Implode-Explode Heavy Industries news feed http://implode-explode.com/ Tracking the many faces of the global credit implosion. en-us 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-60299 Tue, 26 Jul 2016 03:35:31 GMT Miami judge: "Bitcoin not money", Overturns laundering conviction http://implode-explode.com/viewnews/2016-07-25_MiamijudgeBitcoinnotmoneyOverturnslaunderingconviction.html Miami-Dade Circuit Judge Teresa Mary Pooler ruled that Bitcoin was not backed by any government or bank, and was not "tangible wealth" and "cannot be hidden under a mattress like cash and gold bars."

"The court is not an expert in economics; however, it is very clear, even to someone with limited knowledge in the area, the Bitcoin has a long way to go before it the equivalent of money," Pooler wrote in an eight-page order. The judge also wrote that Florida law -- which says someone can be charged with money laundering if they engage in a financial transaction that will "promote" illegal activity -- is way too vague to apply to Bitcoin.

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In Espinoza's case, Miami Beach detectives found him through a Bitcoin exchange site, LocalBitcoins.com, and told him they were going to use the currency to purchase stolen credit-card numbers.

The detectives met with Espinoza, 32, three times in person: on Lincoln Road, at an ice cream shop and in a hotel room.

Espinoza was arrested along with another man, Pascal Reid, who pleaded guilty to acting as an unlicensed money broker and was sentenced to probation. Under his unusual plea deal, he agreed to teach law enforcement about Bitcoin.

At a hearing in May, a defense expert, Barry University economics professor Charles Evans, testified that Bitcoin was not actually money... At a hearing in May, a defense expert, Barry University economics professor Charles Evans, testified that Bitcoin was not actually money.

It's not necessarily a good thing for bitcoin not to be considered money. It seems like the court had to rely on some pretty questionable logic to come to the conclusion that bitcoin wasn't "money" (given that it is a store of value, medium of exchange, and unit of account). On the other hand, states have been moving for a while to a de facto position where anything other than fiat currency isn't considered by them to be "money" (having abandoned gold/silver money and gold-backed money a while ago), and there's a kind of "fairness" to that (i.e., think "render unto Caesar what is Caesar's"...) At any rate, anti-money laundering laws are insanely vague and over-broad, so this is probably a good result on that point alone. That is particularly evident here where this was a case of entrapment for a fictitious transaction that would actually not have led to any illegal activities -- the cops had to make a big show of divulging that they planned to do something illegal to get the requisite intent to launder money for an illegal activity. But in the wild, real criminals aren't announcing their intentions in marquee letters to third parties who have no need to know them -- revealing this case as in fact an "intimidation op" against those who would dare to use virtual currencies in a direct, more private manner.

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iehi-feed-60297 Mon, 25 Jul 2016 19:17:30 GMT Risks to U.S. Financial Stability Increase After Brexit: FSOC Report http://implode-explode.com/viewnews/2016-07-25_RiskstoUSFinancialStabilityIncreaseAfterBrexitFSOCReport.html The U.K. decision to split from the 28-member bloc "surprised financial markets and was a negative shock to investor confidence," said Richard Berner, director of the Office of Financial Research, the research arm of the Financial Stability Oversight Council. He said the vote ushers in "months or years of uncertainty" over rules tied to the U.K.'s investment, financing and trade relations with Europe and the rest of the world.

Despite the ability of U.S. markets to recover from the initial shock of a market selloff, persistent concerns remain as the U.K. decides "if, how and when" to leave the EU, Mr. Berner said in a briefing with reporters. Possible spillover effects, he said, could jolt the broader financial system, including U.S. banks and nonbanks such as life insurers and broker-dealers.

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iehi-feed-60295 Mon, 25 Jul 2016 17:21:38 GMT IceCap Asks What Happens When The Bond Bubble Finally Pops http://implode-explode.com/viewnews/2016-07-25_IceCapAsksWhatHappensWhenTheBondBubbleFinallyPops.html iehi-feed-60293 Mon, 25 Jul 2016 15:25:01 GMT "Putin's Useful Idiots" = Anyone Who Disagrees With The Establishment http://implode-explode.com/viewnews/2016-07-25_PutinsUsefulIdiotsAnyoneWhoDisagreesWithTheEstablishment.html iehi-feed-60292 Mon, 25 Jul 2016 15:19:21 GMT Italy insists there's 'no banking problem' as stress tests loom large http://implode-explode.com/viewnews/2016-07-25_Italyinsiststheresnobankingproblemasstresstestsloomlarge.html iehi-feed-60291 Mon, 25 Jul 2016 15:08:34 GMT Doug Noland - "Don't Mess with Turkey" http://implode-explode.com/viewnews/2016-07-25_DougNolandDontMesswithTurkey.html President Erdogan has championed Turkish economic renaissance, a powerful boom that has been fundamental to his popularity and ascending political power. Unfortunately, it morphed into a Credit-fueled Bubble, with all the associated financial, economic and social consequences. Turkish consumer debt has skyrocketed, fueled by aggressive bank lending. Meanwhile, Turkey's financial institutions have borrowed aggressively in global inter-bank markets, with much of this debt short-term and denominated in foreign currencies.

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The unfolding EM debacle is one of the saddest consequences arising from the U.S. mortgage finance Bubble - turned reflationary QE before transforming into the global government finance Bubble. Throw Trillions of loose finance at the emerging markets and rest assured there will be epic corruption, economic maladjustment and destabilizing social and geopolitical stress. As for corruption and malfeasance, China, Brazil, Russia, Turkey and Malaysia come quickly to mind. Yet it's systemic, the upshot from what has become a hopelessly dysfunctional global system. Indeed, EM these days has regressed into one big highly synchronized and vacillating Bubble. That EM could now somehow be experiencing record inflows in the face of such financial, economic and social instability is remarkable. There is precedent.

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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-60288 Sat, 23 Jul 2016 17:09:36 GMT Munich, Turkey, Baton Rouge, Nice, Brexit, Trump: It's all connected http://implode-explode.com/viewnews/2016-07-23_MunichTurkeyBatonRougeNiceBrexitTrumpItsallconnected.html Those cheering Brexit in the U.K., and welcoming a state of emergency in Turkey, were the ships that were supposed to be lifted by the rising tide of globalization, a promise that proved cruelly incorrect. They are now finding satisfaction in defeating their ruling classes, the people who believed those countries, and the world, were theirs to rule.

It's the same live wire that connects an Islamic State-inspired attack in Europe to a racially motivated shooting rampage in the U.S. The perpetrators are -- almost always -- those who felt they have very little left to lose in their lives. The cause they choose is almost a footnote to their act of anarchy.

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iehi-feed-60287 Sat, 23 Jul 2016 16:49:05 GMT Russian diplomacy aims to accelerate Syrian endgame; US Out of Options http://implode-explode.com/viewnews/2016-07-23_RussiandiplomacyaimstoaccelerateSyrianendgameUSOutofOptions.html Moscow estimates that Obama administration will somehow ride out the domestic criticism of Russian-American coordinated strategy to fight extremist groups in Syria. Indeed, Washington has run out of options in Syria and Moscow cannot be oblivious of that.

The Obama administration cannot afford to overlook the intelligence reports that Nusra Front, al-Qaeda's affiliate in Syria, is planning to attack targets in the West. Simply put, the Russian prognosis is coming true.

However, it is the failed coup in Turkey that becomes a god-sent opportunity for Russia to connect the dots and accelerate the endgame in Syria.

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iehi-feed-60284 Sat, 23 Jul 2016 14:46:52 GMT Once-expanding EU prepares to contract for the first time in its history http://implode-explode.com/viewnews/2016-07-23_OnceexpandingEUpreparestocontractforthefirsttimeinitshistory.html iehi-feed-60283 Sat, 23 Jul 2016 00:49:14 GMT Pension Funds Are Underwater And Taxpayers Along http://implode-explode.com/viewnews/2016-07-22_PensionFundsAreUnderwaterAndTaxpayersAlong.html iehi-feed-60281 Sat, 23 Jul 2016 00:46:42 GMT How Sub-Zero Government Bonds Turned the Hunt For Yield Upside Down http://implode-explode.com/viewnews/2016-07-22_HowSubZeroGovernmentBondsTurnedtheHuntForYieldUpsideDown.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-60276 Fri, 22 Jul 2016 00:08:17 GMT Toga! Toga! Toga! - Jared Dillon http://implode-explode.com/viewnews/2016-07-21_TogaTogaTogaJaredDillon.html Both candidates for [U.S.] president have increasingly grandiose visions for the sorts of things government should do, and I don't see any scenario in 2017 where the deficit doesn't widen sharply.

... the debt problem is most acute in Japan, obviously, where debt to GDP is now about 240%. Japan was insolvent at a debt-to-GDP ratio of 120%, so the rest is just gravy... What if the Ministry of Finance simply defaults to the BOJ?... This is in fact being seriously considered... Think about it: back when we started doing QE, people were freaking out about what would happen when the Fed sold bonds back into the market. That was never going to happen--that was never the intent at all.

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So if debt doesn't matter and we're going to build roads and trains and bridges to nowhere, it means that shorting this market is a huge waste of time. It will end badly someday, but keep in mind that people have been predicting disaster for the last 45 years, when Nixon took us off gold. We could have 15 more years of this crap... The obvious trade here is gold...''

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iehi-feed-60272 Thu, 21 Jul 2016 17:56:58 GMT Caribbean Dream: Cuba Legalizes Small and Medium Private Business http://implode-explode.com/viewnews/2016-07-21_CaribbeanDreamCubaLegalizesSmallandMediumPrivateBusiness.html 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-60267 Wed, 20 Jul 2016 22:34:55 GMT The financial system is breaking down at an unimaginable pace http://implode-explode.com/viewnews/2016-07-20_Thefinancialsystemisbreakingdownatanunimaginablepace.html iehi-feed-60263 Wed, 20 Jul 2016 13:57:28 GMT The 28 Pages that Damn Saudi Arabia http://implode-explode.com/viewnews/2016-07-20_The28PagesthatDamnSaudiArabia.html iehi-feed-60251 Tue, 19 Jul 2016 13:54:25 GMT Auditing The Fed Would "Probably Cause Worldwide Panic": Gary Johnson http://implode-explode.com/viewnews/2016-07-19_AuditingTheFedWouldProbablyCauseWorldwidePanicGaryJohnson.html