Implode-Explode Heavy Industries news feed http://implode-explode.com/ Tracking the many faces of the global credit implosion. en-us iehi-feed-65449 Fri, 31 Jul 2020 22:30:59 GMT Gold powers to new record on weak US dollar and GDP; Cornered Fed http://implode-explode.com/viewnews/2020-07-31_GoldpowerstonewrecordonweakUSdollarandGDPCorneredFed.html Gold rose on Friday to hit a new all-time high, as a sliding dollar and dire economic numbers from far and wide sparked a rush to safety in bullion. It was gold's best month since February 2016, and its fifth straight positive month... Spot gold gained 0.58% to trade at $1,970.81 per ounce, while U.S. gold futures settled 1% higher at $1,985.9, after earlier breaking above $2,000 for the first time on record.

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The dollar was on track for its biggest monthly drop in almost a decade...Safe-haven bullion has gained nearly 30% so far this year, propelled by low interest rates globally and widespread stimulus from central banks adding to support for the metal considered a refuge from inflation and currency debasement.

"With policy rates already at or even below the zero bound, support to gold prices will increasingly have to come from higher inflation, in our view," said BofA Global Research, which expects gold to hit $3,000 per ounce in the coming 18 months.

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Silver climbed 4.2% to $24.34 per ounce, on course for a monthly rise of about 33%, its largest on records going back to 1982, supported by investment and industrial demand.

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iehi-feed-65440 Wed, 22 Jul 2020 19:06:11 GMT Gold futures blast forward to their highest since 2011; silver soars to highest finish since 2013 http://implode-explode.com/viewnews/2020-07-22_Goldfuturesblastforwardtotheirhighestsince2011silversoarstohighe.html iehi-feed-65427 Fri, 10 Jul 2020 18:40:44 GMT New York Court Approves Resumed Investigation Into $10 Billion Cryptocurrency Created By A Presidential Candidate http://implode-explode.com/viewnews/2020-07-10_NewYorkCourtApprovesResumedInvestigationInto10BillionCryptocurre.html The news comes at an awkward time for Brock Pierce, 39, the creator of the [Tether] cryptocurrency [and the Bitfinex exchange], who this week announced he was running for President of the United States. A representative of the New York State Attorney General says he "cannot confirm or deny that the investigation" includes Pierce.

In 2014, Pierce, who is running as an independent on a pro-technology platform, created the tether currency as a way for cryptocurrency investors to quickly enter and exit a position. Unlike bitcoin and other cryptocurrencies, tether was meant to have a stable price, backed one-to-one by real U.S. dollars. But unlike traditional dollars, it can be moved instantly, while actually cashing out a crypto-asset using banks can take days, and many banks won't support the service at all.

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Officially, the case involves, BFXNA Inc. and BFXWW Inc., wholly-owned subsidiaries of iFinex, which operates the Bitfinex cryptocurrency exchange, and Tether Holdings Limited the holding company for Tether Limited, Tether Operations Limited, and Tether International Limited. Though Pierce is not mentioned in the opinion, he not only founded Tether in 2014, but is the co-founder of Block.One, behind the 11th largest cryptocurrency, EOS, valued at $900 million, and Blockchain Capital, one of the most influential venture capital firms in crypto.

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Specifically, the attorney general previously alleged that Bitfinex had handed over $850 million to third-party payments processor Crypto Capital Corp., based in Panama, to handle customers-withdrawal requests. When the company failed to hold up its end of the bargain the respondents allegedly hid the losses through unspecified machinations, leading some to wonder if they'd simply started printing new tether cryptocurrency without any backing.

At around this time, Tether changed the wording on its site to show that instead of every tether being backed by a U.S. dollar, they were "backed by Tether Holding's "reserves," which include unspecified currency, "cash equivalents," and "other assets and receivables from loans made by Tether [Holdings] to third parties," according to the opinion. In turn, the respondents also successfully managed to get the investigation halted, temporarily though it may have been.

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Perhaps counter-intuitively, since the stay was issued in September 2019, tether's market cap exploded from $4.1 billion to $10 billion today, in spite of the doubts about whether the currency was actually backed by dollars, perhaps giving credibility to Tether's value proposition. Also over that time though, a newer stablecoin, USDC, co-created by cryptocurrency exchange Coinbase and crypto tech firm Circle, has risen to a market cap of $1 billion today and an even newer competitor, DAI, backed by a wide range of collateral has risen to $190 million. A loss to Tether would almost certainly be a win for the competition, and vice-versa.

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iehi-feed-65422 Thu, 09 Jul 2020 22:11:49 GMT Why ‘safe haven' gold and the stock market are now moving the same direction http://implode-explode.com/viewnews/2020-07-09_Whysafehavengoldandthestockmarketarenowmovingthesamedirection.html Chalk it up, in part, to opportunity costs. Efforts by global central banks to push down interest rates, which have fallen into negative territory in real, or inflation-adjusted terms, in the U.S. and are outright negative in many parts of the world, mean that investors who hold gold aren't missing out on the yield they would earn from holding bonds in more usual circumstances.

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"Firstly, central bank policy is a strong driver behind higher gold prices. Not only are official rates close to zero in a large number of countries, they will unlikely go up in our forecast horizon," Boele wrote.

Most central banks have announced quantitative easing, with the Federal Reserve embarking on unlimited QE and the Bank of Japan and the European Central Bank also implementing large programs. "This sounds like music to the ears of gold bugs as money floods into the market and currencies begin to decline," she said.

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"Now the psychological resistance of $1,800 per ounce has been surpassed. It seems that investors will only be satisfied if the former (intraday) peak in gold prices at $1,921 per ounce is reached and taken out. Above that, the important psychological level of $2,000 per ounce is within reach," she said.

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iehi-feed-65409 Fri, 03 Jul 2020 22:05:54 GMT Dalio: "Capital Markets Are No Longer Free Markets" Due To Central Bank Interference http://implode-explode.com/viewnews/2020-07-03_DalioCapitalMarketsAreNoLongerFreeMarketsDueToCentralBankInterfe.html iehi-feed-65387 Sun, 14 Jun 2020 02:01:04 GMT Mnuchin secrecy on bailout sparks rift with Congress http://implode-explode.com/viewnews/2020-06-13_MnuchinsecrecyonbailoutsparksriftwithCongress.html Treasury Secretary Steven Mnuchin is facing criticism from lawmakers and watchdog groups after refusing to disclose the businesses that received more than $500 billion in government-backed emergency loans.

Mnuchin ignited controversy on Wednesday when he said the Trump administration will not reveal the names of companies and nonprofits that got the so-called Paycheck Protection Program loans, which are guaranteed by the taxpayer and can be forgiven in full if borrowers maintain their payrolls.

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A senior House Democratic aide said lawmakers need to know the information to assess whether the administration is "trying to hide bad decisions, and the true impact of the PPP program, especially in meeting the needs of underserved communities."

Rep. Ben McAdams, a Utah Democrat who serves on the House Financial Services Committee, said "transparency, not secrecy, is the only way to keep faith with citizens that their money is getting to those for whom it was intended." "What part of `it's taxpayer money' does he not understand?" he said of Mnuchin.

The SBA has also withheld information from the Government Accountability Office, the watchdog agency that serves Congress. The GAO confirmed on Friday that it has received no information about when SBA will provide data the agency requested on the loans and the separate Economic Injury Disaster Loan program.

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iehi-feed-65383 Thu, 11 Jun 2020 18:17:28 GMT Another Bank Bailout Under Cover of a Virus | Ellen Brown http://implode-explode.com/viewnews/2020-06-11_AnotherBankBailoutUnderCoverofaVirusEllenBrown.html In March 2020, under cover of a national crisis, the Fed therefore flung the doors open to its discount window, where only banks could borrow. Previously, banks were reluctant to apply there because the interest was at a penalty rate and carried a stigma, signaling that the bank must be in distress. But that concern was eliminated when the Fed announced in a March 15 press release that the interest rate had been dropped to 0.25% (virtually zero). The reserve requirement was also eliminated, the capital requirement was relaxed, and all banks in good standing were offered loans of up to 90 days, "renewable on a daily basis." The loans could be continually rolled over, and no strings were attached to this interest-free money -- no obligation to lend to small businesses, reduce credit card rates, or write down underwater mortgages. Even J.P. Morgan Chase, the country's largest bank, has acknowledged borrowing at the Fed's discount window for super cheap loans.

The Fed's scheme worked, and demand for repo loans plummeted. But unlike in Canada, where big banks slashed their credit card interest rates to help relieve borrowers during the COVID-19 crisis, US banks did not share this windfall with the public. Canadian interest rates were cut by half, from 21% to 11%; but US credit card rates dropped in April only by half a percentage point, to 20.15%. The giant Wall Street banks continued to favor their largest clients, doling out CARES Act benefits to them first, emptying the trough before many smaller businesses could drink there.

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State and local governments with a mandate to serve the public interest deserve to be treated as well as private Wall Street banks that have repeatedly been found guilty of frauds on the public. How can states get parity with the banks? If Congress won't address that need, states can borrow interest-free at the Fed's discount window by forming their own publicly-owned banks. For more on that possibility, see my earlier article here.

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iehi-feed-65343 Tue, 05 May 2020 00:38:21 GMT Negative Interest Rates: Will Donald Trump And The Fed Destroy The U.S. Banking System? http://implode-explode.com/viewnews/2020-05-04_NegativeInterestRatesWillDonaldTrumpAndTheFedDestroyTheUSBanking.html iehi-feed-65332 Thu, 30 Apr 2020 15:36:09 GMT Fed expanding the scope of Main Street lending program to include bigger businesses http://implode-explode.com/viewnews/2020-04-30_FedexpandingthescopeofMainStreetlendingprogramtoincludebiggerbus.html Touted as one of the cornerstone's the Fed's initiatives to get money to businesses and households in need, the Main Street program now will allow companies with up to 15,000 employees and $5 billion in revenue to apply for financing.

That's up from the previous limit of 10,000 workers and $2.5 billion in revenue for a program targeted at medium-sized firms whose operations have been hamstrung by the social distancing efforts put into place to limit the spread of the coronavirus.

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iehi-feed-65316 Mon, 20 Apr 2020 20:07:25 GMT ‘The world is more screwed up' than the stock market is currently reflecting, warns billionaire investor http://implode-explode.com/viewnews/2020-04-20_Theworldismorescrewedupthanthestockmarketiscurrentlyreflectingwa.html iehi-feed-65314 Mon, 20 Apr 2020 13:59:29 GMT The economic data is even worse than Wall Street feared: 'The economy is clearly in ruins here' http://implode-explode.com/viewnews/2020-04-20_TheeconomicdataisevenworsethanWallStreetfearedTheeconomyisclearl.html iehi-feed-65277 Fri, 03 Apr 2020 15:20:51 GMT The Virus Economic Response Is Already Being Botched http://implode-explode.com/viewnews/2020-04-03_TheVirusEconomicResponseIsAlreadyBeingBotched.html The good news is that the $2 trillion CARES Act (Coronavirus Aid, Relief, and Economic Security Act) Congress passed last week does, on paper, provide a lot of economic life support. The bad news is that it looks as if it could be weeks, maybe even months, before serious amounts of money flow to those who need aid right now.

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Both of these programs are very good ideas. The trouble is that both are having a hard time getting started -- and time is one thing millions of distressed Americans, many of whom were already living on the edge, don't have.

On unemployment benefits: State unemployment offices, already overwhelmed by the surge in applications, aren't ready to disburse these extra benefits, and may not be ready for quite a while -- a disastrous delay for families already in dire financial straits.

Small business loans are also facing a crippling lag in processing, with potential borrowers either unable to complete the forms or being told that they will have to wait three weeks. Furthermore, for some reason the federal government, instead of lending money directly, is channeling small-business lending through private banks -- and the banks are complaining that they have yet to receive crucial guidelines and that the administration is setting unworkable requirements.

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iehi-feed-65276 Thu, 02 Apr 2020 15:03:31 GMT US weekly jobless claims double to gargantuan 6.6 million http://implode-explode.com/viewnews/2020-04-02_USweeklyjoblessclaimsdoubletogargantuan66million.html The torrent of Americans filing for unemployment insurance skyrocketed last week as more than 6.6 million new claims were filed, the Labor Department reported Thursday. That brings to 10 million the total Americans who filed over the past two weeks.

Economists surveyed by Dow Jones had expected 3.1 million for last week, one week after 3.3 million filings in the first wave of what has been a record-shattering swelling of the jobless ranks. The previous week's total was revised higher by 24,000.

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"Sadly, this probably still underestimates the actual numbers because of the overload in the systems and not every call getting through," said Liz Ann Sonders, chief investment strategist at Charles Schwab. "Even if we're accurately calculating the numbers, we still likely have worse to come."

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the sudden shutdown from social distancing policies caused a cascade of joblessness unlike anything the nation has ever seen.

"Not only was the number worse than expected, but with lockdowns becoming stricter and being extended, we should anticipate further surges in jobless claims over the coming weeks," said Seema Shah, chief strategist at Principal Global Investors.

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iehi-feed-65275 Wed, 01 Apr 2020 20:07:18 GMT 40% of N.Y. Tenants May Not Pay Rent This Month. What Happens Then? http://implode-explode.com/viewnews/2020-04-01_40ofNYTenantsMayNotPayRentThisMonthWhatHappensThen.html ``No one knows for sure how many renters in New York City will have a hard time paying, but landlords and the real estate industry say they are bracing for perhaps as many as 40 percent of tenants, if not more, skipping their April payments.

... "I'm trying not to panic," said Christopher Athineos, whose family owns nine apartment buildings in Brooklyn with about 150 tenants. "In my lifetime and even my parents' and grandparents' lifetime, we have never seen anything like this."

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Gov. Andrew M. Cuomo of New York has ordered a 90-day moratorium on evictions, a lifeline to people who cannot pay rent and are worried about losing their homes during the crisis. Other states have followed New York State's lead, including California, which introduced a 60-day ban on evictions.

But that doesn't wipe away that rent from having to be paid later on.

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The current economic crisis has all the ingredients to cause a collapse in the New York City real estate market, said Joseph Strasburg, the president of the Rent Stabilization Association, which represents 25,000 landlords in New York City.

A significant drop in April rent payments would create an immediate domino effect and leave many landlords without enough money to pay their water and sewer bills for their properties, he said.

Rent payments could drop even more drastically in May, Mr. Strasburg s..

aid, when tenants who lost jobs in March may have even less money to pay that month's rent.

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Some landlords have worked out payment plans with tenants, while others have said they cannot offer concessions because they face their own challenges.

Mr. Strasburg said landlords who have first-floor commercial tenants, such as restaurants, fear that those tenants too will not be paying rent in April. Landlord representatives said property owners also deserve a lifeline, including the option to defer utility payments and their property taxes.

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The $2 trillion federal stimulus bill offers assistance specifically for renters and homeowners, though they are limited in most cases to people with federally backed or supported mortgages.

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iehi-feed-65265 Sun, 29 Mar 2020 20:22:26 GMT Market Panic: The Wild Hunt for 100-Ounce Gold Bars http://implode-explode.com/viewnews/2020-03-29_MarketPanicTheWildHuntfor100OunceGoldBars.html At the center of it all are a small band of traders who for years had cashed in on what had always been a sure-fire bet: shorting gold in the futures market. Usually, they'd ride the trade out till the end of the contract when they'd have a couple of options to get out without marking much, if any, loss.

But the virus, and the global economic collapse that it's sparking, have created such extreme price distortions that those easy-exit options disappeared on them. Which means that they suddenly faced the threat of having to deliver actual gold bars to the buyers of the contract upon maturity.

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Signs of distress picked up on Friday, March 20, when the cost to swap New York futures and spot physical gold in London -- the world's biggest market -- rose to about $2. Typically, this trade cost almost nothing. After the close of the next session on Monday, that premium had jumped further to $6.75.

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The spread between April and June futures contracts on Tuesday jumped to $20 an ounce, meaning it cost that much more to buy metal for April than it did for two months later. That signaled more near-term demand for bullion and the need to soon have physical supply in hand.

By the end of the week, though, the situation had flipped. The June contract cost almost $30 more than the April contract, suggesting that traders appetite for physical gold has subsided for now.

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iehi-feed-65254 Mon, 23 Mar 2020 00:58:57 GMT 'Unrecognizable': Experts warn of historic collapse in economic activity in wake of coronavirus http://implode-explode.com/viewnews/2020-03-22_UnrecognizableExpertswarnofhistoriccollapseineconomicactivityinw.html Because of the unprecedented nature and scale of what the world is facing, economists have struggled to model how badly things are getting.

"There is no blueprint for the current shock, and uncertainty about the extent of contagion and the economic consequences is overwhelming," Credit Suisse economist James Sweeney said.

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"We now guesstimate that second quarter GDP will drop at a 10% annualized rate, after a 2% fall in Q1," Shepherdson said. "We are pencilling in a 20% plunge in discretionary consumers' spending in the second quarter, enough alone to subtract some eight percentage points from GDP growth."''

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iehi-feed-65252 Sun, 22 Mar 2020 16:03:15 GMT Exclusive: Goldman injects $1 billion into own money-market funds after heavy withdrawals http://implode-explode.com/viewnews/2020-03-22_ExclusiveGoldmaninjects1billionintoownmoneymarketfundsafterheavy.html iehi-feed-65251 Sun, 22 Mar 2020 15:40:55 GMT Mnuchin: Coronavirus Financing efforts from Fed and Treasury could be $4 trillion http://implode-explode.com/viewnews/2020-03-22_MnuchinCoronavirusFinancingeffortsfromFedandTreasurycouldbe4tril.html iehi-feed-65242 Thu, 19 Mar 2020 02:21:08 GMT Coronavirus Recession Is Already Causing Staggering Job Losses http://implode-explode.com/viewnews/2020-03-18_CoronavirusRecessionIsAlreadyCausingStaggeringJobLosses.html [based on preliminary data], for the U.S. as whole, total initial claims for unemployment insurance for this week could spike to over 2 million. During the worst week of the Great Recession, the last week of March 2009, claims reached 665,000.

... The first month of major job losses during the Great Recession was February 2008, when the economy shed 906,000 jobs. The effect rippled throughout 2009, and during the entirety of the Great Recession about 8.5 million jobs were lost. A similar multiplier would place total job losses from the current recession at ... 37 million... using back-of-the-envelope math, that implies a rise in the unemployment rate to about 27% -- even higher than the 20% Treasury Secretary Steven Mnuchin has warned as possible. It would exceed the highest unemployment on record, 24.9%, set during the Great Depression. To repeat: These are rough estimates based on early data.

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iehi-feed-65241 Wed, 18 Mar 2020 22:42:21 GMT Opinion: Bitcoin Just Proved Itself to Be The Perfect Asset In A Financial Crisis http://implode-explode.com/viewnews/2020-03-18_OpinionBitcoinJustProvedItselftoBeThePerfectAssetInAFinancialCri.html The bitcoin sell-off looked much worse than how equities fared, but that's just an illusion. You see, Bitcoin consolidated and rallied like equities Friday. But without the benefit of $1.5 trillion pumped into money markets by the Federal Reserve. Without a half percent interest rate cut by the Fed earlier this month. And without the president teasing massive tax relief.

Isn't it obvious by now? Bitcoin is the only free-market currency of its size in the world. And it has stood up under this crisis of confidence, this absolute maelstrom of FUD, on its own two legs. That's what a really strong currency looks like. And those with eyes to see it have not missed what just happened.

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