Behold Insanity ~ link ~ Check out the graphs at the link. Stirling
This is not normal... Dow futures moved over 4,500 points intraday today!!!
Yuan Devalues as Deposit Rate Spikes to Record Highs; Chinese Stocks Continue Crashing ~ link ~ Again, check out the graphs at the link ... very impressive! Stirling
Following yesterday's bloodbath (and the continued carnage around the world), AsiaPac stocks are lower with Japan unable to mount any sustained bounce despite every effort to lift JPY. The propaganda-fest is in full swing as Amari claims JPY is safe-haven asset and Aso denies any coordinated G7 response is being planned (which means they are all feverishly trying to figure out how to 'save' the world again from a 4-day stock drop). China is ugly with stocks down hard in the pre-open (CSI-300 -4.3%) as offshore Yuan depo rates spike to 22.9% - a record high - as liquidity outflows must be accelerating (as PBOC adds another CBNY150bn liquidity). China devalues Yuan 0.2% - most in 11 days.
- *CHINA SHANGHAI COMPOSITE SET TO OPEN DOWN 6.4% TO 3,004.13
- *CHINA'S CSI 300 INDEX SET TO OPEN DOWN 6.3% TO 3,070.01
Crunch Time Approaches - The Clock Is Running Out For Us ~ link ~
World trade is grinding to a halt. There are no economies in recovery that can pull us out of our current economic malaise. The Baltic Dry Index measures large scale shipping activity. It is at an all time low. Inventories are up. Retail sales are down. Auto sales are crashing despite the growth in really bad auto loans. The Chinese stock market is down despite the creation of something called Securitized Margin Debt. These are bonds that someone has guaranteed. 90% of these bonds have a AAA rating. This proves two things. China is in worse shape than we imagined. And Chinese people are not as smart as we thought.
Peter Schiff had the best insight into the devaluation of the Chinese yuan. He said that the euro is down 30 cents against the dollar and that the Yen is also down. When NAFTA was passed the Chinese pegged their currency against the dollar. This shut down 57,000 manufacturing plants in the US which was very bad for 99% of all Americans but very good for Wall Street and China. What the Chinese did last week was to allow the market to correct a few percent the value of their currency. But they also removed their link to the dollar so that in the future they will no longer have to buy dollars and US Treasury bonds to maintain a subsidy to American politicians and consumers. And that is very bad news for Washington politicians and the people who vote for them.
It means that in the future the only one left standing to finance American deficits will be the Federal Reserve’s printing press. That means Hyperinflation as soon as foreigners start dumping dollars. Hyperinflation will mean that the food on our store shelves will be too expensive for the bottom half of society to buy. Wall Street is hoping that 315 million Americans will use 350 million guns to kill each other at the grocery stores.