Fiat Collapsing. Gold/Silver/Bitcoin UP.

[iCEBREAKER]

Now that Frap.doc has been put out to pasture, it's time for a new (and less prejudiced) economic monitoring thread.  Today is a better day than most to start one!


[ZeroHedge] Gold, Bitcoin Soar After China Liquidates Most Reserves On Record To Defend Currency

Moments ago gold finally broke out above the $1,100 resistance level which so many sellside experts warned it would never be able to cross again...

... while that "other" currency, bitcoin, has soared by 5% overnight, not on some idiotic narrative about a Russian pyramid schemer's website, but because of what we first warned in September (when bitcoin was at $225): the more the Yuan devalues, the faster Chinese depositors will seek to circumvent China's capital controls and convert their increasingly less valuable money into either other currencies (via bitcoin), or into gold.

[CNBC] As global markets flounder, Bitcoin rockets up 6%


Finally, the conservative, hard-asset heavy portfolio stops melting down and begins to pay off!

[BlindMayorBitcorn]

Where's CypherDoc tho? I still can't see too good. 

[iCEBREAKER]

Where's CypherDoc tho? I still can't see too good. 

After trying to simultaneously be a Bitcoin Maximalist and Buttcoiner, he vanished in a puff of logic.

[jaberwock]

But still some FIAT stuff are in green, like Netflix and Wallmart. It is more about where invest, no matter how you are investing

[iCEBREAKER]

But still some FIAT stuff are in green, like Netflix and Wallmart. It is more about where invest, no matter how you are investing

Those two were just (partially) recovering from large drops the previous day.

[Cconvert2G36]

And then we've got this coiling cobra here...

A whole 79 BTC protecting it from new lows.     

[iCEBREAKER]

*off-topic flame baiting*

If you could stay on topic, that would be great.   

Let's not get the thread locked for discussing altcoins, like Frap.doc's former XT shilling platform.   

[brg444]

I can get jiggy with this!

[jmintuck02]

Here, I see btc has a chance to be a good one. I am glad to be involved with btc. This really helps if btc is rising.

[iCEBREAKER]

Paper Money Burning.  Gold/Silver/Bitcoin DGAF.

[ZEROHEDGE] When 3 Trillion Just Isn't Enough: Analysts Fret Over "Worrying" China Reserve Burn

“China Finds $3 Trillion Just Doesn't Pack the Punch It Used To,” a Bloomberg headline from Friday morning reads.

“China’s $3 trillion-plus in foreign currency reserves, the biggest such stockpile in the world, would seem to be a gold-plate insurance policy against the country’s current market chaos, a depreciating currency and torrent of capital leaving the country,” Bloomberg writes, before citing a number of sources who say that in reality, $3 trillion aint what it used to be.

“Some Chinese reserves may have already been committed to fund pet government projects like the Silk Road fund to build roads, ports and railroad across Asia or tens of billions in government-backed loans to countries such as Venezuela, much of which is repaid through oil shipments,” the piece continues. “Then there are other liabilities that China needs to cover, such as the nation’s foreign currency debt to finance and manage imports denominated in overseas currencies.”

As we discussed at length on Thursday, Beijing burned through its UST stash at the fastest pace on record in December, liquidating some $108 billion in reserves in a desperate attempt to manage capital outflows and the yuan devaluation.

[ZEROHEDGE] China's Largest Bank Is Mystery Buyer Of Massive 1,500 Ton Gold Vault In London

Most curiously, the bank's London gold vault only became operational in June of 2014, more than two years after launching the project. It can store some 1,500 tonnes of gold and was built and managed by British security services company G4S.

As Reuters further noted, with other banks withdrawing from the commodities business to cut costs and reduce their regulatory burden, it might be difficult for Deutsche Bank to find buyers amongst its nearest peers. However, one possible buyer is general LBMA-member, Chinese bank ICBC, which we said at the end of 2014, was trying to build a presence in London.

In any case, the list of potential buyers for DB's brand new vault lease remained a mystery, and perhaps our revelation of the exact location of this vault, something potential buyers tend not to appreciate especially when said vault will house up to 1,500 tons of gold, or over $50 billion worth of "inventory", may have dissuaded some. As a reminder, the "secret" location of the Deutsche Bank vault, which as revealed in the G4S building application, is located in the Park Royal complex, and specifically at the 291 Abbey Road, London NW10 7SA location.

As it turns out, one persistent buyer failed to be dissuaded.

According to Reuters, as was rumored one year ago, China's largest bank - and in fact the world's largest bank - by assets, ICBC Standard Bank, is buying the lease on Deutsche Bank's London gold and silver vault, enlarging its footprint in the city's bullion market, four industry sources close to the companies told Reuters.

China's ICBC, which took a controlling stake in Standard Bank's London-based Global Markets business last year, has also applied to become a clearing member of the London gold and silver over-the-counter business.

China is burning its paper and stacking gold faster than ever.  The time of reckoning draws near....

[suda123]

Paper Money Burning.  Gold/Silver/Bitcoin DGAF.

[ZEROHEDGE] When 3 Trillion Just Isn't Enough: Analysts Fret Over "Worrying" China Reserve Burn

“China Finds $3 Trillion Just Doesn't Pack the Punch It Used To,” a Bloomberg headline from Friday morning reads.

“China’s $3 trillion-plus in foreign currency reserves, the biggest such stockpile in the world, would seem to be a gold-plate insurance policy against the country’s current market chaos, a depreciating currency and torrent of capital leaving the country,” Bloomberg writes, before citing a number of sources who say that in reality, $3 trillion aint what it used to be.

“Some Chinese reserves may have already been committed to fund pet government projects like the Silk Road fund to build roads, ports and railroad across Asia or tens of billions in government-backed loans to countries such as Venezuela, much of which is repaid through oil shipments,” the piece continues. “Then there are other liabilities that China needs to cover, such as the nation’s foreign currency debt to finance and manage imports denominated in overseas currencies.”

As we discussed at length on Thursday, Beijing burned through its UST stash at the fastest pace on record in December, liquidating some $108 billion in reserves in a desperate attempt to manage capital outflows and the yuan devaluation.

[ZEROHEDGE] China's Largest Bank Is Mystery Buyer Of Massive 1,500 Ton Gold Vault In London

Most curiously, the bank's London gold vault only became operational in June of 2014, more than two years after launching the project. It can store some 1,500 tonnes of gold and was built and managed by British security services company G4S.

As Reuters further noted, with other banks withdrawing from the commodities business to cut costs and reduce their regulatory burden, it might be difficult for Deutsche Bank to find buyers amongst its nearest peers. However, one possible buyer is general LBMA-member, Chinese bank ICBC, which we said at the end of 2014, was trying to build a presence in London.

In any case, the list of potential buyers for DB's brand new vault lease remained a mystery, and perhaps our revelation of the exact location of this vault, something potential buyers tend not to appreciate especially when said vault will house up to 1,500 tons of gold, or over $50 billion worth of "inventory", may have dissuaded some. As a reminder, the "secret" location of the Deutsche Bank vault, which as revealed in the G4S building application, is located in the Park Royal complex, and specifically at the 291 Abbey Road, London NW10 7SA location.

As it turns out, one persistent buyer failed to be dissuaded.

According to Reuters, as was rumored one year ago, China's largest bank - and in fact the world's largest bank - by assets, ICBC Standard Bank, is buying the lease on Deutsche Bank's London gold and silver vault, enlarging its footprint in the city's bullion market, four industry sources close to the companies told Reuters.

China's ICBC, which took a controlling stake in Standard Bank's London-based Global Markets business last year, has also applied to become a clearing member of the London gold and silver over-the-counter business.

China is burning its paper and stacking gold faster than ever.  The time of reckoning draws near....

How the hell are they keeping the dow and Chinese composite index floating after a free fall wtf.

[The Sceptical Chymist]

I would take anything from zerohedge with a huge grain of salt.  In fact, I would highly recommend not trying to get your business news from them.  They're fear mongers, always predicting economic Armageddon and pumping gold and silver.  The writers are anonymous.  But the second part of your thread title is correct.   

[iCEBREAKER]

How the hell are they keeping the dow and Chinese composite index floating after a free fall wtf.

Good question.  The central banks' plunge protection teams work together, because they know their cushy phony baloney jobs are at stake.

Also, Red China's vulnerable-cum-paranoid PLA regime don't hesitate to ban selling and execute shorters.

Their legitimacy rests entirely on stability.  The people only accept one party rule because they're enjoying peace and prosperity.

If that changes, the Butchers of Beijing's mandate from heaven is lost, and all hell breaks loose.

The situation is similar in America and Europe, but buffered by a century of learned helplessness and institutional inertia.

[ZEROHEDGE] The China Narrative That Really Matters

there's one aspect of the China story that can't heal itself or transform into something more benign from a market perspective, and that's the Narrative of Chinese Government Competence. To quote myself in "When the Story Breaks":

    "This is a completely different Narrative than the growth story, and it’s the story that one-party States rely on to prevent even the thought of a viable political opposition. In highly authoritarian one-party nations – like Saddam's Iraq or the Shah’s Iran – you’ll typically see the competence Narrative focused on the omnipresent secret police apparatus. In less authoritarian one-party nations – like Lee Kuan Yew’s Singapore or Deng Xiaoping’s China – the competence Narrative is more often based on delivering positive economic outcomes to a wide swath of citizens (not that these regimes are a slouch in the secret police department, of course). From a political perspective, this competence Narrative is THE source of legitimacy and stability for a one-party State. In a multi-party system, you can vote the incompetents (or far more likely, the perceived incompetents) out of office and replace them peacefully with another regime. That’s not an option in a one-party State, and if the competency story breaks the result is always a very dicey and usually a violent power transition."

So when I read an article this morning in a famous media outlet owned by famously Beijing-friendly Rupert Murdoch that "the impression left on investors is that Chinese authorities are out of their depth" and that "certainly with respect to the stock market, their reputation for incompetence is well-earned", I get nervous.
 
I get nervous because the next move in China is going to be a political move, and political moves are never well anticipated by markets. The Beijing regime is going to take steps to defend itself, or at least insulate itself, from the growing Narrative that they are incompetent. Heads will roll. Literally, in all likelihood. But the incompetence genie is very hard to stuff back into the bottle, and depending on whose head is on the chopping block, regime stability can deteriorate very quickly. Now that's what will make me change my bullish stance on China fundamentals, and that's what will make the US market swoon of last August look like a gentle spring rain.
 
From an Epsilon Theory perspective, a collapse in the Narrative of Chinese Government Competence is the biggest systemic risk out there right now, and that's where I'm focusing my risk antennae.

[iCEBREAKER]

I would take anything from zerohedge with a huge grain of salt.  In fact, I would highly recommend not trying to get your business news from them.  They're fear mongers, always predicting economic Armageddon and pumping gold and silver.  The writers are anonymous.  But the second part of your thread title is correct.   

Skepticism is always healthy.  But you seem to be advocating a higher degree of scrutiny for ZH than say, CNBC and other house organs of TPTB.

You know ZH is a Drudge-style clearinghouse, with original content mixed with contributions from third parties (many of whom are not anonymous), right?

And what is your problem with anonymous writers?  You know Satoshi is a nom de plume/guerre right?  And what is your Real Name, Mr. "The Pharmicist?"  Perhaps we should assume you are not legitimate until we know exactly who you are?  Oh wait, that would be lazily indulging in a logical fallacy of the 'shoot the messenger' type.

You sound exactly like the MSM toadies whining about Drudge because he broke their embargo on the Lewinski story.   

Your FUD about ZH identifies you as the one "fear mongering" here.  What's next, "something something blogger pajamas?"   

[The Sceptical Chymist]

I would take anything from zerohedge with a huge grain of salt.  In fact, I would highly recommend not trying to get your business news from them.  They're fear mongers, always predicting economic Armageddon and pumping gold and silver.  The writers are anonymous.  But the second part of your thread title is correct.   

Skepticism is always healthy.  But you seem to be advocating a higher degree of scrutiny for ZH than say, CNBC and other house organs of TPTB.

You know ZH is a Drudge-style clearinghouse, with original content mixed with contributions from third parties (many of whom are not anonymous), right?

And what is your problem with anonymous writers?  You know Satoshi is a nom de plume/guerre right?  And what is your Real Name, Mr. "The Pharmicist?"  Perhaps we should assume you are not legitimate until we know exactly who you are?  Oh wait, that would be lazily indulging in a logical fallacy of the 'shoot the messenger' type.

You sound exactly like the MSM toadies whining about Drudge because he broke their embargo on the Lewinski story.   

Your FUD about ZH identifies you as the one "fear mongering" here.  What's next, "something something blogger pajamas?"   

No, I actually don't watch TV because of the MSM news stations you mentioned.  Everyone's got their own agenda, that's my thought.  I just think ZH is a breeding ground for conspiracy theory-type stuff and I don't buy into a lot of that.  If you do have a good amount of skepticism, that's fantastic.  But a lot of the people who read ZH and the like are not skeptics but believers.

[suda123]

I would take anything from zerohedge with a huge grain of salt.  In fact, I would highly recommend not trying to get your business news from them.  They're fear mongers, always predicting economic Armageddon and pumping gold and silver.  The writers are anonymous.  But the second part of your thread title is correct.   

you mean fear porn, but yea zero hedge is like satire

[iCEBREAKER]

I would take anything from zerohedge with a huge grain of salt.  In fact, I would highly recommend not trying to get your business news from them.  They're fear mongers, always predicting economic Armageddon and pumping gold and silver.  The writers are anonymous.  But the second part of your thread title is correct.   

you mean fear porn, but yea zero hedge is like satire

Wrong.  The satire is Pollyanna nonsense like Gavin's "the economic crisis is over" conclusion/prediction.

But we're used to howls of poutrage from those being disrupted, just as the MSM tried to denigrate Drudge (which has been the world's most influential news site for like 10 years now).

Drudge often links to ZH, because they cover stories either not covered or laughed off as conspiracy theories by the gatekeepers.

Case in point: plunge protection teams rigging markets with BIS confetti was a fringe trope, until it became common knowledge in 2008.

Today's ZH 'fear porn' is next year's 'nobody could have predicted this' MSM hand-waving.   

Do you have a problem with hoping for the best but planning for the worst?

[tabnloz]

The central banks' plunge protection teams work together

Pretty much the most important insight to understand in the current era.

[iCEBREAKER]

[ZEROHEDGE] China Contagion Spills Over To Hong Kong Banks As HIBOR Explodes To Record High, Stocks Tumble

Chinese stocks are trading at the lows of the day after Overnight HIBOR rates (Hong Kong's interbank borrowing rate) exploded a stunning 939bps to a record high 13.4%. It is clear that banks are utterly desperate for liquidity and/or are extremely concerned about one another's counterparty risk. This has dragged HSCEI down 5% (to its lowest since Oct 2011).

[ZEROHEDGE] This Is What Gold Does In A Currency Crisis, China Edition

As China’s leaders figure out that pegging the yuan to the dollar while quintupling their debt in five years was a colossal mistake, they are, apparently, concluding that the only way out is a sudden, sharp currency devaluation. As Reuters reports...
   

China's central bank is under increasing pressure from policy advisers to let the yuan currency fall quickly and sharply, by as much as 10-15 percent, as its recent gradual softening is thought to be doing more harm than good.

    The People's Bank of China (PBOC) has spent billions of dollars buying yuan over recent months to defend the exchange rate, but has failed to stabilize market sentiment.

[tvbcof]

Where's CypherDoc tho? I still can't see too good. 

After trying to simultaneously be a Bitcoin Maximalist and Buttcoiner, he vanished in a puff of logic.

I suspect that his attorney told him to shut his yap.  At least here on bitcointalk.org where he did much of his hard-core shilling.