The Velocity of Money
As I noted in 2009 at a lecture I gave in New York, the velocity of money* – an important economic indicator – was lower than during the Great Depression. Since that time things have gotten even worse.
*The velocity of money is the rate at which a dollar moves from one person to the next through the economy.
Greek Banks On Verge Of Total Collapse: Bank Run Surges “Massively” As Depositors Yank €700 Million On June 5 Alone
The Econ Bond Yields All Over Europe Soaring Indicating That The Central Banks Are Losing Control As Greek Default Looms
On Tuesday, June 2, ahead of the ECB’s policy announcement today, German Bonds sagged, and the 10-year yield soared from 0.54% to 0.72%, drawing a squiggly diagonal line across the chart. In just one day, yield increased by one-third!
Makes you wonder to which well-connected hedge funds the ECB had once again leaked its policy statement and the all-important speech by ECB President Mario Draghi that the rest of us got see today.
And on Wednesday, June 3, the German 10-year yield jump to 0.89%, the highest since October last year. From the low in mid-April of 0.05% to June 3rd’s 0.89% in just seven weeks! Bond prices, in turn, have plunged! This is the definition of a “rout.”
Other euro sovereign bonds have gone through a similar rout, with the Spanish 10-year yield soaring from 1.05% in March to 2.07% today, and the Italian 10-year yields jumping from a low in March of 1.03% to 2.17% now.
Blackbox Forecast of the World’s Banks:
The Global Financial Reset Has Already Begun – China’s Yuan Currency
China’s yuan currency, which Washington has long alleged was manipulated, is “no longer undervalued,” the International Monetary Fund said Tuesday.
This decision by the IMF underscores a larger shift in the global balance of power from North America to Asia – for there is no doubt that there are serious cracks in the foundation as the U.S. petrodollar has lost its potency as the world reserve currency hegemony.
The upcoming five year review of the International Monetary Fund’s Special Drawing Rights (SDR) basket will formally be placed on the IMF agenda in October. This summer, China will be part of the negotiations to include the renminbi in a basket of the IMF’s de facto currency alongside the dollar, the yen, the euro and sterling.
Financial Reset will commence when China formally shows the IMF and the rest of the world that its gold reserves has surpassed the U.S.
“Kaboom” Event – Shanghai Composite Stock Index
The Shanghai Composite stock index was slammed on Thursday, May 28, dropping by 6.5%! Why is that important? Because over the last year, the Shanghai exchange has grown to be the third largest in the world. Here are the ten largest stock exchanges in the world by total market capitalization, as of April 2015, according to the World Federation of Exchanges’ monthly report. With a total end of April market cap of $5.6 trillion, Shanghai is the third largest exchange in the world after the two big U.S. exchanges.
The Global Economy = The Titanic
The chief economist of the world’s third largest bank, HSBC’s Stephen King, has compared the global economy to the Titanic. He believes that we are now nearer to the next global recession than we are to the last one which ended (at least for the too big to fail Wall Street banks) in June of 2009.
“The world economy is like an ocean liner without lifeboats …” – HSBC
- Four areas of high risk identified by HSBC
- Risk of stock market crash
- Pension funds and insurers may not meet obligations
- Chinese recession may drag U.S. into recession or depression
- Premature rate rise would expose very fragile global economy
- “There aren’t enough lifeboats to go around”
- Gold vital lifeboat when global ship strikes iceberg
In a note to clients on May 20:
“We may not know what will cause the next downswing but, at this stage, we can categorically state that, in the event we hit an iceberg, there aren’t enough lifeboats to go round.
“The world economy is like an ocean liner without lifeboats. Global debt has soared by 40 percent since the Great Recession. We now have a staggering $200 trillion of debt globally, or almost three times the size of the global economy. The world economy is like an ocean liner without lifeboats. If another recession hits, it could be a truly titanic struggle for policymakers.”
– HSBC’s Stephen King
The Geopolitical Collapse Among the World Powers Has Already Begun – The Chinese Navy
The Chinese Navy on May 20 warned a U.S. military surveillance plane multiple times as it flew over a contested military installation being constructed on man-made islands in the South China Sea.
The U.S. is planning on flying such surveillance missions at lower altitudes over the islands and sailing U.S. warships within miles of them to make clear the United States does not recognize China’s territorial claims.
A CNN team was given exclusive access to fly onboard the P8-A Poseidon as it flew over the islands.
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