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Image | From Deflation To Hyperinflation
From Deflation To Hyperinflation
 PREVIEW
by Chris Martenson

Executive Summary

  • China is rolling over
  • Contagion will eventually take down the core economies, including the US
  • We are witnessing a full-blown collapse of the commodity complex
  • Deflation will win the day over the next year, but then get ready for helicopter money hyperinflation

If you have not yet read Part 1: Deflation Warning: The Next Wave available free to all readers, please click here to read it first.

The Chinese GDP Lie

Right off the top, China is not growing anywhere near the 7% it claims.  That’s just a politically useful lie that the Chinese tell to the world as much as they tell to themselves.

Fortunately, hardly anyone is falling for that particular fib any longer.  Let’s start with the completely obvious manufacturing slump that has hit China:

Chinese Factory Gauge Slumps to Lowest Level Since March 2009

Sept 22, 2015

A private Chinese manufacturing gauge fell to the lowest in 6 1/2 years, underscoring challenges facing the economy as its old growth engines splutter.

A global sell off in riskier assets gained pace after the preliminary Purchasing Managers’ Index from Caixin Media and Markit Economics dropped to 47.0 in September. That missed the median estimate of 47.5 in a Bloomberg survey and fell from the final reading of 47.3 in the previous month. Readings have remained below 50 since March, indicating contraction.

Premier Li Keqiang’s growth target of about 7 percent for this year is being challenged by a slowdown in manufacturing and exports even as services and consumption show resilience.

(Source)

The way a PMI reading works is anything over 50 indicates expansions and anything under 50 indicates contraction.  Anybody care to explain to me how China can be sporting sub-50 readings every month since March — that’s five full months — and still be claiming to be aiming for a 7% annual growth target?  You know, because China is…

From Deflation To Hyperinflation
 PREVIEW by Chris Martenson

Executive Summary

  • China is rolling over
  • Contagion will eventually take down the core economies, including the US
  • We are witnessing a full-blown collapse of the commodity complex
  • Deflation will win the day over the next year, but then get ready for helicopter money hyperinflation

If you have not yet read Part 1: Deflation Warning: The Next Wave available free to all readers, please click here to read it first.

The Chinese GDP Lie

Right off the top, China is not growing anywhere near the 7% it claims.  That’s just a politically useful lie that the Chinese tell to the world as much as they tell to themselves.

Fortunately, hardly anyone is falling for that particular fib any longer.  Let’s start with the completely obvious manufacturing slump that has hit China:

Chinese Factory Gauge Slumps to Lowest Level Since March 2009

Sept 22, 2015

A private Chinese manufacturing gauge fell to the lowest in 6 1/2 years, underscoring challenges facing the economy as its old growth engines splutter.

A global sell off in riskier assets gained pace after the preliminary Purchasing Managers’ Index from Caixin Media and Markit Economics dropped to 47.0 in September. That missed the median estimate of 47.5 in a Bloomberg survey and fell from the final reading of 47.3 in the previous month. Readings have remained below 50 since March, indicating contraction.

Premier Li Keqiang’s growth target of about 7 percent for this year is being challenged by a slowdown in manufacturing and exports even as services and consumption show resilience.

(Source)

The way a PMI reading works is anything over 50 indicates expansions and anything under 50 indicates contraction.  Anybody care to explain to me how China can be sporting sub-50 readings every month since March — that’s five full months — and still be claiming to be aiming for a 7% annual growth target?  You know, because China is…

Image | Off The Cuff: Why Commodities Are Getting Crushed
Off The Cuff: Why Commodities Are Getting Crushed
 PREVIEW
by Adam Taggart

In this week's Off The Cuff podcast, Chris and John Rubino discuss:

  • The Commodity Beat-Down
    • Why are gold, oil, etc so weak?
  • Fluffed-Up Fakery
    • Official economic reports are just pure fiction these days
  • The End Of The Long Cycle
    • The devastation when this bubble pops will be epic
  • Stock market roll-over?
    • It's increasingly looking like we'll finally see a material correction

Click to listen to a sample of this Off the Cuff Podcast or Enroll today to access the full audio and other premium content today.

Off The Cuff: Why Commodities Are Getting Crushed
 PREVIEW by Adam Taggart

In this week's Off The Cuff podcast, Chris and John Rubino discuss:

  • The Commodity Beat-Down
    • Why are gold, oil, etc so weak?
  • Fluffed-Up Fakery
    • Official economic reports are just pure fiction these days
  • The End Of The Long Cycle
    • The devastation when this bubble pops will be epic
  • Stock market roll-over?
    • It's increasingly looking like we'll finally see a material correction

Click to listen to a sample of this Off the Cuff Podcast or Enroll today to access the full audio and other premium content today.

Image | Jim Rogers: Turmoil Is Coming
Jim Rogers: Turmoil Is Coming
by Adam Taggart

Two years since his last interview with us, investor Jim Rogers returns and notes that the risks he warned of last time have only gotten worse. In this week's podcast, Jim shares his rational for predicting:

  • increased wealth confiscation by the central planners
  • a pending major financial market collapse
  • gold's return as the preferred safe haven investment
  • more oil price weakness, followed by a trend reversal
  • Russia's rebound
  • a China bubble reckoning
  • agriculture's long-term value
Jim Rogers: Turmoil Is Coming
 by Adam Taggart

Two years since his last interview with us, investor Jim Rogers returns and notes that the risks he warned of last time have only gotten worse. In this week's podcast, Jim shares his rational for predicting:

  • increased wealth confiscation by the central planners
  • a pending major financial market collapse
  • gold's return as the preferred safe haven investment
  • more oil price weakness, followed by a trend reversal
  • Russia's rebound
  • a China bubble reckoning
  • agriculture's long-term value
Image | Commissioner Bart Chilton: Price Discovery In The Commodities Markets
Commissioner Bart Chilton: Price Discovery In The Commodities Markets
by Adam Taggart

In theory, regulation is supposed to set and enforce the rules of the game that market participants play by, in order to ensure that price discovery remains efficient, effective — and most important — fair.

In practice, there's plenty of debate to be had on how successful our regulators are in effecting their mission. And one investment class in particular, commodities, frequently comes under criticism for questionable price action.

So, this week we talk with Bart Chilton, former Commissioner of the Commodity Futures Trading Commission (CFTC), about price discovery within the commodity markets, and whether investors can have confidence in the "fairness" of the current system.
Commissioner Bart Chilton: Price Discovery In The Commodities Markets
 by Adam Taggart

In theory, regulation is supposed to set and enforce the rules of the game that market participants play by, in order to ensure that price discovery remains efficient, effective — and most important — fair.

In practice, there's plenty of debate to be had on how successful our regulators are in effecting their mission. And one investment class in particular, commodities, frequently comes under criticism for questionable price action.

So, this week we talk with Bart Chilton, former Commissioner of the Commodity Futures Trading Commission (CFTC), about price discovery within the commodity markets, and whether investors can have confidence in the "fairness" of the current system.
Image | David Stockman: The Global Economy Has Entered The Crack-Up Phase
David Stockman: The Global Economy Has Entered The Crack-Up Phase
by Adam Taggart

Few people understand the global economy and its (mis)management better than David Stockman — former director of the OMB under President Reagan, former US Representative, best-selling author of The Great Deformation, and veteran financier.

David is now loudly warning that events have entered the crack-up phase, which he predicts will be defined by the following 4 developments:

David Stockman: The Global Economy Has Entered The Crack-Up Phase
 by Adam Taggart

Few people understand the global economy and its (mis)management better than David Stockman — former director of the OMB under President Reagan, former US Representative, best-selling author of The Great Deformation, and veteran financier.

David is now loudly warning that events have entered the crack-up phase, which he predicts will be defined by the following 4 developments:

Image | When Every Country Wants to Sell, Who Buys?
When Every Country Wants to Sell, Who Buys?
by Gregor Macdonald

Understandably for the US, which sustained a consumption supercycle for several decades, the post-financial crisis period has kicked off a new trend: Americans want to consume less, and make more.

Americans want to own less stuff, use less energy, and produce their own goods. In short, Americans want to sell. 
When Every Country Wants to Sell, Who Buys?
 by Gregor Macdonald

Understandably for the US, which sustained a consumption supercycle for several decades, the post-financial crisis period has kicked off a new trend: Americans want to consume less, and make more.

Americans want to own less stuff, use less energy, and produce their own goods. In short, Americans want to sell. 
Image | Ugo Bardi: The Banquet of Consequences
Ugo Bardi: The Banquet of Consequences
by Adam Taggart

Everybody, soon or late, sits down to a banquet of consequences.

~ Robert Louis Stevenson

"Growth is the problem; not the solution" says Ugo Bardi, Professor of Physical Chemistry at Italy's University of Florence and author of the recent book Extracted: How the Quest for Mineral Wealth is Plundering the Planet.

In this week's podcast, Professor Bardi and Chris discuss resource depletion and its growing impact on geopolitical events and the world economy.

Ugo Bardi: The Banquet of Consequences
 by Adam Taggart

Everybody, soon or late, sits down to a banquet of consequences.

~ Robert Louis Stevenson

"Growth is the problem; not the solution" says Ugo Bardi, Professor of Physical Chemistry at Italy's University of Florence and author of the recent book Extracted: How the Quest for Mineral Wealth is Plundering the Planet.

In this week's podcast, Professor Bardi and Chris discuss resource depletion and its growing impact on geopolitical events and the world economy.

Image | Understanding the Secular Shift of Capital into Commodities
Understanding the Secular Shift of Capital into Commodities
 PREVIEW
by charleshughsmith

Executive Summary

  • The commodity complex is already beginning to rise following oil's upside breakout
  • Natural gas is trending higher
  • Copper appears to have bottomed
  • Wheat and coffee's downtrends are ending
  • A secular rise in commodities can happen even in the face of slower economic growth and lower demand

If you have not yet read Part I: Get Ready for Rising Commodity Prices available free to all readers, please click here to read it first.

In Part I, we examined the conventional narratives used to explain the price of oil and found that they no longer account for oil’s breakout to a new uptrend.  I suggested that financialization and speculation could power oil much higher, despite sagging global demand for physical oil and a potentially deflationary global recession.

This thesis has been met with widespread skepticism when I’ve aired it privately, and I think this skepticism arises from the newness of this narrative. In the past, oil has responded to supply-demand and inflation/deflation. The notion that oil could rise in a finance-induced “scarcity amidst plenty” is neither simple nor intuitive.

If oil tracks higher, we can anticipate that the primary commodities (energy, agricultural, and construction) may well rise, even as end-user demand weakens, as oil underpins all production and transport. The 2.5% rise in producer prices over the past year suggests this is already occurring.

The secondary reason is that lower prices eventually push marginal producers out of business, tightening supply and giving the remaining producers pricing power.

As noted in Part I, regardless of what we see as key drivers or what we think oil “should do,” oil has broken out technically.

Is there any evidence to support the idea that the uptrend in oil will trigger higher prices in other commodities? Let’s start with the CRB (Commodity Research Bureau) index that reflects a basket of commodities…

Understanding the Secular Shift of Capital into Commodities
 PREVIEW by charleshughsmith

Executive Summary

  • The commodity complex is already beginning to rise following oil's upside breakout
  • Natural gas is trending higher
  • Copper appears to have bottomed
  • Wheat and coffee's downtrends are ending
  • A secular rise in commodities can happen even in the face of slower economic growth and lower demand

If you have not yet read Part I: Get Ready for Rising Commodity Prices available free to all readers, please click here to read it first.

In Part I, we examined the conventional narratives used to explain the price of oil and found that they no longer account for oil’s breakout to a new uptrend.  I suggested that financialization and speculation could power oil much higher, despite sagging global demand for physical oil and a potentially deflationary global recession.

This thesis has been met with widespread skepticism when I’ve aired it privately, and I think this skepticism arises from the newness of this narrative. In the past, oil has responded to supply-demand and inflation/deflation. The notion that oil could rise in a finance-induced “scarcity amidst plenty” is neither simple nor intuitive.

If oil tracks higher, we can anticipate that the primary commodities (energy, agricultural, and construction) may well rise, even as end-user demand weakens, as oil underpins all production and transport. The 2.5% rise in producer prices over the past year suggests this is already occurring.

The secondary reason is that lower prices eventually push marginal producers out of business, tightening supply and giving the remaining producers pricing power.

As noted in Part I, regardless of what we see as key drivers or what we think oil “should do,” oil has broken out technically.

Is there any evidence to support the idea that the uptrend in oil will trigger higher prices in other commodities? Let’s start with the CRB (Commodity Research Bureau) index that reflects a basket of commodities…

Image | Get Ready for Rising Commodity Prices
Get Ready for Rising Commodity Prices
by charleshughsmith

The human mind seeks a narrative explanation of events, a story that makes sense of the swirl of life’s interactions.

The simpler the story, the easier it is to understand. Thus the simple stories are the most attractive to us.

But conspiracies and power groups do not always provide comprehensive explanations for what we observe.
Get Ready for Rising Commodity Prices
 by charleshughsmith

The human mind seeks a narrative explanation of events, a story that makes sense of the swirl of life’s interactions.

The simpler the story, the easier it is to understand. Thus the simple stories are the most attractive to us.

But conspiracies and power groups do not always provide comprehensive explanations for what we observe.
Image | Everything Is Being Sold
Everything Is Being Sold
by Chris Martenson

Global financial markets are now in a very perilous state, and there is a much higher than normal chance of a crash. Bernanke's recent statement revealed just how large a role speculation had played in the prices of nearly everything, and now there is a mad dash for cash taking place all over the world.
Everything Is Being Sold
 by Chris Martenson

Global financial markets are now in a very perilous state, and there is a much higher than normal chance of a crash. Bernanke's recent statement revealed just how large a role speculation had played in the prices of nearly everything, and now there is a mad dash for cash taking place all over the world.
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