manuscripts at Doyle in New York on April 9 proved to be an example of one of the most ancient forms of writing. And it featured one of the best-known Old Testament figures. - See more at: http://blog.the-saleroom.com/sold-at-auction/evidence-man-destroyed-solomons-temple/#more-1952

his particular cylinder comes from the temple complex at Sippar (modern Tall Abu Habbah in Iraq), the cult site of the Akkadian sun god Shamash, and is inscribed with two well-preserved columns of text of approximately 37 lines that relate the rebuilding of the temple of Shamash in Sippar. - See more at: http://blog.the-saleroom.com/sold-at-auction/evidence-man-destroyed-solomons-temple/#more-1952

Now his exploits have come to light again as a 100-piece archive comprising his photos, diaries and logbooks goes on sale for £25,000 from Somerset firm - See more at: http://blog.the-saleroom.com/category/books-2/#sthash.K1CT7UkI.dpuf

More evidence of the man who destroyed Solomon’s Tem - See more at: http://blog.the-saleroom.com/sold-at-auction/evidence-man-destroyed-solomons-temple/#more-1952

Dollar under attack:

Foreigners Have Stopped Accumulating US Debt Securities

 

It's not a question of when foreigners will ratchet down their US debt purchases.  They are now net sellers.  

 

The question is How long can the Fed continue to "Wind Down" QE in the face of this.  When they change course what will happen to their Credibility?

I watch foreign investment in US securities closely, because small shifts are big enough to affect other US markets. In the last 12 months, foreigners have sold Treasuries at an unprecedented rate.

I include the US’s current account above because historically, countries that sell goods to America invest their dollar proceeds in Treasuries. China, for example, sends goods to the US, and the US pays for them with dollars. China then takes those dollars and buys Treasuries. That’s why foreign investment in Treasuries tends to closely follow the US trade deficit. Fracking has allowed the US to produce more energy domestically, helping to improve its trade deficit.

But foreigners are free to do what they want with their dollars. And recently, they’ve been doing anything but buying Treasuries—like buying American companies and Midwest farmland. It’s risky to have so many dollars and dollar-denominated assets in foreign hands, outside of US control.

Other indicators confirm that foreigners are selling US debt. The Fed holds Treasuries in custody for foreign central banks, and its custody holdings recently plummeted by a disastrous $100 billion in just one week.

Announcements of sanctions against Russia seem to have precipitated that fire sale. Russia itself has decreased its holdings of US Treasuries from $165 billion to $126 billion.
Why should Putin loan the US money when the US is sanctioning Russia’s use of dollars?

Again, since foreigners aren’t buying US government debt, the Fed will have to. That, in turn, increases the quantity of dollars, diluting the value of Treasuries those foreigners already own. Which eventually will induce foreigners to sell even more of their Treasuries, depressing the dollar’s value further.

It’s a risky game, and a potential vicious cycle.

Attack on the dollar: China's drive to accumulate gold

China Takes Steps To Further Conceal Gold Holdings

April 24th, 2014

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It has long been public knowledge that China has been secretly adding to its gold reserves.

Speculation abounds as to the quantity of gold that China holds, and even further speculation surrounds what they plan on doing with it.

Many precious metals experts believe that China is gearing up for the “end game” in which they will usher in a new global currency, a currency that will displace the US dollar and bring about a new age of prosperity for China.

Zhang Bingnan, market analyst for China Central Television and vice president of the China Gold Association, had intriguing things to say at a financial conference last year. As a result of his studies on gold's place in the modern economy, he concluded gold has an essential role in the current monetary system.

Shortly thereafter Tan Ya Ling, president of the China Foreign Exchange Investment Research Institute, spoke at a Beijing gold conference last May. She told delegates that gold is a currency - perhaps even the next world reserve currency - and therefore China has to dominate the world gold market.

Just incidental chatter from high placed Chinese officials?   Some Western ananlysts don't think so:

In an intereview this month with Bloomberg News, Lombard Street Research of London had this too say:  "The massive flow of gold into the country does make it seem plausible that they [China's authorities] could be moving in the direction of using gold in the effort to internationalize the currency and escape what is seen as a domineering dollar."

The truth of the matter is we don’t know.

Up until now, the only way investors could get any indication of how much gold China was accumulating was from the monthly release of export data from Hong Kong, which last year supplied $53 billion worth of gold to China last year.

All that is about to change.

China has announced that it will begin allowing gold imports directly through its capital, Beijing.

China would have no obligation to release or disclose its import numbers, thus making its accumulation of gold even more discreet.

The People’s Bank of China is likely to continue its trend of secrecy; they have made it well known that they intend to diversify out of US treasuries, much to the disappointment of the Federal Reserve.

The true gold holdings of China is a national secret.

 China’s last official report was released in 2009, with holdings standing at 1,054 tonnes.

Experts question even the validity of this number and suspect it was much higher.

Financial experts estimate that China’s holdings range between 3,000 and 5,000 tonnes.

Some estimates place this number even above the United States’ ”official” holdings of 8,000 tonnes.

Unfortunately, those of us who are interested in knowing the truth will have to wait.

China will release their true numbers one day, and the ramifications of that announcement could forever change the World and propel gold to staggering new heights.

Until then, enjoy the discount.

Dollar under attack: The Russia China alliance

It's really not possible to overstate the importance of the Russia/China (India Brazil South Africa) alliance.

It's not that they're going to start invading countries.  Sure there will be territorial disputes that get lots of press, but they'll be largely symbolic - not to the people who get killed in those territories - but in terms of the global stage.  These territorial disputes will certainly have no substantive impact on the United States.  Not even Ukraine.

It's not that they'll launch a nuclear attack on the US.  Why would they?  It's not in their own interest.

It's not that they'll introduce the world to a communist ideology that will compete with capitalism.  Capitalism and Communism are infotainment ideas that fuel fake news outlets, talk radio and Hollywood movies but they have no existence in the real world.  Russia and China, like the US are crony capitalist states - which is a form of economy much closer to Mercantalism than to free market capitalism, which entirely ceased to exist in the world after 2008.  If it ever really existed.

They have one common issue that unites them: TRADE.

And they have one clear current objective to maximize PROFIT on TRADE.  And that objective is to CUT OUT THE DOLLAR as the SETTLEMENT CURRENCY.

That's it.  Because if they settle their trade in their own currencies then they can used their own printed debt to float their own economies.  They will stop buying our debt.  They will stop funding our deficits.  They will fund their own.

This attack on the US Dollar may or may not have small elements of historical enmity and resentment attached.  But this is largely irrelevant.  It just makes good economic sense.

It's in their own interest.  And they can do it.  They are doing it.

As they succeed, it becomes increasingly difficult for the US to fund itself through debt issuance.

As they succeed the massive global dollar stock loses value.

And as they succeed the price of all real goods denominated in dollars become increasingly expensive.

That's why the wealthy are amassing hard assets with a vengeance.

TASS: We love China:

FM: Russia-China relations turn in increasingly significant factor in world politics

Russia

April 24, 11:42 UTC+4
“Good example of mutually beneficial partnership is unprecedentedly high level of Russian-Chinese relations which turn in an increasingly significant factor in world politics,” Sergei Lavrov says

© ITAR-TASS/Yuri Smityuk

NOVATEK says Russia may agree to sell liquefied natural gas to China from Yamal

MOSCOW, April 24. /ITAR-TASS/. Russian Foreign Minister Sergei Lavrov noted “an unprecedentedly high level of Russian-Chinese relations which turn in an increasingly significant factor in world politics.” The minister has made a statement at an opening ceremony of the global university forum in the Russian capital on Thursday. “Joint work to step up international stability, create conditions for broad international co-operation, take joint actions to settle global regional problems is a basis of foreign political philosophy of our country,” the Russian foreign minister noted.
“A good example of mutually beneficial partnership is unprecedentedly high level of Russian-Chinese relations which turn in an increasingly significant factor in world politics,” Lavrov said, adding that “There are also relations within the troika (three) of Russia, India and China and between the BRICS states (the developing-nation assembly of Brazil, Russia, India, China, South Africa) which develop actively their ties with regional structures in Latin America and on other continents.

NOVATEK says Russia may agree to sell liquefied natural gas to China from Yamal

Economy

April 18, 13:56 UTC+4
Yamal LNG, in which NOVATEK holds a 60% equity stake (France’s Total - 20%, and CNPC - 20%), holds the license for exploration and production at the South-Tambeyskoye field valid until 2045

A tanker transportin liquified gas (archive)

© ITAR-TASS/Alexander Semeyonov

Japan set to support LNG projects in Russia’s Far East

MOSCOW, April 18./ITAR-TASS/. Russia’s NOVATEK oil and gas company says during the visit of Russia’s President Vladimir Putin to China, due in May, the two countries may sign a contract with CNPC (China National Petroleum Corporation) on LNG (liquefied natural gas) supplies from Yamal, the company’s head Leonid Mikhelson told reporters on Friday.
The document will contain exact pricing, he said adding as of now 75-78% of future LNG from Yamal had been contracted already. The company does not rule out it may contract the entire 100% of the liquefied natural gas.

The Dollar: extremely vulnerable to attack:

 

 

The US Dollar On the Ropes:

As bad as gold looks right now, it is at least still slightly above its (recently rising) 200 day moving average and the 50 and 200 day averages have just had a theoretically bullish crossover (unfortunately the 'golden cross' doesn't exactly have very convincing statistics as a bullish indicator). 

Still, none of this applies to the dollar index, which is all the more remarkable - five years into a supposed recovery - as numerous emerging market and commodity currencies have been bushwhacked over the past year or so, along with the yen. 

The dollar is stuck below both its 50 and 200 day moving averages, both of which are declining to boot. The reason for this dismal performance of this index is that the euro - despite all the problems of the euro zone - has been the by far strongest major currency, and the euro represents the biggest component in the dollar index.  

Let's remember that a year ago most analysts were predicting Euro Dollar parity to be the result of a resurgent US recovery and a Euro zone mired in recession.  Now, we still have the myth of the resurgent US recovery but looks at the backbone of the US economy:

The US dollar index: the more often the shelf of support at the 79-79.50 level gets tested, the more likely it becomes that it will eventually break – click to enlarge.

In other words, if gold looks bad, the dollar looks even worse. Keep in mind that the Merrill Lynch fund manager survey found a record 83% of fund managers to be bullish on the dollar last July. This is historically a very reliable long term bearish signal. Conversely, a large bearish consensus (above  70%) can bring about rallies lasting a decade – as has happened with the yen for example. 

Let us not forget, even though the pace of money printing is slowing down now, the dollar money supply has grown by multiples of the euro and yen money supply since 2008. This relative pace of monetary inflation is by far the most important long term factor in relative currency valuation.

What happens to this monetary inflation/US dollar index once the Fed has to reverse course yet again to increase "asset purchases" as the BRICS continue to decrease US debt purchases?

Nobody knows, as we're in uncharted territory here.  But it might be good to own a few hard assets.

Why The Dollar is so incredibly vulnerable to attack:

Fed now the largest hedge fund in the world
Why the former head of the Federal Reserve's QE trading room owns gold

Andrew Huszar, formerly a managing director at Morgan Stanley and the man who set up the Fed's trading room to run the quantitative easing program, now believes that the Federal Reserve has set a dangerous course for America and the world. In this surprising interview at King World News, he reveals the Fed's deep involvement directly in markets and explains why he now includes gold in his own investment portfolio.

"I think when you see the Fed go from having a balance sheet of $800 billion to $4 trillion in the span of five years, and pump over $4 trillion of cash into Wall Street, you've seen a lot of cash liquidity flowing throughout the world. I would argue that the markets have become addicted to the liquidity that the Fed is pumping out there.

So when you pull back any punchbowl this big you are going to see substantial issues. (or when the punch bowl is pulled away) We saw this first last summer when the Fed initially talked about a taper and we saw a $5 trillion global equity market selloff. In January, in anticipation of the second QE cut by the Fed, you saw more volatility in the emerging markets.

I think what you are going to see in 2014 is the unintended consequences of this stimulus hit as the Fed tries to pull it back. ... At this point the Fed effectively owns 30% of the US Treasury market, it owns 10% of the housing market, it has become what is effectively the biggest hedge fund in the world.

You have a lot of hawks on the Federal Open Market Committee (FOMC) who are confident they can pull back (on QE). I think the Fed will be surprised again -- by what happened in the emerging markets, for example, spreading to the US markets. I believe the idea that the Fed would finish QE by the end of 2014 is unrealistic.

The volatility in the markets will be a rollercoaster ride. If the Fed really sticks to its guns, I think we could see a 20% - 30% selloff in the US (stock) market pretty easily in the course of a few months. ... If the market really believed that central banks around the world were going to step away meaningfully, and there was no so-called 'Greenspan/Bernanke/Yellen put' in the market, I believe you could see far more dramatic declines."

Huszar also points out that the Fed is now buying 90% of newly issued mortgages and 70% of newly issued government debt.

What happens when value of the dollar plummets as it loses its reserve status?

THE DOLLAR UNDER ATTACK; WHILE AMERICA SLEEPS

Are you a conservative?  A liberal?  A Tea Party Patriot?  A Democrat?  A Republican?

Are you involved in the Health Care Wars?  The Fracking Wars?  The Culture Wars?  The War on Christmas?  Are you for standing up to the Russians?  Standing up to the Chinese?

If you identify yourself with any of these mini-ideologies you're playing right into the hands of the Big Banks.  You might as well be in the employ of J P Morgan.

Because you will read every current event in terms of how it plays politically for your self identified party.  And then you will necessarily miss - not just the Big Picture - but the Only Picture.

The world is now a series of Economic Zones.  The people who rule these zones don't have political affiliations.  They act in the political world.  But they are motivated by one thing and one thing only:

MONEY.

And the only War worth worrying about right now is the Global Currency War. China, Russia, India and Brazil and all their clients and allies want one thing, and one thing only: That international trade be settled in their own currencies, and that the dollar is cut out of all settlements not directly involving the US.

Because they know that right now Settlement Currency : Reserve Currency is the weapon of the 21st Century.  And everything else is smoke and mirrors.  Because global debt levels are so incredibly high, economic existence depends upon other countries needing your debt to settle trade agreements.
 
The banks and all their infotainment clients (Fox CNBC Bloomberg etc.) downplay it.  Most of them don't even acknowledge that it's real.  Because to acknowledge it focuses attention on it.  In stead, they want you worrying about ridiculous minutiae so they can suck as much capital out of the system while becoming monolithic power structures that can never be dismantled, and never be allowed to fail, no matter what happens in the broader economy.

And guess what: The banks have achieved this.

While liberals and conservatives bicker over health care and pipelines.

RUSSIA - CHINA - INDIA: It's all about the dollar

THE DOLLAR UNDER ATTACK:

Russia Prepares Mega-Deal With India After Locking Up China With "Holy Grail" Gas Deal

Submitted by Tyler Durden

inShare17

Last week we reported that while the West was busy alienating Russia in every diplomatic way possible, without of course exposing its crushing overreliance on Russian energy exports to keep European industries alive, Russia was just as busy cementing its ties with China, in this case courtesy of Europe's most important company, Gazprom, which is preparing to announce the completion of a "holy grail" natural gas supply deal to Beijing. We also noted the following: "And as if pushing Russia into the warm embrace of the world's most populous nation was not enough, there is also the second most populated country in the world, India." Today we learn just how prescient this particular comment also was, when Reuters reported that Rosneft, the world's top listed oil producer by output, may join forces with Indian state-run Oil and Natural Gas Corp to supply oil to India over the long term, the Russian state-controlled company said on Tuesday.

Rosneft CEO Igor Sechin, an ally of President Vladimir Putin, travelled to India on Sunday, part of a wider Asian trip to shore up ties with eastern allies at a time when Moscow is being shunned by the West over its annexation of Crimea.

With EU nations threatening to cut their reliance on Russian oil and gas, Russian officials have started to look East.

Rosneft said it had also agreed with ONGC they may join forces in Rosneft's yet-to-be built liquefied natural gas plant in the far east of Russia to the benefit of Indian consumers.

We just have one question: will payment for crude and LNG be made in Rubles or Rupees? Or in gold. Because it certainly won't be in dollars.

 

 

DOLLAR UNDER ATTACK: RUSSIAN FOREIGN POLICY JUST A SUBPLOT

India along with BRICS economies lower exposure in US treasuries

Gayatri Nayak, ET Bureau Apr 19, 2014, 09.50PM IST

Tags:

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(India reduced its exposure…)

MUMBAI: India lowered its exposure to US treasury securities in February along with other BRIC economies due to a slowdown in portfolio investment resulting in lower surpluses in these economies.
India reduced its exposure in US treasury bonds and by 1.6% or $1.1billion in February to $67 billion, data released by the US treasury department.

 

 

BRICS aim to finish development bank preparations by July summit

By Lidia Kelly and Paul Simao

WASHINGTON Fri Apr 11, 2014 4:39am IST

A traffic policeman stands on duty outside the Sheraton Hotel, the venue of BRICS Summit in Sanya, China's Hainan province, April 13, 2011.
shows

(Reuters) - The BRICS bloc of emerging economies will have all preparatory work done for setting up its development bank by the group's summit in July, South African Finance Minister Pravin Gordhan said on Thursday.
The bank Brazil, Russia, India, China and South Africa plan to support infrastructure projects has been slow in coming, with prolonged disagreements over its funding, management and headquarters.
The group, which has struggled to take coordinated action on most issues in the past year after the scaling back of U.S. stimulus prompted an exodus of capital from their markets, is hoping their leaders will officially launch the bank at their July meeting in Brazil.
"We've made very good progress on the new development bank and most of the formal documentation is ready," Gordhan told journalists after a meeting of the BRICS finance ministers in Washington.
"There will be a few issu

 Why Did BRICS Back Russia on Crimea?

 (SEE ABOVE)

The BRICS’s support for Russia shows the Western-dominated post-Cold War order is eroding.

By Zachary Keck

March 31, 2014

There’s been no shortage of reports and commentaries on the crisis in Ukraine and Crimea, and Russia’s role in it. Yet one of the more notable recent developments in the crisis has received surprisingly little attention.
Namely, the BRICS grouping (Brazil, Russia, India, China, and South Africa) has unanimously and, in many ways, forcefully backed Russia’s position on Crimea. The Diplomat has reported on China’s cautious and India’s more enthusiastic backing of Russia before. However, the BRICS grouping as a whole has also stood by the Kremlin.

The BRICS countries collectively represent almost 3 billion people (43 per cent of world population) with a combined nominal GDP of $14.8 trillion (about a quarter of global income), 17 per cent of world trade, and an estimated $4.5 trillion in total foreign reserves.  (excess dollars)