KASHGAR, CHINA - JULY 27: Uyghurs wait at a bus stop on July 27, 2014 in old Kashgar, Xinjiang Province, China. Nearly 100 people have been killed in unrest in the restive Xinjiang Province in the last week in what authorities say is terrorism but advocacy groups claim is a result of a government crackdown to silence opposition to its policies. China's Muslim Uyghur ethnic group faces cultural and religious restrictions by the Chinese government. Beijing says it is investing heavily in the Xinjiang region but Uyghurs are increasingly dissatisfied with the influx of Han Chinese and uneven economic development.  (Photo by Kevin Frayer/Getty Images)

Erich Follath – Beijing’s New Silk Road to Europe

China is building new roads, railroads and pipelines from Central Asia to Europe in an effort to build new connections to the rest of the world. The results may be good for the Chinese — but less so for the other countries involved. In Kashgar, on the western edge of the Peoples’ Republic of China, the view is reminiscent of the …

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Nathan Halverson – The world already would be out of water if everyone ate like Americans

If the rest of the world ate like Americans, the planet would have run out of freshwater 15 years ago, according to the world’s largest food company. In private, Nestle executives told U.S. officials that the world is on a collision course with doom because Americans eat too much meat, and now, other countries are following suit, according to a secret …

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CHRIS MARTENSON – The Return of Crisis: Everywhere Banks are in Deep Trouble

Financial markets the world over are increasingly chaotic; either retreating or plunging. Our view remains that there’s a gigantic market crash in the coming future — one that has possibly started now. Our reason for expecting a market crash is simple: Bubbles always burst. Bubbles arise when asset prices inflate above what underlying incomes can sustain. Centuries ago, the Dutch woke …

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Trends This Week – Keep your eye on the banking crisis – 02.10.16

Don’t the buy the media line that the volatility in global markets is all about oil. It’s not. Not even close. The fast-moving meltdown in those markets resulting in global recession is the eventual price world economies will pay for chronically injecting cheap money into the market for the last decade, artificially pumping up the economy and masking the spreading cancer below the surface. Now, six weeks into the new year, the mad swings in the markets will more and more center on the banks. Watch the banking crisis as it unfolds. Global stock indexes have plunged into bear territory, currencies are crashing – and as commodity prices tumble, resource-rich nations going broke are begging the World Bank and International Monetary Fund to bail them out. Neither “The Panic” nor the Global Recession, one of our Top Trends for 2016, will spare any country, large or small. We are looking at a Global Recession turning into a Global Depression. And when all measures fail to revive the economy – “they take you to war.”

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Alternative Visions – China Unwinding Stock Bubble and Its Contagion Effects – 01.15.16

Jack Rasmus continues analysis of China’s unwinding stock bubble and explains how it is connected to China currency devaluation, slowing real economy, and currency speculators in Hong Kong markets. How currency devaluation exacerbates stock decline and vice versa and how real economic slowing in China, now no more than 5% GDP annual growth, interacts with the other forces. China’s revolving bubbles, from property markets to entrusted loans and WMPS, to stock markets is explained. China’s $1trillion capital flight in 2015 and government policy makers spending of $500 billion to prop up stocks and currencies. How China’s massive credit-debt and liquidity buildup since 2009 is behind it all. And behind that the rise of shadow banks and the new global finance capital elite. Jack concludes with exploration of possible contagion effects from China’s continuing bubble unwind—on US corporate profits, stock investor contagion, on emerging market economies, and the parallel bubble deflation in global oil prices that continues. Jack concludes the global economy is moving faster now toward another financial crisis and global recession, which will be precipitated, he predicts, by China and then centered in emerging market economies. US and other advanced economies are far less prepared or able to contain the next crisis. (For deeper analysis, see Jack’s chapter 6 on China in his new book, ‘Systemic Fragility in the Global Economy’, January 2016, available from his blog at jackrasmus.com and on Amazon.)

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Financial Sense – Global Markets in 2016: Four Risks to Watch Out For

After an eventful 2015, where we witnessed the first US rate hike in 9 years, crude oil dropping to 6 year lows, a dramatic selloff in Chinese equity markets and an unexpected abandonment of the Swiss Franc-Euro currency cap, we head into 2016 with global markets on tenterhooks. In this article, we analyze the 4 most important risks that global …

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The Emerging Market Growth Model Is “Broken”; RIP EM

It’s that time of year again, when every sellside macro strategist peers into his or her crystal ball in a completely futile effort to predict the direction the global economy economy will take in the year ahead. As everyone knows, the only thing more difficult than forecasting the weather is forecasting economic outcomes (economics is, after all, merely a pseudoscience …

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Simon Kennedy – Wall Street Is Running the World’s Central Banks

Wall Street is again leading to the corridors of central banks. From Minneapolis to Paris, investors and financiers are increasingly being hired to help set monetary policy less than a decade since the banking crisis roiled the world economy and chilled their public-sector employment prospects. Academic studies of historical voting records at central banks suggest the new trend may mean …

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Alternative Visions – Europe Ups ‘Ante’ In Global ‘QE Currency Devaluation’ Game – 10.23.15

Jack reviews the most recent threat by Europe’s central bank to expand its ‘quantitative easing’ program in order to gain share of a slowing global trade pie. As the global economy slows and competition for exports intensifies from China to US to Japan to Europe, the European Central Bank announces plans to expand its $1.1 trillion free money program for bankers and investors. Jack explores the possible consequences of the likely decision: Japan will no doubt follow with further expansion of its own QE program to defend its share of global exports. The US federal reserve, its central bank, will be less likely to raise interest rates in turn—as US exports and manufacturing are already close to stagnating, and reducing US GDP. Simultaneously, China announces its sixth cut in interest rates. Major sectors of the global economy and intensifying competition over a shrinking global economy. Jack also updates recent Alternative Visions shows on the TPP, Big Pharmaceutical companies’ price gouging, and the Chrysler-Auto Workers recent negotiations. With TPP almost a done deal, now corporate America, Jack predicts, will focus on its second big objective: corporate tax cuts. How US multinational tech and pharma companies play the global tax avoidance game is explained.

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Citi Just Made “Global Recession In 2016” Its Base Case Scenario

Over the weekend, we reported that in a dramatic turn of events, the research division of Japan’s second biggest brokerage house, Daiwa, did what nobody else has done before and released a report in which it made a global financial “meltdown”, one resulting from nothing short of a Chinese economic cataclysm its base case scenario, its base case. It added …