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- Long has the government waged war on the privacy and freedom of its citizens. Government has an insatiable appetite for more power and control. This is ultimately how it expands itself and exerts its dominance and ability to tax / steal the wealth of its people.
- Increasingly, governments are becoming more interested in the ability of its citizens to spend uninhibited amounts of money in the form of cash. Cash, although fiat, at least grants the ability of some privacy to its user and is typically readily converted into most other forms of fiat money.
- Gold, which also holds these positive characteristics of cash, has already suffered under a long-term campaign by western governments, in which they have sought to discredit and label it as a relic.
- Despite their best efforts, gold has persevered and will continue to do so in the future, as it cannot be readily printed into infinity by any one government who wishes to see its destruction.
- Unfortunately, fiat money does not possess these qualities that gold possesses. Fiat can and has been in the past, printed into infinity. Inflation has ruined peoples lives and evaporated the savings of its holder, time and time again.
- At least compared to the new emerging form of “electronic money” (i.e. debit cards, credit cards, online banking, etc.), cash at least still holds onto that one positive quality, which is the privacy it can offer its user.
- Although, that may be set to change. Western governments around the world have turned their eyes in the direction of cash and are pushing forward with laws and regulations to restrict its use.
- One country that is leading the charge against its people is France, who hide behind the illusion that the changes they are moving towards are simply an effort to combat terrorism. Again, “the war on terrorism” has become the common scapegoat that western governments have used whenever they are taking away privacy or ramping up control over its people.
- Come September, France will begin more closely monitoring its citizens’ transactions and withdrawals of money. People will not be able to make cash payments of more than 1,000 euros in one transaction, this is down from the already low 3,000 euro limit.
- Additionally, any withdrawal of more than 10,000 euros in one month will automatically trigger an investigation by the Tracfin anti-fraud and money laundering agency.
- Furthermore, the ability to use cash will be further limited by the fact that in order to convert more than 1,000 euros into another currency, you will need to show a valid ID card. This threshold has plummeted from the previous 8,000 euro limit.
- Prepaid cards, that have become increasingly popular over the years, will also be under scrutiny, as the French government clamps down on its efforts to “combat terrorism”.
- Of course, this is all hogwash. Unfortunately, despite the French government’s best efforts, if a terrorist wants to gain access to funds, then they are going to do so. These laws and restrictions are going to do nothing to stop them. Rather, they are going to hinder even more of its peoples freedom to access and use their own money.
- This is the true point of these changes. Western governments around the world have already taken similar actions, although not yet as severe as France. But don’t rejoice yet, more will be following suit.
- Western officials know that the global economy is teetering on a cliffs edge. All efforts will be taken to keep their “cash cows” in place and to keep the current system flowing.
- If citizens are able to convert their funds into precious metals, or another foreign currency, then governments cannot easily seize their funds in a time of crisis, similar to the bail-ins seen during the crisis in Cyprus.
- For those that still have the ability to move your funds, purchase precious metals and diversify your risk and have not yet done so, ask yourself…what am I waiting for?
Source: zerohedge.com – Written by Nathan McDonald
- Yemen’s ousted officials have requested a ground intervention to bolster a Saudi-led air offensive against the country’s Houthi rebels. Meanwhile, neighboring Iran has made calls for diplomacy, saying the military campaign is a “strategic mistake”.
- Saudi authorities say they have gathered troops along the border with Yemen in preparation for any possible ground offensive, Reuters reported on Tuesday, adding that no exact time to send the troops in has yet been stipulated. Pakistan, which has previously supported Riyadh by deploying troops to Saudi Arabia to provide extra regional security, also said that it is sending troops to support Saudi Arabia in the context of the current Yemeni conflict, the agency reported.
- Despite airstrikes delivered by Saudi air forces and their Gulf allies, the Houthis are continuing their offensive against the dwindling loyalists of President Abd Rabbuh Mansur Hadi. Hadi was ousted by the rebels and fled to Saudi Arabia, requesting military intervention from the Arab states.
- The heaviest exchange of cross-border fire since the start of air offensive was reported on Tuesday, with Saudi troops clashing with Yemeni Houthi fighters. Hadi-allied officials have remained hopeful that Riyadh would send ground troops to turn the tide for the ousted official.
- “We are asking for that [Saudi ground operation in Yemen], and as soon as possible, in order to save our infrastructure and save Yemenis under siege in many cities,” the president’s Foreign Minister Riyadh Yasseen said an interview with al-Arabiya Hadath TV channel.
— RT (@RT_com) March 30, 2015
- Meanwhile, Iran’s Deputy Foreign Minister Hossein Amir Abdollahian labeled the Saudi strikes a “strategic mistake” and called for a dialogue to help solve the crisis in Yemen. “Iran and Saudi Arabia can cooperate to solve the Yemeni crisis,” the official said in Kuwait, as cited by Reuters, adding that Iran “recommends all parties in Yemen return to calm and dialogue.”
- “This war is not about Yemen or the Houthis, it’s about what used to be a cold war between the Persians and the rest of the Islamic world, especially the Arab Gulf. Today the cold war became a real one,” political analyst Roula Taj told RT.
— RT (@RT_com) March 31, 2015
- More casualties have been reported in the escalating conflict, with overnight street clashes in Hadi’s stronghold Aden claiming at least 26 lives, Reuters reported, citing a health ministry official. Ten others died during the Tuesday shelling of a residential building close to the residence once used by the president, the agency reported referring to witnesses accounts. In the central town of Yarim, an air strike hit a fuel tanker, killing at least 10 people, residents said.
- Coalition bombers targeted rebel positions near the airport of the Yemeni capital of Sanaa, while fighters from the Houthi militia entered a coastal military base overlooking the Red Sea’s strategic Bab el-Mandeb strait on Tuesday, local officials told Reuters. Heavy fighting between Hadi loyalists and opponents was also reported in southern province of Dhalea.
- On Monday, 45 people were killed and another 65 injured in an airstrike by a Saudi-led coalition at a refugee camp in Houthi-controlled northern Yemen, according to the International Organization for Migration (IMO).
— RT (@RT_com) March 30, 2015
- The airstrikes have also affected the Red Cross medical supplies deliveries to the area, with the planes which are carrying the necessities unable to fly to Yemen.
- “In Yemen today we have a very serious humanitarian situation. Hospitals are running at a low capacity… We need to bring in urgent medical supplies to sustain our stocks,” spokesperson at the International Committee of the Red Cross (ICRC) for Near and Middle East Sitara Jabeen told RT.
- She added that the organization was expecting to bring in a plane carrying medical supplies for up to 1,000 patients to Sanaa, “but so far have not been able to get the permission we need to move this plane from Jordan to Yemen.”
- 1987 Or 2015?
- “They are not real buyers and sellers… these are computers that drive the markets down extremely fast…”
- “A crash is coming…”
- “A correction will prompt rate cuts which will ensure The Bull Market is not over…”
* * *
- It’s never different this time… The Friday night before Black Monday 1987…
- If you need evidence that we are in the midst of a lunatic financial mania, just consider this summary from a Marketwatch commentator as to why markets are ripping higher this morning:
“The dovish comments from both Fed Chairwoman Janet Yellen and People’s Bank of China Governor Zhou Xiaochuan are giving markets a big lift, and in the absence of negative data or news, I imagine this will continue to buoy the markets throughout the session,” Erlam said in emailed comments.
Yellen said gradual hikes are likely this year, but that the central bank will move cautiously……. the PBOC governor said he saw “more room” for China to ease policy if the economy stays soft and inflation continues to weaken.
- Its just that frightfully simple. If any of the major central banks anywhere on the planet ease or even hint they might, the robo machines and day traders unleash an avalanche of buy orders and the stock averages jerk higher.
- Indeed, Zero Hedge captured the motion succinctly this AM. In keeping with Bernanke’s inaugural blog revelation that 98% of monetary policy consists of “open mouth” operations, the markets leapt upwards on cue. That is, if central banker jaws are flapping, then buy!
- What this means is that this third immense financial bubble of the current century will keep inflating until central bankers stop banging the “stimulus” lever or the bubble finally crashes under its own weight. The latter will surely happen, eventually—- and the potential carnage can be readily approximated.
- Last time, global equity market inflated to a peak of $60 trillion in aggregate value before they plunged to barely $25 trillion during the post-Lehman meltdown. Now they have been pumped back to the $80 trillion mark by the sheer recklessness of the world’s central bankers, but this time the underlying economic advance has been even more artificial and unsustainable; it amounts to little more than a temporary outgrowth of the explosion in public and private credit since late 2008. At the same time, the bubble has been spread to virtually the entirety of the world’s $200 trillion credit market owing to the nearly universal embrace of massive central bank bond-buying under QE.
- Yet do the central bankers have even the foggiest clue that they are sitting on a potential $50-$100 trillion financial market implosion? That the mother of all meltdowns lurks around the corner?
- Not these boneheads. They have ripped all the stabilization circuitry out of financial markets, thereby completely disabling honest price discovery. That means they have destroyed the shorts, extinguished fear, obsoleted fundamental analysis, drastically cheapened the cost of hedging and offered speculators unlimited opportunities to shoot fish in a barrel by front-running their announced bond buying and currency manipulation campaigns. In short, they have showered speculators with stupendous windfalls, displacing self-correcting two-way financial markets with rigged gambling casinos in the process.
- The immense damage visited upon the machinery of financial markets is sitting there in plain sight. The endless six-year buy-the-dips run of the S&P 500 since March 2009, for example, would be impossible in an honest free market. So why do they ignore the dangers, and stubbornly plow forward clutching to ZIRP, N-ZIRP, QE, forward guidance and all the other tools of central bank stimulus?
- The utterances of the duo who kicked off today’s rip make absolutely clear why the central bankers will never stop stimulating. They have embraced a spurious “inflation deficiency” doctrine, and have thereby, in effect, lashed themselves to the wheel of a doomsday machine.
- To wit, massive central bank financial repression is the actual cause of deflation. In the boom phase of the expansion it leads to unsustainable public and private borrowing which finances artificial spending by households and governments and excess investment in private mining, processing, manufacturing, transportation and distribution capacity, as well as public infrastructure. Then eventually comes the crack-up phase when the borrowing ends or diminishes, causing cascading reductions in output, prices, profits and incomes throughout the economic chain.
- Thus, Governor Zhou Xiaochuan’s threat to unleash more stimulus owing to the specter of “deflation” in China borders on the comical. The very deflation about which he frets was caused by the runaway money printing campaigns of the PBOC over the last several decades—-campaigns which produced monumental price and credit inflation in China, and which were then transmitted and amplified throughout the world economy, and especially China’s supply base in the EM
- In the process, the latter caused massive overinvestment and malinvestment in private industry and public infrastructure alike. The “deflation” that Zhou professes to fear is thus the result of price cutting by companies battered by too much debt and too little business, and the inexorable cooling of artificial demand for the materials and services needed to build empty apartments, malls and cities and hideously redundant highways, airports, subways and bridges.
- Indeed, the PBOC is threatening to chase its own tail. If China’s traditional high level of consumer inflation is abating, its because of the drastic cooling of the oil-energy complex and the iron ore-metals complex—–trends which, in turn, originate in the sharp and unavoidable slowing of China’s construction and investment mania.
- Iron Ore Spot Price (Any Origin) data by YCharts
- So there you have it. The People’s Printing Press of China has been running red hot for more than two decades, and has fueled the most fantastic credit bubble in human history. Total credit market debt outstanding in China at the turn of the century was $2 trillion; now its 14X higher at $28 trillion.
- Even more fantastically, China’s nominal GDP has barely doubled—-from $5 trillion to $10 trillion since the 2007. Yet its credit market debt—-public and private combined—-has increased by $21 trillion, or by 4X the gain in money GDP.
- This is downright monetary insanity, but in response to modest cooling of its construction frenzy, its chief central banker could think of only one thing: moar ease! Apparently, a 7X increase in PBOC’s balance sheet since the turn of the century is not enough—–even when it only adds fuel to the deflationary fires.
- Needless to say, during the past year the signs that China’s house of cards is tottering have become omnipresent. So this is where the doomsday machine comes front and center. China’s credit addicted financial system has just channeled the central bank’s liquidity injections to the stock market in response to Beijing’s attempts to administratively rein-in shadow banking system excesses, and particularly, the so-called “trust loans” to developers and commodity speculators.
- Accordingly, the Shanghai A Shares index is up 81 % in the last nine months fueled by margin loans and an explosion of retail stock market speculation. Never has there been a more pathetic march of the lemmings toward their doom.
- ^SSEA data by YCharts
- Janet Yellen’s pronouncements last Friday were no more sensible. Rhetorically waving her arms at the bogeyman of too little inflation, she proclaimed the following:
That said, we must be reasonably confident at the time of the first rate increase that inflation will move up over time to our 2 percent objective, and that such an action will not impede continued solid growth in employment and output.
- That is sheer gibberish and rationalization. There is not an iota of evidence that 2% inflation will cause any more growth in output and employment than will 1.6% inflation—–the actual rate of PCE deflator less food and energy increases since 2007. Worse still, there is absolutely no chance that “open mouth” policy at the Eccles Building will have any impact on what amount to downright trivial short-term wiggles in the measured CPI.
- Indeed, the very idea that the US economy is suffering from insufficient inflation is a Keynesian canard that defies empirical reality and common sense. As we demonstrated last week, the rate of real GDP growth has slowed to 1.7% since the turn of the century and 1.1% since the pre-crisis peak. That is, to less than one-third of its historic growth rate. And that’s despite a 9X increase in the Fed’s balance sheet—-from $500 billion to $4.5 trillion during the last 15 years—-and far more inflation than main street households could reasonably tolerate, given the tepid rate of wage growth during that period.
- And it doesn’t matter how you measure it. Inflation has been high on a cumulative basis, and the median household income has been going in the wrong direction.
- In short, the US economy has not suffered from an “inflation deficiency”. As shown above, the price level has actually doubled since the era of monetary central planning incepted under Greenspan in 1987.
- Likewise, there is no shortage of “aggregate demand” that can be remedied by continued “monetary accommodation”. The welcome, modest abatement of consumer price inflation in recent months reflects the epochal deflation now underway around the planet——the inexorable correction of the monetary boom that has been fueled by central banks since the 1990s.
- By insisting that monetary accommodation can fill-up an imaginary bathtub called the US economy until it reaches the brim of full employment and precisely 2.000% change in the PCE deflator over some arbitrary time frame that remains forever undefined, the Fed is engaging in an act of monumental folly. And one which is now being replicated even more egregiously by the rest of the world’s convoy of money printing central banks.
- That’s the equivalent of a doomsday machine. The central banks will ease and talk of easing until the third great bubble of this century reaches brobdingnagian extremes. Then the carnage will commence. Again.
- Update, and just as expected: IRAN NUCLEAR NEGOTIATORS MAY MISS 3RD DEADLINE: U.S. OFFICIA -
- In what has been the world’s longest negotiation (we are only modestly joking: the Iran P5+1 nuclear “talks” started in 2013 and have yet to achieve anything) one whose “rolling deadline” has been breached time and time again, it appears that with today’s latest deadline just hours away, the most likely outcome is another deadline extension even though, as Reuters puts it, “Iran and six world powers ramped up the pace on Tuesday in negotiations over a preliminary deal on Tehran’s nuclear program, while officials cautioned that any agreement would likely be fragile and incomplete.”
- The negotiations, which we have largely ignored covering as the past has abundantly shown that nothing ever actually gets done except for a lot of talking, posturing, gesticulating and pizza-ordering, have seen the United States, Britain, France, Germany, Russia and China trying to break an impasse in the talks, which are aimed at stopping Iran from gaining the capacity to develop a nuclear bomb in exchange for easing international sanctions that are crippling its economy.
- As a reminder, it is the “threat” of an amicable resolution and a resumption in Iran oil exports that has been presented as the cause for oil’s most recent weakness.
- According to the conventional narrative “disagreements on enrichment research and the pace of lifting sanctions threatened to scupper a deal that could end a 12-year standoff between Iran and the West over Tehran’s nuclear ambitions and reduce the risk of another Middle East war.”
- “The two sticking points are the duration and the lifting of sanctions,” an Iranian official said. “The two sides are arguing about the content of the text. Generally progress has been made.”
- They said the main sticking points remain the removal of U.N. sanctions and Iranian demands for the right to unfettered research and development into advanced nuclear centrifuges after the first 10 years of the agreement expires.
- Iran said the key issue was lifting sanctions quickly.
- “There will be no agreement if the sanctions issue cannot be resolved,” Majid Takhteravanchi, an Iranian negotiator, told Iran’s Fars news agency. “This issue is very important for us.”
- The six powers want more than a 10-year suspension of Iran’s most sensitive nuclear work. Tehran, which denies it is trying to develop a nuclear weapons capability, demands a swift end to sanctions in exchange for temporary limits on its atomic activities.
Not surprisingly, “officials played down expectations for the talks in the Swiss city of Lausanne.”
- For days they have been trying to agree on a brief document of several pages outlining key headline numbers to form the basis of a future agreement. Officials said they hoped to be able to announce something, though one Western diplomat said it would be “incomplete and kick some issues down the road”.
- Negotiations among the parties on sticking points went into the night and continued on Tuesday. They were expected to run late and possibly into Wednesday. Officials said they were hoping to agree on some kind of declaration, while any actual preliminary understanding that is agreed might remain confidential.
- It was also possible they would not agree on anything.
And sure enough, with the specter of yet another extension, the talking down of expectations (it snowed in Lausanne) begins:
- French Foreign Minister Laurent Fabius and his German counterpart Frank-Walter Steinmeier canceled plans to go to Berlin for a French-German summit on Tuesday. “The negotiations are at a critical and difficult phase, making the presence of both ministers in Lausanne essential,” a German government source said.
- The real deadline in the talks, Western and Iranian officials said, is not Tuesday but June 30.
- They said the main sticking points remain the removal of U.N. sanctions and Iranian demands for the right to unfettered research and development into advanced nuclear centrifuges after the first 10 years of the agreement expires.
But is that really the case? After all, if all superpowers press Iran, the middle east country will have no choice. According to Iran’s own IRNA news agency there is much more to this story than what the conventional narrative presents, and it once again all boils down to a well-known tension in modern geopolitics: the US and the West vs the rising Russia-China axis.
- From IRNA:
- The United States and Europe reportedly want the UN Security Council (UNSC) sanctions on Iran to be automatically reversible, meaning that if Iran violates the deal at any point, the UNSC sanctions will automatically be re-imposed on Tehran.
- Russia opposes such a scenario, saying in such a case the UNSC should decide what to do. Moscow says automatic imposition of sanctions goes against the mechanism of the Security Council.
- China also reportedly shares Russia’s viewpoint and is against the imposition of automatically reversible sanctions on Iran.
- The final stage of the ongoing talks between Iran and the P5+1 countries – the United States, Britain, France, Russia and China plus Germany – in Lausanne is expected to continue until Tuesday, which was set as a deadline for reaching mutual understanding in the negotiations.
And there you have it: the reason why the Iran talks have dragged on more than two years, and specifically since the February 2013 “interim agreement”, is not because of Iran’s intransigence (which could have been resolved overnight with a few Swiss bank accounts opened under strategic Iranian personnel’s names or a few NYC duplex apartments), but because this, too, has become one global theater of realpolitik, one in which the fate of Iran’s sanctions is no longer in the hands of Iran, but a function of the power play between West and East.
- Keep a very close eye on who prevails, assuming there is a deal, because if the US loses the upper hand, that will certainly explain why two weeks ago US Treasury Secretary Jack Lew was heard complaining that “US International Credibility & Influence Is Being Threatened”…
- The residents of about a dozen US states received a scare when an ominous message rolled across their TV screens announcing an ‘emergency alert’ with the names of their states – without any explanation or further information.
- A test of the Emergency Alert System (EAS) began shortly before noon on Monday and was seen by millions of television viewers in Indiana, Kentucky, Maryland, Massachusetts, Rhode Island, Connecticut, New Jersey, North Carolina, South Carolina, Virginia and Washington, DC, Infowars reported.
- EAS is a special department run by the Federal Emergency Management Agency (FEMA), the Federal Communications Commission (FCC), and the National Weather Service (NOAA/NWS).The alert interrupted regularly scheduled television programs for 10 minutes with a listing of affected states and an announcement that the alert would remain in effect until midnight.
MSNBC emergency alert seems to have us all in trouble. It’s frozen and is pretty broad.pic.twitter.com/engRKBMwzu
— Paul Angelone (@PaulAngelone) March 30, 2015
- Americans across the country took to social media to express a wide range of emotions – from bewilderment to panic – as the alert gave no indication that it was only a test.
Anyone else seeing this #emergencyalert on their TV right now?
— Julie Grauert (@JulieGrauert) March 30, 2015
- While much of the alert was for the East Coast of the United States, viewers from as far away as Sacramento, California, also reported seeing the test.
So the emergency alert system is going off on my tv. Listing a couple dozen states… And it doesn’t say “this is a test….”
— Jenn Coffill (@BecauseImCheap) March 30, 2015
- The emergency alert follows shortly after reports that elite branches of the US military – including Green Berets, Navy SEALS and Special Operations from the Air Force and Marines – are preparing to hold military training in seven southwest states, with some troops operating incognito among civilians.
Emergency Alert System just broadcasted all the States but it’s frozen. What the hell is going on?
— Kenneth Sitjar (@KSitjar) March 30, 2015
- Operation Jade Helm, which is scheduled to kick off in July and run for eight weeks, will involve the participation of 1,200 troops in dozens of towns in Arizona, California, Colorado, New Mexico, Nevada, Texas and Utah.
— WarMonitor (@USCitizen95) March 31, 2015
- No information was available indicating that the emergency alert was connected to this upcoming military drill, where Americans were asked to provide information on ‘suspicious’ activity to the authorities.
- Yemen has received an affirmative response for a request to send ground troops to the country in support of the Decisive Storm operation against Houthi rebels, Yemeni Foreign Minister Riyadh Yaseen said.
- On Wednesday, the Saudi-led coalition launched airstrikes against Houthi positions in Yemeni capital Sanaa at the request of the country’s ousted President Abd Rabbuh Mansur Hadi. On Thursday, a Saudi Arabia military spokesman said coalition forces were ready to launch a ground operation, if Yemen needed it.
- An armed man walks on the rubble of houses destroyed by an air strike near Sanaa Airport March 26, 2015.
The campaign aims to roll back the Houthi insurgency, after the militants ousted the president and formed a presidential council in the first few weeks of 2015.
“We request ground support as soon as possible. We have received an affirmative response to our request on ground support,” Al-Hadath news channel quoted him as saying in the Saudi Arabian capital.
- Numerous people, including civilians, were killed and wounded in coalition attacks.
- On Monday, a source in Yemen’s Health Ministry told Sputnik that 37 people had been killed and 150 injured after five days of airstrikes on Yemeni targets by the international coalition. Earlier on Tuesday, a security source told Sputnik that 11 had been killed and 30 injured in a Saudi-led bombing south of Yemen’s capital Sanaa, while at least 17 died in airstrikes on Hadi’s residence in Aden.
- Ankara, we have a problem.
- At around 10:36 a.m. local time, Turkey suffered a massive power outage that left half of the country’s 81 provinces without electricity in what was the biggest blackout in a decade and a half. The blackout shut down subways in Instanbul and knocked out 11 of 16 air traffic control receivers, grounding flights to and from the capital. Although the cause is not yet known, officials haven’t yet ruled out the possibility that the blackout may be terror-related.Here’s more via Reuters:
Prime Minister Ahmet Davutoglu said all possible causes of the outage were being investigated and did not rule out sabotage, but said that trouble with transmission lines was the most likely reason for the problem.
“Our main target right now is to restore the network. This is not an incident that we see frequently,” Energy Minister Taner Yildiz said during a trip to Bratislava, in comments broadcast on Turkish television.
“Whether or not terrorism is a high possibility or a low one I can’t say at this stage. I can’t say either whether it is a cyber attack,” he said in response to questions from reporters.
- …and a bit more via RT:
The worst power outage in 15 years struck most of Turkey, grounding flights and crippling rail networks.The government scrambled efforts to investigate the power cut, before energy was partially restored in the afternoon.
The outage was confirmed in some 23 provinces, including Ankara and Istanbul, by news agency Anadolu. Later information from Broadcaster NTV put the number at 40.
Energy officials did admit that there was no electricity in most of the country for several hours, before electricity was restored by 15 percent.
— Flightradar24 (@flightradar24) March 31, 2015
- …and here’s a BofAML:
“If the problem cannot be fixed shortly, the wide scale suggests that the cost will be loss of a working day for the GDP.”
- * * *
- We would note that Energy Minister Taner Yildiz is known for getting to the bottom of mass power outages. You’ll recall that last year, when blackouts caused officials to count votes in local elections by candlelight, the minister quickly discovered precisely what went wrong:
“I am not joking, friends…A cat walked into a transformer unit. That’s why there was a power cut. It’s not the first time this has happened.”
- It’s official: the US is on its own when it comes to opposing the China-led Asian Infrastructure Investment Bank (see here for full summary of AIIB developments). We suppose it was only a matter of time, but news that Japan will seek membership in a matter of months will likely still come as somewhat of a surprise to Washington, given the otherwise tenuous relationship between the two countries and considering Japan’s leadership role in the ADB. Nevertheless, the Japanese have apparently come to the same conclusion as Australia and South Korea: not joining simply isn’t an option no matter how loudly the US protests. Here’s more from FT:
- Japan is likely to join the Asian Infrastructure Investment Bank within a few months, according to the country’s ambassador to Beijing, a move that would see Tokyo break ranks with Washington and leave the US as the only big holdout.
- Masato Kitera told the Financial Times he agreed with Japanese business leaders’ belief that the country would sign up to the China-led development bank by June.
- “The business community woke up late, but now they have mounted a big campaign for the AIIB which appears to be very effective,” Mr Kitera said…
- A Japanese move to join the bank would be a reversal of rhetoric and, for China, the biggest coup yet given the fractious relationship between the two Asian powers.
- Japan also has strong links to the rival Asian Development Bank, the head of which it traditionally appoints, and has in the past questioned the need for a new bank…
- No country was seen to be as supportive of the US position as Japan — in part because many officials in both countries saw the AIIB as a direct challenge to the Japanese-controlled Asian Development Bank.
- But Japanese executives look on China’s ambitious plans to help build infrastructure in the region as a huge business opportunity, as well as a chance to help repair frayed relations.
So in the end, money does indeed talk, and the possibility that the $50 billion venture may serve to shore up relations between Beijing and Tokyo has apparently proven sufficient to outweigh “concerns” about the fund’s lending standards. Of course, as we’ve noted on any number of occasions, the only real concerns about the bank revolve around the degree to which China uses the institution as an instrument of foreign policy, something Beijing has sought to play down even as it pushes for loans to be denominated in yuan. The ball is now in Washington’s court in terms of adopting a stance towards the bank that strikes a face-saving balance between caution and acceptance.
- * * *
- Meanwhile, someone in Washington called someone in Tokyo as indicated by the following which came across on Bloomberg Monday evening:
- JAPAN WON’T JOIN AIIB FOR TIME BEING, NHK SAYS
- When an economic crisis is coming, there are usually certain indicators that appear in advance. For example, commodity prices usually start to plunge before a recession begins. And as you can see from the Bloomberg Commodity Indexwhich you can find right here, this has already been happening. In addition, I have previously writtenabout how the U.S. dollar went on a great run just before the financial collapse of 2008. This is something that has also been happening over the past few months. Some people would have you believe that nobody can anticipate the next great economic downturn and that to try to do so is just an exercise in “guesswork”. But that is not the case at all. We can look back over history and see patterns that keep repeating. And a lot of the exact same patterns that happened just before previous stock market crashes are happening again right now.
- For example, let’s talk about the price of oil. There are only two times in history when the price of oil has fallen by more than 50 dollars in a six month time period. One was just before the financial crisis in 2008, and the other has just happened…
- As a result of crashing oil prices, we are witnessing oil rigs shut down in the United States at a blistering pace. In fact, almost half of all oil rigs in the U.S. have already shut down. The following commentary and chart come from Wolf Richter…
In the latest week, drillers idled another 41 oil rigs, according to Baker Hughes. Only 825 rigs were still active, down 48.7% from October. In the 23 weeks since, drillers have idled 784 oil rigs, the steepest, deepest cliff-dive in the history of the data:
- We are looking at a full-blown fracking bust, and this bust is already having a dramatic impact on the economies of states that are heavily dependent on the energy industry.
- For example, just check out the disturbing number that just came out of Texas…
The crash in oil prices is hammering the Texas economy.
The latest manufacturing outlook index from the Dallas Fed plunged again in March, to -17.4 from -11.2 in February, indicating deteriorating business conditions in the state.
- But this pain is going to be felt far beyond Texas. In recent years, Wall Street banks have made a massive amount of money packaging up energy industry loans, bonds, etc. and selling them off to investors.
- If that sounds similar to the kind of behavior that preceded the subprime mortgage meltdown, that is because it is.
- Now those loans, bonds, etc. are going bad as the fracking bust intensifies, and whoever is left holding all of this worthless paper at the end of the day is going to lose an extraordinary amount of money. Here is more from Wolf Richter…
It suited Wall Street just fine: according to Dealogic, banks extracted $31 billion in fees from the US oil and gas industry and its investors over the past five years by handling IPOs, spin-offs, “leveraged-loan” transactions, the sale of bonds and junk bonds, and M&A.
That’s $6 billion in fees per year! Over the last four years, these banks made over $4 billion in fees on just “leveraged loans.” These loans to over-indebted, junk-rated companies soared from about $40 billion in 2009 to $210 billion in 2014 before it came to a screeching halt.
For Wall Street it doesn’t matter what happens to these junk bonds and leveraged loans after they’ve been moved on to mutual funds where they can decompose sight-unseen. And it doesn’t matter to Wall Street what happens to leverage loans after they’ve been repackaged into highly rated Collateralized Loan Obligations that are then sold to others.
- At the same time, we are also witnessing a slowdown in global trade. This usually happens when economic conditions are about to turn sour, and that is why it is so alarming that the total volume of global trade in January was down 1.4 percent from December. According to Tyler Durden of Zero Hedge, that was the largest drop since 2011…
Presenting the latest data from the CPB Netherlands Bureau for Economic Policy Analysis, according to which in January world trade by volume dropped by a whopping 1.4% from December: the biggest drop since 2011!
- We are seeing some troubling signs in the U.S. as well.
- I shared the following chart in a previous article, but it bears repeating. It comes from Charles Hugh Smith, and it shows that new orders for consumer goods are falling at a rate not seen since the last recession…
- Well, what about the stock market? It was up more than 200 points on Monday. Isn’t that good news?
- Yes, but the euphoria on Wall Street will not last for long.
- When corporate earnings per share either start flattening out or start to decline, that is a huge red flag. We saw this just prior to the stock market crash of 2008, and it is happening again right now. The following commentary and chart come from Phoenix Capital Research…
Take a look at the below chart showing current stock levels and changes in forward Earnings Per Share (EPS). Note, in particular how divergences between EPS and stocks tend to play out (hint look at 2007-2008).
We all know what came next.
- And guess what?
- According to CNBC, a lot of the “smart money” is pulling their money out of the stock market right now while the getting is good…
Recent market volatility has sent stock market investors rushing for the exits and into cash.
Outflows from equity-based funds in 2015 have reached their highest level since 2009, thanks to a seesaw market that has come under pressure from weak economic data, a stronger dollar and the the prospect of monetary tightening.
Funds that invest in stocks have seen $44 billion in outflows, or redemptions, year to date, according to Bank of America Merrill Lynch. Equity funds have seen outflows in five of the last six weeks, including $6.1 billion in just the last week.
- It doesn’t matter if you are a millionaire “on paper” today.
- What matters is if the money is going to be there when you really need it.
- At the moment, a whole lot of people have been lulled into a false sense of complacency by the soaring stock market and by the bubble of false economic stability that we have been enjoying.
- But under the surface, there is a whole lot of turmoil going on.
- Those that are looking for the signs are going to see the next crisis approaching well in advance.
- Those that are not are going to get absolutely blindsided by what is coming.
- Don’t let that happen to you.
- Protests erupted in Turin Saturday when anti-fascist demonstrators clashed with police in riot gear.
- Anti-fascist and anti-racist demonstrators organized a national day of protest against far right groups for March 28 and posted on social media under the hashtag #MaiConSalvini — Never With Salvini — a reference to Matteo Salvini, leader of the far-right Lega Nord or “Northern League,” who was scheduled to speak in the city.
— Dimitris Plastiras (@dplastir) March 29, 2015
- The Lega Nord has seen a surge in popularity in post-crisis Italy, riding a wave of anger over austerity measures and growing anti-immigrant xenophobia.
- As head of the Lega Nord, Matteo Salvini has called for an exit from the eurozone, has denounced corrupt politicians and bankers for causing the crisis, and has advocated drastic reductions in immigration, which critics deem racist.
— th anonymous (@ori_no_co) March 29, 2015
- A main complaint of the Lega Nord is that disproportionate resources that should be reserved for Italians are being used on the many immigrants washing up on Italy’s shores in recent years. Their rhetoric also reflects an anti-Southern Italy sentiment that sees the economically less-developed south as a drain on national resources.
— Matteo Salvini (@matteosalvinimi) March 23, 2015
- The above tweet from Salvini reads “Keep Calm…Our People First!”
— ѕyndιcalιѕт (@syndicalisms) March 28, 2015
- Organizers played on the Lega Nord’s slogan “Roma ladrona, La Lega No Perdona” – “Rome is a thief, the League won’t forgive.” Protesters gave it their own local twist- “Lega Ladrona, Torino no Perdona” — “The League is a thief and Turin will not forgive.”
— Infoaut (@Infoaut) March 26, 2015
03.30.15 – Greece to ask Russia for economic help
- The Greek government reportedly plans to negotiate a possible reduction in gas prices from Russia and the lifting of the embargo on certain types of Greek products.
- Relief from the food embargo would particularly cover fresh fruit, reported Der Spiegel on Sunday.
- It will be put to the Russian government by Greece’s Industrial Reform Minister Panagiotis Lafazanis and Syriza MP Thanasis Petrakos during their two-day visit to Moscow on March 30 and 31.
- Read more
Hungary, Cyprus and Greece first to return to Russian market after sanctions lifted – watchdog
“This visit is very important for Greece. We intend to deepen our relationship with Russia in the energy sector and thereby hope to gain a significant advantage,” said Petrakos as quoted by Spiegel Online.
- On March 30, the Greek delegation will meet with Energy Minister Aleksandr Novak and the head of Gazprom Aleksey Miller. Gazprom currently controls almost 70 percent of the Greek gas market.
- Greek Prime Minister Alexis Tsipras is planning a visit to Russia on April 8 to meet President Putin. Meanwhile, the European Union is concerned about the possibility of a rapprochement between Moscow and Athens, as Greece has said it could seek financial support from Russia and China if it is denied aid from the European Union.
- The recently elected government in Greece has been struggling to keep its economy afloat and in the eurozone since it was elected in January. The country wants to renegotiate its €240 billion debt with international creditors and stick to its pre-election promise to end the era of drastic cuts.
- Greek plan
On Friday, Greece submitted its reform plan, as Monday is the deadline for the approval by international creditors. If accepted, it would secure €7.2 billion from the troika of lenders.
- Athens has said the reforms are meant to raise €3 billion and exclude “recessionary measures” such as wage and pension cuts.
- Khristophoros Vernardakis, general secretary coordinating the work of the Greek government, said in an interview with RIA that the government is ready to propose a number of reforms to the creditors in Brussels on Monday. The key reforms will be carried out in the administration and in the tax system; the government also aims at eradicating corruption and smuggling.
- Read more
Russia might bailout Greece – finance minister
“The prepared reforms primarily contain a number of administrative changes, organizational and managerial changes in the state, which, however, will bring great financial benefits,” said Vernardakis as quoted by RIA.
- “We will free the state budget from undue financial burdens in 2015, and over the next two to three years. The benefit of these reforms will be huge; it’s not just administrative changes.”
- Vernardakis said that synchronizing Greek legislation with European will help the country avert heavy fines.
- “We believe that the benefit will be at least €3 billion over the next three years, or a billion a year,” he said.
- The Troika of creditors said in February they were ready to extend the current bailout program until June 2015, but a no official agreement has been reached.
- Prime Minister Tsipras has sharply criticized the troika’s methods, blaming the creditors for the recession Greece plunged into five years ago.
- Greece received two bailouts from the EU in 2010 and 2014 totaling €240 billion. The troika of creditors agreed to provide financial assistance to Greece, if it imposed austerity measures, cutting all kinds of spending. As a result, the country saw its economy shrink by a quarter, with a third of Greeks living below the poverty line and unemployment exceeding 30 percent.
- The day is starting off on a very bizarre footing after not only Ben Bernanke became a blogger and joined Twitter, but moments ago at least one American appears to have had enough with the Big Brother state, and moments ago WNEW reported that there has been a shooting, two injured and according to local reports, one fatality, when someone decided to ram the gate of the NSA’s Fort Meade, Maryland headquarters.
— Brad Freitas (@NewsChopperBrad) March 30, 2015
— 99.1 WNEW (@WNEW) March 30, 2015
— WUSA9 (@wusa9) March 30, 2015
- From WNEW:
- Two people are injured Monday after an incident at the gate of National Security Agency headquarters, Fort Meade officials say.
- There are multiple reports that a shooting took place, but no officials have confirmed.
- A Ft. Meade employee tells WNEW that an announcement was made to employees that the incident was cleared, but the gate is closed.
- More than 30 UK Royal Air Force planes took to the skies for Rising Panther, Britain’s largest aerial exercises in more than a decade. Military sources confirmed the drills were in response to increased Russian presence around UK shores.
- “Russia has certainly painted the background to these exercises, though of course they are needed in any event,” a high-ranking source within the NATO member’s air force told The Sunday Express. The newspaper cited another source as saying that the war games would “show Vladimir Putin in no uncertain terms” that Britain is ready for any military confrontation.
- In the training missions, conducted earlier this month, Tornado strike aircraft arriving from Norway in a “mass” attack were intercepted by a team of Typhoon fighters from several locations in the North East of England and Scotland, co-ordinated through ground control.The exercises will now be conducted up to six times a year, said the RAF.“Due to our continuing commitment to operations overseas, this is the first time we have had the full spectrum of our capability operating together at the same time in a realistic, opposed, environment,” said Wing Commander Andy Coe through the official RAF News portal.
- A video emerged last month of Russia’s Tu-95 Bear bomber – capable of carrying a nuclear payload and disabling a Trident submarine – being shepherded by fighter jets off the coast of Cornwall.The Russian airplane did not enter UK skies, and Russia has stoutly defended its practice of testing its operational capacity around the world. Moscow did not confirm details of that particular sortie.UK Prime Minister David Cameron accused the Kremlin of “trying to make some sort of point.” But Foreign Secretary Philip Hammond has been less flippant about a perceived Russian threat.
“The rapid pace with which Russia is seeking to modernize her forces, combined with the increasingly aggressive stance of the Russian military, are all significant causes of concern,” he said this month. “Russia has the potential to pose the single greatest threat to our security.”
- Last week, Russia completed a surprise mass mobilization and drill of its Northern Fleet. This involved more than 110 aircraft, as well as 40,000 servicemen and over 40 ships.With tension rising between Moscow and the West, largely over events in Ukraine, the Kremlin has upped defense spending by a third this year, with a military budget of $50 billion dollars.
“Putin has spent five years getting his bomber boys and girls back up to speed – he is investing in honing their skills. We need to show him and the world we are still ready to take on a major league fixture,” Andrew Brookes, a retired RAF wing commander and current aviation expert told the Sunday Times.
- Despite allegations of the Russian military’s “aggressive stance,” the allies see no double-standards in massive military build-up of NATO troops right on the Russian border.
- Thousands of US troops and hundreds of tanks have poured into Estonia, Latvia and Lithuania in the past two months as part of an operation dubbed “Atlantic Resolve.” In February, 140 NATO vehicles and 1400 troops swept through Narva, a mere 300 meters from the Russian border.
- On March 21, a convoy of Strykers, US armored fighting vehicles, started its 1,100-mile tour through Estonia, Lithuania, Poland, Latvia, the Czech Republic to Germany under the operation dubbed ‘Dragoon Ride.’ The mission is a symbolic show of force and solidarity with Eastern European allies “that live closest to the Bear,” according to the commanding general of US Army Europe, Lt. Gen. Ben Hodges. US Army’s 2nd and 3rd Cavalry Regiments are taking part in the controversial “exercise.”
- Czech people were told not to throwtomatoes and eggs at the US military convoy, with the local media citing the laws of the land allowing up to three years in prison for“disorderly conduct” or “damage to property.”On Saturday, hundreds came out to protest against the US convoy passing through the Czech Republic and briefly clashed with pro-NATO demonstrators rallying nearby.
- Meanwhile, twelve American F-15C fighters jets with 200 troops from the 125th Fighter Wing of the Florida Air National Guard have been ordered to go to Europe in mid-April, the US Air Forces in Europe reported. Earlier, four US A-10 Thunderbolt II attack planes were taking part in drills in western Poland.
- Moscow has denounced NATO military build-up at the so-called “eastern flank,” warning that it will only increase tension in the region and have long-term negative consequences.
- “Today’s problem is not Russia’s military activity, but the increased military activity of NATO. Every other day new military exercises take place within the framework of The Readiness Action Plan of the alliance. The number of NATO drills has exceeded 200. The total number of tactical flights of the NATO air forces over the Baltic and Barents Seas, as well as bordering Russia regions last year exceeded 3,000, which is the double number of 2013 drills,” Russia’s envoy to NATO, Aleksandr Grushko, pointed out in an interview to Germany’s Das Erste TV on Wednesday.
- A Lugansk Region resident, whom Reuters cites as saying he saw evidence of a surface-to-air missile launched from rebel-held territory on the day MH17 was downed, told RT the news agency gave a false report of his interview.
- For its March report on the Malaysian Airlines flight MH17 tragedy Reuters talked to Pyotr Fedotov, a 58-year-old resident of the village Chervonniy Zhovten in the Lugansk Region of eastern Ukraine.
- “When interviewed by Reuters, Fedotov, the witness who described the ‘wiggling’ rocket, at first said on camera that it was fired from territory held by the Ukrainian army. Later, off camera, he said it was launched from a nearby rebel area. Asked why he had originally said the opposite, he said it was because he was afraid of the rebels,” the news agency said.
- RT contacted Fedetov who, after some persuasion, agreed to be filmed. He told RT that Reuters correspondent Anton Zverev was “less than accurate” with Fedetov’s testimony.
- “When we talked about the Boeing on camera, I explained everything as it was. The things that I allegedly said off-camera were just made up by the journalist. It’s all lies. Off-camera, we never discussed the Boeing,” Fedotov told RT.
- He added that the Reuters journalist contacted him after taking the interview, but never showed him a draft of the article. Instead he was asking whether Fedotov had got into trouble for speaking to him.
- “The journalist called me and asked if I was in trouble. I was really surprised. Why would I be in trouble if I told the truth? And then my friends told me in the article I was saying different things when the cameras were on and off. That’s when I understood why he was asking if I was in trouble,” the witness explained.
- “So it’s mere fantasy from the journalist or maybe he was doing it for his own benefit,” he added.
- RT’s request to Reuters for comments on the controversy and raw footage of Fedotov’s interview was not replied to as of publication of this article.
- Reuters’ reporting was not based solely on Fedotov’s testimony. The agency cited three other eyewitnesses from the village, but only Fedotov was cited as pointing to either side of the conflict as firing the missile. The report emphasized that the eyewitness accounts didn’t conclusively prove that the rocket they saw was the one that downed Flight MH17.
- The Malaysian Boeing 777 airliner was downed over eastern Ukraine on July 17 last year, killing 298 people on board. The incident became an instant controversy, with Ukraine and its Western backers accused rebel forces and Russia of being behind the downing.
- An investigation into the incident is being conducted by the Netherlands, but the preliminary report released last year didn’t point even to a kind of weapon used in the downing of the aircraft, only that an outside force destroyed it mid-air.
- Russia called not to jump to conclusions and made military radar data public which indicated the presence of Ukrainian surface-to-air batteries and warplanes in the area on the day of the Boeing shooting.
- Earlier Ukrainian media falsely claimed that Dutch investigators concluded that MH17 had been shot down by the rebels with a Buk missile, citing a report in the Dutch media that outlined the popular theory, but didn’t claim it to be proven. Dutch prosecutors told RT at the time that the investigation had not been concluded.
- Saudi-led international coalition may launch a ground operation in Houthi-controlled Yemen in the coming days, Yemeni Foreign Minister Riyad Yassin said on Sunday.
- In an interview with the CNN Yassin stressed the importance of an immediate launch of the ground operation in Yemen, stating that it can be started within few days.
- Earlier this day a video showing military trucks carrying tanks down highway in Saudi Arabian town of Jazan, which is just 20 miles away Yemeni border, was distributed by the media, the CNN included.
- On Thursday, Saudi Arabia military spokesman said that its forces and those of its allies were ready to launch ground operations inside Yemen if needed. And on Saturday, Yemeni Foreign Minister Riyad Yassin stressed he expected coalition troops to be in Yemen within days.
- Yemen is currently suffering from an armed confrontation between Houthi rebels and forces loyal to the country’s president Abd Rabbuh Mansur Hadi, who has fled the country amid hostilities.
- On Wednesday night, Saudi Arabia-led coalition launched airstrikes against Houthi positions in the country’s capital Sanaa following the Yemeni president’s request.
- United Arab Emirates, Kuwait, Bahrain, Qatar, Jordan, Morocco, Sudan, Pakistan, Egypt and Saudi Arabia take part in the coalition with intelligence, targeting and logistical support provided by the United States.
- Several hundred protesters gathered for an anti-NATO rally on Saturday in Prague, protesting against a US military convoy set to parade through the Czech Republic. The rally clashed with a pro-NATO demonstration held nearby.
- Footage by RT’s Ruptly agency shows anti-war activists carrying flags and placards with logos such as ‘Tanks? No Thanks!’ and ‘Stop US Army.’ At the same time, the pro-NATO demonstrators armed themselves with flags in support of the US military forces.
- Scuffles and arguments erupted between the two groups. There were no reports of violence and police made no arrests.
- The anti-NATO protesters have been speaking out against the bloc’s ‘Operation Dragoon Ride’ drills, which involve over 100 US Strykers stopping in a new European city every night.
- Anti-NATO activists have spoken out against the American military hardware, which is set to cross into the Czech Republic’s territory between March 29 and April 1. The vehicles will make their way back to a military base in the German city of Vilseck.
- The Strykers are usually transported by rail, but it was decided that they would travel through Eastern Europe to demonstrate a US commitment to NATO and its allies in the region.
03.29.15 – Jade Helm Exercises In Florida
- As we noted a week ago, Vladimir Putin’s calls for a Eurasian currency union clearly demonstrate that the Russian President is acutely aware of the fact that the unipolar world of the 1980s is long gone. Putin’s security council also made it clear this week that the Kremlin is well aware that the sole aim of US foreign policy is preserving Western hegemony via an implicit (and sometimes explicit) policy of containment aimed at perpetuating the idea of US exceptionalism. Moscow then took the rhetoric up a notch on Thursday, accusing the US of attempting to take the “mutual” out of “mutually assured destruction” (i.e. Moscow thinks Washington is trying to tip the nuclear power balance).
- Given all of this, we weren’t surprised to learn that Putin is now backing a Russian bid for membership in China’s Asian Infrastructure Investment Bank (for a summary of AIIB developments, see here). Here’s more via RT:
- Russia decided to apply to join the China-led Asian Infrastructure Investment Bank (AIIB), the country’s Deputy Prime Minister Igor Shuvalov said on Saturday.
“I would like to inform you about the decision to participate in the AIIB,” which was made by Russian President Vladimir Putin, Shuvalov said at the Boao Forum for Asia.
- Shuvalov added that Russia welcomes China’s Silk Road Economic Belt initiative and is happy about stepping up cooperation.
- “We are delighted to be able to step up cooperation in the format of the Eurasian Economic Union (EEU) and China…the free movement of goods and capital within the EEU brings economies of Europe and Asia closer. This is intertwined with the Silk Road Economic Belt initiative, launched by the Chinese leadership,” he said.
This comes after yet another US ally threw its support behind the venture last week, as South Korea finally conceded that not joining really wasn’t an option if Seoul wanted to maintain its influence in the region. More color via Bloomberg:
- South Korea “needs to play the active role it deserves in the international community that’s comparable to its economic status, and AIIB would be an important gateway to expand our financial and diplomatic arena,” the Sejong, South Korea-based ministry said Thursday. The country will officially become a founding member of the AIIB once other members agree, and when the national assembly approves, according to the e-mailed statement.
- Asia’s fourth-largest economy joins key U.S. allies from the U.K. to Germany and France in supporting China’s bid to create a new institution funding infrastructure projects in Asia. Japan is yet to make a decision on membership after the U.S. expressed concerns about the fund’s governance structure.
And then there’s The Netherlands, an official bid from Australia, and Brazil…
- Via Reuters:
- Russia, Australia and the Netherlands on Saturday became the latest three countries to say they plan to join the China-led Asian Infrastructure Investment Bank (AIIB), adding clout to an institution seen as enhancing China’s regional and global influence.
- The AIIB, seen as a challenge to existing institutions the World Bank and Asian Development Bank, has drawn a cool response from the United States, despite which European U.S. allies including Britain, France, Germany and Italy have already announced they would join the bank.
- Other countries such as Turkey and South Korea have also said they would join. Brazil, China’s top trading partner, said on Friday it would sign up and that there were no conditions set. “Brazil is very interested in participating in this initiative,” the office of President Dilma Rousseff said in a statement.
To make a long story short, everyone but the US and Japan are on board and Japan is seriously considering a bid. The question now is not whether de-dollarization is progressing or whether a shift away from US-dominated multinational institutions is in the offing (that horse, as one ADB official put it, has left the barn), but rather whether China will be aggressive about using the AIIB to begin a push towards yuan hegemony. Of course Beijing is playing down the idea that it will use the new development bank as a means of advancing China’s global footprint, but as we noted on Thursday, actions speak louder than words.
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