JPMorgan's Gold Vault Has Biggest One-Day Withdrawal Ever

Curious why over the past few months JPM has quietly been accumulating a substantial amount of eligible physical gold (even as its registered gold inventory is the lowest it has ever been at just 87K ounces since December 13, 2013 when 147K ounces of gold was withdrawn - keep that date in mind for a few minutes)? 

This may have something to do with it: moments ago the daily Comex gold vault report confirmed what many expected, namely that the JPM accumulation was merely in advance anticipation of major withdrawals. How major? Well, on January 23, JPM saw 321,500 ounces of gold depart in one day. This was tied for the single biggest daily withdrawal in history!The last time JPM had an identically sized withdrawal? December 13.... 2012.

Something tells us the next few days will see matching withdrwawals from JPM's gold vault, which at last check was officially owned by the Chinese.

And for those wondering how JPM's total gold holdings look over time here it is:

Credit to Zero Hedge

Will This STOCK MARKET FREE-FALL Continue?

The TRUTH On The Collapsing 23 Trillion Credit Bubble In China

Church entering 'new era' under Pope Francis

OXFORD, England -- The cardinal who heads Pope Francis' Council of Cardinals said the Catholic Church is entering a "new era" and accused critics of the pope's statements on economic injustice of failing to "understand reality."

"I'm firmly convinced we are at the dawn of a new era in the Church, just as when Pope John XXIII opened its windows 50 years (ago) and let in fresh air," said Honduran Cardinal Oscar Rodriguez Maradiaga of Tegucigalpa in an interview with Germany's Cologne-based Kolner Stadt-Anzeiger published Jan. 20.

"Francis wants to lead the Church in the same direction that he himself is moved by the Holy Spirit. This means closer to the people, not enthroned above them, but alive in them," said the cardinal, who leads the council appointed by Pope Francis to work on reform in the Roman Curia and advise him on Church governance.

In addition, Cardinal Rodriguez Maradiaga said, the pope favored "above all, a simpler life and leadership" from priests and bishops in line with the "sometimes forgotten message of Jesus," and believed they should go out to people, rather than "sitting in our administrative offices and waiting for people to come."

He said most Catholics were "behind the pope" and added that he believed Cardinal-designate Gerhard L. Muller, prefect of the Vatican's Congregation for the Doctrine of the Faith, could be less absolute in his defense of authority in the Church.

"I understand it. He's German and a German professor of theology on top of it. In his mentality, there is only right or wrong, that's it," said Cardinal Rodriguez Maradiaga.

"But I say: The world, my brother, isn't like that. You should be slightly flexible when you hear other voices, instead of just listening and saying, no, here this is the wall. I believe he'll get there, and understand other views. But for now he's still only at the beginning."

The cardinal's remarks follow recent criticisms of Cardinal-designate Muller, formerly bishop of Regensburg, Germany, for what some bishops and cardinals see as an overly rigid stance on Church teaching in some areas.

The archbishop was appointed by Pope Benedict XVI to head the doctrinal congregation in July 2012 and named a cardinal by Pope Francis Jan. 12.

Speaking Jan. 21 at a Catholic university symposium in Venice, Cardinal Rodriguez Maradiaga said he believed Church life should not be "so much concentrated on the pope and his Curia." He said the pope's November apostolic exhortation, "Evangelii Gaudium" ("The Joy of the Gospel"), did not, "contrary to superficial interpretations, contain any instructions for a change of direction or revolution."

However, in the interview, Cardinal Rodriguez Maradiaga said the pope's priority was that the Church should "reach the common people," and show compassion through "a different kind of care for the world, especially the needy."

He added that there had been "a lot of shouting" against the pope's "critique of capitalism" in "Evangelii Gaudium," especially in "U.S. business circles" who did not "understand reality."

"Who says capitalism is perfect, especially since the recent financial market crisis?" the cardinal said.

Asked about calls for the Church to change its attitude to divorced and remarried Catholics, Cardinal Rodriguez Maradiaga said the Church was "bound by God's commandment" that "what God has joined together, man must not divide."

However, he explained that there were "many ways to interpret" the commandment, and "still much room for a deeper interpretation" without reversing the teaching.

The cardinal said an October Synod of Bishops on the family would tackle new social issues such as surrogate parenthood, childless marriages and same-sex partnerships which were "not even visible on the horizon" at the last family synod in 1980.

"We have the traditional doctrine, and, of course, the traditional teaching will continue," Cardinal Rodriquez Maradiaga said.

"But pastoral challenges require timely answers. They can't any longer come from authoritarianism and moralism."

He said the cardinals who elected Pope Francis in March knew that "much had to change in the Church."

He added that changes now "high on the agenda" included plans to make the Synod of Bishops a "useful and powerful tool of collegial leadership," rather than a body "meeting in Rome every three years," and the creation of a new Congregation for the Laity to reflect the fact that laity "constitute the vast majority of God's people."

A new constitution for the Curia also was planned, the cardinal said. It would replace Pope John Paul II's 1988 apostolic constitution, "Pastor Bonus," on the structure and responsibilities of the Curia. The cardinal promised it would be "something completely new, not just a modification or adaptation."

"There are plenty of staff in the Curia who agree it cannot stay as it is and are supporting us with their own proposals. The Curia is by no means a monolithic bloc," he said.

Credit to St. Louis Review

Palestinian leader turns to Putin for Palestinian state

Palestinian Authority Chairman Mahmoud Abbas (Abu Mazen) launched his “diplomatic intifada” against Israel and exit from the Kerry peace initiative Thursday, Jan. 23, from Moscow. His meetings with President Vladimir Putin and Prime Minister Dmitry Medvedev marked his breakaway from the US-led peace process with Israel, four months before it was due to expire, and signaled his bid for Russian backing for a Palestinian state.

The Palestinian leader’s defection caught both Secretary of State John Kerry and Prime Minister Binyamin unprepared – and surprised their intelligence agencies. Putin and Abbas almost certainly planned in advance to drop their bombshell on the day both Kerry and Netanyahu were otherwise engaged at two international events in Switzerland, Geneva 2 on Syria and the World Economic Forum.
For the Russian leader it was a chance to show the international community and the Obama administration that he was several steps ahead of the game on the three hottest Middle East issues – Iran’s nuclear program, the Syrian civil conflict and the Palestinian bid for statehood.

The first intimation that something big was up came from an ITAR-TASS agency report Thursday that Abbas and Medvedev were due to sign an intergovernmental agreement for a $1 billion natural gas project in the Gaza section of the Mediterranean Sea. Russia's natural gas giant Gazprom hoped to produce 30 billion cubic metres of natural gas at the site.

The report added that Russia's Technopromexport engineering firm was also considering a small oil development project near the West Bank city of Ramallah, hub of the Palestinian Authority government headed by Abbas.

The Palestinian leader began his conversation with Putin by calling Russia a "great power" that deserved to play a more prominent role in the volatile Middle East region.

Clearly taken aback by the news coming in fast from Moscow, Israeli official sources said Thursday night they could not understand how the Russians and Palestinians came to an agreement on Mediterranean waters off the shores of Gaza, when the rights were already owned by British Gas.

It did not occur to them that the deal Russia proposed to sign with the Palestinians was designed to be an extension of the Russian-Syrian oil exploration contract signed on Dec. 27 in Moscow.

This move confronts Israel with two troubling concerns:

1. Russian interests could potentially encircle Israel’s offshore Mediterranean gas and oil sites and Russian pipelines may block Israel’s export facilities.

2. Under international law, the Palestinian Authority is not recognized as an independent state and is therefore not empowered to establish Special Economic Zones in the Mediterranean as closed areas for prospecting for oil or gas. This was one of the topics placed on the agenda of the peace talks led by John Kerry.

However, Moscow has high-handedly circumvented this obstruction by taking charge of the offshore exploration opposite Gaza, thereby proffering its Palestinian partner to the deal implicitl Russian recognition of its status as an independent national entity authorized to sign international contracts. This could be the precedent for a process of creeping Palestinian statehood without engaging Israel in negotiation.

Moscow has already proved it can get away with busting international sanctions by concluding a $1.5 bn contract with Tehran for the purchase of half a million barrels of Iranian oil a day, without incurring a word of complaint from Washington.

The Palestinians have clearly opted to follow the examples of other Middle East leaders, ranging from Iran’s Ayatollah Ali Khamenei, to Syria’s Bashar Assad, Saudi King Abdullah and Egyptian strongman Abdel-Fatteh El-Sisi, in making tracks, overtly or covertly, to Moscow. They are opening the door for Russia to fill the void left by American disengagement from region under the Obama administration.

Credit to DEBKA file

American Citizens Are One Step Away From Being Chinese Slaves

As Mark Twain once said, “There are lies and there are damn lies”. There is a rumor floating around the internet and it has gone viral. The rumor states that when Hillary Clinton went to China, she pledged the ownership of our homes as collateral to the Chinese so that they would continue to purchase our debt.

What Are the Chinese Purchasing?

Before I subscribe to this rumor, I would like to know which debt the rumor is referring to. Is the debt consist of the United States selling 17 trillion dollars in budget debt and the Chinese are purchasing that debt? Would the purchased debt consist of the unfunded liabilities debt totaling 240 trillion dollars? Or, would the Chinese be so kind as to purchase the really big debt of 1.5 quadrillion dollars of derivatives debt created by the bankster Ponzi schemes gone bad?

Are the Chinese just plain stupid or are they just dumb like a fox?

Applying Common Sense

Ask yourself, why would the Chinese ever purchase our derivatives debt of 1.5 quadrillion dollars when the entire GDP of the planet is only 65 trillion dollars? We can safely assume that the Chinese are not insane enough to purchase this debt.

It is a certainty that the Chinese did not purchase the unfunded liabilities debt of 240 trillion dollars for the same reasons that they would not purchase the derivatives debt in that there is no way to ever pay this debt off.

If I put on my tinfoil conspiracy hat, I might suggest that the Chinese would purchase the derivatives debt and/or the unfunded liabilities debt as a means to declare eminent domain over all US property. Following the transfer of all American deeds, the Chinese could boldly do what our Congress should have done decades ago, repudiate this debt owed to the central banksters. But  I almost forgot, there is going to be no repudiation of the debt because the Chinese are playing for the same team as the Russians and the Obama administration, namely, the Bastards from Basel.

And then finally, there is the notion that the Chinese would be dumb enough to even purchase our 17 trillion dollar debt. Why would any country purchase a debt from a single country when that debt is more than 25% of the entire value of the planet? In this scenario, where is the return on investment? This would be a totally foolish financial move by the Chinese and just the simple math alone, would suggest that this is not true. Yet, the Chinese are still purchasing our debt, why? And I have to agree with the rumor mongers about one thing, there is something of ours that is of enough value to get the Chinese to continue to throw good money after bad. And there is that trip that Clinton took to China and she did come away with a guarantee that the Chinese would continue purchase our debt. In other words, this internet rumor, regarding the collateralizing our homes, does indeed have some basis in fact because something is collateralizing the Chinese actions as they continue to bail out water on a sinking ship with no hope of realizing a return on investment from a monetary standpoint.

World Net Daily Receives the Standard Denial

The fact does remain that Secretary of State Hillary Clinton did indeed go to China for the express purpose of convincing the Chinese to continue to purchase our debt. With our economy in the mess that it is in, that had to be one tough sell. There can be no question that the Chinese had to be promised something really, really, really big to continue investing in the sinking American economy.

I completely understand why many people would jump to the conclusion that Clinton pledged the homes of American citizens. However, this has never been legislation or adjudicated. Private debt is not public debt and the United States government has taken no overt legislative action, nor have Executive Orders been issued to this effect.

Therefore when the State Department says there is “no factual basis” to an Internet rumor that went viral over the weekend claiming Secretary of State Hillary Clinton was willing to pledge American homes to China as collateral for Beijing buying the U.S. debt, I believe the government. However, what is most disturbing here is not what the State Department is saying. What is most disturbing is what they are not saying. Something was pledged to get the Chinese to continue to buy our debt and nobody from the government is being forthcoming enough to tell the public what the Chinese have been promised.

Legitimizing Tyranny

There is one thing that I will say in defense of our criminal enterprise government, they at least try to appear to have the power of law behind them in everything that they do. In other words, they do legitimize tyranny and make it sound so legal. For example, they can force you to buy Obamacare by calling it a tax. They spy on our every move by saying it is for our safety and that they can only do so by having to violate our rights. Therefore, if the Chinese were going to be granted the authority to seize our homes, we would see some legal justification for such an action. Still, there can be no doubt that Clinton had to pledge something to get something from the Chinese. What could be big enough that the Chinese would be willing take on a 17 trillion dollar debt with no hope of repayment? Let’s examine some possibilities which have already been legitimized by the actions of the rogue Obama administration.

America Is Not Broke As America Has Buried Treasure

Far beneath the ground, the federal government owns the rights to mineral and energy leases, from which they receive royalties, rents, and bonus payments, states the Institute for Energy Research, an industry group. According to their estimates, the government states that the assets are worth $128 trillion. That’s almost eight times the national debt.

Further, the unleashing of these assets would reduce the costs of energy for consumers and businesses.  Now, the owners of the utilities, the same people who are the owners of the oil companies, could not permit that. The utilities have invested billions toward the installation of smart meters and a new infrastructure  smart grid, in which they control all energy pricing.

Another factor that comes into play on why these assets are not being unleashed is because plentiful, reliable and cheap energy supplies would greatly accelerate economic growth and jump start the economy out of the doldrums. But when the globalists’ goal is the creation of a one world economic system controlled by a tyrannical one world government, the old government and economy must be brought down and this economic boon to the economy cannot be allowed to transpire. Therefore, the government acts as a procurement agent for the Chinese, who will eventually unleash these assets to themselves, after the collapse of the dollar. However, if I was taking on a debt the size of the United States, I would think bigger.

Chinese Debt Collection

There is no doubt that the Chinese are being granted authority to control our international inland ports in which eventually all commerce will flow through. If the Chinese own the Inland Ports, then they own the American trade system, by default. This is a likely asset that would have been pledged by Clinton. However, if I was taking on a debt the size of the United States, I would think bigger.

All Material and Human Capital

 I have written extensively on Executive Order 13603. This EO sets up the most draconian martial law authority on the planet. Literally, everything is controlled by the government. All food, all industry, all energy and you are controlled by the President. The interesting thing about EO 13603 is that does not require an emergency declaration to be acted upon.

Can there be any doubt?

A review of EO 13603 reveals that Obama not only can seize every material asset in the country, he can seize you and your family and assign anyone and everyone to duties of his choosing.  An examination of this EO reveals that the “new draft” would be controlled by the Secretary of Labor. The military draft would be administered by the Selective Service as it always has been done. The civilian draft will be overseen by the Secretary of labor.

EO 13603 is the whole enchilada. I have written four articles on different aspects of EO 13603 and I would suggest that everyone spend some time Googling this EO and come to your own conclusions. I think there is no doubt that it would take this type of pledge to keep the Chinese from withdrawing their support and it would be a good deal for them. If I could own all of America, including its people, in perpetuity, I would certainly make the deal the Chinese have apparently made with Hillary Clinton.

Conclusion

Handing over all capital resources to the Chinese, including human capital, makes a great deal of sense because this is the one thing that Clinton could have pledged which might have convinced the Chinese to continue to purchase our out-of-control-debt. If only our homes had been pledged to the Chinese as collateral for their investment in our debt, that would have been the deal of the century for all Americans.

We need to demand the full scope of what Clinton pledged to the Chinese. And as a man, I say this to all of you: If this possibility is not enough to get you to realize that you have no choice but to get into this fight, then nothing will and maybe then, we do deserve to be China’s slave colony!

Credit to Common Sense

1914 All Over Again? Japan's PM Abe Raises Ghost of WWI with China

The latest remarks by Japanese Prime Minister Shinzo Abe about China and Japan being in a “similar situation” to that of Britan and Germany ahead of World War One have exacerbated an already tense situation.

Abe, who was speaking on the sidelines of the World Economic Forum in Davos, Switzerland, also said that China’s rocketing investment in military spending was a source of instability in the region.

His hawkish words were picked up by renowned economist Nouriel Roubini, who forecast the collapse of the US housing market and the worldwide recession which started in 2008.

Roubini, nicknamed Dr Doom, brought some eerie parallels between 1914 and 2014.

Abe’s spokesman denied that the Japanese PM’s words could be interpreted as if a possible war between the two Asian countries was possible. However, Beijing and Tokyo’s relations have worsened recently due to a territorial spat.

“We must…restrain military expansion in Asia, which could otherwise go unchecked,” Abe said in Davos.

“Military budgets should be made completely transparent and there should be public disclosure in a form that can be verified,” Abe said.

The hawkish prime minister defended his visit to the Yasukuni Shrine, seen by many critics as a symbol of Japan’s past militarism. The move angered China’s foreign ministry, who called it “an intrinsic attempt to deny and beautify that history of invasion by the Japanese militarists”.

Credit to Tru News

Professor Warns of Coming World War

20 Early Warning Signs That We Are Approaching A Global Economic Meltdown

Have you been paying attention to what has been happening in Argentina, Venezuela, Brazil, Ukraine, Turkey and China?  If you are like most Americans, you have not been.  Most Americans don't seem to really care too much about what is happening in the rest of the world, but they should.  In major cities all over the globe right now, there is looting, violence, shortages of basic supplies, and runs on the banks.  We are not at a "global crisis" stage yet, but things are getting worse with each passing day.  For a while, I have felt that 2014 would turn out to be a major "turning point" for the global economy, and so far that is exactly what it is turning out to be.  The following are 20 early warning signs that we are rapidly approaching a global economic meltdown...

#1 The looting, violence and economic chaos that is happening in Argentina right now is a perfect example of what can happen when you print too much money...

For Dominga Kanaza, it wasn’t just the soaring inflation or the weeklong blackouts or even the looting that frayed her nerves.

It was all of them combined.

At one point last month, the 37-year-old shop owner refused to open the metal shutters protecting her corner grocery in downtown Buenos Aires more than a few inches -- just enough to sell soda to passersby on a sweltering summer day.

#2 The value of the Argentine Peso is absolutely collapsing.

#3 Widespread shortages, looting and accelerating inflation are also causing huge problems in Venezuela...

Economic mismanagement in Venezuela has reached such a level that it risks inciting a violent popular reaction. Venezuela is experiencing declining export revenues, accelerating inflation and widespread shortages of basic consumer goods. At the same time, the Maduro administration has foreclosed peaceful options for Venezuelans to bring about a change in its current policies.

President Maduro, who came to power in a highly-contested election last April, has reacted to the economic crisis with interventionist and increasingly authoritarian measures. His recent orders to slash prices of goods sold in private businesses resulted in episodes of looting, which suggests a latent potential for violence. He has put the armed forces on the street to enforce his economic decrees, exposing them to popular discontent.

#4 In a stunning decision, the Venezuelan government has just announced that it has devalued the Bolivar by more than 40 percent.

#5 Brazilian stocks declined sharply on Thursday.  There is a tremendous amount of concern that the economic meltdown that is happening in Argentina is going to spill over into Brazil.

#6 Ukraine is rapidly coming apart at the seams...

A tense ceasefire was announced in Kiev on the fifth day of violence, with radical protesters and riot police holding their position. Opposition leaders are negotiating with the government, but doubts remain that they will be able to stop the rioters.

#7 It appears that a bank run has begun in China...

As China's CNR reports, depositors in some of Yancheng City's largest farmers' co-operative mutual fund societies ("banks") have been unable to withdraw "hundreds of millions" in deposits in the last few weeks. "Everyone wants to borrow and no one wants to save," warned one 'salesperson', "and loan repayments are difficult to recover." There is "no money" and the doors are locked.

#8 Art Cashin of UBS is warning that credit markets in China "may be broken".  For much more on this, please see my recent article entitled "The $23 Trillion Credit Bubble In China Is Starting To Collapse – Global Financial Crisis Next?"

#9 News that China's manufacturing sector is contracting shook up financial markets on Thursday...

Wall Street was rattled by a key reading on China's manufacturing which dropped below the key 50 level in January, according to HSBC. A reading below 50 on the HSBC flash manufacturing PMI suggests economic contraction.

#10 Japanese stocks experienced their biggest drop in 7 months on Thursday.

#11 The value of the Turkish Lira is absolutely collapsing.

#12 The unemployment rate in France has risen for 9 quarters in a row and recently soared to a new 16 year high.

#13 In Italy, the unemployment rate has soared to a brand new all-time record high of 12.7 percent.

#14 The unemployment rate in Spain is sitting at an all-time record high of 26.7 percent.

#15 This year, the Baltic Dry Index experienced the largest two week post-holiday decline that we have ever seen.

#16 Chipmaker Intel recently announced that it plans to eliminate5,000 jobs over the coming year.

#17 CNBC is reporting that U.S. retailers just experienced "the worst holiday season since 2008".

#18 A recent CNBC article stated that U.S. consumers should expect a "tsunami" of store closings in the retail industry...

Get ready for the next era in retail—one that will be characterized by far fewer shops and smaller stores.

On Tuesday, Sears said that it will shutter its flagship store in downtown Chicago in April. It's the latest of about 300 store closures in the U.S. that Sears has made since 2010. The news follows announcements earlier this month of multiple store closings from major department stores J.C. Penney and Macy's.

Further signs of cuts in the industry came Wednesday, when Target said that it will eliminate 475 jobs worldwide, including some at its Minnesota headquarters, and not fill 700 empty positions.

#19 The U.S. Congress is facing another deadline to raise the debt ceiling in February.

#20 The Dow fell by more than 170 points on Thursday.  It is becoming increasingly likely that "the peak of the market" is now in the rear view mirror.

And I have not even mentioned the extreme drought that has caused the U.S. cattle herd to drop to a 61 year low or the nuclear radiation from Fukushima that is washing up on the west coast.

In light of everything above, is there anyone out there that still wants to claim that "everything is going to be okay" for the global economy?

Sadly, most Americans are not even aware of most of these things.

All over the country today, the number one news headline is about Justin Bieber.  The mainstream media is absolutely obsessed with celebrity scandals, and so is a very large percentage of the U.S. population.

A great economic storm is rapidly approaching, and most people don't even seem to notice the storm clouds that are gathering on the horizon.

In the end, perhaps we will get what we deserve as a nation.

Credit to Economic Collapse

Protests Spread to West Ukrainian Cities

MOSCOW, January 23 (RIA Novosti) – Anti-government unrest in the Ukrainian capital Kiev has spread to western Ukraine, where government buildings in two major cities were seized by protesters Thursday.

Activists smashed a door and broke into the City Hall of the western Ukrainian city of Rivne at about 10:00 GMT, demanding the resignation of Governor Vasyl Bertash, local media reported.

The governor, who was recently decorated with a state award by President Viktor Yanukovych, is currently on official vacation and according to Ukrainian media is out of the country.

The protesters, who negotiated with Bertash’s deputies, also demanded the withdrawal of riot police from Kiev, where dozens have been injured and at least two protesters killed in clashes with law-enforcement officers in the past few days.

Earlier in the day, residents of another western Ukrainian city, Lviv, seized the city administration building and forced Governor Oleh Salo to resign.

Several thousand protesters gathered outside the building and claimed they were “taking power into their own hands,” Zaxid.net website reported.

The governor later asked for his resignation letter to be considered invalid because it was written under pressure. He also reiterated his allegiance to the president and said he shared Yanukovych’s “desire to bring peace and stability to Ukraine.”

In the central Ukrainian city of Poltava, a group of “radically-minded young people” attempted to seize the city administration late Wednesday, but the city’s police chief managed to defuse the situation, Poltavshchina website reported.

According to local opposition activist and politician Oleh Pustovhar, the head of the city’s police department removed his hat and suggested singing the national anthem to honor those killed in Kiev.

“Tensions eased a bit after that,” Pustovhar said. “The protesters went around the corner and threw a couple of flares, and the rally was over.”

The traditionally pro-European western part of Ukraine has been the support base for protest rallies that began in late November when Yanukovych pulled away from an association agreement with the EU in favor of closer ties with Moscow. Many residents of Lviv, Ternopil, Ivano-Frankivsk and other Ukrainian cities have traveled to Kiev to take part in the protests there.

Meanwhile, an anti-protest movement has formed in the traditionally pro-Russian city of Simferopol in the Crimea, in Ukraine’s south.

“It’s a popular initiative, there are no politicians or lawmakers among us,” said Nikolai Filippov, one of the movement’s founders. “We call on residents of the Crimea and all Ukrainians to unite against attempts to unleash a civil war.”

The movement’s leaders have called on supporters to disseminate its symbol – a red hexagon similar to the stop sign – via social networking websites.

Credit to RIA Novosti

Your Front Row Seat To Argentina's Currency Collapse

UPDATE: The Argentine Trade Balance missed surplus expectations by the most in 3 years (and 2nd most on record).





As those who follow Zero Hedge on twitter know, we have recently shown a keen interest in the collapse of the Argentine currency reserves - most recently at $29.4 billion - which have been declining at a steady pace of $100 million per day over the past week, as the central bank desperately struggles to keep its currency stable. Actually, make that struggled. Here is what we said just yesterday:


The decline continues: ARGENTINA'S RESERVES FELL $80M TODAY TO $29.4B: CENTRAL BAN

zerohedge (@zerohedge) January 22, 2014

As of today it is not just the collapse in the Latin American country's reserves, but its entire currency, when this morning we woke to learn that the Argentina Peso (with the accurate identifier ARS), had its biggest one day collapse since the 2002 financial crisis, after the central bank stopped intervening in currency markets. The reason: precisely to offset the countdown we had started several days back, namely "an effort to preserve foreign exchange reserves that have fallen by almost a third over the last year" as FT reported.

As the chart below shows, the official exchange rate cratered by over 17% when the USDARS soared from 6.8 to somewhere north of 8.



But as most readers know, just like in Venezuela, where the official exchange rate is anywhere between 6.40 and 11, and the unofficial is 78.85, so in Argentina the real transactions occur on the black market, where they track the so-called Dolar Blue, which as of this writing just hit an all time high of 12.90 and rising fast.

What happens next? Nothing good. "The risk of capital flight is rising by the minute. This will be very hard to control,” wrote Dirk Willer, strategist at Citigroup, adding that liquidity had "largely disappeared" with a risk of Venezuela-style capital controls. Ah Venezuela - that socialist paradise with a soaring stock market... even if food or toilet paper are about to become a thing of the past.

Some other perspectives via the FT:

Siobhan Morden of Jeffries said: “This is not an administration that respects or understands market pressure. They have been in the early stages of currency crisis since December, and yet their main strategy has been to pay off arrears and try to attract foreign direct investment.”

Luis Secco, Buenos Aires economist, said "It is hard to figure out what is the logic behind the authourities decision to let the peso so abruptly, without any other accompanying macroeconomic policy. It’s possible that the authorities would rather see a strong rise in the dollar, than lose, again, a large quantity of reserves."

“It is a potentially dangerous situation...not least because it could give the impression that the authorities don’t have a very clear idea of how to manage the situation.”

Ricardo Delgado, Buenos Aires economist, said on Wednesday: “The government faces a dilemma. It wants to stop reserves from falling. But that means less imports and thus lower growth, as the economy is very dependent on imports. So the question is: do you want more growth, or higher foreign reserves.“

However, with the "currency run" having once again begun, absent a wholesale bailout and/or backstop by "solvent" central banks of Argentina, a country which has hardly been on good speaking terms with the western central banks, there is little that the nation can do.

So for all those morbidly curious individuals who are curious what the slow-motion train wrecked death of yet another currency will look like, below is a link to the DolarBlue website, aka the front row seats where the true level of the Argentina currency can be seen in real time. If and when this number takes off parabolically, that's when the panic really begins - first in Argentina, then elsewhere.





Of course, it's not just Argentina - most of the world's emerging market FX is getting hammered year-to-date...

Credit to Zero Hedge