Perspectives on the global economic changes

Suraj · Post by **Suraj** » 20 Jan 2014 04:51

panduranghari wrote:
Suraj wrote:It was good enough send gold prices down and make it the worst performing asset category during 2013. That counts for much more than how local it is as a phenomenon, or not.
Using only 2013 is ingenious. If we compare asset classes since 2008 Lehmann crisis, silver and gold are the best asset classes.

Why is it disingenious ? My original post specifically mentioned Gundlach's reference to 2013 and a recent change in the direction of capital flows from gold into RE that his own clients demonstrated. I'm *not* referring to the larger returns of gold at all. I'm aware of gold's ROI over a more extended period - I hold substantial holdings of it that I purchased years ago and are worth around 2-3x my basis even after 2013.

Neshant · Post by **Neshant** » 20 Jan 2014 14:52

panduranghari · Post by **panduranghari** » 20 Jan 2014 18:41

Suraj wrote:
panduranghari wrote: Using only 2013 is ingenious. If we compare asset classes since 2008 Lehmann crisis, silver and gold are the best asset classes.
Why is it disingenious ? My original post specifically mentioned Gundlach's reference to 2013 and a recent change in the direction of capital flows from gold into RE that his own clients demonstrated. I'm *not* referring to the larger returns of gold at all. I'm aware of gold's ROI over a more extended period - I hold substantial holdings of it that I purchased years ago and are worth around 2-3x my basis even after 2013.

Making investment decisions based on the data from 1 year is perhaps not the cup of tea for common man. Perhaps if day trading is the profession then such analysis is of use. But how many people have the time and the money to do day trading for livelyhood. I know only one guy who used to live in London and then in NY. He set up the energy trading desk at JP Morgan. He now does day trading for living and he lives in HK. He would be very happy to use data like that published by Gundlach.

Though this thread is 'perspective on global economic change' hence the Gundlach's data has its place in that perspective, anyone who is not a day trader perhaps may not essentially find this of use. I am not questioning that the data should not be there but by putting the data up and having a bigger perspective as well helps.

Hence I said its 'ingenious'.

Its not 'disingenious'.

Suraj · Post by **Suraj** » 21 Jan 2014 01:11

I think we're discussing very different things. Gundlach provided a valuable datapoint about where the capital flows into gold moved into. One could surmise that capital did move out of gold into RE, but Gundlach's statement is something out of the horses mouth, because he's an actual bond heavyweight with an inside view into big money movements. That is all.

Anything more than that is a tangential topic you're getting into. I'm not talking about long term gold investment potential, aam aadmi investors or anything. That's why I responded to your original response, which really had nothing to do with my post about Gundlach's statement about gold in 2013.

Austin · Post by **Austin** » 21 Jan 2014 13:30

Foreign debt has increased over 2013 by 15%, to $ 732 billion

http://ria.ru/economy/20140120/990235944.html

External Debt of the Russian Federation on January 1, 2014 amounted to $ 732.046 billion compared to $ 636.435 billion as of January 1, 2013, according to preliminary data of the Bank of Russia.

Thus, the country's foreign debt has grown over the past year to 95.6 billion dollars, or 15%.

For the fourth quarter of 2013 foreign debt increased by 2.5%, or 17.84 billion. In late December, the Bank of Russia re-estimated the country's external debt on October 1, 2013, reducing it to 714.206 billion dollars from the original figure of 719.6 billion dollars.

Non-financial sector in 2013 increased its external debt to 73.02 billion dollars, or 20% - up to 437.822 billion.

Banks increased their debt to non-residents 13.37 billion, or 6.6% - to 214.94 billion dollars.

External debt of general government in 2013 increased by 9.01 billion dollars, or 16.6% - to 63.44 billion dollars.

The level of external debt of the monetary (CB) increased by $ 205 million, or 1.3% - to 15,844 billion dollars.

So net external Debt of RF as of 1st Jan 2014 is 36 % of GDP , Public Debt of Russian Government is 11 % of GDP

Austin · Post by **Austin** » 21 Jan 2014 20:33

Fed to reduce bond-buying program to $65bn - WSJ

The Federal Reserve is on track to trim its bond-buying program for the second time in six weeks, the Wall Street Journal said. A reduction in the program to $65 billion a month from the current $75 billion is expected to be announced at the end of the January 28-29 meeting. Last year the Fed spent $85 billion a month buying bonds. Outgoing Chairman Ben Bernanke said in December that officials were inclined to continue cutting purchases in $10 billion increments at subsequent meetings as long as the economy keeps strengthening.

Austin · Post by **Austin** » 21 Jan 2014 20:35

US oil demand grows faster than China first time in 15 years - IEA

For the first time since 1999 oil demand in the US overtook that of China, the International Energy Agency (IEA) says. The US “shale revolution” has largely contributed, and analysts agree higher fuel consumption means the American economy is recovering.

According the IEA US oil demand grew by 390,000 barrels a day, showing a 2 percent increase after years of decline. In contrast, Chinese demand growth was the weakest in 6 years having added only 295,000 barrels per day.

Higher oil demand in the US reflects stronger activity by both American companies and people, as fuels such as gasoline and diesel are a primary source of energy.

The boost in US consumption came as a surprise to many analysts. Many who predicted a decline in demand in 2014 are now forecasting a second consecutive year of growth.

“Sometimes oil is a lagging indicator, but sometimes it is the opposite and shows that an economy is growing faster than thought,” Antoine Halff, head of oil market research at the IEA told the Financial Times.

During a decade of boom, Chinese oil demand was rising dramatically, while US oil consumption was constantly falling. However after new fracking technology which allowed the development of problematic shale deposits was introduced US oil consumption is quickly increasing again.

“It is clear that the US economy is rebounding very strongly thanks to its energy supplies,” added Mr. Halff.

Beyond the US, the IEA also raised its forecast for global oil demand in 2014, shifting oil prices up almost 1 percent to slightly more than $107 per barrel.

ramana · Post by **ramana** » 22 Jan 2014 04:09

Hindu Business Line:

No Longer US grain market

Some thing happened with collapse of FSU.

No longer Uncle Sam’s grain market
TEJINDER NARANG

The price of wheat is determined by Black Sea region countries, and corn by Argentina, Brazil and Ukraine.

The views of analysts that world grain prices are bearish simply because they are declining in the US’ Chicago Board of Trade (CBOT) may not be entirely true.

Price movements in the Black Sea region have been quite the opposite of what transpired on futures exchanges. US leadership in agro trade is on the decline and other origins are asserting themselves. This is borne out by some recent developments.

WHEAT DYNAMICS

US share in world wheat trade has declined to 20 per cent from 30-35 per cent in 1990-2008. In recent times, the Black Sea nations of Russia, Ukraine and Kazakhstan have been the largest single bloc of wheat exporters of about 35 million tonnes (mts) while the US share is around 28-30 mts out of the world’s total volume of 140 mts.

Egypt, the world’s largest wheat buyer (10-12 mts per annum) is heavily dependent upon Black Sea Wheat (BSW), as are other nations in Africa and West Asia. The Far-East gets its wheat from Australia. Since 2011, Indian wheat export of about 5-6 mts has been competing with Black Sea and Australian wheat.

US futures exchanges, CBOT and the Kansas Board of Trade (KBOT), are no longer “reliable” platforms of price discovery. The high speculative interest of hedge funds in futures trades distorts evaluations. The price trends (bullish or bearish) indicated by these exchanges are disregarded by other origins.

During the last quarter of 2013, the values of US’ Hard Red Winter (HRW-12 per cent protein) wheat, which is comparable to Indian wheat and tracked by KBOT, plummeted by $45/mt ($290 fob), while Black Sea quotes climbed up by $45/mt from $250 to $295.

From India’s export perspective, Black Sea values are more relevant than what is happening in the US or its future exchanges. Moreover, Indian fob export price has to be compared with the landed cost (CIF) of the nearest origin — the Black Sea or Australia.

The US is the world’s largest producer of corn — about 350 mts. It had a share of 60 per cent share in world coarse grains in 2000-08 but that is now down to 40 per cent.

Recently, China “rejected” about 600,000 tonnes of US corn on GMO-related aberrations, though China requires about 5 mts maize this year.

The US or its sellers cannot muster the courage to drag China to international arbitration or the WTO for destabilising the market for fear of jeopardising future business.

After all, China imports 65 mts of soya bean, mostly from the US.

Discarded corn cargoes are finally offloaded in Japan, South Korea, Indonesia and elsewhere at a discount. Perhaps to firm up CBOT prices, the US Department of Agriculture underplayed corn yield in its monthly report dated January 10, 2014.

Corn exports from Argentina, Brazil and Ukraine of 20 mts each acted as a dampener on US prices. It is this trio that determines world’s maize prices, rather than the CBOT.

The irony is that the US has supported higher GMO corn production in these very South American countries from whom they are facing the heat. India’s corn exports, too, are calibrated on the basis of this trio, and not the US.

RICE TRENDS

The US was never a frontrunner in rice trade, whereas India is. Surprisingly, the US and Pakistan are on the same footing on rice production and exports. Both produce about 6-7 mts of rice each, and export about 3-3.5 mts. This is in contrast to India’s export of 10-11 mts (25 per cent of world trade) and about 7-8 mts each by Thailand and Vietnam. Global rice trade is expected to reach 40 mts for the first time, from about 38 mts, because of China’s additional demand, to be serviced mainly by Vietnam.

Three factors are responsible for Indian supremacy in rice trade — the populist but unfriendly Thai trading policies, the demand pull of basmati rice from Iran, and the switching of Sub-Saharan consumers from traditional foods (cassava and millet) to rice, which is viewed as a ‘fast’ food because of its shorter preparation time. The expansion in African price-sensitive markets has been supplied largely by India and Vietnam.

Rice trade is linked to the processing of paddy, packaging, and blending rather than bulk shipments. It is labour-intensive. The participation of the US in the rice trade in a big way is difficult.

Lower world prices of wheat and corn do not spell good news for Indian exports. However, basmati rice export — which is growing — is a high value addition item. Non-basmati rice export will depend upon Thailand’s ability to sustain its financial and economic mismanagement. The influence of the US here is marginal.

(The author is a grains trade analyst.)

This is a big shift in grain markets and has geo-political ramifications.

Any old timers recall reading the "Ox-Bow Incident"!!!

Christopher Sidor · Post by **Christopher Sidor** » 22 Jan 2014 10:00

Austin wrote:Fed to reduce bond-buying program to $65bn - WSJ

The Federal Reserve is on track to trim its bond-buying program for the second time in six weeks, the Wall Street Journal said. A reduction in the program to $65 billion a month from the current $75 billion is expected to be announced at the end of the January 28-29 meeting. Last year the Fed spent $85 billion a month buying bonds. Outgoing Chairman Ben Bernanke said in December that officials were inclined to continue cutting purchases in $10 billion increments at subsequent meetings as long as the economy keeps strengthening.

Wow the taper is coming fast. As this rate, i.e. decrease of 10 billion USD per month, the QE stimulus would get over by mid 2014. If this happens this will coincide with the Indian General Elections. Interesting times ahead.

Neshant · Post by **Neshant** » 22 Jan 2014 10:06

I'm sure they'll be rigging the markets behind the scenes well into the future.

Austin · Post by **Austin** » 22 Jan 2014 14:17

The Russian Central Bank's 'Weak Ruble' Policy Is Actually A Great Idea

Austin · Post by **Austin** » 22 Jan 2014 17:14

Best Countries for Business 2014
http://www.bloomberg.com/slideshow/2014 ... -2014.html

The BRIC countries mostly improved their standing this year. Brazil jumped from 61st place to 38th; Russia went from 56th to 44rd place; and India climbed from the 54th position last year to the 48th slot this year. But China continued to slide, dropping from the 19th position in the ranking's first year to a rank of 28 this year, its score on less-tangible costs the 46th lowest among the 50 countries.

TSJones · Post by **TSJones** » 22 Jan 2014 18:29

Christopher Sidor wrote:Wow the taper is coming fast. As this rate, i.e. decrease of 10 billion USD per month, the QE stimulus would get over by mid 2014. If this happens this will coincide with the Indian General Elections. Interesting times ahead.

And some of the posters here said they would never start tapering.

Lilo · Post by **Lilo** » 22 Jan 2014 18:59

The switching of Sub-Saharan consumers from traditional foods (cassava and millet) to rice, which is viewed as a ‘fast’ food because of its shorter preparation time. The expansion in African price-sensitive markets has been supplied largely by India and Vietnam.

^
Highlighting another snippet from the report.

Ramana wrote: Any old timers recall reading the "Ox-Bow Incident"!!!

Ramana ji,
I have seen the movie (another Henry Fonda starrer , this time exhorting about Vigilante justice vs faith in Justice system of the land) , but fail to get the relationship with the news report about grain trade.
Anything specific to the book ?

Suraj · Post by **Suraj** » 22 Jan 2014 20:42

I'd rather wait until late January and see what actually happens. Past record shows that the press has been less then accurate at predicting taper related activity in advance. In particular, Yellen is in charge now and is an unknown commodity, not that Bernanke was easy to figure out.

TSJones · Post by **TSJones** » 22 Jan 2014 21:07

Actually they do this on purpose in order to discourage market speculators. Alan Greenspan was remarkable in his skills at public disassembling. Even to Congress. He always left you going "huh?". And he was a disciple of Ayn Rand for pete's sake!

Austin · Post by **Austin** » 22 Jan 2014 21:17

Silent misery: Actual US unemployment 37.2%, record number of households on food stamps in 2013

Suraj · Post by **Suraj** » 22 Jan 2014 21:52

Mohammed el-Erian announces his departure from PIMCO, after a very eventful 15 years there. Leaves Bill Gross as the only big shot in charge of PTTRX.

TSJ: I agree. Little can be made of the press statements ahead of a Fed meeting, even if the source is WSJ.

TSJones · Post by **TSJones** » 22 Jan 2014 23:05

Austin wrote:Silent misery: Actual US unemployment 37.2%, record number of households on food stamps in 2013

Yet they are dying to come here from all over the world to ge to this miserable place for the jobs, the freedom of choice, the education etc. I wish a lot of them would stay away and make their country better instead of coming here, but they don't.

chola · Post by **chola** » 22 Jan 2014 23:28

Austin wrote:Silent misery: Actual US unemployment 37.2%, record number of households on food stamps in 2013

RT for "Russian Tabloid"?

The most prevalent disease of the "poor" in the US is obesity. Think carefully about what that means.

chola · Post by **chola** » 22 Jan 2014 23:32

TSJones wrote:
Austin wrote:Silent misery: Actual US unemployment 37.2%, record number of households on food stamps in 2013
Yet they are dying to come here from all over the world to ge to this miserable place for the jobs, the freedom of choice, the education etc. I wish a lot of them would stay away and make their country better instead of coming here, but they don't.

True, my sister-in-law ran at the Boston Marathon where two ingrates from a sh1thole decided to pay back a country that sheltered and educated them by setting off bombs.

TSJones · Post by **TSJones** » 23 Jan 2014 00:19

^^^^ And live on state and federal welfare and drive nice cars when they decided to set off their bombs.

Austin · Post by **Austin** » 23 Jan 2014 08:23

TSJones wrote:Yet they are dying to come here from all over the world to ge to this miserable place for the jobs, the freedom of choice, the education etc. I wish a lot of them would stay away and make their country better instead of coming here, but they don't.

Probably because being a welfare state they get their Food Coupons funded by US Government and there is a prestige associated with going to US and getting a Green Card.

A lot of indians still want to get to US , good money , builds up family prestige and helps them get good bride or groom

Austin · Post by **Austin** » 23 Jan 2014 08:24

chola wrote:
Austin wrote:Silent misery: Actual US unemployment 37.2%, record number of households on food stamps in 2013
RT for "Russian Tabloid"?

The most prevalent disease of the "poor" in the US is obesity. Think carefully about what that means.

IT simply means they are jobless and over fed with free food

Austin · Post by **Austin** » 23 Jan 2014 08:41

Total’s CEO Christophe de Margerie declares the European economy dead

DAVOS, January 22. /ITAR-TASS/. In the context of competitive ability, the European economy is dead, and it should be considered as a developing economy, said chief executive officer of the French energy company Total Christophe de Margerie at the World Economic Forum in Davos.

“Europe now is a developing economy, like BRICS and African countries, and the European Union should be added to this group,” said Margerie, adding that it is necessary to increase the competitive advantage of European products.

Europe should once again learn to produce high-quality goods with competitive prices, noted Total’s head.

Theo_Fidel · Post by **Theo_Fidel** » 23 Jan 2014 11:05

TSJ,

The dynamic has changed a bit. The ones from the elite colleges come in far fewer numbers now. Esp. from India and China. Last year only 3 left for USA from my college. The rest were snapped up within India itself. Of course the latin folks are coming but the source population has changed there too. The population boom is over in the latin countries and the USA actually runs an out migration to some sunny countries.

Of course India has such a huge population that there will always be a 100,000 or so per year easily rustled up, but the source population has changed.

Mexico, who people beat up on, now has a per capita income of $15,000, per woman fertility of 2.2 which is not quite replacement, and population growth rate of 1.1 % which is only marginally higher than USA. One can see the population growth rate of Mexico dropping below USA soon and far below replacement right after that. USA population is threatening to collapse into negative without immigrants. In many states where I live depopulation is a reality. Entire counties disappearing. Native born white women now have a only 1.75 children, Asian women on 1.7, blacks 1.9, and the Hispanics are heroically doing a 2.3 (barely replacement) but declining fastest of all. The USA as a whole has a 1.9 per woman and declining. As you can imagine this is not replacement. Every second couple must have 3 kids for replacement. The Latin immigration is not going to last for ever as those countries have even more rapid population growth rate declines going on. No In my lifetime I can see the USA population stagnate or reduce to a glacial growth rate. Large chunks of the rural areas experience this reality first hand as they fill with abandoned homes and towns.

For the first time I'm seeing similar situation in rural TN. Abandoned houses and small towns that no one is returning to.

shyam · Post by **shyam** » 23 Jan 2014 12:11

Austin wrote:
chola wrote:
RT for "Russian Tabloid"?

The most prevalent disease of the "poor" in the US is obesity. Think carefully about what that means.
IT simply means they are jobless and over fed with free food

Cheap unhealthy GM food.

Austin · Post by **Austin** » 23 Jan 2014 22:42

Economics Minister: Russian ruble likely to weaken than to strengthen in 2014
http://en.itar-tass.com/economy/715927

DAVOS, January 23, 16:39 /ITAR-TASS/. Russia's Economic Development Minister Alexei Ulyukayev believes that there are more chances for weakening than for strengthening of the ruble in 2014.

“The dynamics of the Russian ruble does not differ from that of national currencies of Brazil, South Africa, South Korea and other raw materials-based and developing economies. They are in opposition to the movement of the U.S. dollar,” he said in an interview with Rossiya 24 television channel on Thursday. “If we look at major figures of our balance of payment, the current account surplus demonstrates that there are more chances for slight weakening of the national currency than for its strengthening.”

“We have almost “free floating” of the national currency,” Ulyukayev said. “The Central Bank does not set tasks to get on some course through its interventions, therefore multidirectional fluctuations may take place during this year. But there are more chances that this will be fluctuations towards weakening of the course in relation to reserve currencies than towards strengthening.

panduranghari · Post by **panduranghari** » 25 Jan 2014 00:59

TSJones wrote:
Christopher Sidor wrote:Wow the taper is coming fast. As this rate, i.e. decrease of 10 billion USD per month, the QE stimulus would get over by mid 2014. If this happens this will coincide with the Indian General Elections. Interesting times ahead.
And some of the posters here said they would never start tapering.

They won't. Wait to the middle of June.

Suraj · Post by **Suraj** » 25 Jan 2014 04:35

Interesting take on the ongoing market correction:
All Of The Turmoil In Global Markets Right Now Is Just One Gigantic Hedge Fund Short Squeeze

Over the past two trading sessions, the S&P 500 has staged its biggest two-day slide since June 20, and Treasuries are ripping in what appears to be the return of the classic "risk-off" trade.

Everyone seems to be scrambling to identify the specific catalyst for the sell-off. A few theories that have been offered up include disappointing manufacturing data out of China on Thursday, an unexpected plunge in the U.K. unemployment rate (which ostensibly puts the Bank of England closer to monetary policy tightening), disappointing earnings results in the United States, and weakness in emerging markets as several EM currencies take a nosedive against the dollar, fanning fears of a slowdown in those parts of the world.

To dwell on these potential catalysts, however, is to miss what is happening behind the scenes that is really driving the sell-off: a massive unwinding of levered bets in the hedge fund community that were placed on views which have become de rigeur to the point that the market has become very one-sided lately.

"It's not about the economy or the unemployment rate or inflation," says David Ader, head of government bond strategy at CRT Capital.

"It's about unbalanced positions and is not that complicated."

In trader parlance, what we're witnessing, in essence, is one big short squeeze.

Nowhere is this squeeze more evident than in the U.S. Treasury market, which has staged a massive rally alongside the decline in stocks over the last two days.

Who is taking part in this supposed flight to quality?

"It's mostly hedge funds and fast money accounts that have played it from the short side from the beginning of 2014," says Tom di Galoma, head of fixed income rates sales at ED&F Man Capital Markets.

"Most were looking for higher rates in 2014 — near 3.5-4% on 10-years. This rally is all about short positions being alleviated and covered."

Treasury short squeeze => margin calls => liquidate equity positions => stock market falls.

TSJones · Post by **TSJones** » 26 Jan 2014 03:57

Suraj wrote:Interesting take on the ongoing market correction:
All Of The Turmoil In Global Markets Right Now Is Just One Gigantic Hedge Fund Short Squeeze
Over the past two trading sessions, the S&P 500 has staged its biggest two-day slide since June 20, and Treasuries are ripping in what appears to be the return of the classic "risk-off" trade.

Everyone seems to be scrambling to identify the specific catalyst for the sell-off. A few theories that have been offered up include disappointing manufacturing data out of China on Thursday, an unexpected plunge in the U.K. unemployment rate (which ostensibly puts the Bank of England closer to monetary policy tightening), disappointing earnings results in the United States, and weakness in emerging markets as several EM currencies take a nosedive against the dollar, fanning fears of a slowdown in those parts of the world.

To dwell on these potential catalysts, however, is to miss what is happening behind the scenes that is really driving the sell-off: a massive unwinding of levered bets in the hedge fund community that were placed on views which have become de rigeur to the point that the market has become very one-sided lately.

"It's not about the economy or the unemployment rate or inflation," says David Ader, head of government bond strategy at CRT Capital.

"It's about unbalanced positions and is not that complicated."

In trader parlance, what we're witnessing, in essence, is one big short squeeze.

Nowhere is this squeeze more evident than in the U.S. Treasury market, which has staged a massive rally alongside the decline in stocks over the last two days.

Who is taking part in this supposed flight to quality?

"It's mostly hedge funds and fast money accounts that have played it from the short side from the beginning of 2014," says Tom di Galoma, head of fixed income rates sales at ED&F Man Capital Markets.

"Most were looking for higher rates in 2014 — near 3.5-4% on 10-years. This rally is all about short positions being alleviated and covered."
Treasury short squeeze => margin calls => liquidate equity positions => stock market falls.

Vast sums of dollar denominated equities are being called in right now. The mind reels. They are covering their positions.

ramana · Post by **ramana** » 26 Jan 2014 09:47

Lilo. Ox-Bow Incident is about railroads squeezing out the mid western farmers and building the railroad. The bigger picture is to ship the grain from Mid West to India!!! So my allusion was to how the wheat and corn grain markets have shifted from US to Central Asia..

The shift in Africa from cassava to rice will have huge social impacts on African economy:less fuel, less wood chopping, less drudgery for the housewives, more productivity due to better nutrition, so on

Austin · Post by **Austin** » 26 Jan 2014 11:41

Dollar will continue its downward qualm in 2014 - expert

Austin · Post by **Austin** » 27 Jan 2014 08:51

Japan's foreign trade deficit in 2013 reached a record high amount

Japan brought in 2013 the balance of its foreign trade with the largest deficit in the country's history. He reached 11.47 trillion yen (over $ 112 billion). This was reported on January 27 , ITAR-TASS reported with reference to the Japanese Ministry of Finance. Exports last year increased by 9.5% due to strong demand abroad for many Japanese products, primarily for automobiles and other engineering products. However, the volume of imports jumped by 15%. This is due primarily to the rapid expansion of procurement of liquefied natural gas and other fossil fuel due to stop all nuclear power plants after the Chernobyl nuclear power plant "Fukushima-1".

Austin · Post by **Austin** » 27 Jan 2014 12:18

China passes India as world’s leading gold consumer

Austin · Post by **Austin** » 28 Jan 2014 09:52

In this episode of the Keiser Report, Max Keiser and Stacy Herbert discuss the fact that a vassal state of the Troika has been listed as number 9 in terms of economic freedom by the Heritage Foundation and Wall Street Journal. They ask: what is economic freedom in a neo-liberal, hyper-contractualized and financialized world run by big business, big banks and big bureaucrats. In the second half, Max interviews Payu Harris about his attempt to bring bitcoin and other cryptocurrencies to the Pine Ridge Indian Reservation in South Dakota. Payu suggests cryptos and the blockchain can offer unbreakable, sacrosanct contracts.

http://rt.com/shows/keiser-report/episo ... eiser-041/

Austin · Post by **Austin** » 28 Jan 2014 09:54

‘Mise-Ruble?’ Russia’s currency hits 5-year low

Christopher Sidor · Post by **Christopher Sidor** » 28 Jan 2014 18:59

Suraj wrote:I'd rather wait until late January and see what actually happens. Past record shows that the press has been less then accurate at predicting taper related activity in advance. In particular, Yellen is in charge now and is an unknown commodity, not that Bernanke was easy to figure out.

Yellen was allegedly a dove. Just to clarify, it was always meant that Yellen would keep the interest rate at zero or close to zero for significant amount of time. So taper would stop soon. Whether it would be the final end of QE/QE-II/QE-III is not certain.

The problem is that with zero interest rates the options which US Fed has to stimulate the economy are less. Unless and until US Fed does the unthinkable and takes the interest rates to negative territory, we can expect that low interest rates in US are there to stay. That would be something though, negative interest rates.

Suraj · Post by **Suraj** » 28 Jan 2014 22:04

Effective interest rates have been negative for more than 2 years now

The point I'm making is, the lakshman rekha of -ve interest rates was breached long ago, so it's not a resistance level.

The economic data released so far hasn't been particularly strong. The weather conditions would have weakened economic output. My guess is the QE program will be left as is this time. If you're wondering who'll be the main treasury bond buyer once the Fed, Chinese and others back away ? You. Yes, you: Obama announces Treasury IRA plans

chanakyaa · Post by **chanakyaa** » 29 Jan 2014 07:22

++ Amen to effective negative interest regime already in place for several year. A unique and a sneaky way of taxing savings and investment that average Joe will never understand.