Implode-Explode Heavy Industries news feed http://implode-explode.com/ Tracking the many faces of the global credit implosion. en-us iehi-feed-60318 Thu, 28 Jul 2016 01:53:08 GMT Sudden Spike - Trend Reversal and Record Swiss Gold Flow Into The United States http://implode-explode.com/viewnews/2016-07-27_SuddenSpikeTrendReversalandRecordSwissGoldFlowIntoTheUnitedState.html iehi-feed-60313 Wed, 27 Jul 2016 14:52:15 GMT The Real Secret of the South China Sea http://implode-explode.com/viewnews/2016-07-27_TheRealSecretoftheSouthChinaSea.html And so we finally discover Rosebud -- the ultimate South China Sea "secret". China under Clinton's "rule-based regional and global order" effectively means that China must obey and keep the South China Sea open to the US Navy.

That spells out inevitable escalation further on down the sea lanes. China, slowly but surely, is developing an array of sophisticated weapons which could ultimately "deny" the South China Sea to the US Navy, as the Beltway is very much aware. 

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The US, for its part, is all about Exceptionalism and Manifest Destiny. As it stands, more than Russia's western borderlands, the Baltics or "Syraq", this is where the hegemon "rules" are really being contested. And the stakes couldn't be higher. That'll be the day when the US Navy is "denied" from the South China Sea; and that'll be the end of its imperial hegemony.

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iehi-feed-60312 Wed, 27 Jul 2016 13:39:17 GMT Hong Kong June exports fall for 14th month, Brexit to deepen pain http://implode-explode.com/viewnews/2016-07-27_HongKongJuneexportsfallfor14thmonthBrexittodeepenpain.html Hong Kong's total exports in June fell for the 14th straight month, dampened by a slowdown in China, with the city's factories bracing for more pain in coming months from the impact of Brexit.

Open and trade-dependent economies in Asia such as Hong Kong are expected to be among the most vulnerable to a slowdown in global trade from Britain's shock vote to leave the European Union as the effects filter through factory supply chains, analysts say.

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iehi-feed-60307 Tue, 26 Jul 2016 19:50:00 GMT ‘Impending gold production cliff' may deliver a jolt to prices http://implode-explode.com/viewnews/2016-07-26_Impendinggoldproductioncliffmaydeliverajolttoprices.html iehi-feed-60301 Tue, 26 Jul 2016 04:05:42 GMT Grant Williams on Peak Credit, Oil (Demand), and Gold (Supply); Trump and The Money Printing Endgame (Matterhorn Interview) http://implode-explode.com/viewnews/2016-07-26_GrantWilliamsonPeakCreditOilDemandandGoldSupplyTrumpandTheMoneyP.html Donald Trump is the self-professed king of debt, which is very apropos for the United States right now... He's come out and said, "No, no, no. We'll never have to default because we'll just print the money". This, to me, is something I've been waiting for, for quite some time now, and this is the fact that central banks have been able to print an extraordinary amount of money over the last eight years with optically no bad side effects. The inflation hasn't shown up that people were warning about price in the money printing game going. And my fear was always that that would embolden politicians who didn't really understand any of the nuance of this; they heard there was money printing going on, they were waiting for the bad effects to happen, they haven't seen them, so they think that this money printing thing works.

... Politicians don't understand these things for the most part. They're complicated ideas and they don't have demonstrable outcomes, the wheels that get set in motion when you do things like go to negative interest rates and print money start spinning very slowly and you don't really see what comes out of the machine for an indeterminate amount of time. We haven't seen it yet, but we will. There are no free lunches, but the very fact that the political class has seen this happen without any obvious ill effects has emboldened them and Trump... He thinks he understands debt and he will have no qualms about going deeper into debt.

At some point, however, the question of faith in the finances of the US Government, faith in the quality of the dollar are going to be raised again by the market in general, and when that time comes, it's very hard to see how there is a solution to calm any nervousness that people have around the dollar without some significant pain being felt. There is a storm coming. There is no two ways about it, and I think if people pay attention, you will have heard recently some really significant names starting to express the fears they have. Guys like Carl Icahn, guys like Stan Druckenmiller have been very outspoken about how concerned they are for what's happening. And if you listen to those things carefully and you understand that these guys are some of the smartest investors in the world, if guys like that are getting out of equities, getting into gold, getting into cash, there are very good reasons for that, and the average investor in the street should be listening to that and trying to understand why the smartest investors in the world are thinking that way because it's extremely important to try and understand.

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iehi-feed-60290 Mon, 25 Jul 2016 14:44:41 GMT Vindicating GATA, academic study says central banks rig markets with gold lending http://implode-explode.com/viewnews/2016-07-25_VindicatingGATAacademicstudysayscentralbanksrigmarketswithgoldle.html iehi-feed-60286 Sat, 23 Jul 2016 14:51:29 GMT Mexico May Be On Verge of Backing Peso With Silver: "Would Unleash a Global Power Shift" http://implode-explode.com/viewnews/2016-07-23_MexicoMayBeOnVergeofBackingPesoWithSilverWouldUnleashaGlobalPowe.html iehi-feed-60280 Sat, 23 Jul 2016 00:37:35 GMT Japan joins China in opening a physical gold exchange, Amidst Japan Retail "Gold Rush" http://implode-explode.com/viewnews/2016-07-22_JapanjoinsChinainopeningaphysicalgoldexchangeAmidstJapanRetailGo.html The Tokyo Commodities Exchange (TOCOM) is joining with the Shanghai Gold Exchange (SGE) to become the second major physical gold market in Asia.  Beginning on July 25, the TOCOM will begin deliveries for spot contracts, and is the only gold exchange accepted for futures contracts in Japan.

Since Japanese bonds fell into negative yields, investors and consumers have been buying physical gold at incredible rates.  And now that their market will have an official gold exchange like the one that opened in Shanghai last year, the precious metal will become even more liquid and draw more customers into gold.

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iehi-feed-60268 Thu, 21 Jul 2016 00:35:12 GMT European Union: CETA trade deal with Canada in peril as German party to sue EU http://implode-explode.com/viewnews/2016-07-20_EuropeanUnionCETAtradedealwithCanadainperilasGermanpartytosueEU.html Centre-left Die Linke has launched legal action to block the controversial Comprehensive Economic and Trade Agreement (CETA) pact, saying it is unconstitutional under German law. 

The party's attempt to torpedo the hated deal is just the latest in a series of devastating trade blows for the EU, which is unravelling following the Brexit vote. 

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Earlier this month Canada's despairing Trade Minister Chrystia Freeland asked: "If the EU cannot do a deal with Canada, I think it is legitimate to say who the heck can it do a deal with?"

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Negotiations over the Transatlantic Trade and Investment Partnership (TTIP) have ground to a halt, with impatient American officials warning Brussels to stop dragging their heels.

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Britain will not be affected by either calamity after voting to leave the EU, and is now free to begin informal talks on sealing its own trade deals with Canada, the US and the rest of the world.

Theresa May has set up an independent trade department, headed by Dr Liam Fox, which has already been inundated requests for free trade agreements from the biggest economies across the globe.

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iehi-feed-60261 Tue, 19 Jul 2016 23:47:22 GMT "The Last Time This Happened, Silver Prices Rallied 900%" http://implode-explode.com/viewnews/2016-07-19_TheLastTimeThisHappenedSilverPricesRallied900.html iehi-feed-60243 Sun, 17 Jul 2016 18:32:02 GMT Hell Hath No Fury Like a Teflon Sultan http://implode-explode.com/viewnews/2016-07-17_HellHathNoFuryLikeaTeflonSultan.html Needless to add Ankara and Washington are now on a certified collision course... Hell hath no fury as an underestimated Sultan as well. For all his recent geopolitical follies, Erdogan's simultaneous ballet of reconnecting with Israel and Russia is eminently pragmatic. He knows he needs Russia for the Turkish Stream and to build nuclear plants; and he needs Israeli gas to consolidate Turkey's role as a key East-West energy crossroads.

When we learn, crucially, that Iran supported Turkey's "brave defense of democracy", as tweeted by Foreign Minister Zarif, it's clear how Erdogan, in a mater of only a few weeks, reconfigured the whole regional picture. And that spells out Eurasia integration and Turkey deeply connected to the New Silk Roads -- not NATO. No wonder the Beltway -- for whom, overwhelmingly, Erdogan is the proverbial "erratic and unreliable ally" -- is freaking out. That dream of Turkish colonels under direct CIA orders is over -- at least for the foreseeable future.

So what about Europe? Yildirim already said that Turkey might reinstate the death penalty -- to be applied to the coup plotters. This means, in essence, bye bye EU. And bye bye to the European Parliament approving visa-free travel for Turks visiting Europe. Erdogan after all already got what he wanted from chancellor Merkel; those 6 billion euros to contain the refugee crisis that he essentially unleashed. Merkel bet the farm on Erdogan. Now she's talking to herself -- while the Sultan is able to dial God on Face Time.

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iehi-feed-60226 Fri, 15 Jul 2016 17:20:20 GMT Wells Fargo Profit Falls as Energy Loans Sour, Costs Climb (AND ZIRP HURTS) http://implode-explode.com/viewnews/2016-07-15_WellsFargoProfitFallsasEnergyLoansSourCostsClimbANDZIRPHURTS.html Wells Fargo & Co., the world's most valuable bank, said second-quarter profit fell 2.8 percent as more energy loans soured, expenses rose and revenue from mortgage lending declined... Net interest margin, the difference between what a bank pays for deposits and earns on loans, decreased 4 basis points in the quarter to 2.86 percent, falling short of some analysts' estimates. The measure, known as NIM, has declined the past four quarters.

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Provisions for credit losses more than tripled to $1.07 billion from a year earlier, tied largely to the bank's oil and gas portfolio, while net write-offs rose about 42 percent to $924 million, Wells Fargo said. Net interest income, including the loan-loss provision, declined 2.8 percent to $10.7 billion from a year earlier... "... "The oil and gas portfolio remains under significant pressure," Chris Wheeler, an analyst at Atlantic Equities LLP wrote in a note to clients.

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iehi-feed-60212 Thu, 14 Jul 2016 14:05:37 GMT Great American Oil Bust Rages on; Defaults, Bankruptcies Soar http://implode-explode.com/viewnews/2016-07-14_GreatAmericanOilBustRagesonDefaultsBankruptciesSoar.html The trailing 12-month US high-yield bond default rate jumped to 4.9% at the end of June, the highest since May 2010 as the Financial Crisis was winding down, Fitch Ratings reported today. The first-half total of $50.2 billion of defaults already exceeds the $48.3 billion for the entire year 2015.

Energy companies accounted for 56% of those defaults. The energy sector default rate shot up to 15%. Within it, the default rate of the Exploration & Production (E&P) sub-sector soared to 29%!

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Between E&P and Oilfield Services companies, the Great American Oil Bust has now generated a combined 157 bankruptcies involving $73 billion in debt, much of it unsecured and by now mostly evaporated.

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iehi-feed-60203 Wed, 13 Jul 2016 13:51:16 GMT Did Citi Just Confiscate $1 Billion In Venezuela Gold? http://implode-explode.com/viewnews/2016-07-13_DidCitiJustConfiscate1BillionInVenezuelaGold.html iehi-feed-60198 Tue, 12 Jul 2016 20:05:55 GMT China's Slowdown Leaves Second-Tier City Locals Looking for Exit http://implode-explode.com/viewnews/2016-07-12_ChinasSlowdownLeavesSecondTierCityLocalsLookingforExit.html Tieling is among the places hardest hit by a slowdown across the nation of 1.4 billion people triggered in recent years by a commodity-price slump, housing correction and campaign to rein in wasteful investment. The city has seen a triple whammy from the three dynamics, which left the local economy contracting 6.2 percent last year -- compared with national growth of near 7 percent.

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"These types of cities are in for a really tough stretch," said Andrew Polk, Beijing-based director of China research at Medley Global Advisors LLC, who previously worked at the U.S. Treasury. "Industrial cities that got hollowed out in the U.S. after the 1960s and '70s are still in really bad shape, showing how difficult it is to turn the industrial corner even in an economy as well-connected and innovative as the U.S."

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Tieling's plight underscores the magnitude of the challenge facing President Xi Jinping: he needs to slash the deflation-causing excess capacity in these areas, while cushioning the blow to the millions of people on the losing end. China's economy continued decelerating in the past three months, to a pace of 6.6 percent, according to the median estimate of economists surveyed by Bloomberg ahead of gross domestic product data due Friday.

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iehi-feed-60194 Tue, 12 Jul 2016 14:18:43 GMT Beijing's claims to South China Sea rejected by international tribunal http://implode-explode.com/viewnews/2016-07-12_BeijingsclaimstoSouthChinaSearejectedbyinternationaltribunal.html An international tribunal ruled Tuesday that China has no legal basis to claim historic rights to the South China Sea -- a major blow to Beijing that could further inflame tensions.

China immediately rejected the decision by the Permanent Court of Arbitration in The Hague, but it was hailed as a landmark victory for those challenging Beijing's reach into waters with key strategic and commercial significance.

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"It is a clean sweep for the Philippines, with the tribunal rejecting China's nine-dashed line and historical rights claim as well as censuring its aggressive activities in the area and, among others, the ecological damage caused by its reclamation activity."

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In Washington, Bonnie Glaser, senior adviser for Asia at the Center for Strategic and International Studies, said the Philippines won "a major victory," with judges ruling in its favor on almost every point. "China's reaction is likely to be extremely tough. Fasten your seat belts," she said.

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In rejecting the decision, Beijing is certainly not alone. No permanent member of the U.N. Security Council has ever complied with a ruling by the PCA on the Law of the Sea, wrote Graham Allison, director of the Harvard Kennedy School's Belfer Center for Science and International Affairs. "In fact, none of the five permanent members of the U.N. Security Council have ever accepted any international court's ruling when (in their view) it infringed on their sovereignty or national security interests," Allison wrote in The Diplomat. The United States has never ratified UNCLOS, and rejected a 1986 verdict at the International Court of Justice ordering it to pay reparations to Nicaragua for mining its harbors, he noted.

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iehi-feed-60193 Tue, 12 Jul 2016 13:53:38 GMT South China Sea: Philippines and Beijing await court ruling http://implode-explode.com/viewnews/2016-07-12_SouthChinaSeaPhilippinesandBeijingawaitcourtruling.html iehi-feed-60179 Sun, 10 Jul 2016 20:09:58 GMT Bank of Italy Chief Says Some Italian Banks May Need Aid http://implode-explode.com/viewnews/2016-07-10_BankofItalyChiefSaysSomeItalianBanksMayNeedAid.html Bank of Italy Gov. Ignazio Visco said Friday that state intervention may be needed to prevent the problems afflicting Italy's weakest banks from spreading to other lenders.

"A public intervention cannot be ruled out given that in a context of high uncertainty specific problems can impact confidence in the [whole] banking system," said Mr. Visco.

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The U.K. vote to leave the European Union has rekindled tension in the Italian banking sector, with investors dumping local banks' shares over concerns about their massive holdings of bad loans and chronically low profitability.

In response to market upheaval, especially among banks such as Banca Monte dei Paschi di Siena SpA and Banco Popolare SC, the Italian government has been discussing the possibility of state intervention with European authorities to shore up the system.

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In a speech at the annual meeting of Italian banking lobby ABI, Mr. Visco referred to a European rule that allows precautionary recapitalization of solvent banks that fail stress tests run by supervisory authorities.

In such cases, European rules allow government money to be pumped into banks without triggering losses for shareholders, bondholders and uninsured depositors, which are otherwise a prerequisite for a government rescue of ailing banks.

Considering the current market situation is full of risks for financial stability, Mr. Visco said a public backstop for banks--to be used if needed and in compliance with European rules--must be created.

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The Italian government orchestrated the creation of Atlante earlier this year to backstop capital increases at ailing banks and buy bad loans. The fund raised €4.25 billion from banks and other institutional investors, but has already spent roughly €2.5 billion to underwrite the capital increases of troubled banks Banca Popolare di Vicenza SpA and Veneto Banca SpA.

See also What's the problem with Italian banks?.

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iehi-feed-60174 Sun, 10 Jul 2016 02:01:07 GMT Massive One-Day Record Surge Of Mainstream Gold Investment Demand http://implode-explode.com/viewnews/2016-07-09_MassiveOneDayRecordSurgeOfMainstreamGoldInvestmentDemand.html iehi-feed-60169 Sat, 09 Jul 2016 14:24:13 GMT Silver: Turning Of The Tide? - Ted Butler http://implode-explode.com/viewnews/2016-07-09_SilverTurningOfTheTideTedButler.html What's most unprecedented about current circumstances is that never in the past have gold and silver prices rallied strongly after historic commercial short positions had been established. Yet, for the very first time, prices have so rallied.

It's not possible the commercials intended to be billions of dollars in the hole and the most plausible explanation for why they are so deep in the red is simple miscalculation. And if the commercials have miscalculated to this point, that would seem to increase the odds of continued miscalculation, leading to a total failure which I would define as aggressive short covering on escalating prices.

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