Socialism in the real world eekster...
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[h=1]This Is What The Death Of A Nation Looks Like: Venezuela Prepares For 720% Hyperinflation[/h]For citizens of Nicolas Maduro's socialist paradise the news is terrible, and getting worse with every passing day.
Yesterday, we reported that one year after our November 2014 forecast, Barclays has decided that Venezuela is now past the "point of no return", and a bankruptcy in 2016 will be "difficult to avoid." But while some may have thought that this dramatic impact, while welcome by the rest of OPEC and oil bulls around the globe, would only impact the government, the reality is that this latest hit means a total disintegration of the economy and will take the country's already staggering hyperinflation to previously unprecedented levels.
According to the latest IMF estimate, Venezuela’s consumer inflation, already the world’s highest, will triple this year to a level above all estimates from economists surveyed by Bloomberg.
This is because the IMF, which until recently had predicted "only" 204% inflation for Venezuela, already higher than the 140% consensus, revised its numbers and now sees a mindblowing 750% hyperinflation in 2016: this means that the average price of products and services will increase over eight times over the span of the next 12 months.
Bloomberg reports that inflation will surge to 720 percent in 2016 from 275 percent last year, according to a note published by the IMF’s Western Hemisphere Director, Alejandro Werner. That’s nearly quadruple the median 184 percent estimate from 12 economists surveyed by Bloomberg, and exceeding the highest forecast of 700 percent from Nomura Securities.
Venezuela’s central bank published economic statistics Jan. 15 for the first time in a year, confirming that inflation had reached triple digits and closed the third quarter at 141.5 percent on an annual basis. As of December 2014, the last time data was released, inflation was 68.5 percent.
It has gotten so surreal, that the local central bank accused websites that track the dollar’s street value of “destroying prices” and installing a “savage” form of capitalism in the country, adding that 60 percent of inflation was the result of currency manipulation.
Whatever the cause, the reality is that real inflation is even worse, and when charted, this is what the death of a sovereign nation looks as follows (this does not assume a sovereign bankruptcy; when that happens the hyperinflation will really take off):
And when described with words:
According to Bloomberg, Venezuela’s economy will shrink 8% this year following a 10% contraction last year, according to the IMF. While these forecasts are more pessimistic than economists’ median estimates for a contraction of 4.1%, in reality the Venezuela economy no longer exists, with all transactions now taking place in the gray or black markets, and the government apparatus effectively operating in a vacuum.
Which, as we noted yesterday, is good news for oil bulls: once the now inevitable sovereign bankruptcy hits, the resulting chaos and collapse in oil production in the political and power vacuum which may last for years, will serve as just the supply drop buffer the world oil market so desperately needs.
But while that may be good news for oil traders, there is no good news in any of the above for the long-suffering citizens of this "socialist paradise" which any minute now will be downgraded to its fair value of "socialist hell."
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[h=1]This Is What The Death Of A Nation Looks Like: Venezuela Prepares For 720% Hyperinflation[/h]For citizens of Nicolas Maduro's socialist paradise the news is terrible, and getting worse with every passing day.
Yesterday, we reported that one year after our November 2014 forecast, Barclays has decided that Venezuela is now past the "point of no return", and a bankruptcy in 2016 will be "difficult to avoid." But while some may have thought that this dramatic impact, while welcome by the rest of OPEC and oil bulls around the globe, would only impact the government, the reality is that this latest hit means a total disintegration of the economy and will take the country's already staggering hyperinflation to previously unprecedented levels.
According to the latest IMF estimate, Venezuela’s consumer inflation, already the world’s highest, will triple this year to a level above all estimates from economists surveyed by Bloomberg.
This is because the IMF, which until recently had predicted "only" 204% inflation for Venezuela, already higher than the 140% consensus, revised its numbers and now sees a mindblowing 750% hyperinflation in 2016: this means that the average price of products and services will increase over eight times over the span of the next 12 months.
Bloomberg reports that inflation will surge to 720 percent in 2016 from 275 percent last year, according to a note published by the IMF’s Western Hemisphere Director, Alejandro Werner. That’s nearly quadruple the median 184 percent estimate from 12 economists surveyed by Bloomberg, and exceeding the highest forecast of 700 percent from Nomura Securities.
Venezuela’s central bank published economic statistics Jan. 15 for the first time in a year, confirming that inflation had reached triple digits and closed the third quarter at 141.5 percent on an annual basis. As of December 2014, the last time data was released, inflation was 68.5 percent.
It has gotten so surreal, that the local central bank accused websites that track the dollar’s street value of “destroying prices” and installing a “savage” form of capitalism in the country, adding that 60 percent of inflation was the result of currency manipulation.
Whatever the cause, the reality is that real inflation is even worse, and when charted, this is what the death of a sovereign nation looks as follows (this does not assume a sovereign bankruptcy; when that happens the hyperinflation will really take off):
And when described with words:
Spiking prices and widespread shortages for even staples have driven discontent in Venezuela. That helped spur the opposition to gain control of Congress for the first time in a decade as President Nicolas Maduro attempts to turn the tide of what he has deemed an “economic emergency.”
“A lack of hard currency has led to scarcity of intermediate goods and to widespread shortages of essential goods — including food — exacting a tragic toll,” Werner said. “Prices continue to spiral out of control.”
Actually, the hard currency exists, because while locals may not have access to dollars, they certainly could have converted their now totally worthless currency into gold, thus not only preserving but boosting their purchasing power relative to the local stock market which, as we showed previously, has also generated negative returns relative to the rampaging hyperinflation.“A lack of hard currency has led to scarcity of intermediate goods and to widespread shortages of essential goods — including food — exacting a tragic toll,” Werner said. “Prices continue to spiral out of control.”
According to Bloomberg, Venezuela’s economy will shrink 8% this year following a 10% contraction last year, according to the IMF. While these forecasts are more pessimistic than economists’ median estimates for a contraction of 4.1%, in reality the Venezuela economy no longer exists, with all transactions now taking place in the gray or black markets, and the government apparatus effectively operating in a vacuum.
Which, as we noted yesterday, is good news for oil bulls: once the now inevitable sovereign bankruptcy hits, the resulting chaos and collapse in oil production in the political and power vacuum which may last for years, will serve as just the supply drop buffer the world oil market so desperately needs.
But while that may be good news for oil traders, there is no good news in any of the above for the long-suffering citizens of this "socialist paradise" which any minute now will be downgraded to its fair value of "socialist hell."
All South American nations are disasterzones Tiz, no matter what they do... they fuk it up.
Capitalist loving Argentina being the other side of the coin
South America is a corrupt idiots paradise
Cuba has survived quite well, considering the pressure it has been under for 50 years
(miles better then Haiti or the Dominican Republic)
Capitalist loving Argentina being the other side of the coin
South America is a corrupt idiots paradise
Cuba has survived quite well, considering the pressure it has been under for 50 years
(miles better then Haiti or the Dominican Republic)
Foreign Economic influence has a detrimental effect on most second tier nations
The poster child for this is South East Asia which was a gigantic warzone while the USA was involved
The USA leaves(A very rare totally 100% exit) and within 15 years South East Asia had sorted itself out, even getting rid of the Khmer Rouge nutters, and peace reigned forever after in South East Asia because no-one was bankrolling instability anymore
The modern South East Asia is the Middle east where constant interference and foreign bankrolling of various factions generates constant conflict
The poster child for this is South East Asia which was a gigantic warzone while the USA was involved
The USA leaves(A very rare totally 100% exit) and within 15 years South East Asia had sorted itself out, even getting rid of the Khmer Rouge nutters, and peace reigned forever after in South East Asia because no-one was bankrolling instability anymore
The modern South East Asia is the Middle east where constant interference and foreign bankrolling of various factions generates constant conflict
Here's a chap I just read about, never heard of him before either (perhaps because he could be a REAL philanthropist and not a corporate wooden horse?)
North Face co-founder Douglas Tompkins' widow offers land to Chile
http://www.bbc.co.uk/news/world-latin-america-35393932
Profile: Douglas Tompkins, billionaire-turned-conservationist
http://www.bbc.co.uk/news/world-latin-america-35048806
Doug Tompkins
There’s no doubt whatsoever that there’s no future in capitalism. It’s a relatively recent phenomenon. It’s probably no more than 500 years old, and it’s demonstrating over and over again that it is destroying the world. We are going to have to rethink that, and I wouldn’t even suggest that we are talking about other failed systems such as socialism and communism. We should take the best of socialism, the best of capitalism, and form new economic technologies that are going to sustain nature and not destroy it. I don’t think capitalism can survive: It’s built on the premise of endless growth, and anybody in their right mind knows you cannot grow endlessly.
http://www.earthisland.org/journal/index.php/eij/article/doug_tompkins/
North Face co-founder Douglas Tompkins' widow offers land to Chile
http://www.bbc.co.uk/news/world-latin-america-35393932
Profile: Douglas Tompkins, billionaire-turned-conservationist
http://www.bbc.co.uk/news/world-latin-america-35048806
Doug Tompkins
There’s no doubt whatsoever that there’s no future in capitalism. It’s a relatively recent phenomenon. It’s probably no more than 500 years old, and it’s demonstrating over and over again that it is destroying the world. We are going to have to rethink that, and I wouldn’t even suggest that we are talking about other failed systems such as socialism and communism. We should take the best of socialism, the best of capitalism, and form new economic technologies that are going to sustain nature and not destroy it. I don’t think capitalism can survive: It’s built on the premise of endless growth, and anybody in their right mind knows you cannot grow endlessly.
http://www.earthisland.org/journal/index.php/eij/article/doug_tompkins/
Again I repeat.. Got gold?
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[h=1]Something Snapped At The Comex[/h]There had been an eerie silence at the Comex in recent weeks, where after registered gold tumbled to a record 120K ounces in early December nothing much had changed, an in fact the total amount of physical deliverable aka "registered" gold, had stayed practically unchanged at 275K ounces all throughout January.
Until today, when in the latest update from the Comex vault, we learn that a whopping 201,345 ounces of Registered gold had been de-warranted at the owner's request, and shifted into the Eligible category, reducing the total mount of Comex Registered gold by 73%, from 275K to just 74K overnight.
This took place as a result of adjustments at vaults belonging to Scotia Mocatta (-95K ounces), HSBC (-85K ounces), and Brink's (-21K ounces).
Meanwhile, the aggregate gold open interest remained largely unchanged, at just about 40 million ounces.
This means that the ratio which we have been carefully tracking since August 2015 when it first blew out, namely the "coverage ratio" that shows the total number of gold claims relative to the physical gold that "backs" such potential delivery requests, - or simply said physical-to-paper gold dilution - just exploded.
As the chart below shows - which is disturbing without any further context - the 40 million ounces of gold open interest and the record low 74 thousandounces of registered gold imply that as of Monday's close there was a whopping 542 ounces in potential paper claims to every ounces of physical gold. Call it a 0.2% dilution factor.
To be sure, skeptics have suggested that depending on how one reads the delivery contract, the Comex can simply yank from the pool of eligible gold and use it to satisfy delivery requests despite the explicit permission (or lack thereof) of the gold's owner.
Still, the reality that there are just two tons of gold to satisfy delivery requsts based on accepted protocols should in itself be troubling, ignoring the latent question why so many owners of physical gold are de-warranting their holdings.
Considering there are now less than 74,000 ounces of Registered gold at the Comex, or just over 2 tonnes, we may be about to find out how right, or wrong, the skeptics are, because at this rate the combined Registered vault gold could be depleted as soon as the next delivery request is satisfied. Or isn't.
Average: Your rating: None Average: 4.9 (59 votes)
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[h=1]Something Snapped At The Comex[/h]There had been an eerie silence at the Comex in recent weeks, where after registered gold tumbled to a record 120K ounces in early December nothing much had changed, an in fact the total amount of physical deliverable aka "registered" gold, had stayed practically unchanged at 275K ounces all throughout January.
Until today, when in the latest update from the Comex vault, we learn that a whopping 201,345 ounces of Registered gold had been de-warranted at the owner's request, and shifted into the Eligible category, reducing the total mount of Comex Registered gold by 73%, from 275K to just 74K overnight.
This took place as a result of adjustments at vaults belonging to Scotia Mocatta (-95K ounces), HSBC (-85K ounces), and Brink's (-21K ounces).
Meanwhile, the aggregate gold open interest remained largely unchanged, at just about 40 million ounces.
This means that the ratio which we have been carefully tracking since August 2015 when it first blew out, namely the "coverage ratio" that shows the total number of gold claims relative to the physical gold that "backs" such potential delivery requests, - or simply said physical-to-paper gold dilution - just exploded.
As the chart below shows - which is disturbing without any further context - the 40 million ounces of gold open interest and the record low 74 thousandounces of registered gold imply that as of Monday's close there was a whopping 542 ounces in potential paper claims to every ounces of physical gold. Call it a 0.2% dilution factor.
To be sure, skeptics have suggested that depending on how one reads the delivery contract, the Comex can simply yank from the pool of eligible gold and use it to satisfy delivery requests despite the explicit permission (or lack thereof) of the gold's owner.
Still, the reality that there are just two tons of gold to satisfy delivery requsts based on accepted protocols should in itself be troubling, ignoring the latent question why so many owners of physical gold are de-warranting their holdings.
Considering there are now less than 74,000 ounces of Registered gold at the Comex, or just over 2 tonnes, we may be about to find out how right, or wrong, the skeptics are, because at this rate the combined Registered vault gold could be depleted as soon as the next delivery request is satisfied. Or isn't.
Average: Your rating: None Average: 4.9 (59 votes)
They need inflation for gold to really prosper and Going Japanese is bad for inflation.
The current instability should do gold no harm though
In the good ol' days we had lots of socialist governments and policies to give inflation a boost, high taxes for wealth redistribution, wage inflation, printing money etc
All gone now, it's just a sea of revenue backed Liberal Clones who pander to the global elite
The current instability should do gold no harm though
In the good ol' days we had lots of socialist governments and policies to give inflation a boost, high taxes for wealth redistribution, wage inflation, printing money etc
All gone now, it's just a sea of revenue backed Liberal Clones who pander to the global elite
Nah gold is more of a gloom and doom metal than anything
since 2000 tech bubble peak when we started down this path of fed bubble mania/western world tries to print and bail itself out of every problem.. gold has had huge gains vs every single currency worldwide ... Priced in usd my guess is it will begin to take off again here soon.. All their policies have created more long term problems which is good for gold..
heres a chart showing gold vs global currencies since 2000
http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/01/26/gold2.gif
since 2000 tech bubble peak when we started down this path of fed bubble mania/western world tries to print and bail itself out of every problem.. gold has had huge gains vs every single currency worldwide ... Priced in usd my guess is it will begin to take off again here soon.. All their policies have created more long term problems which is good for gold..
heres a chart showing gold vs global currencies since 2000
http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/01/26/gold2.gif
Fed basically says oops we didn't see this weakness coming..the economic slowdown.. It's real.. Market tanks..
those hoping for qe fairy to save us will be disappointed ... Like 2000 and 2007 Fed cuts/support comes as we tank.. Prob this time we almost already at zero and in hyper accommodative policy.. Will be interesting.. Way to go Ben!
those hoping for qe fairy to save us will be disappointed ... Like 2000 and 2007 Fed cuts/support comes as we tank.. Prob this time we almost already at zero and in hyper accommodative policy.. Will be interesting.. Way to go Ben!
Remember the old pre-gold-rush period in 2000?(A nice cherry picking year btw)
Money was flowing, commodities were cheap, debt was easy, gold was ignored and property was a doddle.
Those days are gone tiz, everyone is fooked and the capitalist ponzi scheme has nothing left to squeeze, every market is dry, squeezed out
Money was flowing, commodities were cheap, debt was easy, gold was ignored and property was a doddle.
Those days are gone tiz, everyone is fooked and the capitalist ponzi scheme has nothing left to squeeze, every market is dry, squeezed out
Pre 2000 us had a balanced budget if only for a little bit.. banks were in great shape.. housing wasn't a bubble and affordable.. People actually saved some money and weren't in debt up to their eyeballs...Stock market and tech just got way way ahead of itself... Fed allowed it to go on too long...
than with that bust all the bad monetary habits began.. Mega war campaign.. Heavy debtors.. Banksters run wild.. Housing bubbles.. Fed promoting it all and bailing out the people who are the probelm..
therefore gold the safe haven and a place to store value when the system is bankrupt has gone up..
than with that bust all the bad monetary habits began.. Mega war campaign.. Heavy debtors.. Banksters run wild.. Housing bubbles.. Fed promoting it all and bailing out the people who are the probelm..
therefore gold the safe haven and a place to store value when the system is bankrupt has gone up..
Oil bounce continues 27 and change to 35 now... If I'm wrong about global recession and they manage to kee the ship afloat for
longer that's likely it for the oil pain...
cant my see oil getting below 20s unless mega depression/recession hits..
Oil much closer to the to the bottom than equities IMO..
will ll see if this all a head fake before they next leg down..
longer that's likely it for the oil pain...
cant my see oil getting below 20s unless mega depression/recession hits..
Oil much closer to the to the bottom than equities IMO..
will ll see if this all a head fake before they next leg down..
I for one can see oil sitting below 30 for a very long time, there are now more people employed by solar companies in the USA then the oil industry. Iran is warming up for a return to the world market, backed by Oil Majors, Iran could add another 1mmbpd to the glut, the question is how OPEC will react on this ? India could potentially become the one of largest power producers with 300 days of sun a year to harvest photovolic energy. According to the EIA’s (U.S. Energy Information Administration) Weekly Petroleum Status Report, US weekly crude oil production slightly fell by 0.01 MMbpd (million barrels per day) to settle at 9.2 MMbpd for the week ended January 22, 2016. The current crude oil production levels were just 0.08% higher than the production levels in the same period last year.
~the crude oil inventory rise is mostly derived from lower crude oil demand, as the fall in production levels didn’t contribute to the inventory build
~the crude oil inventory rise is mostly derived from lower crude oil demand, as the fall in production levels didn’t contribute to the inventory build
Lots of the oil being pumped now is uneconomical at 30... Most just keep pumping for the cash flow hoping to survive and costs to shut down/start up huge.. Can't just flip off spigots when market crashes and turn back in when it recovers .. Not how it works..
demand is now moving up with the depressed prices in recent data.. As always happens..
fair value for oil these days when the economy is ok shape likely in 50-70 region.. Markets are going to get distorted at times to both sides.. Speculation and heavy debting causing the fracking boom.. Saudi wanting to protect market share etc... Is causing lots of volatility..
also the opec nations can't handle sub 30 for a long time.. Part of spike today was them starting to talk about cuts..
Only way sub 30 long time happening is mega global depression
demand is now moving up with the depressed prices in recent data.. As always happens..
fair value for oil these days when the economy is ok shape likely in 50-70 region.. Markets are going to get distorted at times to both sides.. Speculation and heavy debting causing the fracking boom.. Saudi wanting to protect market share etc... Is causing lots of volatility..
also the opec nations can't handle sub 30 for a long time.. Part of spike today was them starting to talk about cuts..
Only way sub 30 long time happening is mega global depression
Here's some very detailed analysis of the recent data not the one singular data point you cite..
http://oilprice.com/Energy/Oil-Pric...ng-Faster-Than-IEA-Would-Have-Us-Believe.html
http://oilprice.com/Energy/Oil-Pric...ng-Faster-Than-IEA-Would-Have-Us-Believe.html
It's just like anything after a boom 100+ oil there is usually a bust happening now.. That's the new world we live in .. Boom/bust mania fueled by easy debt that causing massive malinvestment.. Zirp/qe mania funneled a lot of bad money into the fracking boom..
also on demand side/alt energy the world population is still exploding upwards and energy demands continue to soar globally.. At sub 30 dollars there is pretty much nothing out there that can compete economically.. In addition many of the current producers can't survive at those prices either..
just seems totally illogical in a balanced market + non recessionary global economy that anywhere near 30 dollar oil makes sense.. Maybe I'm wrong..
also on demand side/alt energy the world population is still exploding upwards and energy demands continue to soar globally.. At sub 30 dollars there is pretty much nothing out there that can compete economically.. In addition many of the current producers can't survive at those prices either..
just seems totally illogical in a balanced market + non recessionary global economy that anywhere near 30 dollar oil makes sense.. Maybe I'm wrong..
just seems totally illogical in a balanced market
Tizdooms deflationary death spiral?
The market isn't really balanced now capitalism is global, don't forget most people are pretty poor and do nothing more than pay bills
The only big driver left is borrowed money... and the Fed just gave that market a kick in the ass
Tizdooms deflationary death spiral?
The market isn't really balanced now capitalism is global, don't forget most people are pretty poor and do nothing more than pay bills
The only big driver left is borrowed money... and the Fed just gave that market a kick in the ass
