Hillary Exposed – Australia Withdraws Donation for Hillary’s Pay-to-Play Scheme

For all the fools who supported Hillary claiming her Foundation was not illegal and doing good, Now Australia, who donated $75 million to the Clintons tax free has joined Norway cutting their donations. All government will withdraw their support for Hillary’s foundation because it was just corruption – pay to play. Hillary even had the audacity to say her foundation would continue when she was President and would not be shut down.

This post was published at Armstrong Economics on Nov 24, 2016.

Global Deflation Alert: Australia’s Unprecedented Collapse of CapEx in One chart

You’ve probably heard of the ‘capex cliff’, the term for the collapse in capital expenditure plans by Australian businesses that is an inevitable feature of the economy following the once-in-a-lifetime mining investment boom driven mainly by the surge in Chinese demand over the past two decades.
But with Australia’s manufacturing industry having been hollowed out too over the past decade, the capital investment pipeline for both mining and manufacturing are gone. So the fall-off, when measured in terms of a percentage of GDP, is nothing short of spectacular in historical context, as shown in this chart from Macquarie:

This post was published at David Stockmans Contra Corner By PAUL COLGAN, Business Insider ‘ August 22, 2016.

The Road to Stagflation – – The Case Of Norway

We have all heard the incredible stories of housing riches in commodity producing hotspots such as Western Australia and Canada. People have become millionaires simply by leveraging up and holding on to properties. These are the beneficiaries of a global money-printing spree that pre-dates the financial crisis by decades. The road toward such outsized gains in property is not paved with some global savings glut concocted by theoretical economists, but have rather been a process whereby the US leveraged up its economy-wide asset base allowing the Chinese to print ‘dollars’ with abandon. China, being a top-down system favoured fix asset investments as a means to grow their economy; the newly minted ‘dollars’ were thus used to bid on international commodities. That this increased the nominal values of tangibles, especially commodities with a direct Chinese bid, should come as no surprise. However, now that the Chinese economy is trying to move away from a system based on slave labour, foreign direct investment and exports to an overleveraged world, fixed asset investment growth is slowing down. That this has negatively affected Perth and Calgary is clearly visible in property data. However, one stalwart bubble remain resolute in all of this. A bubble like few before it and which will inevitably burst spectacularly with dire consequences for the small community. If you look to the prosperous fringe of northern Europe, you will note a small resource-based economy that has gone completely haywire. A population befuddled by surging commodity prices in a world where monetary policy is a foreign import. Remember the Impossible Trinity; a country cannot have free capital flows, a fixed exchange rate and a sovereign monetary policy all at the same time. While exchange rates were supposedly freely floating, they were in practice partly managed because a too strong exchange rate would crowd out the non-commodity export based part of the economy. Capital was certainly free to flow across the border, but to dampen the effect on the exchange rate the central bank set its monetary policy with diktat from the Eccles Building in Washington DC via Frankfurt. The result of such folly? We present exhibit A, a gargantuan housing bubble equal to none before it.

This post was published at David Stockmans Contra Corner on August 19, 2016.

Helicopter Money – – The Biggest Fed Power Grab Yet

The Cleveland Fed’s Loretta Mester is a clueless apparatchik and Fed lifer, who joined the system in 1985 fresh out of Barnard and Princeton and has imbibed in its Keynesian groupthink and institutional arrogance ever since. So it’s not surprising that she was out flogging – -albeit downunder in Australia – – the next step in the Fed’s rolling coup d etat.
We’re always assessing tools that we could use,’ Mester told the ABC’s AM program. ‘In the US we’ve done quantitative easing and I think that’s proven to be useful.
‘So it’s my view that [helicopter money] would be sort of the next step if we ever found ourselves in a situation where we wanted to be more accommodative.
This is beyond the pale because ‘helicopter money’ isn’t some kind of new wrinkle in monetary policy, at all. It’s an old as the hills rationalization for monetization of the public debt – – that is, purchase of government bonds with central bank credit conjured from thin air.
It’s the ultimate in ‘something for nothing’ economics. That’s because most assuredly those government bonds originally funded the purchase of real labor hours, contract services or dams and aircraft carriers.
As a technical matter helicopter money is exactly the same thing as QE. Nor does the journalistic confusion that it involves ‘direct’ central bank funding of public debt make a wit of difference.

This post was published at David Stockmans Contra Corner by David Stockman ‘ July 13, 2016.

Meltdown! Central Banks Are Destroying The Global Bond Market

Japanese, German and Swiss bond yields fell to records, as government debt around the world extended its best gains in two decades, with the prospect of Britain leaving the European Union boosting demand for havens.
Federal Reserve Chair Janet Yellen fueled the rally by saying Wednesday slow productivity growth and aging societies may keep interest rates at depressed levels. Fewer Fed officials expect the central bank to raise interest rates more than once this year than they did three months ago, based on projections the central bank issued. The Bank of Japan said inflation in the nation may be zero or negative, while holding monetary policy unchanged.
The bond rally is sending benchmark 10-year yields to unprecedented levels in some countries. Japan’s tumbled to minus 0.21 percent. Australia’s fell below 2 percent. Germany’s plunged below zero. Even Switzerland’s 30-year yield briefly turned negative, as sub-zero yields, once considered unthinkable, are becoming more common.
‘New Abnormal’
‘It’s the new abnormal,’ said Park Sungjin, the head of principal investment in Seoul at Mirae Asset Securities Co., which oversees $7.7 billion. ‘The abnormal is normal now.’

This post was published at David Stockmans Contra Corner on June 16, 2016.

More Volume From The Red Dumpster – -China’s Q1 Steel Exports Up 8%, Implied 120 Million Ton Annual Rate

Steel exports from China rebounded in March to the highest level this year, underscoring the competitive threat facing global producers still reeling from last year’s record surge in shipments and slump in prices.
Shipments expanded to 9.98 million metric tons, up 30 percent on-year and higher than the 8.11 million tons in February, according to data from the customs administration on Wednesday. The March figure takes exports for the quarter to 27.83 million tons, about 8 percent more than a year earlier.
Facing a glut of metal at home, Chinese mills have boosted exports to unprecedented levels, triggering a crisis for steelmakers outside the largest producer. The resurgence in March, part of a broader rebound in China’s exports over the month, is more bad news for steelmakers from Australia to the U. K., where the battle against the deluge of Chinese metal has claimed high-profile victims including Sydney-based Arrium Ltd., and cast doubt on the future of Tata Steel Ltd.’s U. K. operations.

This post was published at David Stockmans Contra Corner by Bloomberg Business ‘ April 15, 2016.

State of Fear – Corruption in High Places

Mr. X and his Mysterious Benefactors
As the Australian Broadcasting Corporation (ABC) reports, a money-laundering alarm was triggered at AmBank in Malaysia, a bank part-owned by one of Australia’s ‘big four’ banks, ANZ. What had triggered the alarm? Money had poured into the personal account of one of the bank’s customers, a certain Mr. X, in truly staggering amounts.
Hundreds of millions of dollars were paid into the account of Mr. X by a Saudi prince described as ‘mysterious’, and two British Virgin Island companies characterized as ‘shadowy’.
Overall, more than $1.05 billion landed in Mr. X’s private account in a little over two years. This was bound to raise eyebrows, considering Mr. X’s official salary only amounts to approx. $100,000 per year. Not a bad salary to be sure, but even if he were to save half of it every year, it would take him 210,000 years to save up $1.05 billion, not just two.
Then the head of a government-owned Malaysian company put millions of ringgit into Mr. X’s credit card accounts, which had been a tad overdrawn (by slightly over $ 1m.), due to Mr. X’s wife splurging a bit on jewelry in 2014.

This post was published at Acting-Man on April 13, 2016.

Rich Countries Have a $78 trillion Pension Problem

Dreams of lengthy cruises and beach life may be just that, with 20 of the world’s biggest countries facing a pension shortfall worth $78 trillion, Citi said in a report sent on Wednesday.
‘Social security systems, national pension plans, private sector pensions, and individual retirement accounts are unfunded or underfunded across the globe,’ pensions and insurance analysts at the bank said in the report.
‘Government services, corporate profits, or retirement benefits themselves will have to be reduced to make any part of the system work. This poses an enormous challenge to employers, employees, and policymakers all over the world.’
The total value of unfunded or underfunded government pension liabilities for 20 countries belonging to the Organisation for Economic Co-operation and Development (OECD) – a group of largely wealthy countries – is $78 trillion, Citi said. (The countries studied include the U. K., France and Germany, plus several others in western and central Europe, the U. S., Japan, Canada, and Australia.)

This post was published at David Stockmans Contra Corner on March 17, 2016.

The War On Savers And The 200 Rulers Of Global Finance

There has been an economic coup d’tat in America and most of the world. We are now ruled by about 200 unelected central bankers, monetary apparatchiks and their minions and megaphones on Wall Street and other financial centers.
Unlike Senator Joseph McCarthy, I actually do have a list of their names. They need to be exposed, denounced, ridiculed, rebuked and removed.
The first 30 includes Janet Yellen, William Dudley, the other governors of the Fed and its senior staff. The next 10 includes Jan Hatzius, chief economist of Goldman Sachs, and his counterparts at the other major Wall Street banking houses.
Then there is the dreadful Draghi and the 25-member governing council of the ECB and still more senior staff. Ditto for the BOJ, BOE, Bank of Canada, Reserve Bank of Australia and even the People’s Printing Press of China. Also, throw in Christine Lagarde and the principals of the IMF and some scribblers at think tanks like Brookings. The names are all on Google!
Have you ever heard of Lael Brainard? She’s one of them at the Fed and very typical. That is, she’s never held an honest capitalist job in her life; she’s been a policy apparatchik at the Treasury, Brookings and the Fed ever since moving out of her college dorm room.
Now she’s doing her bit to prosecute the war on savers. She wants to keep them lashed to the zero bound – -that is, in penury and humiliation – – because of the madness happening to the Red Ponzi in China. Its potential repercussions, apparently, don’t sit so well with her:
Brainard expressed concern that stresses in emerging markets including China and slow growth in developed economies could spill over to the U. S.
‘This translates into weaker exports, business investment, and manufacturing in the United States, slower progress on hitting the inflation target, and financial tightening through the exchange rate and rising risk spreads on financial assets,’ she said, according to the Journal, which said she made the comments on Monday.
In the name of a crude Keynesian economic model that is an insult to even the slow-witted, Brainard and her ilk are conducting a rogue regime of financial repression, manipulation and unspeakable injustice that will destroy both political democracy and capitalist prosperity as we have known it. They are driving the economic lot of the planet into a black hole of deflation, mal-distribution and financial entropy.
The evil of it is vivified by an old man standing at any one of Starbucks’ 24,000 barista counters on any given morning. He can afford one cappuccino. He pays for it with the entire daily return from his savings account where he prudently stores his wealth.

This post was published at David Stockmans Contra Corner on February 4, 2016.

The War On Savers And The 200 Rulers Of World Finance

There has been an economic coup d’tat in America and most of the world. We are now ruled by about 200 unelected central bankers, monetary apparatchiks and their minions and megaphones on Wall Street and other financial centers.
Unlike Senator Joseph McCarthy, I actually do have a list of their names. They need to be exposed, denounced, ridiculed, rebuked and removed.
The first 30 includes Janet Yellen, William Dudley, the other governors of the Fed and its senior staff. The next 10 includes Jan Hatzius, chief economist of Goldman Sachs, and his counterparts at the other major Wall Street banking houses.
Then there is the dreadful Draghi and the 25-member governing council of the ECB and still more senior staff. Ditto for the BOJ, BOE, Bank of Canada, Reserve Bank of Australia and even the People’s Printing Press of China. Also, throw in Christine Lagarde and the principals of the IMF and some scribblers at think tanks like Brookings. The names are all on Google!
Have you ever heard of Lael Brainard? She’s one of them at the Fed and very typical. That is, she’s never held an honest capitalist job in her life; she’s been a policy apparatchik at the Treasury, Brookings and the Fed ever since moving out of her college dorm room.
Now she’s doing her bit to prosecute the war on savers. She wants to keep them lashed to the zero bound – -that is, in penury and humiliation – – because of the madness happening to the Red Ponzi in China. Its potential repercussions, apparently, don’t sit so well with her:

This post was published at David Stockmans Contra Corner by David Stockman ‘ February 4, 2016.

Deflation Roll Call – -Mining Giant BHP Takes $7.2 Billion Write-Down, Faces 50% Dividend Cut

SYDNEY – BHP Billiton Ltd. said it is committed to protecting its balance sheet amid a sharp downturn in world commodity markets, as expectations build about the miner preparing to cut its dividend.
The Anglo-Australian mining giant has faced growing speculation it may have to cut its payout by as much as half this year as it grapples with plunging resources prices and the fallout from one of its worst mining disasters, a deadly dam burst at a mine operated by Samarco Minerao SA, a 50-50 joint venture with Brazil’s Vale SA.
Last week, BHP also announced its largest write-down ever, a roughly US$7.2 billion pretax charge against its U. S. onshore energy assets as oil prices slumped below US$30 a barrel for the first time in more than 10 years.
Only 18 months ago, the market was speculating about the possibility of a major share repurchase by the company to reward investors. Now, even maintaining its dividend, a US$6.6 billion annual burden on its balance sheet, appears a stretch.
Cutting investor payouts is a measure big companies are loath to take, for fear of alienating important shareholders. It is particularly difficult when options for growth are limited.

This post was published at David Stockmans Contra Corner on January 20, 2016.

Australia Bet The House On The Red Ponzi – -Now Comes The Reckoning

Over the last couple of decades, China has undergone profound change and is often cited as an economic growth miracle. Day by day, however, the evidence becomes increasingly clear the probability of a severe economic and financial downturn in China is on the cards. This is not good news at all for Australia. The country is heavily exposed, as China comprises Australia’s top export market, at 33%, more than double the second (Japan at 15%).
A considerable proportion of Australia’s current and future economic prospects depend heavily on China’s current strategy of building its way out of poverty while sustaining strong real GDP growth. To date, China has successfully pulled hundreds of millions of its people out of poverty and into the middle class through mass provision of infrastructure and expansion of housing markets, alongside a powerful export operation which the global economy has relied upon since the 1990s for cheap imports.
Though last week’s volatile falls on the Chinese stock markets alongside a weakening yuan sent shockwaves through the global markets, Australia’s exposure lies much deeper within the Chinese economy. The miracle is starting to look more and more fallible as it slumps under heavy corporate debts and an over-construction spree which shall never again be replicated in our lifetimes or that of our children.

This post was published at David Stockmans Contra Corner on January 11, 2016.

AUSTRALIAN GOVT TRIES TO DISTANCE ITSELF FROM ITS LAUGHABLY BAD ANTI-POT ‘STONER SLOTH’ ADS

Sometimes in the so-called war against drugs, bureaucrats who have a vested interest in protecting megacorporate financial interests (like, say, that of big pharmaceutical companies for example) do something that’s so completely ridiculous, it actually has the opposite effect and backfires. Big time.
Meet ‘Stoner Sloth,’ tagline ‘You’re worse on weed,’conceived by New South Wales’ National Cannabis Prevention and Information Centre:


This post was published at The Daily Sheeple on DECEMBER 21, 2015.

Global Deflation Alert – -Even Goldman Takes Axe To Iron Ore Forecast, Industry In Hibernation

Goldman Sachs Group Inc. took the ax to its iron ore forecasts, predicting the price will remain under $40 a ton for the next three years as China’s slowdown forces the global industry into a long period of hibernation.
Iron ore will average $38 a metric ton next year and $35 in both 2017 and 2018, analysts Christian Lelong and Amber Cai wrote in a report received on Thursday. The new forecasts are 13 percent to 14 percent lower than the bank’s previous outlook.
Iron ore has been pummeled this year as surging output from the largest miners including Rio Tinto Group and BHP Billiton Ltd. in Australia and Brazil’s Vale SA combined with weaker demand in China to produce a glut. Goldman Sachs said it expected mine closures to accelerate next year as the health of China’s steel industry deteriorates. The bank raised the prospect that by 2040, China’s iron ore demand may contract by 50 percent as steel consumption drops and more scrap gets used with greater recycling.
‘The iron ore sector may have to hibernate for an extended period before alternative steel markets in other regions take over from China and usher in the next bull market,’ Lelong and Cai wrote, adding that prices had reached the bank’s $40 forecast one year ahead of schedule. At present, China makes about half of the world’s steel.

This post was published at David Stockmans Contra Corner on December 17, 2015.

More Signs Of The Bursting Global Bubble – -Growing Swath Of Empty Houses Down Under

Australia’s three-year property boom is leaving Melbourne awash with empty homes.
In the country’s second-biggest city, growing numbers of local landlords and absent overseas owners have locked up their properties – forgoing rental income as they focus instead on price gains, a report by Prosper Australia said Wednesday.
Some 82,724 properties, or 4.8 percent of the city’s total housing stock, appear to be unused, said the report, which estimated occupancy rates by gauging water usage. In the worst-hit areas, a quarter of all homes are empty, said Prosper. The Melbourne-based research group is lobbying for more affordable housing through tax reform.
Driven by a wave of Chinese buyers and record-low interest rates, average home prices have soared to about A$700,000 ($505,000) in Melbourne and around A$1 million in Sydney. But with prices now cooling, the empty accommodation also masks a hidden glut of supply that could worsen any housing slump.
‘Those properties need to be utilized,’ said Catherine Cashmore, author of the Prosper report, Speculative Vacancies. ‘Having property sitting vacant has a very high cost on the economy. It’s very destructive to our national prosperity.’

This post was published at David Stockmans Contra Corner on December 9, 2015.

Iraq Switches Sides – – Joins The Coalition Of The Un-Washington

Iraq joined Russia, Iran and Syria in a new agreement to strengthen cooperation against extremist group Islamic State, extending the Kremlin’s reach in the Middle East as it rivals Washington for influence.
U. S. and Russian officials held talks Sunday on the sidelines of a United Nations summit in New York to try to forge a common approach to fighting Islamic State, a day before President Barack Obama and Russian PresidentVladimir Putin were to hold their first formal meeting in more than two years at the U. N. The two had an informal encounter in November on the sidelines of a G-20 summit in Australia.
Iraq’s Defense Ministry said Sunday that the country had signed an intelligence and security cooperation pact with Russia, Iran and Syria, pledging to cooperate in collecting information about Islamic State. The deal effectively formalizes years of military collaboration among the four nations, which have intermittently been allies since the 1980s.
The deal is another challenge to U. S. influence in the Middle East at a time when Russia is deploying new military assets – primarily in support of Syrian President Bashar al-Assad – including fighter aircraft and attack helicopters in the coastal region of Syria.

This post was published at David Stockmans Contra Corner on September 28, 2015.

From Miracle To Cataclysm – – Why The Commodity Bust Will Last For Years

September 12, 2015
The Chinese Jngj qj, wirtschaftswunder, keizai no kiseki, milagro econmico or whatever you want to call is neither a miracle nor distinctly Chinese. A basket case like Argentine managed to pull off a similar feat, albeit with more volatility, over a 42 year timespan beginning in 1870. Germany did even better between 1945 and 1970. And Japan had its own miracle from 1950 to 1990.
Giving the Beijing consensus, whatever that may be, credit for creating an unprecedented economic miracle is nave and have led pundits all over the world to make disastrously optimistic forecasts for what the future will bring. Commodity producers as far away as Latin America, Africa and Australia have poured money into capacity expansions with a very simple strategy;can’t sell it? Dump it in China, they’ll take it. We have seen this, admittedly expressed more eloquently, first hand.
China is several countries centrally governed by a ruthless power elite with vested interest in maintaining the status quo. To expand their own power, wealth and status all they had to do was open up their borders to foreign capital and supplying it with slave labour. It is not very difficult, even a communist can figure it out. However, as the economy evolved it needed investments in infrastructure which was easily funded by stealing workers savings (financial repression on a scale the Yellen’s and Draghi’s of the world can only dream off) and funnelling it into state owned enterprises with lucrative government contracts. They didn’t even have to pay lip service to property rights as all property was and still is held by the state. In short, this stage of economic development involves resource allocation from the centre. As Michael Pettis argues in The Four Stages of Chinese Growthcentralised capital allocation gets a tremendous support from the rent-seeking elite and are thus easy to implement.

This post was published at David Stockmans Contra Corner BY EUGEN VON BHM-BAWERK Bawerk.net /.

The Corruption Of American Freedom

This is my third column in a row on corruption.
In the first, I suggested that 75% may be the most important figure in American politics. It is the percentage of Americans who say in the Gallup World Poll that corruption is widespread in government. Given this extraordinary level of contempt for American political and administrative elites, it is no wonder that non-establishment figures like Donald Trump, Ben Carson, and Bernie Sanders are gaining such traction in the presidential nominating contests.
In the second, I compared the American view of widespread governmental corruption with the view in other countries. It turns out that 82 countries have a better view of their government, although many of them not by much. For example, at 74%, Brazilians’ dissatisfaction with corruption in their government has led to nationwide protests. But there are many countries where the view of government corruption is far less: Germany (38%), Canada (44%), Australia (41%), and Denmark (19%).
Today I want to offer some historical context for America’s understanding of corruption.
America’s Founding Fathers had a very precise understanding of corruption. As I describe in my book ‘A Nation Like No Other,’ the Founders used that word less to describe outright criminal behavior than to refer to political acts that corrupt a constitutional system of checks and balances and corrode representative government. They frequently accused the British Parliament of corruption, citing practices such as the crown’s use of ‘placemen’ – members of Parliament who were also granted royal appointments or lucrative pensions by the crown, in exchange for supporting the king’s agenda.
In ‘The Creation of the American Republic,’ Gordon Wood, a scholar of the American Revolution, explains the Founders’ idea of corruption:

This post was published at Zero Hedge on 08/28/2015 –.

Is This The Great Crash of China?

China has achieved a remarkable transformation in the last 30 years – something that you can only fully appreciate if, like me, you visited China before that transformation began. In 1981/82, I took a group of Australian journalists on a tour of China on behalf of the Australia-China Council. The key purpose was to take part in a seminar with Chinese journalists under the auspices of the ‘All-China Journalists Association’. Given the unfortunate acronym by our Chinese hosts of SAPS – for the ‘Sino-Australian Press Seminar’ – it was the first seminar between Chinese journalists and those of any other nation.
After the seminar, we went on a tour of China, taking in Sichuan, Shanghai, and Shenzhen. Shanghai’s skyline then was dominated by Soviet-style architecture – mixed with French and Chinese touches – and on the south side of the river, paddy fields stretched as far as the eye could see. On the north side, we saw furtive black-market trading of currencies as we strolled along the banks of the Bund.
Today, some of the Soviet-style buildings still exist on the north side, while the south side is an extravaganza of skyscrapers that turn on an impressive light show every evening. So capitalism has come to China.
Almost. The one thing China hasn’t yet had is a full-blown financial crisis. But the plunging ShanghaiSTOCK MARKET has raised fears that that quintessential capitalist experience has finally arrived in China.
In fact, this isn’t the first time that Shanghai has crashed: it did so in 2008 as well. Then the index plunged by over 2/3rds in one year (see Figure 1).
Figure 1: The Shanghai Stock Market undergoes its second crash

This post was published at David Stockmans Contra Corner on August 20, 2015.