Chinese Currency Devaluation

The Crisis Is Spreading: China, Australia, Brazil, Canada, Sweden...

Earlier today, we posted an excerpt from IceCap Asset Management's latest letter to investors focusing on the farce that is the Greek bailout #3, which can be summarized simply by the following table... 

... and Keith Dicker's assessment which was that "for Greece, it’s mathematically impossible to repay its debt" and that the Greek "economy continues to plummet to deeper depths and is now -33% less than where it was in 2008."

But the truth is that for all the endless drama, Dicker continues, "the Greek debt crisis isn’t THE crisis. Rather it is simply a symptom of a much larger global debt crisis." 

The problem is that the "larger global debt crisis" is finally metastasizing and spreading to more places, all of which are large enough that they can not be simply swept under the rug, like Greece. 

* * * 

IceCap's Keith Dicker continues:

We’ve written before that governments all around the world have borrowed too much money and the weight of these debts are choking economic growth. 

And to make matters worse – these very same governments and their central banks have implemented various plans that have only made matters worse. 

Our view has not changed – the global debt crisis has escalated to a point where the government bond bubble has inflated itself to become the mother of all bubbles. It’s going to burst, and when it does it wont be pretty. 

Further evidence to support our view is as follows: 

Canada – the collapse in oil and commodity markets has pushed the country into recession and the Canadian Dollar to decline to levels lower than that reached during the 2008 crisis. 

Oil dependent provinces Alberta and Newfoundland remain in deep denial. Since everyone in these provinces have only ever experienced a booming oil market, many naively believe things will bounce back – and quickly. 

Meanwhile, both Toronto and Vancouver housing markets also remain in denial as they continue to go gangbusters. Buyers today are likely buying at all-time highs.

And as we predicted last year, the Bank of Canada has cut (not raised) interest rates twice in the last 6 months. 

We fully expect the Bank of Canada to eventually cut interest rates to 0% and start a money printing program as well. And for the stunner - NEGATIVE interest rates will not be that far behind. 

Australia – Over the last 20 years, China has been viewed as the growth engine of the world, and justifiably so. With annual growth rates between 8% to 15%, China’s economy was literally eating every rock, stalk and barrel of practically every commodity in the world. 

And naturally, any country or company that produced these commodities made a tonne of money – including Australia. 

Today, China’s growth rate has slowed to about 3% which is a dramatic slow down compared to what it achieved in the past. This slowdown and China’s effort to even maintain these rates, will have significant repercussions around the world. 

And the first up to bear the brunt of this slowdown is its closest supplier of raw materials – Australia. 

With dark clouds on the economic horizon, the Australian government and central bank is doing everything possible to prevent the unpreventable recession.

Interest rates have been reduced to all-time historical lows, meanwhile the Australian Dollar has plummeted -25% over the last year. Yet – the negative outlook has not improved.

Brazil – Like Australia, Brazil has benefitted immensely from China’s growth. And now, also like Australia, it too is feeling the affects of the dramatic Chinese slowdown.

The economy has now declined for 12 consecutive months making it both the longest and deepest recession in 25 years.

But wait – it gets worse. Despite declining growth, inflation continues to soar higher causing interest rates to rise as well.

And if that wasn’t bad, also know that the Brazilian currency has fell off the cliff at -53%.

Sweden – Unlike Australia and Brazil, Sweden relies very little on China as a buyer of last resort. Yet, the Swedish economy is also not very hot these days.

In fact, instead of spectacular and dramatic declines in anything, it is doing the exact opposite – it just isn’t moving.

While Sweden isn’t in the Eurozone, it is smack dab next to it and that in itself is reason enough for the lack of growth. We’ve written before how the debt crisis in the Eurozone is acting like a giant, slow moving tornado that is sucking the life out of the economy and everything near by. And unfortunately for Sweden, it is very near by. 

While economic growth in the Nordic state hasn’t declined, it hasn’t accelerated either – and this is what has many worried. 

So worried, that the central bank shocked everyone not once but twice, by first announcing that they would begin to print money, and then when they announced that interest rates would be NEGATIVE. 

These actions are so severe, that we need to repeat them:

1) MONEY PRINTING
2) NEGATIVE INTEREST RATES 

It is hoped that these actions will cause people and companies to loosen their wallets and start spending again. Yet, what the government and the central bank doesn’t understand is that these actions will actually make the problem worse. 

As the global economy continues to move as we expect, there is nothing Sweden can do to change what is coming – a global recession and a significantly weaker Krona. 

China, Australia, Brazil, Canada, Sweden - it is beyond us how anyone can declare the crisis isn’t spreading. Be prepared – there are going to be lots of opportunities to both make and lose money. 

But first, you have to recognize what is happening.

Credit to Zero Hedge

Time to Care for My Vineyard

Joseph Herrin




The number of writings I have been posting has slowed down of late due to other areas of ministry increasing. The biggest change I have experienced has been in the area of prison outreach. The number of men on the mailing list for the Parables Bookshelf Newsletters has tripled in the last six months. This is a tremendous blessing, for the need is great in this area. Men in prison need the encouragement and instruction of wholesome spiritual food more than most. Their environment is exceptionally dark spiritually. The men in prison who do have a hunger for spiritual food are generally far more ravenous than the average believer on the outside. I do sense the Father wanting me to make the outreach to men in prison a priority, and I am very happy to do so.

Along with the increase of men in prison receiving material, the amount of correspondence with them is also increasing. It is not unusual to receive letters from 10% of the men on the mailing list in any given week. This calls for patient responses to sincere questions and needs, and the printing of packets of writings to satisfy interest in particular areas of Biblical doctrine, or kingdom life.

At the same time, my regular e-mail with readers from my websites continues steady. This morning I am caught up in answering e-mail for the first time in weeks. I have had a desire to write more blog posts as there is a great deal transpiring in this world. Some recent stories that have caught my attention have been the unveiling of the Baphomet statue in Detroit, the projection of the image of Kali -the Hindu goddess of destruction and death on the Empire State Building, the participation of a homosexual couple in leading worship at the Hillsong church in New York City (a Bieber-friendly church), and numerous reports and prognostications of evil events set to occur from September forward.

Baphomet Story
http://vigilantcitizen.com/latestnews/the-satanic-temple-unveils-a-massive-statue-of-baphomet-in-detroit/

Hillsong Story
http://bit.ly/1DMBs4z




Kali - Empire State Building
(I believe the Empire State Building is symbolic of the Old World Order which must be torn down in order to make way for the New World Order. By projecting Kali onto the Empire State Building, a message is given of the upcoming destruction of the prevailing structures of the nations that a new order might arise out of the ashes of the destruction of the old. Some of Hollywood’s most expensive and successful recent movies dealt with the theme of covert government agencies destroying the old system of world order. Among them were Captain America - The Winter Soldier, and Mission Impossible - Rogue Nation. Hollywood is thoroughly under the control of Satan and he uses it to announce what he is doing.)

Videos on Upcoming Events in September
(Disclaimer: There is very little that I agree with regarding the narrative provided by the speaker in the following videos. I do NOT believe there will be a rapture event in September. I do NOT believe there will be an alien invasion, real or pretended. I have no reason to believe an asteroid will strike the earth causing massive destruction in this time period. The only reason I am sharing these links is that the creator of the videos has aggregated a significant amount of information from various sources that all point to the fact that this is a very important time period for Satan and his human disciples in the advancement of their plans to bring forth a New World Order, which is more properly referred to as “Babylon Rising.” The significance of the Pope meeting with President Obama and addressing a joint session of Congress during this time cannot be underestimated. It does not bode well for Americans, or the world at large.)

Video Part 1 of 4
https://youtu.be/jCoGDTi9RvI

Video Part 2 of 4
https://youtu.be/IvyojcyKpRM

Video Part 3 of 4
https://youtu.be/O21Fb-Ykv74

Video Part 4 of 4
https://youtu.be/TAamB3dqac8

I also have some ideas on new books and writing series that I would like to work on, but at this moment I sense that the Father is telling me to take care of some personal projects that have been languishing. The following Scripture has come to my mind frequently of late.

Song of Solomon 1:6
They made me caretaker of the vineyards, but I have not taken care of my own vineyard.

These words, spoken by the Shulamite woman, the lover of King Solomon, express her concern that she was made to care for the vineyards of her brothers, while neglecting her own needs. Partly due to the quickly approaching Fall timeline when there will be a convergence of a great many signs and events, I sense the need to complete some outstanding projects while I have the means and opportunity. I have been putting these projects off because there was always another blog post to write, or more e-mail to answer, but I sense in the spirit that I should not put them off any longer. I am committed to continuing to send out the newsletters to men in prison every week, for their need is great, but aside from this I am sensing a leading to focus on completing some personal projects at this time. This will have the added benefit of freeing my mind from the nagging thought of labors that need attending to, so that when I do return to writing I can do so without distraction.

I am announcing this to the readers of the Parables Blog that you might understand why for the next couple weeks I may not be posting much, and why I may be slower to respond to personal e-mail. Also, my example may impress upon others the need to no longer delay in taking care of their own projects that the Father has directed them to complete. I appreciate your understanding of this matter.

May you be blessed with peace and understanding in these days,

Joseph Herrin

US Ready to Destroy Europe to Defeat Russia - American Historian

In order to weaken Russia, the US is ready to use any means and fight until the last breath, American historian Eric Suess wrote. Washington does not take into account the interests of its allies and is ready to accept damage inflicted on them.

The fact that anti-Russian sanctions harm the European economy and that the EU is struggling to resolve the current refugee crisis is quite acceptable for the American strategists, the expert said as cited by DWN.

US Would Even Treat ISIL as Ally If It Were Fighting Against Russia - Austrian Media

In order to weaken Russia, US President Barack Obama has pursued a policy of destabilization in Libya, Syria, Ukraine and other countries, which negatively affected European states.

Before the US bombing missions in Libya in 2011, the country’s population lived in peace and prosperity, Suess argued. But now Libya has become Europe's biggest problem. Millions of Libyan residents are fleeing the chaos in the country to seek asylum in refugee camps in southern Italy as well as other places in Europe.

© AFP 2015/ YURIY DYACHYSHYN 

US Wants to 'Turn Ukraine Into New Pawn' on European Chessboard

Syria is another nation which is being destroyed by the US in order to conquer Russia. The US bombing mission in Syria is aimed at overthrowing the Russian ally Bashar al-Assad and replacing its secular government with an Islamic one.  The "Anti-ISIS" rhetoric is a way to conceal the US’ real goal of expanding the American empire. It is just a show for the public, which is clearly more anxious to fight against ISIL than against a distant country such as Russia.

In a similar way, the US played a part in the coup of Viktor Yanukovych in Ukraine in February 2014. But this time it was done under the guise of democratic demonstrations, Suess argued.

According to the historian, the main goal of Obama's destructive policy is to defeat Russia, to force a "regime change" there and make it a part of the American empire. The US wants Russia to lose its status as a world power which opposes Washington’s control, the expert claimed.

Credit to Sputnik

Read more: http://sputniknews.com/us/20150814/1025746966.html#ixzz3inYPp26w

Economic Armageddon Is Coming

Gold Jumps After China Reveals It Bought Another 19 Tons In July

One month ago, when everyone suspected that the PBOC's dramatic, 57% jump in gold holdings after a 6 year silence, to a "record" 1658 tons would be a "one-and-done" event, meant to facilitate China's admission into the SDR, we disagreed. This is what we said:

... now that the seal has been finally broken after so many years, and since today's update indicates that Chinese gold numbers are clearly goal-seeked with a specific policy purpose - to boost confidence - we await for the PBOC to start leaking incremental gold holding data every month (and especially in months when the market crashes) which will bring us ever closer to what China's true gold holdings are. 

One month later, this is precisely what happened, when overnight the People's Bank of China reported that even as the price of gold dropped once more in the month of July after the epic June drubbing (when China supposedly "bought" over 500 tons of gold), it added another 610,000 ounces of the yellow metal, or 1.1%, bringing its total to 53,930,000 ounces, or 1677 tons of gold.

Our view on China's disclosure (if not accumulation: this has already happened and now the PBOC is merely picking the right moments to gradually reveal what its true gold holdings are) of gold have not changed: expect every month to see a modest, incremental increase in its gold holdings.

And while last month, the market took China's announcement as a disappointing update - speculation had been rife that China has over 3,000 tons of gold - today the market is slowly waking up to what we said a month ago, namely that China's official gold holdings are far greater than what is revealed and that the PBOC will simply keep increasing month after month, now that both FX and gold play a very specific policy role in what everyone now realizes is a global currency war.

Credit to Zero Hedge

A Death Cross, Wild Market Swings And A Currency War – And We Haven’t Even Gotten To September Yet

Michael Snyder

Things continue to line up in textbook fashion for a major financial crisis by the end of 2015.  This week, Wall Street has been buzzing about the first “death cross” that we have seen for the Dow since 2011.  When the 50-day moving average moves below the 200-day moving average, that is a very important psychological moment for the market.  And just like during the run up to the stock market crash of 2008, we are starting to witness lots of wild swings up and down.  The Dow was up more than 200 points on Monday, the Dow was down more than 200 points on Tuesday, and it took a nearly 700 point roundtrip on Wednesday.  This is exactly the type of behavior that we would expect to see during the weeks or months leading up to a crash.  As any good sailor will tell you, when the waters start getting very choppy that is not a good sign.  Of course what China is doing is certainly not helping matters.  On Wednesday, the Chinese devalued the yuan for a second day in a row, and many believe that a new “currency war” has now begun.

So what does all of this mean?

Does this mean that the time of financial “shaking” has now arrived?

Let’s start with what is happening to the Dow.  When the 50-day moving average crosses over the 200-day moving average, it is a very powerful signal.  For example, as Business Insider has pointed out, if you would have got into stocks when the 50-day moving average moved above the 200-day moving average in December 2011, you would have experienced a gain of 43 percent by now…

The Dow Jones Industrial Average has been on an unrelenting upward trajectory since its October 2011 low.

The signal that convinced many traders that the market was now moving with a bullish bias was when the 50-day moving average of the index price rose above the 200-day moving average a couple of months later at the end of December.

Since then the market rallied 6,200 points to a high of 18,333 before pulling back to last night’s close of 17,404. That’s a gain of around 43% even though the market is 5% off its high.

But now a cross is happening in the other direction.  That is why it is called a “death cross”.  It is quite understandable why a lot of investors are freaking out about the fact that the 50-day moving average has moved below the 200-day moving average for the first time in four years.  Every major stock market in history has been preceded by a death cross.

Of course no indicator is perfect.  Sometimes these death crosses come just before market crashes, and other times nothing much seems to happen.  The following comes from MarketWatch…

The 50-day moving average (or “MA”) crossed below a rising 200-day MA on July 7, 2010, when the Dow closed at 10,018.28. The Dow’s closing low for 2010 was actually hit two sessions earlier, at 9,686.48.

But the Dow fell another 5.9% over six weeks after the Aug. 24, 2011 death cross, and tumbled as much as 50% over 14 months after the one appearing on Jan. 3, 2008.

And keep in mind that when the January 2008 death cross appeared, the Dow had lost just 7.8% from its Oct. 9, 2007 peak. That means the bull market was still firmly in place, as the rule of thumb is a bear market is defined by a decline of at least 20% from a significant peak. In addition, the 200-day moving average didn’t turn lower until two weeks after the death cross appeared.

But this is not the only indicator pointing to trouble ahead.  Even while we have many stocks hitting 52-week highs, we also have an extraordinary number hitting 52-week lows.  This is called a “split market”, and this is a very ominous sign.  In fact, according to Peter Boockvar 62 percent of all stocks on the New York Stock Exchange are already trading below their 200-day moving average…

Peter Boockvar, market strategist at Lindsey Group, said he believes the market is in a correction that began a few weeks ago, starting with commodities names getting hit. The small-cap Russell 2000 was also a leader of the declines. “The key is it’s infecting other areas of the market. You have every headwind and every reason to continue this correction,” he said.

“Going into today, 62 percent of the NYSE stocks were trading below the 200-day moving average,” said Boockvar. “More and more companies are dropping out of the bull market.”

At this point, we have already had more than 50 “split days” this year.  King World News has just released an article which has pointed out this has only happened four times before, and a major stock market crash has followed each occurrence…

The only other times in history we’ve seen more than 50 split days during the past year were March 1968, August 1972, October 2000 and July 2006.

After all four of those, stocks lost more than a third of their value at some point during the next two years.

Are you starting to see?

A stock market crash is coming.

Another thing that has investors concerned is the fact that we have seen a large divergence between high yield credit and stocks.  As Bloomberg has pointed out, when this happens a significant stock market decline follows more than 70 percent of the time…

While not without precedent, instances when anxiety in bonds didn’t seep into equities are rare. More than 70 percent of the time since 1996, as spreads widened as much as they have since April, the S&P 500 has fallen, with the average decline exceeding 10 percent, data compiled by Bloomberg show.

“This is something that sooner or later is going to impact the stock market,” said Russ Koesterich, global chief investment strategist at New York-based BlackRock Inc., which oversees $4.7 trillion. “Credit market conditions have not been benign and easy as where they were last summer.”

On top of everything else, it looks like a global currency war could be erupting.

According to USA Today, this desperate move by China to devalue the yuan may indicate that the Chinese economy is in far worse shape than most had thought…

One, China’s move suggests that its economy is in worst shape than believed. “It highlights the fragility of the global economy,” says Donald Luskin, chief investment officer at TrendMacro. Second, a weaker yuan means a stronger dollar, and a stronger dollar means U.S. products sold in China are more expensive, which means fewer sales of Apple iPhones, hotel rooms offered by Wynn Resorts and computer chips made by Micron Technology.

Lastly, there is a fear that other nations will respond to China by devaluing their own currencies to stay competitive.

“When people start talking about ‘currency wars,’ it’s never a good thing,” says Michael Farr, president of money-management firm Farr, Miller & Washington. “China’s move to devalue its currency could be the first shot across the bow towards a wider currency war.”

As I discussed yesterday, it seems like the phrase “currency war” has been thrown around a lot lately.

But what would that look like, and what would that mean for the global economy?

Well, former IMF economist Stephen Jen is suggesting that we could soon see major currencies all over the planet being devalued by up to 50 percent…

[The] devaluation of the yuan risks a new round of competitive easing that may send currencies from Brazil’s real to Indonesia’s rupiah tumbling by an average 30 percent to 50 percent in the next nine months, according to investor and former International Monetary Fund economist Stephen Jen.

Volatility measures were already signaling rising distress in emerging markets even before China’s shock move. An index of anticipated price swings climbed above a rich-world gauge at the end of July, reversing the trend seen for most of the past six months.

The surging U.S. dollar combined with crashing prices for commodity exports has already created a state of crisis in South America.  If emerging markets such as Brazil are forced to devalue their currencies to stay competitive with nations such as China, that is going to just exacerbate the problems.

For a long time, things in the financial world were pretty quiet.

But now events are beginning to accelerate.

A lot of people are extremely concerned about what is going to happen in September, and I think that there are very good reasons to be concerned.

Throughout our history, the majority of our stock market crashes have happened in the fall.  Just remember what happened in 1929, 1987 and 2008.

Now we are approaching that time of the year once again, and things are lining up perfectly for a major financial crisis.

Credit to Right Side News