Here are the latest news items and commentary on current economics news, market trends, stocks, investing opportunities, and the precious metals markets. We also cover hedges, derivatives, and obscura. Most of these items are from the “tangibles heavy” contrarian perspective of SurvivalBlog’s Founder and Senior Editor, JWR [1]. Today, we look at continuing risks in the global derivatives market. (See the Derivatives section.)
Precious Metals:
We’ll start out with this piece by Christopher Aaron: Silver Price Forecast: Breakout Ahead This Fall [2].
o o o
Gold Seems Stuck At $1900. Are Inflationary Fears Exaggerated? [3]
Economy & Finance:
Biden and the Fed Are Creating an Inflation Crisis [4]
o o o
G-7 nations reach historic deal on global tax reform [5]. JWR’s Comments: Call me skeptical, but I think there is a “Great Unspoken” here — some sort of quid pro quo. Why would the European nations cave in on this without any bickering, unless there was some plum in it somewhere for them? I won’t be surprised to hear a year or two from now that this multinational tax harmonization was a precursor for the introduction of a Euro-American sovereign cryptocurrency. The other likely precursor would be bringing the value of the Euro and the U.S. Dollar close to parity, before a currency unification.
o o o
United Airlines Wants to Bring Back Supersonic Air Travel [6]
o o o
WorldNetDaily reports: U.S. Chamber of Commerce warns worker shortage getting worse [7].
o o o
PolitiFact: 90% of Biden Stimulus Spending Not Directly Related to COVID-19 [8]. Bottom line: It was a bail-out of failed Blue States. In the long term, it will be the Red States that bear the burden.
Commodities:
Phil B. sent us this: Global Food Prices Surge to Near Decade High, UN Says [9]
o o o
OilPrice News reports: ‘We’ll See $200 Oil”: Russia & OPEC Ministers Blast IEA’s Net Zero Plan [10]
o o oYes, the global microchip shortage is COVID’s fault. No, it won’t end any time so [11]on. (Thanks to reader C.B. for the link.)
Derivatives:
The $2.3 Quadrillion Global Timebomb [12]. This echoes what I’ve been warning in SurvivalBlog since 2006 [13]. Here is an excerpt:
“Just take the notorious Deutsche Bank (DB) that has outstanding derivatives of €37 trillion against total equity of €62 billion. Thus the derivatives position is 600X the equity.
Or to put it in a different way, the equity is 0.17% of the outstanding derivatives. So a loss of 0.2% on the derivatives will wipe the share capital and the bank out!
Now the DB risk managers will argue that the net derivatives position is just a fraction of the €37 trillion at €20 billion. That is of course nonsense as we saw with Archegos when a few banks let $30 billion over a weekend.
Derivatives can only be netted down on the basis that counterparties pay up. But in a real systemic crisis, counterparties will disappear and gross exposure will remain gross.”
o o o
The Financial Crisis Madness is Back! Risky Debt Derivatives Hit RECORD HIGH! [14]
o o o
NCUA Board Approves Derivatives Final Rule [15]
Forex & Cryptos:
Martin W. Armstrong: The Cyber Attacks Are to Force the End of Paper Money [16].
o o o
Russia Cuts Dollar Holdings From $119 Billion Wealth Fund Amid Sanctions [17].
o o o
Chinese central bank’s digital yuan given trial by lottery [18]
o o o
Why Bitcoin Price Could Be Destined To Retrace To $14K [19].
o o o
I found this linked at the Whatfinger.com [20] news aggregation site: Musk Breakup Tweets Bruise Bitcoin [21].
Tangibles Investing:
Price Increase Announced for Winchester and Browning Ammo [22]. JWR’s Comments: Given the much higher prices for component commodities including copper and lead, I do not expect ammo prices to ever drop back to 2019 levels. Congratulations to my readers who took my advice and stocked up, during the Trump Slump. That ammunition is now far better than cash in the bank. “Tangibles, tangibles, tangibles!”
o o o
It’s too expensive for builders to solve the housing shortage [23].
Provisos:
SurvivalBlog and its Editors are not paid investment counselors or advisers. Please see our Provisos [24] page for our detailed disclaimers.
News Tips:
Please send your economics and investing news tips to JWR [1]. (Either via e-mail or via our Contact form [25].) These are often especially relevant because they come from folks who closely watch specific markets. If you spot any news that would be of interest to SurvivalBlog readers, then please send it in. News items from local news outlets that are missed by the news wire services are especially appreciated. And it need not be only about commodities and precious metals. Thanks!