Fantasy Or Reality… Which Is It?
By Bill Holter
GoldSeek.com
Monday, 12 October 2015
I must apologize for leaving so many e-mails and comments unanswered last week. My wife Kathryn and I travelled to northern Michigan and the upper peninsula for the week and saw some wonderful fall foliage. Cell phone and wifi coverage was somewhat spotty. While there we celebrated her birthday and our 10 year wedding anniversary. The week away did allow me to step back from the global economic and financial fray to a vantage point of the very big picture and headlines rather than minutia.
Last week was a true dichotomy of fantasy and reality. We witnessed a massive short squeeze and the best week for U.S. equities in over a year. While the markets were oversold and due a bounce, the “bounce” came with a backdrop of very dire news! Day after day brought forth new and consistently worse news.
In no particular order of importance; Deutsche Bank reported a $6.5 billion loss (10% of their net equity), UBS joined the derivatives implosion party and required a capital raise, Glencore ‘fessed up to $100 billion in debt versus the previous $19 billion (with three or four other major commodity firms in the same boat), the Bank of England required their banks to disclose how much of this debt they were exposed to, China’s yuan surpassed the yen in the settlement of global trade, China also went live with their alternative settlement of trade in yuan (non dollars), Saudi Arabia and Norway disclosed they are now in deficit and thus no longer “buyers” of dollars (are they now sellers?) …and the U.S. was effectively kicked out of the Middle East! I might add that several recent economic reports even though fudged, massaged and outright falsehoods were unable to hide the reality of global AND U.S. recession and decline in the real economic sectors.
To top all of this off, the U.S. Fed has now attracted naysayers including our (their) own bought and paid for media. They have effectively lost credibility. Since the last Fed meeting, the world has collectively come to the conclusion they have no options left and credible monetary policy is not a possibility. In fact, Mr. Trichet of Europe’s central bank has admitted that global central banks can no longer save the day or even buy time. On the other side of the financial coin, John Boehner resigned a couple of weeks back and his proposed replacement Congressman Kevin McCarthy withdrew his name from consideration. Please understand what this really means, the U.S. House of Representatives has now been hijacked by a minority which controls the majority. Normally this might be a good thing as a divided Congress cannot spend money (it does not have). Currently I believe this is a very bad event because it proves the further loss of credibility in U.S. leadership is valid.
The Rest…HERE
