A RESOURCE

 

I am closing my blog seemorerocks.is, so have migrated many of the the more important items over to my Substack, 

This relates to articles dating from 2021-23 which should act as a review. 

As many items have been removed from this blog in the last couple of years I have provided links to the items.

The insanity of the covid-19 plandemic in New Zealand - 2020-23

Rubbery Polymer Clots Grow Outside Of The Body And Were Found In a Deceased Child

The New Zealand economy during the covid pandemic

Is the Deagel Report’s 2025 Depopulation Nightmare Unfolding?

CLIMATE CHANGE: A REASESSMENT IN THE CONTEXT OF THE LAST 3 YEARS

Australian dollar plunges

Of this in NZ media not a peep.

Aussie Dollar Plunges As Inflation Slumps To Record Low

ZeroHedge,

26 April, 2016

Despite surging commodity prices in China - which must be real and represent demand growth and price increases, right? - Aussie core inflation slowed to the weakest on record as headline prices unexpectedly fell last quarter (CPI -0.2%). RBA Rate-cut odds tripled instantly sending AUD down over 1.2% (its biggest drop in 2 months). Perhaps, just perhaps, that collossal credit injection in Q1 via China did not make it into the AsiaPac economy after all and merely fueled a speculative frenzy in commodities that merely "looks" like a recovery?

The Reserve Bank of Australia looks at two core inflation measures -- trimmed mean and weighted median -- and Wednesday’s report showed:

• Trimmed mean CPI rose 0.2% QoQ vs. median forecast of 0.5%
• Weighted median CPI gained 0.1% QoQ vs. median forecast of 0.5%
• CPI fell 0.2%, first decline since final quarter of 2008 vs. median forecast 0.2% rise

This does not look like a recovering Chinese economy is helping...

Which drove traders to bet on a rate-cut...

• *RBA MAY RATE CUT ODDS RISE TO 40% FROM 14% YDAY, FUTURES SHOW

“A pre-emptive May cut is surely now a real possibility,” said Gareth Berry, a foreign-exchange and rates strategist in Singapore at Macquarie Bank Ltd. “At the latest, an August cut is now inevitable. That spells the end of this three-month old Australian dollar rebound, and the downtrend can now resume in earnest.”

“Whereas the RBA was previously thinking that low inflation would allow it to cut interest rates if demand faltered, it is now clear that low inflation itself is the problem,” said Paul Dales, chief economist for Australia and New Zealand at Capital Economics. “An inflation-targeting bank like the RBA can’t ignore such a big undershoot of underlying inflation.”

As Goldman notes,

We believe the RBA will now be forced to lower their inflation forecasts in the May Statement of Monetary Policy, not just due to the low CPI data for 1Q16 but also in response to the rise in the A$ through 2016 which will further challenge the RBA’s assessment that inflation will accelerate to well within the target band due to rising tradeable inflation. From our perspective the inflation data is key evidence that excess capacity exists in both product and labour markets and this is supported by private sector wages expanding at record lows and the recent erosion of surveyed measures of inflation expectations (see here). In concert with our analysis that the reported strength in GDP growth in 4Q15 overstates the underlying pulse of the domestic economy (see here) and evidence that economic activity is slowing in 2016 across a broad range of indicators (including investment intentions, retail sales, finance approvals, tourist arrivals, housing turnover, consumer confidence).

 

Moreover, the RBA clearly established the criteria required for them to act upon their easing bias; weak inflation, slowing employment growth and a currency at a level that challenges the RBA assumptions of future economic growth. On all three criteria the evidence supports the case to ease policy in May. Should the RBA choose to remain on hold in May the RBA will be more than aware that the calendar quickly becomes crowded by a likely election campaign through May to early July (the RBA’s July meeting is just 3 days post the likely date of the federal election) and the leadership transition at the RBA scheduled for September. History has shown that since 1990 the RBA has not been overly influenced by political and leadership events. The RBA has eased on 3 occasions and hiked once in the month of or the month prior to a federal election and Governor Stevens continued a tightening cycle soon after his appointment to Governor. Nevertheless, it would seem lmore likely that the next widow for the RBA would be late in 2016.

 

While it is still possible that the RBA holds out hope that the rally in commodity prices might continue and that the US Federal Reserve turns significantly more hawkish, we continue to believe that the course of least regret is for the RBA to follow its inflation targeting framework and ease in May, where we continue to forecast a 25bp reduction. Nevertheless, following the firming of the possibility of an early federal election in July we have decided to move our final forecast rate cut to November 2016 (previously July). Our A$ forecast is under review.

*  *  *

Makes one wonder if any of this bounce in Chinese industrial metals is real at all...

Charts: Bloomberg

Meanwhile more news of NZ's "rockstar" economy

NZ: Annual trade deficit hits 7-year high

The annual trade deficit has hit its highest level in nearly seven years, with sharp falls in dairy products.

Annual imports have jumped to more than $52 billion. Photo: 123f

Official figures show imports exceeded exports to the tune of $3.8 billion in the year to March, the largest shortfall since the $4.1b registered in April 2009.

Exports edged down to $48.8b, with sharp falls in dairy products and oil offset by gains in meat and fruit.

In contrast, imports jumped 3 percent to $52.7b.

Despite slumping oil prices, firms spent more on foreign-made machinery and equipment, while consumers bought more cars, furniture and toys and games.

China remained the country's top trade partner for both exports and imports, followed by Australia.

Analysts expect the deficit to widen further on the back of lower dairy prices, recent weakness in meat exports, and solid household demand for imports.

Discussing Russia's economy

CrossTalk: Russia's Econ

To date 2015 is turning into a difficult year for the Russian economy. The dramatic drop in oil prices has halved the value of the ruble and stoked inflation. At this point the consensus is Russia will experience a short but sharp recession. Is the government doing the things?

CrossTalking with Yaroslav Lissovolik and David Gray.

Inflation in Russia

From a fairly dubious source for stories about Russia. I would prefer to see what people on the ground in Moscow are saying.

What is beyond contention, however, is that America and the West is waging economic war against Russia.

What is equally true is that this is not the Soviet Union - something that may be a negative as well as a positive.

I would appreciate comment from anyone in Russia.

Food Prices Surge As Panicked Russians Empty Their Bank Machines Of Cash

A woman eats a plate of boiled buckwheat.

Business Insider,

12 December, 2014

Inflation is rampant in Russia, and the collapsing value of the ruble has triggered panic-buying and food-hoarding among ordinary Russians.

Food prices in Russia will have shot up by 25% over 2014 as Russians’ confidence in their country’s future starts to evaporate, according to the Association of Retail Companies (ACORT).

The prices are reacting to preemptive food hoarding by worried Russians, our sources say. It’s not that there’s an actual shortage of food. Rather, the price of food is so unstable that Russians are worried that their neighbours are going to start hoarding it — so they’re hoarding it first.

One Muscovite told Business Insider that ATMs in the city are being routinely emptied by people eager to withdraw as much cash as they can, either to change into dollars or purchase goods with before the ruble’s value falls even further. He said the mood there is unlike anything he had ever seen, “including during the crash of 2008-9″.

The prices of pork and sugar have risen by 25%, while the price of fish and seafood has also leapt up by more than 15%, according to Russian newspaper Nezavisimaya Gazeta.

The latest data from the official Russian statistics service Rosstat shows that in the first week in December the price of Russian staples continued to rise. Buckwheat leapt up by 5.7% while eggs, tomatoes, cucumbers, and cabbages rose by between 4.3 and 6.2% over seven days.

Food prices are helping to drive headline inflation in the country even higher, hitting 9.4% last month according to the Russian central bank.

While the press has been focused on a leap in Russian purchases of high-end cars — a not-terribly-surprising trend considering that the falling ruble effectively allows rich Russians with large stacks of dollars to purchase them at a discount — it has overlooked the real story:

Buckwheat.

Buckwheat is something of a leading indicator of Russian consumer sentiment. The grain is used to make bread, porridge, pancakes, and local delicacy cutlets. Fears over the future can (and have) resulted in panic buying. Indeed, such is the concern that the Russian state has frequently considered building up strategic buckwheat reserves to try to mitigate acute shortages.

Yet these efforts have not been sufficient to hold down the price of the commodity, which rocketed by 65% this year.

And it’s having a massive impact on Russians’ confidence in the future. A study conducted by VTsIOM in late November found that only 51% of those surveyed felt confident in the future, compared to 58% in the third quarter of the year and 61% between April and June. Around 7% of respondents said that they could no longer tolerate the situation.

The dollar versus the ruble.

Falling confidence and sharply rising prices of staples could be a worrying sign that Russians are losing faith in the authorities’ ability to protect the value of the currency. The central bank hiked interest rates again on Thursday by 1%, following a 1.5% increase at the end of October as it seeks to halt further ruble falls. However, following the announcement, the ruble shifted lower again, with $US1 now buying just under 56 rubles compared to 33 at the start of the year.

The price rises are predominantly being driven by a 40% collapse in the ruble, according to ACORT Executive Director Andrey Karpov. Russia imports a significant amount of its food from abroad and this has become much more expensive due to a combination of the falling ruble and tit-for-tat sanctions imposed by the Russian government against imports from the European Union.

In 2013, Russia imported $US6.7 billion (£4.3 billion) worth of meat and meat products in total, with more than 20% purchased from countries now on the blacklist.

With no end in sight to the sanctions and inflation continuing to rise, it seems the Russian consumer is set to be squeezed even more over the next few months. If sentiment on the street turns even more against the ruble, the central bank may have a much harder task on its hands than it currently expects. 

Argentina

Argentina's Modest Proposal: Buy Bonds Or Go To Jail

Zero Hedge,

11 May, 2013

While Argentina's recent extraordinary attempts at central planning have been widely documented, ranging from freezing supermarket prices in a (failed) attempt to control inflation, to banning advertising in a (failed) attempt to weaken the private media, so far nothing has worked at stabilizing the economy and preventing the collapse in the domestic currency (if leading to such humorous viral videos as #mequieroir). Ironically, this is both good and bad news. It is good news because as we showed two days ago, even the ludicrous speed rise in the Nikkei has been a snail's pace compared to that other unknown "Nation 1." We can now reveal that while Japan is Nation 2, Nation 1 is that inflationary basket 

case Argentina, and specifically its Merval stock index.

Of course, the surge in the stock index is nothing more than a reflection of the ongoing collapse in the economy, which in turn is reflected not by the official, government controlled exchange of the ARS (just try buying dollars at the official rate) which closed the week at a rate of 5.24 to the dollar, then certainly the black market one, showing just how weak the currency is for those who actually want to buy dollars in Argentina, which just hit a record high of over 10. In fact, as the chart below shows, when one factors in the 80% collapse in the real, unofficial 

exchange rate over the same time period, the stock index has barely kept up.

Furthermore, it is merely a time before the runaway inflation pushes corporate input costs so high, that not even the rise in the stock market can preserve wealth.

Still think soaring stock prices in the New Normal are an indication of anything but a collapse in the economy manifested by either current, or discounted, plunges in the purchasing power of a sovereign's currency?

And just to make sure there is no confusion, the full context here is that while the rest of the G-0 world at least has each other's central banks to fund mutual debt purchases, Argentina has been locked out from the global community for a variety of reasons. And yet, like any other Keynesian follower, the nation is desperate to borrow from the future in order to grow government now. However, without access to capital markets how will the country with the imploding currency do this?

Simple. 

Argentina's president Kirchner, a keen observer of recent events in Cyprus, has figured out a way to kill two birds with one stone, namely attempt to put an end to tax evasion, and fund the capex of the recently nationalized state oil company YPF (now that its former owner, Spainish Repsol, is less than keen to keep investing in its former Argentine subsidiary). To do that she will present the local tax-evading population (pretty much anyone with any disposable income and savings) with a simple choice: buy a 4% bond to fund YPF "growth" or go to prison.

From Bloomberg:

President Cristina Fernandez de Kirchner wants tax evaders hiding about $160 billion in dollars to help finance Argentina’s oil-producing ambitions. Her offer: Buy a 4 percent bond or face the prospect of jail time.

The tax authority announced the plan May 7, highlighting its information-sharing agreements with 40 nations and warning Argentines who don’t use the three-month amnesty window that they risk fines or arrest. Evaders have two options for their cash and the only one paying interest will be a dollar bond due in 2016 to finance YPF SA (YPF), the state oil company. The 4 percent rate is a third the average 13.85 yield on Argentine debt and less than the 4.6 percent in emerging markets.

Speaking of YPF's growth, we made it very clear a year ago when we reported on the latest "banana republic" nationalization of formerly efficient and private assets, that it was only a matter of time before an overarching government's epic misallocation of resources, leads to epic inefficiencies, and a liquidity scramble. It is not rocket science: only hardcore socialists can harbor any hope that a government is efficient at allocating capital, especially when one nets out the 50% or so in corruption "externalities" that are incurred along the way, be it in Argentina or the US. Once again we were right:

A year after seizing YPF, Fernandez is funneling more money into the nation’s energy industry as the government struggles to boost production from the world’s third-biggest shale oil reserves. With Argentina already committed to pumping $2 billion of central bank reserves into a fund for energy investments and the highest borrowing costs in emerging markets keeping it from issuing debt abroad, the government is eyeing the billions of undeclared dollars that Argentines hold to help shore up reserves that have dwindled to a six-year low.

“The authorities need to take steps to open up external resources in the energy sector and to finance the Treasury and local governments,” said Sebastian Vargas, a New York-based analyst at Barclays Plc. “The amnesty is not negative for markets but it’s disappointing because they do little to solve balance-of-payment difficulties.”

There are some cynics who will say what Argentina is doing on a semi-voluntary basis is what that other bastion of wealth expropriation, the European Union, did to Cypriot savers. They will be right of course, if only for the simple reason that Argentina does not know precisely where all the "illegal" tax-evading, offshore (and onshore) capital is held.

Argentines have at least $160 billion of undeclared funds, equal to about 36 percent of the nation’s gross domestic product, and $40 billion are hidden inside the country, Vice Economy Minister Axel Kicillof said at the May 7 press conference where he and other senior officials presented the amnesty.

 

Many Argentines hide assets to avoid a 35 percent income tax and a levy of as much as 1.25 percent on their personal wealth. Undeclared assets are also beyond the reach of the government, which in 1989 seized bank certificates of deposit in exchange for bonds and in 2002 converted dollar deposits into pesos.

In other words, unlike in Europe, where Russia's 'tax-efficient' billionaires had a bright shining red light blinking over Cyprus saying "we are here" (a light that is now blinking over Luxembourg, Lichtenstein and of course, Switzerland, not to mention other global offshore tax havens), in Argentina the government first has to find the money. Which is why its initial recourse is the conventional one: simple threats.

Those joining the plan would be immune from prosecution and won’t be forced to pay past-due taxes, said Ricardo Echegaray, head of the tax agency. The search for evaders, which includes cross-checking information on income and personal wealth reports with purchases of real estate and cars, foreign travel and credit card purchases, will continue, Echegaray said.

 

“You better bring your dollars back because we will find you,” Echegaray said at the May 7 press conference. Last year, tax collection in South America’s second-largest economy rose to 37 percent of gross domestic product from 16.5 percent in 2002, according to Economy Ministry data.

 

Former Vice Economy Minister Roberto Feletti, who is now a congressman for Fernandez’s Victory Front alliance, said the government expects to attract at least $5 billion under the program.

Good luck with that - the only thing Argentina will succeed is in forcing tax evaders to hide their money even deeper into the global shadow economy.

The amnesty program will probably fail because its benefits don’t outweigh investors’ mistrust of the government’s ability to rein in inflation, cut spending, attract foreign investment and restore confidence in the currency, according to Moody’s Analytics Inc.

 

“The problem the government faces is lack of credibility and lack of confidence,” Juan Pablo Fuentes, an economist at Moody’s, said in a telephone interview from West Chester, Pennsylvania. “That money is potentially there, it could come back eventually, but there needs to be a lot of changes. These bonds are not going to have any real impact.”

And in the meantime YPF, which can't afford to wait on capital infusion, will have less and less cash with which to operate and grow, until finally it is mothballed, dimming the one bright light in Argentina's economy, and leading to an even faster economic contraction, even more rapid devaluation of the Peso, if only in the black market of course, and an ever faster surge in inflation.

But at least the stock market will be off the charts: sounds like a fair exchange for yet another economy sent to an early grave by central planners.

Japanese buy up gold

Japanese consumers are poised to become net buyers of gold for the first time in eight years

Japanese Seek Refuge in Bullion as Yen Slumps, Inflation Looms

Japanese consumers are poised to become net buyers of gold for the first time in eight years as the yen’s decline and looming inflation drive them to seek refuge in bullion, according to Standard Bank Plc.

Bloomberg,

26 April, 2013

Net sales of gold bars and coins by Japanese individuals shrank to 10.1 metric tons in 2012, the smallest amount since 2005, data from the World Gold Council show. A surge in purchases this month and the chance to buy after bullion slumped into a bear market foreshadow a turnaround in 2013, said Bruce Ikemizu, Standard Bank’s head of commodities trading in Tokyo.

The currency has depreciated 13 percent against the dollar this year and is trading near a four-year low after the central bank’s pursuit of unprecedented monetary easing to end deflation was unopposed by Group of 20 nations. Inflation may rise above 1 percent in the 12 months starting April 2014 and approach a 2 percent target as early as that year, Bank of Japan (8301) policy board member Ryuzo Miyao said April 18.

“The time has come for Japanese to buy gold with the government trying to engineer inflation,” Ikemizu, who has traded commodities for almost three decades, said in an interview in Tokyo yesterday. “Retail investors are turning from sellers to buyers of bullion.”

Japanese households have 1,547 trillion yen ($15.6 trillion) in financial assets, according BOJ data. They purchased 22.9 tons of gold last year from Tanaka Kikinzoku Kogyo K.K., Japan’s largest gold retailer, and sold 28.6 tons to the company, at an average price of 4,321 yen a gram.

Tocom Gold

Yen-denominated gold futures on the Tokyo Commodity Exchange climbed to a record 5,081 yen a gram on Feb. 7, before slumping along with dollar-priced bullion this month. The retail price of gold bars in Japan advanced to the highest level since 1980 on April 10, according to Tanaka Kikinzoku.

Tocom gold futures fell 0.3 percent to 4,553 yen a gram at 9:04 a.m. in Tokyo. Gold for immediate delivery posted the biggest decline since 1983 on April 15, and slid to $1,321.95 on April 16, the lowest level since January 2011. It was down 0.3 percent at $1,422.48 at 9:04 a.m.

Gold for delivery in Tokyo was offered at $1 to $1.50 an ounce higher than the metal for delivery in London last week, as gold stockpiled by Japanese bullion houses was depleted because of surging demand from consumers, Ikemizu said.

Every one-yen depreciation in the Japanese currency against the dollar can boost bullion prices in Japan by 50 yen a gram, assuming the international market is unchanged, Masahiro Arai, general manager at Tokuriki Honten Co., the nation’s second- largest bullion retailer, said on April 16.

Purchases from Japan will partially absorb metal flowing out of exchange-traded funds such as SPDR (GLD) Gold Trust and give support to the international market, according to Ikemizu.

India, China

In India and China, the biggest gold-consuming nations, shoppers last week lined up in bazaars from Mumbai to Shanghai to buy the metal for brides, babies and strongboxes after prices fell. Indian consumers bought a net 312.2 tons of gold bars and coins in 2012, while purchases by individuals in China reached 265.5 tons, according to the World Gold Council.

Ending deflation would pave the way for Japanese Prime Minister Shinzo Abe to go ahead with a plan to double sales tax to 10 percent by October 2015 to reduce the nation’s fiscal deficit. The prospect of higher taxes has also spurred consumers to buy gold, Kate Harada, general manager at the precious metals department of Tanaka Kikinzoku, said in an interview in Tokyo on April 16.

“As Japanese begin paying more for fuel and some foods because of a weakening yen, they’re wondering how to hedge the risk of rising prices,” she said. “Gold is sought to protect against inflation and the yen’s debasement.”