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. Today, JWR opines about the technical defaults of China’s Evergrande and Kaisa. (See the Economy & Finance section.)
Precious Metals:
Silver is the only precious metal likely to achieve persistent deficit over 2021-22 – Metals Focus.
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Christopher Aaron: Silver Price Forecast: A Major Low Is Close.
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Reported on Tuesday: Gold, silver gain as crude oil continues big rebound.
Economy & Finance:
For many years, western journalists have warned about China’s empty “ghost” cities. From the 1990s to present, millions of tons of concrete have been poured, building massive ghost cities in what is perhaps the largest malinvestment in world history. A large portion of that office and residential space still stands empty.
Back on November 11th, the editors of the Investment Watch blog asked: So did Evergrande default or not? U.S. media claims it didn’t yet, yet the narrative for the rest of the world is the complete opposite. In the same time frame, China’s Kaisa Group also missed some payments.
JWR’s Comments: Anyone attempting to sort all of this out has been met with lots of contradictory statements. Perhaps the financial press and even the credit reporting agencies are in a state of denial, because they recognize that the world’s financial system is teetering on the edge of a precipice. At least Fitch had the intestinal fortitude to downgrade Kaisa from “CCC” to “C”.
If this had been some small hedge fund headquartered in Duluth, then the financial press would not have hesitated to use the word default. But when they are talking about the technical default of two of China’s largest property developers with hundreds of billions at stake, the business journalists get very close-mouthed. What is really going on? Methinks that there is the recognition that the Chinese Communist Party (CCP) is in fact the lender of last resort for Evergrande, Kaisa, and their smaller competitors. If need be, they will crank up the Yuan printing press, rather than see a declaration of default. On December 6th, it was reported that Evergrande and Kaisa would be “restructuring”. So… When is a default not called a default? When it spells contagious doom for the global financial house of cards.
Update: I spotted this news, just last night: Evergrande has defaulted on its debt, Fitch Ratings says.
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Biden Threatens to Cut Russia Off From SWIFT Payment ‘Aggression’ Against Ukraine.
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